10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2015

or

¨ 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: 001-36638 

Medley Management Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-1130638
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

375 Park Avenue, 33 ^rd Floor

New York, New York 10152

(Address of principal executive offices)(Zip Code)

(212) 759-0777

(Registrant’s telephone number, including area code)

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  ¨

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  ¨

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	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	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  ¨    No  x

The number of shares of the registrant’s Class A common stock, par value $0.01 per share, outstanding as of May 13, 2015 was 6,000,000. The number of shares of the registrant’s Class B common stock, par value $0.01 per share, outstanding as of May 13, 2015 was 100. 

TABLE OF CONTENTS 

		Page
FORWARD-LOOKING STATEMENTS
PART I.	FINANCIAL INFORMATION	F-1
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014	F-1
	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2015 and 2014	F-2
	Condensed Consolidated Statement of Changes in Equity (unaudited) for the Three Months Ended March 31,2015	F-3
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2015 and 2014	F-5
	Notes to the Condensed Consolidated Financial Statements (unaudited)	F-6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	32
PART II.	OTHER INFORMATION	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
	Signatures	34

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “may,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include, but are not limited to, those described under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “Annual Report on Form 10-K”) available on the SEC’s website at www.sec.gov, which include, but are not limited to, the following:

· difficult market and political conditions;

· our funds are managed pursuant to advisory agreements that may be terminated and fund partnership agreements that permit fund investors to remove us as the general partner;

· our ability to maintain our current fee structure;

· a change of control of us could result in termination of our investment advisory agreements;

· our ability to consummate or successfully integrate development opportunities, acquisitions or joint ventures;

· we depend on third-party distribution sources to market our investment strategies;

· challenges associated with an investment strategy focused primarily on privately held companies;

· our funds’ investments in investee companies may be risky, and our funds could lose all or part of their investments;

· prepayments of debt investments by our investee companies;

· our funds’ investee companies’ ability to incur debt that ranks equally with, or senior to, our funds’ investments in such companies;

· subordinated liens on collateral securing loans that our funds make to their investee companies may be subject to control by senior creditors with first priority liens and, if there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and our funds;

· if our funds’ debt investments are subordinated to claims of other creditors or our funds are subject to lender liability claims;

· our funds may not have the resources or ability to make additional investments in our investee companies;

· economic recessions or downturns;

· a covenant breach by our investee companies;

· competition in the investment management business and the lending market;

· dependence on leverage by certain of our funds and by our funds’ investee companies;

· our funds’ investments in companies that are highly leveraged;

· a lack of control over the business operations of our investee companies;

· uncertainty regarding the value of our funds’ investments;

i

· requirements to pay “clawback” obligations if and when they are triggered under the governing agreements with respect to certain of our funds and SMAs;

· our funds’ risks relating to undiversified investments;

· the ability of third-party investors in our private funds to satisfy their contractual obligation to fund capital calls when requested;

· our funds’ disposition of investments at a disadvantageous time;

· risks associated with hedging strategies;

· our ability to raise capital from investors;

· our dependence on retaining and attracting new senior management, senior investment professionals and other key personnel;

· our failure to appropriately address conflicts of interest;

· potential conflicts of interest that may arise between our Class A common stockholders and our funds’ investors;

· investors in our funds’ willingness to commit new capital to our funds;

· our ability to sustain rapid growth of our businesses;

· risks associated with entering into new lines of business and expanding into new investment strategies, geographic markets and businesses;

· extensive regulation of our business;

· failure to comply with, and changes to the regulatory regime of, “pay to play” regulations;

· new or changed laws or regulations governing our funds’ operations and changes in the interpretation thereof could adversely affect our business;

· the regulation of present and future BDCs for which we serve as investment adviser;

· risks in using custodians, counterparties, administrators and other agents;

· our ability to achieve steady earnings growth on a quarterly basis;

· litigation risks;

· employee misconduct, fraud and other deceptive practices or other misconduct;

· our substantial indebtedness;

· operating and financial restrictions imposed by our Senior Secured Credit Facilities;

· operational risks;

· our organizational structure and dependence upon distributions from Medley LLC to pay taxes, make payments under the tax receivable agreement or pay dividends;

· our control by our pre-IPO owners;

· payments required under the tax receivable agreement;

· costs and additional regulations and requirements as a result of becoming a public company; and

· our ability to maintain internal controls over financial reporting required under the Sarbanes-Oxley Act.

ii

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Form 10-Q. Forward-looking statements speak as of the date on which they are made, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. 

Medley Management Inc. was incorporated as a Delaware corporation on June 13, 2014, and its sole asset is a controlling equity interest in Medley LLC. Pursuant to a reorganization into a holding corporation structure (the “Reorganization”) consummated in connection with Medley Management Inc.’s initial public offering (“IPO”), Medley Management Inc. became a holding corporation and the sole managing member of Medley LLC, operating and controlling all of the business and affairs of Medley LLC and, through Medley LLC and its subsidiaries, conducts its business.

Unless the context suggests otherwise, references herein to the “Company,” “Medley,” “we,” “us” and “our” refer, (1) prior to the consummation of the Offering Transactions (as defined below), to Medley LLC, Medley GP Holdings LLC and their combined and consolidated subsidiaries and, (2) after such Offering Transactions, to Medley Management Inc. and its consolidated subsidiaries.

The “existing owners” and “pre-IPO owners” refer to the senior professionals who were the owners of Medley LLC immediately prior to the Offering Transactions. The “Offering Transactions” refer to Medley Management Inc.’s purchase upon the consummation of its IPO of 6,000,000 newly-issued limited liability company units (the “LLC Units”) from Medley LLC, which correspondingly diluted the ownership interests of the pre-IPO owners in Medley LLC and resulted in Medley Management Inc.’s holding a number of LLC Units in Medley LLC equal to the number of shares of Class A common stock it issued in its IPO.

Unless the context suggests otherwise, references herein to:

· “assets under management” or “AUM” refers to the assets of our funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods);

· “base management fees” refers to fees we earn for advisory services provided to our funds, which are generally based on a defined percentage of assets under management or, in certain cases, a percentage of originated assets in the case of certain of our SMAs;

· “BDC” refers to business development company;

· “Consolidated Funds” refers to, with respect to the three month period ended March 31, 2015, MOF II and MOF III and with respect to prior periods MOF I LP, MOF II and MOF III, subsequent to its formation;

· “fee earning AUM” refers to the AUM on which we directly earn base management fees;

· “long-dated private funds” refers to MOF II, MOF III and any other private funds we may manage in the future, provided that, with respect to periods prior to December 31, 2014, “long-dated private funds” refers to MOF I, MOF II and MOF III and any other private funds we may manage in the future;

· “management fees” refers to base management fees and Part I incentive fees;

· “Medley LLC” refers to Medley LLC and its consolidated subsidiaries and, prior to our IPO and the related Reorganization, Medley LLC and Medley GP Holdings LLC and their consolidated subsidiaries;

· “MOF I” refers to, with respect to the periods prior to October 31, 2014, MOF I LP and MOF I Ltd. and, with respect to the periods subsequent to October 31, 2014, only MOF I LP;

· “MOF I LP” refers to Medley Opportunity Fund LP;

· “MOF I Ltd” refers to Medley Opportunity Fund Ltd;

· “MOF II” refers to Medley Opportunity Fund II LP;

· “MOF III” refers to Medley Opportunity Fund III LP;

iii

· “our funds” refers to the funds, alternative asset companies and other entities and accounts that are managed or co-managed by us and our affiliates;

· “Part I incentive fees” refers to fees that we receive from our permanent capital vehicles, which are paid in cash quarterly and are driven primarily by net interest income on senior secured loans subject to hurdle rates. These fees are not subject to clawbacks or netting against realized losses;

· “Part II incentive fees” refers to fees related to realized capital gains in our permanent capital vehicles;

· “performance fees” refers to incentive allocations in our long-dated private funds and incentive fees from our SMAs, which are typically 15% or 20% of total return after a hurdle rate, accrued quarterly, but paid after the return of all invested capital and in an amount sufficient to achieve the hurdle rate;

· “permanent capital” refers to capital of funds that do not have redemption provisions or a requirement to return capital to investors upon exiting the investments made with such capital, except as required by applicable law, which funds currently consist of Medley Capital Corporation (NYSE: MCC) (“MCC”) and Sierra Income Corporation (“SIC”). Such funds may be required, or elect, to return all or a portion of capital gains and investment income. In certain circumstances, the investment adviser of such a fund may be removed; and

· “SMA” refers to a separately managed account.

iv

Medley Management Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

	As of
	March 31,			As of
	2015			December 31,
	(unaudited)			2014
Assets
Cash and cash equivalents	$	71,834		$	87,206
Investments, at fair value		11,539			9,901
Management fees receivable		15,024			15,173
Performance fees receivable		6,785			5,573
Other assets		9,084			9,230
Assets of Consolidated Funds:
Cash and cash equivalents		77,725			38,111
Investments, at fair value		735,623			734,870
Interest and dividends receivable		6,415			6,654
Other assets		1,340			3,681
Total assets	$	935,369		$	910,399
Liabilities and Equity
Loans payable	$	102,932		$	103,057
Accounts payable, accrued expenses and other liabilities		19,323			27,583
Performance fee compensation payable		11,377			11,807
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		13,724			5,767
Secured borrowings		136,806			141,135
Total liabilities		284,162			289,349
Commitments and contingencies (Note 9)
Equity
Class A Common Stock, $0.01 par value, 3,000,000,000 shares authorized; 6,000,000 shares issued and outstanding		60			60
Class B Common Stock, $0.01 par value, 1,000,000 shares authorized; 100 shares issued and outstanding		-			-
Capital deficit		(1,606	)		(2,384	)
Retained earnings		180			272
Total stockholders' deficit, Medley Management Inc.		(1,366	)		(2,052	)
Non-controlling interests in Consolidated Funds		654,970			625,548
Non-controlling interests in consolidated subsidiaries		2,816			1,526
Non-controlling interests in Medley LLC		(5,213	)		(3,972	)
Total equity		651,207			621,050
Total liabilities and equity	$	935,369		$	910,399

See accompanying notes to unaudited condensed consolidated financial statements

F-1

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Condensed Consolidated Statements of Operations (unaudited)

(Amounts in thousands, except share and per share amounts)

	For the Three Months Ended
	March 31,
	2015			2014
Revenues
Management fees	$	16,194		$	13,228
Performance fees		1,212			755
Other revenues and fees		1,624			2,013
Total revenues		19,030			15,996
Expenses
Compensation and benefits		7,221			3,759
Performance fee compensation		112			1,518
Consolidated Funds expenses		793			320
General, administrative and other expenses		4,507			4,229
Total expenses		12,633			9,826
Other income (expense)
Dividend income		222			222
Interest expense		(2,085	)		(633	)
Other expenses, net		(383	)		(931	)
Interest and other income of Consolidated Funds		18,727			13,421
Interest expense of Consolidated Funds		(3,804	)		(1,312	)
Net realized gain (loss) on investments of Consolidated Funds		952			1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		4,022			(7,813	)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		(416	)		(324	)
Total other income, net		17,235			3,987
Income before income taxes		23,632			10,157
Provision for income taxes		1,690			504
Net income		21,942			9,653
Net income attributable to non-controlling interests in Consolidated Funds		11,575			3,912
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries		1,290			(47	)
Net income attributable to non-controlling interests in Medley LLC		7,803		$	5,788
Net income attributable to Medley Management Inc.	$	1,274
Dividends declared per Class A common stock	$	0.20
Net income per Class A common stock:
Basic (Note 11)	$	0.19
Diluted (Note 11)	$	0.19
Weighted average shares - Basic and Diluted		6,000,000

See accompanying notes to unaudited condensed consolidated financial statements

F-2

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Condensed Consolidated Statement of Changes in Equity (unaudited)

(Amounts in thousands, except share and per share amounts)

															Non-			Non-		Non-
															controlling			controlling		controlling
	Class A				Class B										Interests in			Interests in		Interests in
	Common Stock				Common Stock				Capital			Retained			Consolidated			Consolidated		Medley			Total
	Shares		Dollars		Shares		Dollars		Deficit			Earnings			Funds			Subsidiaries		LLC			Equity
Balance at December 31, 2014		6,000,000	$	60		100	$	-	$	(2,384	)	$	272		$	625,548		$	1,526	$	(3,972	)	$	621,050
Deconsolidation of MOF I LP		-		-		-		-		-			-			(15,321	)		-		-			(15,321	)
Net income		-		-		-		-		-			1,274			11,575			1,290		7,803			21,942
Stock-based compensation		-		-		-		-		778			-			-			-		-			778
Dividends declared on Class
A common stock ($0.20
per share)		-		-		-		-		-			(1,366	)		-			-		-			(1,366	)
Contributions		-		-		-		-		-			-			33,168			-		-			33,168
Distributions		-		-		-		-		-			-			-			-		(9,044	)		(9,044	)
Balance at March 31, 2015		6,000,000	$	60		100	$	-	$	(1,606	)	$	180		$	654,970		$	2,816	$	(5,213	)	$	651,207

See accompanying notes to unaudited condensed consolidated financial statements

F-3

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)

	For the Three Months Ended
	March, 31,
	2015			2014
Cash flows from operating activities
Net income	$	21,942		$	9,653
Adjustments to reconcile net income to net cash used in operating activities:
Net change in unrealized depreciation (appreciation) on investments		131			(22	)
Non-cash stock-based compensation		778			-
Depreciation and amortization		111			92
Provision for (benefit from) deferred taxes		349			90
Amortization of deferred financing costs		132			44
Accretion of debt discount		188			121
Operating adjustments related to Consolidated Funds:
Benefit from deferred taxes		(243	)		(252	)
Interest income paid-in-kind		(837	)		(1,949	)
Accretion of original issue discount		1,899			(328	)
Net realized (gain) loss on investments		(1,059	)		(1,357	)
Net change in unrealized depreciation (appreciation) on investments		(3,916	)		7,813
Net change in unrealized appreciation (depreciation) on secured borrowings of Consolidated Funds		416			324
Changes in operating assets and liabilities:
Management fees receivable		149			(735	)
Performance fees receivable		(1,212	)		(755	)
Other assets		(67	)		(827	)
Accounts payable, accrued expenses and other liabilities		(8,475	)		(1,978	)
Performance fee compensation payable		(430	)		1,067
Changes in operating assets and liabilities of Consolidated Funds:
Cash and cash equivalents		(42,949	)		(5,699	)
Cost of investments purchased		(49,072	)		(105,039	)
Proceeds from sales and repayments of investments		38,959			3,653
Other assets		(793	)		(911	)
Change in accounts payable, accrued expenses and other liabilities		10,950			449
Net cash used in operating activities		(33,049	)		(96,546	)
Cash flows from investing activities
Purchases of property and equipment		(107	)		(84	)
Net cash used in investing activities		(107	)		(84	)

See accompanying notes to unaudited condensed consolidated financial statements

F-4

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Condensed Consolidated Statements of Cash Flows (unaudited) - (continued)
(Amounts in thousands)

	For the Three Months Ended
	March 31,
	2015			2014
Cash flows from financing activities
Proceeds from issuance of debt obligations	$	-		$	17,500
Repayment of loans payable		(313	)		-
Distributions to members		(9,044	)		(25,588	)
Dividends paid		(1,423	)		-
Contribution from non-controlling interest in consolidated subsidiaries		-			928
Financing activities related to Consolidated Funds:
Contributions from non-controlling interest holders		33,169			88,603
Distributions to non-controlling interest holders		-			-
Proceeds from secured borrowings		10,834			12,000
Repayments on secured borrowings		(15,439	)		(239	)
Net cash provided by financing activities		17,784			93,204
Net increase (decrease) in cash and cash equivalents		(15,372	)		(3,426	)
Cash and cash equivalents, beginning of period		87,206			5,395
Cash and cash equivalents, end of period	$	71,834		$	1,969
Supplemental disclosure of non-cash financing activities
Non-cash debt	$	-		$	2,500
Dividends declared but not paid		1,366			-
Supplemental disclosure of non-cash investing activities
Investment in MOF I attributed to deconsolidation	$	1,768		$	-

See accompanying notes to unaudited condensed consolidated financial statements

F-5

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Medley Management Inc. (the “Corporation”) is an asset management firm offering yield solutions to retail and institutional investors. The Corporation’s national direct origination franchise provides capital to the middle market in the U.S. The Corporation, through its consolidated subsidiary Medley LLC, provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts and serves as the general partner to the private funds, which are generally organized as pass-through entities. Medley LLC is headquartered in New York City and has an office in San Francisco.

Initial Public Offering of Medley Management Inc.

Medley Management Inc. was incorporated on June 13, 2014 and commenced operations on September 29, 2014 upon the completion of its initial public offering (“IPO”) of its Class A common stock. Medley Management Inc. raised $100.4 million, net of underwriting discount, through the issuance of 6,000,000 shares of Class A common stock at an offering price to the public of $18.00 per share. Medley Management Inc. used the offering proceeds to purchase 6,000,000 newly issued LLC Units (defined below) from Medley LLC. Prior to the IPO, Medley Management Inc. had not engaged in any business or other activities except in connection with its formation and IPO.

In connection with the IPO, Medley Management Inc. issued 100 shares of Class B common stock to Medley Group LLC (“Medley Group”), an entity wholly owned by the pre-IPO members of Medley LLC. For as long as the pre-IPO members and then-current Medley personnel hold at least 10% of the aggregate number of shares of Class A common stock and LLC Units (defined below) (excluding those LLC Units held by Medley Management Inc.) then outstanding, the Class B common stock entitles Medley Group to a number of votes that is equal to 10 times the aggregate number of LLC Units held by all non-managing members of Medley LLC that do not themselves hold shares of Class B common stock and entitle each other holder of Class B common stock, without regard to the number of shares of Class B common stock held by such other holder, to a number of votes that is equal to 10 times the number of membership units held by such holder. The Class B shares do not participate in dividends and do not have any liquidation rights.

Medley LLC Reorganization

In connection with the IPO, Medley LLC amended and restated its limited liability agreement to modify its capital structure by reclassifying the 23,333,333 interests held by the pre-IPO members into a single new class of units (“LLC Units”). The pre-IPO members also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right, from and after the first twelve month anniversary of the date of the closing of the IPO, subject to the terms of an exchange agreement, to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. In addition, pursuant to the amended and restated limited liability agreement, Medley Management Inc. became the sole managing member of Medley LLC. 

The pre-IPO owners, are, subject to limited exceptions, prohibited from transferring any LLC Units held by them or any shares of Class A common stock received upon exchange of such LLC Units, until the third anniversary of the date of the closing of the IPO without the Company’s consent. Thereafter and prior to the fourth and fifth anniversaries of the closing of the IPO, such holders may not transfer more than 33 1/3% and 66 2/3%, respectively, of the number of LLC Units held by them, together with the number of any shares of Class A common stock received by them upon exchange therefor, without the Company’s consent.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Medley Management Inc., Medley LLC and its consolidated subsidiaries together with certain funds (individually “Consolidated Funds”, collectively, “Medley” or the “Company”). Additionally, the accompanying condensed consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP may be omitted. In the opinion of management, the unaudited condensed consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim period included herein. Therefore, this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “Annual Report on Form 10-K”). The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the full year ending December 31, 2015.

F-6

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The Consolidated Funds have been consolidated in the accompanying financial statements for the periods presented in accordance with U.S. GAAP. Including the results of the Consolidated Funds significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows of the Company; however, the Consolidated Funds’ results included herein have no direct effect on the net income attributable to members or on total equity. The economic ownership interests of the investors in the Consolidated Funds are reflected as “Non-controlling interests in Consolidated Funds” and as “Net income attributable to non-controlling interests in Consolidated Funds” in the accompanying condensed consolidated financial statements.

Prior to the Reorganization and IPO on September 29, 2014, all compensation for services rendered by senior Medley LLC professionals were reflected as distributions from members’ capital rather than as compensation expense. Subsequent to the Reorganization and IPO, all guaranteed payments made to these senior professionals are recognized as compensation expense.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity.

An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk (as a group) lack either the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the success of the legal entity or the obligation to absorb the expected losses or right to receive the expected residual returns or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns of the legal entity, or both, and substantially all of the legal entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. Entities that do not qualify as VIEs are generally assessed for consolidation under the voting interest model.

For those entities that qualify as a VIE, the Company performs an analysis to determine if it is the primary beneficiary. With respect to certain VIEs that qualify for accounting treatment under Accounting Standard Update (“ASU”) 2010-10, the Company determines that it is the primary beneficiary only if its involvement, through holding interests directly or indirectly in the VIE or contractually through other variable interests (e.g., carried interest and management fees), would be expected to absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both. In order to qualify for this accounting treatment, certain conditions have to be met, including if the entities have all the attributes of an investment company and are not securitization or asset-backed financing entities. For all other entities, the Company determines that it is the primary beneficiary if it holds a controlling financial interest defined as possessing both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. In making its assessment the Company takes into consideration all fee and substantive arrangements, terms and transactions that may exist. The assessment of whether an entity is a VIE and the determination of whether the Company should consolidate such VIE requires judgments and is dependent on the particular facts and circumstances. Each entity is assessed for consolidation on a case-by-case basis. 

For those entities evaluated under the voting interest model, the Company consolidates those entities it controls through a majority voting interest or through other means whereby the Company is the general partner and is presumed to have control. The Company would not consolidate an entity in which the presumption of control by the general partner has been overcome through either the granting of substantive rights to the unaffiliated investors to either dissolve the entity or remove the general partner (“kick-out-rights”) or the granting of substantive participating rights.

F-7

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Consolidated Variable Interest Entities

Medley Management Inc. is the sole managing member of Medley LLC and, as such, it operates and controls all of the business and affairs of Medley LLC and, through Medley LLC, conducts its business. Under ASC 810, Medley LLC meets the definition of a variable interest entity because the equity of Medley LLC is not sufficient to permit activities without additional subordinated financial support. Since Medley Management Inc. has the obligation to absorb expected losses that could be significant to Medley LLC and holds 100% of the voting power, Medley Management Inc. is considered to be the primary beneficiary of Medley LLC.

As a result, Medley Management Inc. consolidates the financial results of Medley LLC and its subsidiaries and records a non-controlling interest for the economic interest in Medley LLC held by the non-managing members. Medley Management Inc.’s and the non-managing members’ economic interests in Medley LLC is 20.5% and 79.5%, respectively, as of March 31, 2015 and December 31, 2014. Net income attributable to the non-controlling interest in Medley LLC on the consolidated statements of operations represents the portion of earnings attributable to the economic interest in Medley LLC held by its non-managing members. Non-controlling interests in Medley LLC on the consolidated balance sheets represents the portion of net assets of Medley LLC attributable to the non-managing members based on total LLC Units of Medley LLC owned by such non-managing members.

Medley LLC has one majority owned subsidiary, SIC Advisors LLC, that is a consolidated VIE. This entity was organized as a limited liability company and was legally formed to manage a designated fund and to isolate business risk. As of March 31, 2015 and December 31, 2014, total assets, after eliminating entries, of this VIE reflected in the consolidated balance sheets were $18.6 million and $18.0 million, respectively. Total liabilities, after eliminating entries, of this VIE were $18.7 million and $19.6 million as of March 31, 2015 and December 31, 2014, respectively. Except to the extent of the assets of this VIE that are consolidated, the holders of the consolidated VIE’s liabilities generally do not have recourse to the Company.

Consolidated Funds

With respect to the Consolidated Funds, which represent limited partnerships, Medley LLC earns a fixed management fee based on either (i) limited partners’ capital commitments to the funds, (ii) invested capital, (iii) net asset value (“NAV”), or (iv) lower of cost or market value of a fund’s portfolio investments. In addition, Medley earns a performance fee based upon the investment returns in excess of a stated hurdle rate. The Company considered the accounting treatment under ASU 2010-10 as all the respective conditions have been met and determined that the funds were not VIEs. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, these funds have been consolidated under the voting interest model in accordance with ASC 810-20, Control of Partnerships and Similar Entities.

In December 2014, the Company formed the Medley Opportunity Fund III LP (MOF III), which is structured as a limited partnership.  One of the Company’s wholly owned subsidiaries is the general partner and investment manager of MOF III. The Company considered the accounting treatment under ASU 2010-10 as all the respective conditions have been met and determined that MOF III was not a VIE. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, this fund has been consolidated under the voting interest model in accordance with ASC 810-20.

Deconsolidation of a Fund

The Company had consolidated the Medley Opportunity Fund LP (MOF I LP) in its consolidated financial statements under the voting interest model in accordance with ASC 810-20, as the Company was the general partner and the limited partners lacked substantive kick out or participating rights. Effective January 1, 2015, the Company completed its role as investment manager of MOF I LP and transitioned the management of the residual assets of this fund to another asset manager. As a result of this transition, the Company deconsolidated the financial statements of this fund, on January 1, 2015. There was no gain or loss recognized upon deconsolidation.

F-8

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Basis of Accounting

Management has determined that the Company’s Consolidated Funds are investment companies under U.S. GAAP for the purposes of financial reporting. U.S. GAAP requires that investments held by an investment company be recorded at fair value and any unrealized appreciation (depreciation) in an investment’s fair value be recognized on a current basis in the consolidated statements of operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the specialized accounting guidance for the Consolidated Funds under U.S. GAAP. As such, all of the investments held by the Consolidated Funds are presented at their estimated fair values in the Company’s condensed consolidated balance sheets. Interest income of the Consolidated Funds is included in interest and other income of Consolidated Funds in the Company’s consolidated statements of operations.

Concentrations of Credit and Market Risk

In the normal course of business, the Company encounters significant credit and market risk. Credit risk is the risk of default on investments in debt securities, loans and derivatives that result from a borrower’s or derivative counterparty’s inability or unwillingness to make required or expected payments. Credit risk is increased in situations where the Company is investing in distressed assets or unsecured or subordinate loans or in securities that are a material part of its respective business. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors.

The Company may make investments outside of the United States. These non-U.S. investments are subject to the same risks associated with U.S. investments, as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing the investments, potentially adverse tax consequences, and the burden of complying with a wide variety of foreign laws.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.  

Indemnification

In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has not experienced any prior claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.

Non-Controlling Interests in Consolidated Entities

Non-controlling interests in Consolidated Funds and consolidated subsidiaries represent the component of equity in such consolidated entities held by third party investors. These interests are adjusted for general partner allocations and, for funds, by subscriptions and redemptions that occur during the reporting period.

F-9

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Class A Earnings per Share

The Company computes and presents earnings per share using the two-class method. Under the two-class method, the Company allocates earnings between common stock and participating securities. The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. For purposes of calculating earnings per share, the Company reduces its reported net earnings by the amount allocated to participating securities to arrive at the earnings allocated to Class A common stockholders. Earnings is then divided by the weighted average number of Class A common stock outstanding to arrive at basic earnings per share. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in our earnings. Participating securities consist of the Company’s unvested restricted stock units that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in its basic and diluted calculations.

Investments

Investments include equity method investments that are not consolidated but in which the Company exerts significant influence, and investments held by the Consolidated Funds. Medley measures the fair value of the equity method investments that do not have a readily determinable fair value at net asset value or market value. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investees is reflected as a component of other income (expense) in the condensed consolidated statements of operations.

The Consolidated Funds reflect their investments at fair value with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net change in unrealized depreciation on investments of Consolidated Funds in the condensed consolidated statements of operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price).

Fair Value Measurements

The Consolidated Funds apply fair value accounting to all of their financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Consolidated Funds have categorized their financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 4. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Consolidated Funds’ own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. The Company weights the use of third-party broker quotes, if any, in determining fair value based on the Company’s understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by the Company based upon inputs by third-party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time. 

The Consolidated Funds use third-party valuation firms to assist in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. Based on market data obtained from the third-party valuation firms, the Consolidated Funds use a market yield analysis under the income approach or an enterprise model of valuation under the market approach, or a combination thereof. In applying the market yield analysis, the value of the Consolidated Funds’ loans is determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, the Consolidated Funds use a waterfall analysis that takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital structure. To estimate the enterprise value of the portfolio company, some or all of the traditional market valuation methods and factors are weighed based on the individual circumstances of the portfolio company in order to estimate the enterprise value.

F-10

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The methodologies and information that the Company utilizes when applying the Market Approach for performing investments includes, among other things:

· valuations of comparable public companies (Guideline Comparable approach);

· recent sales of private and public comparable companies (Guideline Comparable approach);

· recent acquisition prices of the company, debt securities or equity securities (Acquisition Price Approach);

· external valuations of the portfolio company, offers from third parties to buy the company (Estimated Sales Proceeds approach);

· subsequent sales made by the company of its investments (Expected Sales Proceeds approach); and

· estimating the value to potential buyers.

The methodologies and information that the Company utilizes when applying the Income Approach for performing investments includes:

· discounting the forecasted cash flows of the portfolio company or securities (Discounted Cash Flow “DCF” approach); and

· Black-Scholes model or simulation models or a combination thereof (Income Approach – Option Model) with respect to the valuation of warrants.

For non-performing investments, the Company may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model (Income Approach – Expected Recovery Analysis or Estimated Liquidation Proceeds).

A multi-step valuation process is undertaken each quarter when valuing portfolio investments for which market quotations are not readily available, as described below:

· The quarterly valuation process begins with each portfolio investment being initially valued by the Company’s internal valuation team;

· An independent valuation firm engaged by the Consolidated Funds prepares an independent valuation report for approximately one-third of the portfolio investments each quarter on a rotating quarterly basis on non-fiscal year-end quarters, such that each of these investments will be valued by independent valuation firms at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms; and

· Preliminary valuation conclusions are then documented and discussed with senior management.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Consolidated Funds’ investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

F-11

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Revenues

Management Fees

Medley provides investment management services to both public and private investment vehicles. Management fees include both base management fees, other management fees, and Part I incentive fees, as described below.

Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) the net asset value or (v) lower of cost or market value of a fund’s portfolio investments. For the private funds, Medley receives base management fees during a specified period of time, which is generally ten years from the initial closing date. However, such termination date may be earlier in certain limited circumstances or later if extended for successive one-year periods, typically up to a maximum of two years. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided. 

Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the portfolio companies of the Consolidated Funds, as well as separately managed accounts. These fees are recognized when Medley becomes entitled to such fees.

Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net interest income (excluding gains and losses) above a hurdle rate. These fees are not subject to repayment, clawbacks or netting against realized losses. Part I incentive fees are paid quarterly and are recognized as earned over the period the services are provided.

Performance Fees

Performance fees consist principally of the allocation of profits from certain funds, including separately managed accounts, to which Medley provides management services. Medley is generally entitled to an allocation of income as a performance fee after returning the invested capital plus a specified preferred return as set forth in each respective agreement. Medley recognizes revenues attributable to performance fees based upon the amount that would be due pursuant to the respective agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized reflects Medley’s share of the gains and losses of the associated funds’ underlying investments measured at their current fair values. Performance fee revenue may include reversals of previously recognized performance fees due to a decrease in the net income of a particular fund that results in a decrease of cumulative performance fees earned to date. Since fund return hurdles are cumulative, previously recognized performance fees also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. For the three months ended March 31, 2015, the Company reversed $0.1 million of previously recognized performance fees on a standalone and consolidated basis. The Company did not reverse any previously recognized performance fees for the period ended March 31, 2014. Cumulative performance fees recognized through March 31, 2015 were $26.7 million and $6.8 million on a standalone and consolidated basis, respectively.

Performance fees received in prior periods may be required to be returned by Medley in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, performance fees can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments at their then current fair values previously recognized and distributed performance fees would be required to be returned, a liability is established for the potential clawback obligation. As of March 31, 2015, the Company had not received any performance fee distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of performance fees. Pursuant to the organizational documents of each respective fund, tax distributions are not subject to clawback. As such, no amounts have been accrued for clawback obligations in the accompanying condensed consolidated financial statements.

Other Revenues and Fees

Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective agreement. These fees are recognized as revenue in the period administrative services are rendered.

Included in other revenues and fees are reimbursements received by Medley from SIC under its investment advisory agreement. Expenses incurred by Medley under this agreement are recorded within general, administrative, and other expenses in the consolidated statements of operations. For additional information on these reimbursements, refer to Note 10.

F-12

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Performance Fee Compensation

Medley has issued profit interests in certain subsidiaries to selected employees. These profit-sharing arrangements are accounted for under ASC 710, Compensation — General, which requires compensation expense to be measured at fair value at the grant date and expensed over the vesting period, which is usually the period over which the service is provided. The fair value of the profit interests are re-measured at each balance sheet date and adjusted for changes in estimates of cash flows and vesting percentages. The impact of such changes is recorded in the consolidated statements of operations as an increase or decrease to performance fee compensation. 

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Under the fair value recognition provision of this guidance, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period.

Stock-based compensation expense recognized for the year ended December 31, 2014 is based on awards ultimately expected to vest and have been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The effect of such change in estimated forfeitures is recognized through a cumulative catch-up adjustment that is included in the period of the change in estimate.

The value of the portion of the award that is ultimately expected to vest on a straight-line basis over the requisite service period is included within compensation and benefits on the Company’s condensed consolidated statements of operations.

Income Taxes

The Company accounts for income taxes using the asset and liability approach, which requires the recognition of tax benefits or expenses for temporary differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to recognize interest and penalties on uncertain tax positions and other tax matters as a component of income tax expense. For interim periods, the Company accounts for income taxes based on its estimate of the effective tax rate for the year. Discrete items and changes in its estimate of the annual effective tax rate are recorded in the period they occur.

Prior to the Company’s Reorganization and IPO, no provision was made for U.S. federal income taxes in the accompanying condensed consolidated financial statements since the Company was a group of pass-through entities for U.S. and state income tax purposes and its profits and losses were allocated to the partners who are individually responsible for reporting such amounts. A provision for income taxes was made for certain entities that were subject to New York City’s unincorporated business tax.

Following the IPO, Medley LLC and its subsidiaries continue to operate as pass-through entities for U.S. income tax purposes. Accordingly, these entities in some cases continue to be subject to New York City’s unincorporated business tax. Medley Management Inc. is subject to U.S. federal, state and local corporate income taxes, which are reflected in the Company’s consolidated financial statements.

Secured Borrowings of Consolidated Funds

The Consolidated Funds follow the guidance in ASC 860, Transfers and Servicing, when accounting for loan participations and other partial loan sales. Such guidance provides accounting and reporting standards for transfers and servicing of financial assets and requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance. Under ASC 860, the Company applies a control-oriented approach to participating interests whereby control is considered to have been surrendered only if (i) the transferred financial assets have been isolated from the transferor, (ii) the transferee has the right to pledge or exchange the transferred financial assets it received, and (iii) the transferor, its consolidated affiliates in the financial statements being presented, or its agents do not maintain effective control over the transferred financial assets. Participations or other partial loan sales which do not meet all of these conditions remain on the Company’s condensed consolidated balance sheets and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

F-13

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

For these participations or partial loan sales accounted for as secured borrowings, the interest income earned on the entire loan balance is recorded within interest and other income of Consolidated Funds and the interest income earned by the buyer in the partial loan sale is recorded as interest expense of Consolidated Funds in the accompanying consolidated statements of operations. Changes in the fair value of secured borrowings of Consolidated Funds are included in net change in unrealized depreciation (appreciation) on secured borrowings in the consolidated statements of operations.

Revisions to Previously Issued Financial Statements

The Company accounts for certain loan participations as secured borrowings that in previously issued financial statements had been accounted for as true sales, as defined in ASC 860.  These loan participation agreements did not contain any prohibited constraints on exchange or transfer and the assets were legally isolated from the transferor. Upon further analysis, the Company determined that a provision in the asset management agreement between the transferee and a consolidated affiliate of the transferor had a standard provision that restricted transfer of the assets for a period of time. As a result of this constraint, the Company determined that, in accordance with ASC 860-10-40-5, the transactions should be reported as secured borrowings. The Company has determined that the impact on its previously issued financial statements was not material.  As a result, prior periods were revised as follows: (i) interest and other income of Consolidated Funds increased by $1.3 million for the three months ended March 31, 2014, with direct offsetting amounts to interest expense of Consolidated Funds, (ii) the recording of unrealized appreciation (depreciation) on investments of Consolidated Funds of $0.3 for the three months ended March 31, 2014, with direct offsetting amounts to unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds, and (iii) a change in net cash used in operating activities of $11.8 million for the three months ended March 31, 2014, with offsetting changes in cash provided by financing activities. These changes had no impact on consolidated and standalone equity or net income.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance 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 amendments are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact, if any, that this ASU will have on its condensed consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation – Principal versus Agent Analysis. This guidance requires an entity to evaluate whether it should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This guidance is effective for interim and annual periods beginning after December 15, 2015 and early application is permitted. The Company is currently evaluating the impact, if any, that this ASU will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Under current accounting standards, such costs are reflected as an asset on the Company's condensed consolidated balance sheets. While the new guidance is effective for the Company beginning January 1, 2016, early application is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated balance sheets.

In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).  Under the amendments in this update, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient should not be categorized in the fair value hierarchy. Removing those investments from the fair value hierarchy not only eliminates the diversity in practice resulting from the way in which investments measured at net asset value per share (or its equivalent) with future redemption dates are classified, but also ensures that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share (or its equivalent), but for which the practical expedient is notapplied will continue to be included in the fair value hierarchy. The amendments in this update are effective for the Company beginning January 1, 2016. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

F-14

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

3. INVESTMENTS

The composition of investments is as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Equity method investments, at fair value	$	11,539	$	9,901
Investments of Consolidated Funds, at fair value		735,623		734,870
Total Investments	$	747,162	$	744,771

Equity Method Investments, at Fair Value

Medley measures its equity method investments at net asset value or at market value. Total unrealized appreciation (depreciation) recorded for the Company’s equity method investments is included in other income (expense). Equity method investments, at fair value includes Medley’s investment in Sierra Income Corporation (“SIC”) which amounted to $10.0 million and $9.9 million as of March 31, 2015 and December 31, 2014, respectively.

F-15

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Investments in Consolidated Funds

The following table presents a summary of the investments held by the Consolidated Funds and as a percentage of total investments of Consolidated Funds.

	Investments of Consolidated Funds
	Fair Value				Percentage
	March 31,				March 31,
	2015		December 31,		2015			December 31,
	(unaudited)		2014		(unaudited)			2014
	(Amounts in thousands)
Geographic Region/Investment Type/Industry Description:
North America:
Senior secured loans and notes:
Automotive	$	21,710	$	21,937		3.0	%		3.0	%
Banking, Finance, Insurance and Real Estate		188,471		206,424		25.5	%		28.1	%
Beverage, Food and Tobacco		14,859		14,934		2.0	%		2.0	%
Capital Equipment		8,000		-		1.1	%		0.0	%
Chemicals, Plastics and Rubber		21,144		21,196		2.9	%		2.9	%
Construction and Building		52,985		53,547		7.2	%		7.3	%
Consumer goods: Non-durable		34,948		34,687		4.8	%		4.7	%
Containers, Packaging and Glass		26,411		26,823		3.5	%		3.7	%
Energy: Oil and Gas		30,333		32,736		4.1	%		4.6	%
Healthcare and Pharmaceuticals		97,120		81,921		13.2	%		11.1	%
High Tech Industries		25,532		25,329		3.5	%		3.4	%
Hotel, Gaming and Leisure		10,403		11,494		1.4	%		1.6	%
Media: Advertising, Printing and Publishing		-		346		0.0	%		0.0	%
Metals and Mining		25,525		26,042		3.5	%		3.5	%
Retail and Commercial Kitchen Appliances		24,715		24,886		3.4	%		3.4	%
Services: Business		38,928		34,808		5.3	%		4.7	%
Services: Consumer		43,133		45,545		5.9	%		6.2	%
Total Senior Secured Loans and Notes, North America (cost of $704,698 and $711,398, respectively)	$	664,217	$	662,655		90.3	%		90.2	%
South America:
Senior secured loans and notes:
Banking, Finance, Insurance and Real Estate	$	-	$	1,029		0.0	%		0.1	%
Energy: Oil and Gas		-		424		0.0	%		0.1	%
Total Senior Secured Loans and Notes, South America (cost of $0 and $13,049, respectively)	$	-	$	1,453		0.0	%		0.2	%
Asia:
Banking, Finance, Insurance and Real Estate (cost of $0 and $1,373)	$	-	$	1,377		0.0	%		0.2	%

F-16

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

	Investments of Consolidated Funds
	Fair Value				Percentage
	March 31,				March 31,
	2015		December 31,		2015			December 31,
	(unaudited)		2014		(unaudited)			2014
	(Amounts in thousands)
Geographic Region/Investment Type/Industry Description:
North America:
Equity interests in limited liability companies:
Banking, Finance, Insurance and Real Estate	$	45,336	$	42,338		6.2	%		5.8	%
Construction and Building		3540		3,297		0.5	%		0.4	%
Containers, Packaging and Glass		331		320		0.0	%		0.0	%
Energy: Oil and Gas		-		2,596		0.0	%		0.4	%
Healthcare and Pharmaceuticals		447		63		0.1	%		0.0	%
Telecommunications		-		170		0.0	%		0.0	%
Total Equity Interest in Limited Liability Companies (cost of $35,993 and $40,944, respectively)	$	49,654	$	48,784		6.8	%		6.6	%
Equity securities:
Common Stock (cost of $157 and $8,913 , respectively)	$	53	$	964		0.0	%		0.1	%
Preferred Stock (cost of $0 and $10,187, respectively)	$	-	$	545		0.0	%		0.1	%
Warrants:
Banking, Finance, Insurance and Real Estate	$	10,656	$	10,363		1.4	%		1.4	%
Construction and Building		154		113		0.0	%		0.0	%
Containers, Packaging and Glass		615		105		0.1	%		0.0	%
Energy: Oil and Gas		3,182		1,793		0.4	%		0.3	%
Healthcare and Pharmaceuticals		6,306		5,137		0.9	%		0.7	%
Retail		786		893		0.1	%		0.1	%
Total Warrants (cost of $3,427 and $3,428, respectively)		21,699		18,404		2.9	%		2.5	%
Total Equity Securities (cost of $3,584 and $22,528, respectively)	$	21,752	$	19,913		2.9	%		2.7	%
Collectibles (cost of $0 and $1,385)	$	-	$	688		0.0	%		0.1	%
Total Investments of Consolidated Funds (cost of $606,918 and $790,677, respectively)	$	735,623	$	734,870		100.0	%		100.0	%

F-17

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

4. FAIR VALUE MEASUREMENTS

The Company follows ASC 820 for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the condensed consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows:

· Level I - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

· Level II - Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.

· Level III - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence.

Fair Value Measurement on a Recurring Basis

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

In addition to using the above inputs in investment valuations, the Company continues to employ a valuation policy that is consistent with ASC 820 (Note 2). Consistent with the Company’s valuation policy, management evaluates the source of inputs, including any markets in which the investments are trading, in determining fair value.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

The Company’s equity method investments are valued based on their proportionate share of the net assets of the underlying fund. The terms of the investments generally preclude the ability to redeem the investments. Distributions from these investments will be received as the underlying assets in the funds are liquidated, the timing of which cannot be readily determined. 

F-18

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present the fair value measurements of investments, by major class according to the fair value hierarchy:

	As of March 31, 2015
	(unaudited)
	Level I		Level II		Level III		Total
	(Amounts in thousands)
Assets
Senior secured loans and notes	$	-	$	-	$	664,217	$	664,217
Equity interests in LLCs		-		-		49,654		49,654
Equity securities		-		668		21,084		21,752
Equity method investments		-		-		11,539		11,539
Total assets	$	-	$	668	$	746,494	$	747,162
Secured borrowings of Consolidated Funds	$	-	$	13	$	136,793	$	136,806

	As of December 31, 2014
	Level I		Level II		Level III		Total
	(Amounts in thousands)
Assets
Senior secured loans and notes	$	-	$	-	$	664,108	$	664,108
Equity interests in LLCs		-		-		48,784		48,784
Equity securities		62		29		19,822		19,913
Investments in tangible assets		-		-		2,065		2,065
Equity method investment		-		-		9,901		9,901
Total assets	$	62	$	29	$	744,680	$	744,771
Secured borrowings of Consolidated Funds	$	16	$	-	$	141,119	$	141,135

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting all levels of the fair value hierarchy are reported as transfers in or out of Level I, II or III category as of the beginning of the quarter in which the reclassifications occur. During the three months ended March 31, 2015, one of our warrants with a fair value of $0.1 million transferred from Level III to Level II because of the increase in availability of the transaction data or the inputs to the valuation became observable. During the three months ended March 31, 2015, one of our warrants with a fair value of $0.1 million transferred from Level I to Level II based on changes in valuation methodology.

F-19

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables provide a reconciliation of the beginning and ending balances for the Consolidated Funds’ Level III investments and the Company’s investments in its equity method investees:

	As of March 31, 2015
	(unaudited)
	Financial Assets																		Liabilities
	Investments of Consolidated Funds																		Secured
	Senior									Investment									borrowings
	Secured			Equity						in			Equity						of
	Loans and			Interests in			Equity			Tangible			Method						Consolidated
	Notes			LLCs			Securities			Assets			Investments			Total			Funds
	(Amounts in thousands)
Balance, beginning of year	$	664,108		$	48,784		$	19,822		$	2,065		$	9,901		$	744,680		$	141,119
Deconsolidation of MOF I		(8,252	)		(1,370	)		(1,417	)		(2,065	)		1,768			(11,336	)		-
Transfer out of level III		-			-			(105	)		-			-			(105	)		-
Amortization		(2,140	)		-			-			-			-			(2,140	)		-
Paid in-kind interest income		921			18			-			-			-			939			-
Purchases		51,065			3,032			-			-			-			54,097			-
Sales and settlements		(43,983	)		-			-			-			-			(43,983	)		-
Realized and unrealized appreciation (depreciation), net		2,498			(810	)		2,784			-			(130	)		4,342			-
Unrealized appreciation (depreciation) on secured borrowings of Consolidated Funds, net		-			-			-			-			-			-			418
Proceeds (repayments) from secured borrowings, net		-			-			-			-			-			-			(4,744	)
Balance, end of period	$	664,217		$	49,654		$	21,084		$	-		$	11,539		$	746,494		$	136,793
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	$	2,068		$	(810	)	$	2,784		$	-		$	(130	)	$	3,912		$	420

Total realized and unrealized appreciation (depreciation) recorded for the Consolidated Funds’ Level III investments is included in net realized gain (loss) on investments of Consolidated Funds and net change in unrealized depreciation on investments of Consolidated Funds in the consolidated statements of operations, respectively. 

F-20

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables summarize the quantitative inputs and assumptions used for the Consolidated Funds’ Level III inputs and the Company’s investments in its equity method investees as of March 31, 2015 and December 31, 2014:

	March 31, 2015				Range			Weighted
Assets	(unaudited)		Valuation Technique(s)	Unobservable input		Minimum	Maximum	Average
	(Amounts in thousands)
Senior Secured Loans and Notes	$	573,254	Income Approach (DCF)	Market Yield		9.55%	15.05%		11.90%
		40,115	Recent Arms-length transaction	Recent Arms-length transaction		N/A	N/A		N/A
		21,360	Income Approach (DCF)	Discount Rate		14.50%	18.00%		16.66%
		17,699	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x	6.00x		5.75x
		10,411	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		4.50x	5.50x		5.25x
		1,378	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M	2.00x / $205.8M		2.00x / $205.8M
Equity Interests in LLCs		6,029	Market Approach (Guideline Comparable)	Investment Portfolio Multiple		1.10x	1.10x		1.10x
		9,617	Recent Arms-length transaction	Recent Arms-length transaction		N/A	N/A		N/A
		331	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		7.50x / 7.50x	8.50x / 8.50x		8.50x / 8.50x
		2,919	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		6.00x / 5.50x	7.00x / 6.50x		6.50x / 6.00x
		-	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple/Volatility		3.50x / 4.00x / 40.40%	4.00x / 4.00x / 72.40%		3.75x / 3.75x / 70.00%
		622	Income Approach (DCF)	Market Yield		12.23%	12.23%		12.23%
		15,136	Income Approach (DCF)	Discount Rate		14.50%	18.00%		18.00%
		15,000	Income Approach (DCF)	Discount Rate		10.00%	10.00%		10.00%
		-	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		4.50x / 4.50x	5.50x / 5.50x		5.25x / 5.25x
Equity Securities		4,700	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		4.50x	5.50x		4.50x
		-	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x	6.00x		5.75x
		5,727	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		4.00x / 3.50x	8.50x / 8.00x		5.66x / 5.23x
		-	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M	2.00x / $205.8M		2.00x / $205.8M
		10,657	Recent Arms-length transaction	Recent Arms-length transaction		N/A	N/A		N/A
Equity Method Investments		11,539	Net Asset Value of Underlying Fund	N/A		N/A	N/A		N/A
	$	746,494

	Fair Value as of
	March 31, 2015				Range				Weighted
Liability	(unaudited)		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Secured borrowings of Consolidated Funds	$	311	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		7.50x / 7.00x		8.50x / 8.00x		8.50x / 8.00x
		5,000	Income Approach (DCF)	Discount Rate		10.00%		10.00%		10.00%
		6,637	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		119,857	Income Approach (DCF)	Market Yield		9.63%		13.50%		11.31%
		4,988	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
	$	136,793

F-21

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

	Fair Value as of				Range				Weighted
Assets	December 31, 2014		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Senior Secured Loans and Notes	$	193	Negotiated Sales Proceeds	Expected Sales Proceeds	$	-	$	4,000,000	$	1,932,000
		4,009	Sales Comparison Approach	Price per Acre	$	8,000	$	41,000	$	24,500
				Price per Room	$	43,200	$	71,429	$	57,315
				Price per Unit	$	155,734	$	228,009	$	191,872
		403	Market Approach (Guideline Comparable)	LTM Revenue Multiple		0.60x		0.60x		0.45x
		346	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		3.10x		3.62x		3.60x
		1,167	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		3.10x		5.50x		4.30x
				LTM Revenue Multiple		0.50x		0.65x		0.58x
		1,989	Income Approach (DCF)	Discount Rate		12.0%		35.0%		20.5%
		144	Liquidation Approach	Asset Coverage	$	144,531	$	144,531	$	144,531
		566,010	Income approach	Market Yield		10.00%		15.21%		12.45%
		37,600	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		21,005	Income approach	Discount Rate		14.00%		18.00%		16.45%
		15,859	Market Approach (Guideline Comparable)	EBITDA Multiple		5.50x		6.00x		5.75x
		5,095	Enterprise Valuation Analysis	EBITDA Multiple		6.00x		7.00x		7.00x
		8,910	Market Approach (Guideline Comparable)	Rev Multiple / EBITDA Multiple		0.43x / 4.09x		0.43x / 4.09x		0.43x / 4.09x
		1,378	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
Equity Interests in LLCs		1,370	Market Approach	Unsolicited Offer Price	$	12,000,000	$	12,000,000	$	12,000,000
		5,623	Market Approach (Guideline Comparable)	Investment Portfolio Multiple		1.10x		1.10x		1.10x
		3,099	Market Approach (Guideline Comparable)	EBITDA Multiple		6.25x		8.50x		6.70x
		2,595	Market Approach (Guideline Comparable)	EBITDA Multiple / Volatility		3.75x / 50%		3.75x / 50%		3.75x / 50%
		581	Income Approach (DCF)	Market Yield		13.14%		13.14%		13.14%
		14,516	Income Approach (DCF)	Discount Rate		14.00%		18.00%		18.00%
		15,000	Income Approach (DCF)	Capitalization Rate		8.70%		8.70%		8.70%
		6,000	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
Equity Securities		7,936	Market Approach (Guideline Comparable)	EBITDA Multiple		4.00x		8.31x		5.20x
		10,364	Option Model	Tangible Book Value Multiple / Volatility		1.30x / 41.5%		1.30x / 41.5%		1.30x / 41.5%
		105	Option Model	Volatility		90.80%		90.80%		90.80%
		194	Market Approach (Guideline Comparable)	LTM EBITDARD Multiple		10.40x		11.10x		10.75x
				NTM EBITDARD Multiple		9.50x		10.80x		10.15x
		261	Market Approach (Guideline Comparable)	Revenue Multiple		0.30x		0.60x		0.45x
		417	Income Approach (DCF)	Discount Rate		13.0%		18.0%		16.4%
		545	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		5.00x		5.50x		5.25x
				LTM Revenue Multiple		0.50x		0.65x		0.58x
Tangible Assets		688	Market Approach	Appraisal of assets	$	500,000	$	2,200,000	$	1,350,000
		1,377	Sales Comparison Approach	Price per SQM		1,146		1,274		1,210
Equity Method Investment		9,901	Net Asset Value of Underlying Fund	N/A		N/A		N/A		N/A
	$	744,680

F-22

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

	Fair Value as of				Range				Weighted
Liability	December 31, 2014		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Secured borrowings of Consolidated Funds	$	130,157	Income approach	Market Yield		10.00%		15.21%		12.45%
		5,947	Market Approach (Guideline Comparable)	EBITDA Multiple		5.50x		6.00x		5.75x
		5,000	Income Approach (DCF)	Capitalization Rate		8.70%		8.70%		8.70%
		15	Market Approach (Guideline Comparable)	EBITDA Multiple		4.00x		8.31x		5.20x
	$	141,119

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in senior secured loans include discount due to lack of marketability, discount rate, market yield, earnings before interest, tax, depreciation and amortization (“EBITDA”) and revenue multiples, expected proceeds, and asset coverage. Significant increases or decreases in discount rates, market yields, EBITDA multiples in isolation would result in a significantly higher or lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in equity interests in LLCs include discount rates, long term growth rates, and portfolio multiples. Significant increases or decreases in discount rates, growth rates and portfolio multiples would result in lower or higher fair value measurements.

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in equity securities include revenue, EBITDA and revenue multiples, price per ton, expected proceeds, discount rates, and stock price valuation. Significant increases or decreases in these factors would result in a significantly higher or lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in tangible assets include price per ton, price per acre, price per room, price per unit appraisals and price per square foot. Significant increases or decreases in these factors would result in a significantly higher or lower fair value measurement.

F-23

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

5. OTHER ASSETS

The components of other assets are as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Other Assets of Medley LLC:
Property and equipment, net of accumulated depreciation of $1,343 and $1,232, respectively	$	1,363	$	1,367
Security deposits		1,218		1,218
Administrative fees receivable (Note 10)		1,652		1,500
Deferred tax assets		953		874
Deferred financing costs, net of accumulated amortization of $349 and $217, respectively		2,197		2,329
Due from affiliates (Note 10)		256		382
Prepaid expenses		468		627
Other receivables		977		933
Total other assets of Medley LLC		9,084		9,230
Other Assets of Consolidated Funds
Restricted cash		-		3,000
Deferred tax assets		207		340
Other receivables		1,133		341
Total other assets of Consolidated Funds		1,340		3,681
Total other assets	$	10,424	$	12,911

F-24

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

6. LOANS PAYABLE

The Company’s loans payable consist of the following:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Term loans under the Credit Suisse Term Loan Facility, net of unamortized discount of $948 and $1,006, respectively	$	94,052	$	93,994
Non-recourse promissory notes, net of unamortized discount of $2,370 and $2,500, respectively		8,880		9,063
Total loans payable	$	102,932	$	103,057

Credit Suisse Term Loan Facility

On August 14, 2014, the Company entered into a $110.0 million senior secured term loan credit facility (“Term Loan Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent thereunder, Credit Suisse Securities (USA) LLC, as bookrunner and lead arranger, and the lenders from time-to-time party thereto, which will mature on June 15, 2019. The proceeds from the term loans amounting to $108.9 million after a $1.1 million issuer discount, together with cash on hand, were used to: (i) pay off an existing loan with a different financial institution in the amount of $33.2 million, (ii) pay fees and expenses incurred in connection with this financing in the amount of $2.6 million, of which $2.4 million have been deferred, and (iii) pay a distribution to Medley LLC’s members in the amount of $74.5 million. In connection with this financing, the Company terminated its pre-existing credit agreement with City National Bank.

Borrowings under the Term Loan Facility bear interest, at the borrower’s option, at a rate equal to either a Eurodollar margin over an adjusted LIBOR (with a “floor” of 1.0%) or a base rate margin over an adjusted base rate determined by reference to the highest of (i) the term loan administrative agent’s prime rate; (ii) the federal funds effective rate in effect on such day plus 0.5%; and (iii) an adjusted LIBOR plus 1.0%. The applicable margins for the Term Loan Facility are 5.5%, in the case of Eurodollar loans and 4.5%, in the case of adjusted base rate loans. Outstanding borrowings under the Term Loan Facility bore interest at a rate of 6.5% as of March 31, 2015 and December 31, 2014. In addition, the Term Loan Facility also provides the borrower with the option to raise incremental credit facilities (including an uncommitted incremental facility that provides the borrower the option to increase the amount available under the Term Loan Credit Facility by an aggregate of up to $15.0 million, subject to additional increases, provided that the net leverage ratio as of the last day of any four-fiscal quarter period, commencing with the four-fiscal quarter period ending December 31, 2014, shall not exceed 2.0 to 1.0). Borrowings are collateralized by substantially all of the equity interests in Medley LLC and its wholly owned subsidiaries.

The Term Loan Facility requires principal repayments in quarterly installments equal to $1.4 million (which amount may be adjusted as a result of prepayment or incremental term loans drawn) commencing on March 31, 2015, with the remaining amount payable at maturity. The Company can also make voluntary repayments, without penalty, at any time prior to August 14, 2016, not to exceed $33.0 million in the aggregate. As of March 31, 2015 and December 31, 2014, outstanding borrowings under this facility was $94.1 million and $94.0 million, respectively, which is reflected net of unamortized discount of $0.9 million and $1.0 million, respectively. The discount under the term loans is being accreted, using the effective interest method, over the term of the notes. Total interest expense under this Term Loan Facility, including accretion of the note discount, was $1.6 million for the three months ended March 31, 2015. The fair value of the outstanding balance of Term Loan Facility approximated its par value as of March 31, 2015.

 In October 2014, the Company voluntarily prepaid $15.0 million of the outstanding term loans under this facility using a portion of the proceeds received from its initial public offering. The $15.0 million prepayment is being applied against the upcoming quarterly installments that would have been due commencing on March 31, 2015.

F-25

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The Term Loan Facility also contains a financial covenant that requires the Company to maintain a Maximum Net Leverage Ratio commencing with the quarter ending on December 31, 2014 of not greater than 3.5 to 1.0, with which the Company is compliant. This ratio is calculated on a trailing twelve months basis and is the ratio of Total Net Debt, as defined, to Core EBITDA, as defined, and is calculated using the Company’s standalone financial results and includes the adjustments made to calculate Core EBITDA (Note 14). Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the Term Loan Facility. The Term Loan Facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. There were no events of default under the Term Loan Facility as of March 31, 2015. 

CNB Credit Agreement

On August 14, 2014, the Company entered into a $15.0 million senior secured revolving credit facility with City National Bank (the “Revolving Credit Facility”). The Company intends to use any proceeds of borrowings under the Revolving Credit Facility for general corporate purposes, including funding of its working capital needs. Borrowings under the Revolving Credit Facility bear interest at the option of the Company, either (i) at an Alternate Base Rate, as defined, plus an applicable margin not to exceed 3.25% or (ii) at an Adjusted LIBOR plus an applicable margin not to exceed 4.0%. As of and during the period ended March 31, 2015, there were no amounts drawn under the Revolving Credit Facility.

The Revolving Credit Facility also contains a financial covenant that requires the Company to maintain a Maximum Net Leverage Ratio commencing with the quarter ending on December 31, 2014 of not greater than 3.5 to 1.0, with which the Company is compliant. This ratio is calculated on a trailing twelve months basis and is the ratio of Total Net Debt, as defined, to Core EBITDA, as defined, and is calculated using the Company’s standalone financial results and includes the adjustments made to calculate Core EBITDA (Note 14). Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the Revolving Credit Facility. The Revolving Credit Facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. There were no events of default under the Revolving Credit Facility as of March 31, 2015. 

Non-Recourse Promissory Notes 

In April 2012, the Company borrowed $10.0 million under two non-recourse promissory notes. Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations. Interest on the notes is paid quarterly and is equal to the dividends received by the Company related to the pledged shares. The Company may prepay the notes in whole or in part at any time without penalty and the lenders may call the notes if certain conditions are met. The notes are scheduled to mature in March 2019. The proceeds from the notes were recorded net of issuance costs of $3.8 million and are being accreted, using the effective interest method, over the term of the non-recourse promissory notes. Total interest expense under these non-recourse promissory notes, including accretion of the note discount, was $0.3 million and $0.4 million for the three months ended March 31, 2015 and 2014, respectively. The fair value of the outstanding balance of the notes was $10.3 million as of March 31, 2015 and December 31, 2014.

In March 2014, the Company issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carries no interest, has quarterly amortization payments of $312,500, and matures in March 2016. As of March 31, 2015 and December 31, 2014, the balance under this note was $1.3 million and $1.6 million, respectively.

Contractual Maturities of Loans Payable

As of March 31, 2015, future principal payments due under the loans payable are as follows (in thousands): 

Remaining 2015	$	937
2016		312
2017		2,875
2018		5,500
2019		96,626
	$	106,250

F-26

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

7. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES

The components of accounts payable, accrued expenses and other liabilities are as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Accounts payable, accrued expenses and other liabilities of Medley LLC:
Accrued compensation and benefits	$	2,841	$	8,575
Due to affiliates (Note 10)		4,120		6,998
Revenue share payable (Note 9)		6,744		6,669
Dividends payable		1,366		1,423
Income taxes payable		742		741
Professional fees		499		545
Deferred rent		427		474
Deferred tax liabilities		517		245
Accounts payable and accrued expenses		2,067		1,913
Total accounts payable, accrued expenses and other liabilities of Medley LLC		19,323		27,583
Accounts payable, accrued expenses and other liabilities of Consolidated Funds		13,724		5,767
Total accounts payable, accrued expenses and other liabilities	$	33,047	$	33,350

As of March 31, 2015 and December 31, 2014, dividends payable was comprised of $1.2 million due to the Company’s Class A common stockholders and $0.2 million payable to the Company’s restricted stock unit holders.  Dividends payable to Class A common holders represents a $0.20 per share of Class A common stock dividend that was declared on March 29, 2015 and November 10, 2014, respectively, to shareholders of record as of the close of business on April 23, 2015 and December 17, 2014, respectively, but not paid until May 6, 2015 and January 5, 2015, respectively.  As the restricted stock units are participating securities, the Company calculated the amount due to the holders of the restricted stock units based on the $0.20 per share of Class A common stock dividend declaration amount and the number of restricted stock units expected to vest.

F-27

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

8. SECURED BORROWINGS OF CONSOLIDATED FUNDS

The Consolidated Funds have loan participations which do not meet the definition of a “participating interest”, as defined in ASC 860, Transfers and Servicing. As such, these loan participations remain on the Company’s condensed consolidated balance sheets and are recorded at fair value, as secured borrowings of Consolidated Funds.

As of March 31, 2015, secured borrowings of Consolidated Funds at cost and fair value totaled $137.4 million and $136.8 million, respectively. The fair value of the investments that are associated with these secured borrowings was $136.8 million. During the three months ended March 31, 2015, the Consolidated Funds received net repayments on secured borrowings of $4.6 million. During the three months ended March 31, 2014, the Consolidated Funds received net proceeds from secured borrowings of $11.8 million.

As of December 31, 2014, secured borrowings of Consolidated Funds at cost and fair value totaled $143.0 million and $141.1 million, respectively. The fair value of the investments that are associated with these secured borrowings was $141.1 million.

For the three months ended March 31, 2015 and 2014, the Company recorded interest expense related to the secured borrowings of the Consolidated Funds of $3.8 million and $1.3 million, respectively.

Future minimum repayments under the secured borrowings of the Consolidated Funds are $2.0 million, $4.0 million, $8.7 million, $36.9 million and $81.0 million for the years ended December 31, 2015, 2016, 2017, 2018 and 2019, respectively, and $5.7 million thereafter.

9. COMMITMENTS AND CONTINGENCIES

Operating Leases

Medley leases office space in New York City and San Francisco under non-cancelable lease agreements that expire at various times through December 2020. Rent expense was $0.7 million and $0.6 million for the three months ended March 31, 2015 and 2014, respectively.

Future minimum rental payments under non-cancelable leases are as follows (in thousands):

Remaining 2015	$	1,831
2016		784
2017		452
2018		457
2019		463
Thereafter		469
Total future minimum lease payments	$	4,456

Capital Commitments to Funds

As of March 31, 2015 and December 31, 2014, the Company had aggregate unfunded commitments of $0.9 million and $1.1 million, respectively, to certain long-dated private funds.

Other Commitments

In April 2012, the Company entered into an obligation to pay a fixed percentage of management and incentive fees received by the Company from SIC. The agreement was entered into contemporaneously with the $10 million non-recourse promissory notes that were issued to the same parties (Note 6). The two transactions were deemed to be related freestanding contracts and the $10 million of loan proceeds were allocated to the contracts using their relative fair values. At inception, the Company recognized an obligation of $4.4 million representing the present value of the future cash flows expected to be paid under this agreement. As of March 31, 2015 and December 31, 2014, the obligation amounted to $6.7 million and is recorded as revenue share payable, a component of accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets. The change in the estimated cash flows for this obligation is recorded in other income (expense) on the condensed consolidated statements of operations.

F-28

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

10. RELATED PARTY TRANSACTIONS

Substantially all of Medley’s revenue is earned through agreements with its consolidated and non-consolidated funds for which it collects management and performance fees for providing investment and management services.

In April 2012, Medley entered into an investment advisory agreement (“IAA”) with SIC. Pursuant to the terms of the IAA, Medley agreed to bear all organization and offering expenses (“O&O Expenses”) related to SIC until the earlier of the end of the SIC offering period or such time that SIC has raised $300 million in gross proceeds in connection with the sale of shares of its common stock. Effective June 2, 2014, Medley was no longer liable for these expenses as SIC had reached the $300 million in gross proceeds threshold. The SIC IAA also requires SIC to reimburse Medley for O&O Expenses incurred by Medley in an amount equal to 1.25% of the aggregate gross proceeds in connection with the sale of shares of its common stock until the earlier of the end of the SIC offering period, which is currently scheduled to terminate in April 2016, or Medley has been repaid in full. As of March 31, 2015 and December 31, 2014, there were no reimbursements that were due to Medley.

Medley did not incur O&O Expenses or receive reimbursements of O&O during the three months ended March 31, 2015. During the three months ended March 31, 2014, Medley incurred O&O Expenses of $0.7 million which were recorded within general, administrative, and other expenses in the condensed consolidated statements of operations. Reimbursements of O&O are recorded in other revenues and fees on the condensed consolidated statements of operations and were $0.9 million during the three months ended March 31, 2014.

In June 2012, Medley entered into an Expense Support and Reimbursement Agreement (“ESA”) with SIC. Under the ESA, until June 30, 2015, unless extended, Medley will pay up to 100% of SIC’s operating expenses in order for SIC to achieve a reasonable level of expenses relative to its investment income. Pursuant to the ESA, SIC has a conditional obligation to reimburse Medley for any amounts they funded under the ESA if, within three years of the date on which Medley funded such amounts, SIC meets certain financial levels. For the three months ended March 31, 2015 and 2014, Medley recorded $2.2 million and $1.3 million, respectively, for ESA expenses under this agreement. The ESA expenses are recorded within general, administrative, and other expense in the condensed consolidated statements of operations. Medley recorded a liability of $4.1 million and $5.2 million as of March 31, 2015 and December 31, 2014, respectively, for ESA expenses related to this agreement. These amounts are included in accounts payable, accrued expenses and other liabilities as due to affiliates on the condensed consolidated balance sheets.

In January 2011, Medley entered into an administration agreement with MCC (the “MCC Admin Agreement”), whereby Medley agreed to provide administrative services necessary for the operations of MCC. MCC agreed to pay Medley for the costs and expenses incurred in providing such administrative services, including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of MCC’s officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the condensed consolidated statement of operations. During the three months ended March 31, 2015 and 2014, the Company recorded $1.1 million and $0.8 million, respectively, of revenue related to the MCC Admin Agreement. As of March 31, 2015 and December 31, 2014, the Company had $1.1 million of administrative fees receivable under the MCC Admin Agreement, which are included in other assets on the condensed consolidated balance sheets.

In April 2012, Medley entered into an administration agreement with SIC (the “SIC Admin Agreement”), whereby Medley agreed to provide administrative services necessary for the operations of SIC. SIC agreed to pay Medley for the costs and expenses incurred in providing such administrative services including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of SIC’s officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the condensed consolidated statement of operations. For the three months ended March 31, 2015 and 2014, the Company recorded $0.6 million and $0.2 million, respectively, of revenue related to the SIC Admin Agreement. As of March 31, 2015 and December 31, 2014, the Company had $0.6 million and $0.4 million, respectively, of administrative fees receivable under the SIC Admin Agreement, which are included in other assets on the condensed consolidated balance sheets. 

F-29

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

Promissory Note

In March 2014, the Company issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carries no interest, has quarterly amortization payments of $312,500, and matures in March 2016.

11. EARNINGS PER CLASS A SHARE

The table below presents basic and diluted net income per Class A share using the two-class method for the three months ended March 31, 2015:

	For the Three Months Ended
	March 31, 2015
	(unaudited)
	(Amounts in thousands,
	except per share amounts)
Basic and diluted net income per share:
Numerator
Net income attributable to Medley Management Inc.	$	1,274
Less: Dividends declared on Class A common stock (1)		(1,200	)
Less: Dividends payable to participating securities (2)		(166	)
Less: Overdistributed net income available to participating securities (2)		15
Undistributed net income available to class A common stockholders	$	(77	)
Denominator
Weighted average shares of Class A shares outstanding, including participating securities		7,142,604
Less: weighted average of participating securities (2)		(1,142,604	)
Weighted average Class A common stock outstanding: Basic		6,000,000
Weighted average shares of Class A shares outstanding: Diluted		6,000,000
Add: dilutive effects of conversion of LLC Units (3)		-
Weighted average dilutive shares outstanding		6,000,000
Net income per Class A share: Basic and Diluted
Distributable earnings	$	0.20
Undistributed income		(0.01	)
Net income per Class A share	$	0.19

⁽¹⁾ The Company declared a $0.20 per share dividend on Class A common stock on March 29, 2015.

⁽²⁾ Participating securities relate to the Company’s grant of restricted stock units in connection with its IPO, adjusted for actual forfeitures and additional grants during the period.

⁽³⁾ Excludes the assumed conversion of 23,333,333 LLC units to Class A shares as the impact would be antidilutive.

F-30

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

12. INCOME TAXES

Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s condensed consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. As of March 31, 2015 and December 31, 2014, the Company had total deferred tax assets of $1.2 million which consists primarily of temporary differences relating to certain accrued expenses and, as of March 31, 2015, stock compensation and a tax benefit relating to tax goodwill. Total deferred tax liabilities were $0.5 million and $0.2 million as of March 31, 2015 and December 31, 2014, respectively, which consists primarily of temporary differences relating to accrued fee income and accumulated net unrealized losses. The tax provision for deferred income taxes results from temporary differences arising principally from certain accrued expenses, deferred rent, fee income accruals, and depreciation.

The Company’s effective tax rate was 7.2% and 5.0% for the three months ended March 31, 2015 and 2014, respectively. The quarterly provision for income taxes is determined based on the Company’s estimated full year effective tax rate adjusted by the amount of tax attributable to infrequent or unusual items that are separately recognized on a discrete basis in the income tax provision in the quarter in which they occur. The Company’s effective tax rate includes a rate benefit attributable to the fact that the Company’s subsidiaries operate as limited liability companies, which are not subject to federal or state income tax. Accordingly, a portion of the Company’s earnings attributable to the non-controlling interest are not subject to corporate level taxes. For the three months ended March 31, 2015, the Company was only subject to federal and state income taxes on its pre-tax income attributable to Medley Management Inc. The Company was not subject to any federal and state income taxes during the three months ended March 31, 2014.

Interest expense and penalties related to income tax matters are recognized as a component of the provision for income taxes. There were no such amounts incurred during the three months ended March 31, 2015 and 2014. As of March 31, 2015 and December 31, 2014 and during the three months ended March 31, 2015 and 2014, there were no uncertain tax positions taken that were not more likely than not to be sustained. Certain subsidiaries of the Company are no longer subject to tax examinations by taxing authorities for tax years prior to 2010 and, presently, have no open examinations for tax years before 2014.

13. COMPENSATION EXPENSE

Compensation generally includes salaries, bonuses, and profit sharing awards. Bonuses and profit sharing awards are accrued over the service period to which they relate. Prior to the Company’s Reorganization and IPO, all payments made to the Medley LLC’s members were accounted for as distributions on the equity held by such members rather than as employee compensation. Subsequent to the Company’s Reorganization and IPO, guaranteed payments paid to Medley LLC’s members who are senior professionals will be accounted for as employee compensation.

Performance Fee Compensation

In October 2010, the Company granted shares of vested profits interests in certain subsidiaries to selected employees. These awards are viewed as a profit-sharing arrangement and are accounted for under ASC 710, which requires compensation expense to be recognized over the vesting period, which is usually the period over which service is provided. The shares were vested at grant date, subject to a divestiture percentage based on percentage of service completed from the award grant date to the employee’s termination date. The Company adjusts the related liability quarterly based on changes in estimated cash flows for the profit interests.

In January 2014, the Company granted additional shares of profit interests in certain subsidiaries to selected employees. The shares were fully vested at grant date and were not subject to a divestiture percentage.

In February 2015, the Company granted incentive cash bonus awards to selected employees.  These awards entitle employees to receive cash compensation based on distributed performance fees received by the Company from certain institutional funds. Eligibility to receive payments pursuant to these incentive awards is based on continued employment and ceases automatically upon termination of employment.  Performance compensation expense is recorded based on the fair value of the incentive awards at the date of grant and is recognized on a straight-line basis over the expected requisite service period.  The performance compensation liability is subject to re-measurement at the end of each reporting period and any changes in the liability are recognized in the then current reporting period.

F-31

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

For the three months ended March 31, 2015 and 2014, performance compensation was $0.1 million and $1.5 million, respectively. As of March 31, 2015 and December 31, 2014, the total performance fee compensation payable for these awards was $11.4 million and $11.8 million, respectively. 

Retirement Plan

The Company sponsors a defined-contribution 401(k) retirement plan that covers all employees. Employees are eligible to participate in the plan immediately, and participants are 100% vested from the date of eligibility. The Company makes contributions to the Plan of 3% of an employee’s eligible wages, up to a maximum limit as determined by the Internal Revenue Service. The Company also pays all administrative fees related to the plan. For the three months ended March 31, 2015 and 2014, the Company’s accrued contributions to the plan were $0.1 million and $0.2 million, respectively.

Stock-Based Compensation

In connection with the IPO, the Company adopted the Medley Management Inc. 2014 Omnibus Incentive Plan (the “Plan”). The purpose of the Plan is to provide a means through which the Company may attract and retain key personnel and to provide a means whereby directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of the Company can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Medley Management Inc.’s class A common stock or Medley LLC’s unit interests, thereby strengthening their commitment to the welfare of the Company and aligning their interests with those of the Company’s stockholders. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), stock bonuses, other stock-based awards and cash awards. The maximum aggregate number of awards available to be granted under the plan, as amended, is 4,500,000, of which all or any portion may be issued as shares of Medley Management Inc.’s Class A common stock or Medley LLC’s unit interests. Shares of Class A common stock issued by the Company in settlement of awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the market or by private purchase or a combination of the foregoing. As of March 31, 2015 and December 31, 2014, there were 3.4 million and 3.3 million awards, respectively, available to be granted under the Plan.

The fair value of the RSUs granted in 2014 was determined to be the fair value of the underlying shares on the date of grant and aggregated to $16.0 million. This total fair value, which was adjusted for anticipated forfeitures of up to 8% per annum, will be charged to compensation expense on a straight-line basis over the vesting period, which is generally up to five years. For the three months ended March 31, 2015, stock-based compensation was $0.8 million.

The following summarizes RSU activity for the three months ended March 31, 2015:

				Weighted
				Average Grant
	Number of RSUs			Date Fair Value
Balance at December 31, 2014		1,197,915		$	17.91
Granted		82,000			12.68
Forfeited		(168,000	)		18.00
Vested		-			-
Balance at March 31, 2015		1,111,915		$	17.51

As of March 31, 2015 there were approximately 920,000 RSUs outstanding net of estimated forfeitures, which are expected to vest. Unamortized compensation cost related to unvested RSUs at March 31, 2015 was $14.5 million and is expected to be recognized over a weighted average period of 4.5 years.

F-32

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

14. MARKET AND OTHER RISK FACTORS

Due to the nature of the Consolidated Funds’ investment strategy, their portfolio of investments has significant market and credit risk. As a result, the Company is subject to market and other risk factors, including, but not limited to the following:

Market Risk

The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions that are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Credit Risk

There are no restrictions on the credit quality of the investments the Company intends to make. Investments may be deemed by nationally recognized rating agencies to have substantial vulnerability to default in payment of interest and/or principal. Some investments may have low-quality ratings or be unrated. Lower rated and unrated investments have major risk exposure to adverse conditions and are considered to be predominantly speculative. Generally, such investments offer a higher return potential than higher rated investments, but involve greater volatility of price and greater risk of loss of income and principal.

In general, the ratings of nationally recognized rating organizations represent the opinions of agencies as to the quality of the securities they rate. Such ratings, however, are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of the relevant securities. It is also possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events. The Company may use these ratings as initial criteria for the selection of portfolio assets for the Company but is not required to utilize them.

Limited Liquidity of Investments

The Company intends to invest in investments that may not be readily marketable. Illiquid investments may trade at a discount from comparable, more liquid investments and, at times there may be no market at all for such investments. Subordinate investments may be less marketable, or in some instances illiquid, because of the absence of registration under federal securities laws, contractual restrictions on transfer, the small size of the market or the small size of the issue (relative to issues of comparable interests). As a result, the Company may encounter difficulty in selling its investments or may, if required to liquidate investments to satisfy redemption requests of its investors or debt service obligations, be compelled to sell such investments at less than fair value.

Counterparty Risk

Some of the markets in which the Company may affect its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight, unlike members of exchange-based markets. This exposes the Company to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the applicable contract (whether or not such dispute is bona fide) or because of a credit or liquidity problem, causing the Company to suffer loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Company has concentrated its transactions with a single or small group of counterparties.

Currency Risk

The Company may invest in financial instruments and enter into transactions denominated in currencies other than its functional currency. Although the Company may seek to hedge currency exposure through financial instruments, the Company may still be exposed to risks that the exchange rate of its currency relative to other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Company’s assets or liabilities denominated in currencies other than the functional currency.

F-33

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company may enter into derivative contracts to manage the risk associated with foreign currency exchange fluctuations on its non-U.S. dollar denominated holdings.

15. SEGMENT REPORTING

The Company’s business is currently comprised of only one reportable segment, the investment management segment, and substantially all Company operations are conducted through this segment. The investment management segment provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts. The Company conducts its investment management business in the United States, where substantially all of its revenues are generated.

In addition to analyzing the Company’s results on a GAAP basis, management also makes operating decisions and assesses business performance based on the financial and operating metrics and data that are presented without the consolidation of any funds. Core Net Income and Core EBITDA are income measures that are used by management to assess the performance of its business.

Core Net Income. Core Net Income is an income measure that is used by management to assess the performance of the business through the removal of non-core items, as well as other non-recurring expenses. It is calculated by adjusting standalone net income attributable to members of Medley to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs and stock-based compensation associated with RSUs that were granted to employees in connection with the Company’s IPO.

Core Earnings before interest, income taxes, depreciation and amortization (Core EBITDA). Core EBITDA is calculated as Core Net Income before interest expense, income taxes and depreciation. 

F-34

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The following presents the standalone financial results of the Company’s operating results for the three months ended March 31, 2015 and 2014:

	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands)
Revenues
Management fees	$	17,520		$	14,991
Performance fees		6,336			76
Other revenues and fees		1,624			2,013
Total revenues		25,480			17,080
Expenses
Compensation and benefits		7,221			3,759
Performance fee compensation		112			1,518
General, administrative and other expenses		4,507			4,229
Total expenses		11,840			9,506
Other income (expense)
Dividend income		222			222
Interest expense		(2,085	)		(633	)
Other expenses, net		(262	)		(1,192	)
Total other expense, net		(2,125	)		(1,603	)
Income before income taxes		11,515			5,971
Provision for income taxes		1,148			230
Net income		10,367			5,741
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290			(47	)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	$	9,077		$	5,788
Reimbursable fund startup expenses (1)		1,923			1,275
Severance expense (1)		121			6
IPO date award stock-based compensation (1)		646			-
Adjustment for pre-IPO guaranteed payments to members (1)(2)		-			(1,226	)
Core Net Income	$	11,767		$	5,843
Interest expense		2,085			633
Income taxes		1,499			230
Depreciation and amortization		111			92
Core EBITDA	$	15,462		$	6,798

⁽¹⁾ Presented net of income taxes.

⁽²⁾ Represents a pro forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO, these payments were recorded as distributions from member’s capital.

F-35

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables reconcile the Company’s segment results to its consolidated results of operations:

	For the Three Months Ended March 31, 2015
	(unaudited)
				Consolidation
				Adjustments
				and
				Reconciling			Consolidated
	Standalone			Items			Results
	(Amounts in thousands)
Revenues	$	25,480		$	(6,450	)(1)	$	19,030
Expenses		11,840			793	(2)		12,633
Other income (expense), net		(2,125	)		19,360	(3)		17,235
Provision for income taxes		1,148			542	(4)		1,690
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290			-			1,290
Net income attributable to non-controlling interests in Consolidated Funds		-			11,575			11,575
Net income attributable to non-controlling interests in Medley LLC		7,803			-			7,803
Net income attributable to Medley Management Inc.		1,274			-			1,274
Add: Net income attributable to non-controlling interests in Medley LLC		7,803			-			7,803
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		9,077			-			9,077
Reimbursable fund startup expenses		1,923			-			1,923
Severance expenses		121			-			121
IPO date award stock-based compensation		646			-			646
Core Net Income	$	11,767		$	-		$	11,767

	For the Three Months Ended March 31, 2014
	(unaudited)
				Consolidation
				Adjustments
				and
				Reconciling			Consolidated
	Standalone			Items			Results
	(Amounts in thousands)
Revenues	$	17,080		$	(1,084	)(1)	$	15,996
Expenses		9,506			320	(2)		9,826
Other income (expense)		(1,603	)		5,590	(3)		3,987
Provision for income taxes		230			274	(4)		504
Net income attributable to non-controlling interests in consolidated subsidiaries		(47	)					(47	)
Net income attributable to non-controlling interests in Consolidated Funds		-			3,912			3,912
Net income attributable to non-controlling interests in Medley LLC		5,788			-			5,788
Net income attributed to Medley Management Inc.		-			-			-
Add: Net income attributable to non-controlling interests in Medley LLC		5,788			-			5,788
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		5,788			-			5,788
Reimbursable fund startup expenses		1,275			-			1,275
Severance expenses		6			-			6
Adjustment for pre-IPO guaranteed payments to members		(1,226	)		-			(1,226	)
Core Net Income	$	5,843		$	-		$	5,843

F-36

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

(1) Adjustments and reconciling items to revenues represent management and performance fees earned from Consolidated Funds which were eliminated in consolidation. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015			2014
	(Amounts in thousands)
Management fees from Consolidated Funds eliminated in consolidation	$	(1,326	)	$	(1,763	)
Performance fees eliminated in consolidation		(5,124	)		679
Total consolidated adjustments and reconciling items	$	(6,450	)	$	(1,084	)

(2) Adjustments and reconciling items to expenses represent expenses from Consolidated Funds which were eliminated in consolidation. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Consolidated Funds Expenses	$	793	$	320
Total consolidated adjustments and reconciling items	$	793	$	320

(3) Adjustments and reconciling items to other income primarily represent net interest income and net investment income from Consolidated Funds. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows: 

	2015			2014
	(Amounts in thousands)
Interest and other income of Consolidated Funds	$	18,727		$	13,421
Interest expense on secured borrowings of Consolidated Funds		(3,804	)		(1,312	)
Net realized gain (loss) on investment of Consolidated Funds		952			1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		4,022			(7,813	)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		(416	)		(324	)
Elimination of equity income (loss) from Consolidated Funds		(121	)		261
Total consolidated adjustments and reconciling items	$	19,360		$	5,590

(4) Adjustments and reconciling items to the provision for income taxes represent income taxes from Consolidated Funds. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Consolidated Funds provision for income taxes	$	542	$	274
Total consolidated adjustments and reconciling items	$	542	$	274

F-37

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

16. CONSOLIDATING SCHEDULES

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company’s financial condition as of March 31, 2015 and December 31, 2014, and the Company’s results from operations for the three months ended March 31, 2015 and 2014. The financial condition and results of operations for Medley are presented in the tables below under the “Standalone” column.

	For the Three Months Ended March 31, 2015
	(unaudited)
				Consolidated
	Standalone			Funds			Eliminations			Consolidated
	(Amounts in thousands)
Revenues:
Management fees	$	17,520		$	-		$	(1,326	)	$	16,194
Performance fees		6,336			-			(5,124	)		1,212
Other revenues and fees		1,624			-			-			1,624
Total revenues		25,480			-			(6,450	)		19,030
Expenses:
Compensation and benefits		7,221			-			-			7,221
Performance fee compensation		112			-			-			112
Consolidated Funds expenses		-			2,119			(1,326	)		793
General, administrative and other expenses		4,507			-			-			4,507
Total expenses		11,840			2,119			(1,326	)		12,633
Other income (expense):
Dividend income		222			-			-			222
Interest expense		(2,085	)		-			-			(2,085	)
Other income (expenses), net		(262	)		-			(121	)		(383	)
Interest and other income of Consolidated Funds		-			18,727			-			18,727
Interest expense of Consolidated Funds		-			(3,804	)		-			(3,804	)
Net realized gain (loss) on investments of Consolidated Funds		-			952			-			952
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		-			4,022			-			4,022
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		-			(416	)		-			(416	)
Total other income (expense), net		(2,125	)		19,481			(121	)		17,235
Income before income taxes		11,515			17,362			(5,245	)		23,632
Provision for income taxes		1,148			542			-			1,690
Net income		10,367			16,820			(5,245	)		21,942
Net income attributable to non-controlling interests in Consolidated Funds		-			-			11,575			11,575
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290			-			-			1,290
Net income attributable to non-controlling interests in Medley LLC		7,803			-			-			7,803
Net income attributable to Medley Management Inc.	$	1,274		$	16,820		$	(16,820	)	$	1,274

F-38

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

	As of March 31, 2015
	(unaudited)
				Consolidated
	Standalone			Funds		Eliminations			Consolidated
	(Amounts in thousands)
Assets
Cash and cash equivalents	$	71,834		$	-	$	-		$	71,834
Investments, at fair value		27,588			-		(16,049	)		11,539
Management fees receivable		15,024			-		-			15,024
Performance fees receivable		6,785			-		-			6,785
Other assets		9,338			-		(254	)		9,084
Assets of Consolidated Funds:
Cash and cash equivalents		-			77,725		-			77,725
Investments, at fair value		-			735,623		-			735,623
Interest and dividends receivable		-			6,415		-			6,415
Other assets		-			2,040		(700	)		1,340
Total assets	$	130,569		$	821,803	$	(17,003	)	$	935,369
Liabilities and equity
Loans payable	$	102,932		$	-	$	-		$	102,932
Accounts payable, accrued expenses and other liabilities		20,023			-		(700	)		19,323
Performance fee compensation payable		11,377			-		-			11,377
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		-			13,978		(254	)		13,724
Secured borrowings		-			136,806		-			136,806
Total liabilities		134,332			150,784		(954	)		284,162
Equity
Class A Common Stock		60			-		-			60
Class B Common Stock		-			-		-			-
Capital deficit		(1,606	)		-		-			(1,606	)
Retained earnings		180			-		-			180
Total stockholders' deficit, Medley Management Inc.		(1,366	)		-		-			(1,366	)
Non-controlling interests in Consolidated Funds		-			-		654,970			654,970
Non-controlling interests in consolidated subsidiaries		2,816			-		-			2,816
Non-controlling interests in Medley LLC		(5,213	)		-		-			(5,213	)
Members' equity of consolidated funds		-			671,019		(671,019	)		-
Total (deficit) equity		(3,763	)		671,019		(16,049	)		651,207
Total liabilities and equity	$	130,569		$	821,803	$	(17,003	)	$	935,369

F-39

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

	For the Three Months Ended March 31, 2014
	(unaudited)
				Consolidated
	Standalone			Funds			Eliminations			Consolidated
	(Amounts in thousands)
Revenues:
Management fees	$	14,991		$	-		$	(1,763	)	$	13,228
Performance fees		76			-			679			755
Other revenues and fees		2,013			-			-			2,013
Total revenues		17,080			-			(1,084	)		15,996
Expenses:
Compensation and benefits		3,759			-			-			3,759
Performance fee compensation		1,518			-			-			1,518
Consolidated Funds expenses		-			2,083			(1,763	)		320
General, administrative and other expenses		4,229			-			-			4,229
Total expenses		9,506			2,083			(1,763	)		9,826
Other income (expense):
Dividend income		222			-			-			222
Interest expense		(633	)		-			-			(633	)
Other income (expenses), net		(1,192	)		-			261			(931	)
Interest and other income of Consolidated Funds		-			13,421			-			13,421
Interest expense of Consolidated Funds		-			(1,312	)		-			(1,312	)
Net realized gain (loss) on investments of Consolidated Funds		-			1,357			-			1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		-			(7,813	)		-			(7,813	)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		-			(324	)		-			(324	)
Total other income (expense), net		(1,603	)		5,329			261			3,987
Income before income taxes		5,971			3,246			940			10,157
Provision for income taxes		230			274			-			504
Net income		5,741			2,972			940			9,653
Net income attributable to non-controlling interests in Consolidated Funds		-			-			3,912			3,912
Net income attributable to non-controlling interests in consolidated subsidiaries		(47	)		-			-			(47	)
Net income attributable to Medley LLC	$	5,788		$	2,972		$	(2,972	)	$	5,788

F-40

Medley Management Inc.

(Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Notes to Condensed Consolidated Financial Statements (unaudited)

	As of December 31, 2014
				Consolidated
	Standalone			Funds		Eliminations			Consolidated
	(Amounts in thousands)
Assets
Cash and cash equivalents	$	87,206		$	-	$	-		$	87,206
Investments, at fair value		22,143			-		(12,242	)		9,901
Management fees receivable		15,173			-		-			15,173
Performance fees receivable		5,573			-		-			5,573
Other assets		9,230			-		-			9,230
Assets of Consolidated Funds:
Cash and cash equivalents		-			38,111		-			38,111
Investments, at fair value		-			734,870		-			734,870
Interest and dividends receivable		-			6,654		-			6,654
Other assets		-			5,057		(1,376	)		3,681
Total assets	$	139,325		$	784,692	$	(13,618	)	$	910,399
Liabilities and equity
Loans payable	$	103,057		$	-	$	-		$	103,057
Accounts payable, accrued expenses and other liabilities		28,959			-		(1,376	)		27,583
Performance fee compensation payable		11,807			-		-			11,807
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		-			5,767		-			5,767
Secured borrowings		-			141,135		-			141,135
Total liabilities		143,823			146,902		(1,376	)		289,349
Equity
Class A Common Stock		60			-		-			60
Class B Common Stock		-			-		-			-
Capital deficit		(2,384	)		-		-			(2,384	)
Retained earnings		272			-		-			272
Total stockholders' deficit, Medley Management Inc.		(2,052	)		-		-			(2,052	)
Non-controlling interests in Consolidated Funds		-			-		625,548			625,548
Non-controlling interests in consolidated subsidiaries		1,526			-		-			1,526
Non-controlling interests in Medley LLC		(3,972	)		-		-			(3,972	)
Members' equity of consolidated funds		-			637,790		(637,790	)		-
Total (deficit) equity		(4,498	)		637,790		(12,242	)		621,050
Total liabilities and equity	$	139,325		$	784,692	$	(13,618	)	$	910,399

F-41

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

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this form 10-Q and our annual financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K.

Overview

We are an asset management firm offering yield solutions to retail and institutional investors. We focus on credit-related investment strategies, primarily originating senior secured loans to private middle market companies in the United States that have revenues between $50 million and $1 billion. We generally hold these loans to maturity. Our national direct origination franchise, with over 80 people, provides capital to the middle market in the U.S. As of March 31, 2015, we have in excess of $3.9 billion of AUM in business development companies, MCC and SIC, and private investment vehicles. Over the past 13 years, we have invested in excess of $5.3 billion to help over 290 companies grow across 35 industries in North America.

We manage two permanent capital vehicles, both of which are BDCs, as well as long-dated private funds and SMAs. Our focus on senior secured credit, combined with the permanent and long-dated nature of our vehicles, leads to predictable management fee and incentive fee income. Our year to date AUM growth as of March 31, 2015 was 7% and our compounded annual growth rate of AUM from December 31, 2010 through March 31, 2015 was 43%, which have been driven in large part by the growth in our permanent capital vehicles.

· Permanent capital vehicles: MCC and SIC, have a total AUM of $2.5 billion as of March 31, 2015.

· Long-dated private funds and SMAs: MOF II, MOF III and SMAs, have a total AUM of $1.4 billion as of March 31, 2015.

Since the launch of our first permanent capital vehicle in January 2011, permanent capital has grown to represent 63% of our AUM as of March 31, 2015. We expect that AUM growth in MCC and SIC and the launch of new permanent capital vehicles will continue to increase the proportion of our AUM derived from permanent capital vehicles over time.

For the three months ended March 31, 2015, 94% of our standalone revenues were generated from management fees and performance fees derived primarily from net interest income on senior secured loans.

Direct origination, careful structuring and active monitoring of the loan portfolios we manage are important success factors in our business, which can be adversely affected by difficult market and political conditions, such as the turmoil in the global capital markets from 2007 to 2009. Since our inception in 2006, we have adhered to a disciplined investment process that employs these principles with the goal of delivering strong risk-adjusted investment returns while protecting investor capital. We believe that our ability to directly originate, structure and lead deals enables us to consistently lend at higher yields with better terms. In addition, the loans we manage generally have a contractual maturity of between three and seven years and are typically floating rate, which we believe positions our business well for rising interest rates.

Our senior management team has, on average, over 20 years of experience in credit, including originating, underwriting, principal investing and loan structuring. We have made significant investments in our corporate infrastructure and have over 80 employees, including over 44 investment, origination and credit management professionals, and over 36 operations, accounting, legal, compliance and marketing professionals, each with extensive experience in their respective disciplines.

We believe that our revenue is consistent and predictable due to our investment strategy and nature of our fees. The significant majority of our standalone revenue is derived from management fees, which include base management fees earned on all of our investment products as well as Part I incentive fees earned from our permanent capital vehicles. Our base management fees are generally calculated based upon fee earning assets and paid quarterly in cash. Our Part I incentive fees from our permanent capital vehicles are generally equal to 20% of net investment income, subject to a hurdle rate, and are also paid quarterly in cash.

We also earn performance fees from our long-dated private funds and SMAs. Typically, these performance fees are 15% or 20% of the total return above a hurdle rate. These performance fees are accrued quarterly and paid after return of all invested capital and an amount sufficient to achieve the hurdle rate of return.

The investment strategies in our permanent capital vehicles, long-dated private funds and SMAs are focused on generating net interest income from senior secured loans. Because we focus on capital preservation and generally originate senior secured loans that pay interest at a rate in excess of our hurdle rate, we believe our Part I incentive fees and performance fees are predictable and recurring.

1

We also receive incentive fees related to realized capital gains in our permanent capital vehicles that we refer to as Part II incentive fees. Part II incentive fees are payable annually and are calculated at the end of each applicable year by subtracting (i) the sum of cumulative realized capital losses and unrealized capital depreciation from (ii) cumulative aggregate realized capital gains. If the amount calculated is positive, then the Part II incentive fee for such year is equal to 20% of such amount, less the aggregate amount of Part II incentive fees paid in all prior years. If such amount is negative, then no Part II incentive fee will be payable for such year. As our investment strategy is focused on generating yield from senior secured credit, historically we have not generated Part II incentive fees.

Our primary expenses are compensation to our employees and general, administrative and other expenses. Compensation includes salaries, discretionary bonuses and benefits paid and payable to our employees as well as the performance fee compensation that is directly related to performance fees, generally consisting of incentive allocations in our long-dated private funds that we grant to certain of our professionals. General and administrative expenses include costs primarily related to professional services, office rent and equipment expenses, expense support agreement expenses related to SIC, depreciation and amortization, travel and related expenses, information technology, communication and information services, placement fees and third party marketing expenses and other general operating items.

Reorganization and Initial Public Offering

Medley Management Inc. was incorporated on June 13, 2014 and commenced operations on September 29, 2014 upon the completion of its IPO of its Class A common stock. We raised $100.4 million, net of underwriting discounts, through the issuance of 6,000,000 shares of Class A common stock at a public offering price of $18.00 per share. The offering proceeds were used to purchase 6,000,000 newly issued LLC Units from Medley LLC. Prior to the IPO, Medley Management Inc. had not engaged in any business or other activities except in connection with its formation and IPO.

In connection with the IPO, Medley Management Inc. issued 100 shares of Class B common stock to Medley Group LLC (“Medley Group”), an entity wholly owned by the pre-IPO members of Medley LLC. For so long as the pre-IPO members and then-current Medley personnel hold at least 10% of the aggregate number of shares of Class A common stock and LLC Units (excluding those LLC Units held by Medley Management Inc.) then outstanding, the Class B common stock entitles Medley Group to a number of votes that is equal to 10 times the aggregate number of LLC Units held by all non-managing members of Medley LLC that do not themselves hold shares of Class B common stock and entitle each other holder of Class B common stock, without regard to the number of shares of Class B common stock held by such other holder, to a number of votes that is equal to 10 times the number of membership units held by such holder.

In connection with the IPO, Medley LLC amended and restated its limited liability agreement to modify its capital structure by reclassifying the 23,333,333 interests held by the pre-IPO members into a single new class of units. The pre-IPO members also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right, from and after the first twelve month anniversary of the date of the closing of the IPO, subject to the terms of the exchange agreement, to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. In addition, pursuant to the amended and restated limited liability agreement, Medley Management Inc. became the sole managing member of Medley LLC.

Trends Affecting Our Business

We believe that our disciplined investment philosophy contributes to the stability of our firm’s performance. As of March 31, 2015, approximately 63% of our AUM was in permanent capital vehicles, which have unlimited duration, attractive total returns and strong growth. Our results of operations, including the fair value of our AUM, are affected by a variety of factors, including conditions in the global financial markets as well as economic and political environments, particularly in the United States.

In general, the full year of 2014 and the first three months of 2015 were characterized by economic recovery and increasing investor demand for yield products given historically low interest rates, which continued to drive corporate credit issuance to record levels in the United States. We have benefited from the demand for yield products and have grown our AUM over this period. Generally, private debt markets did not experience the same level of credit spread tightening seen in the broader markets, which has allowed us to continue to deliver strong total returns to investors and grow our AUM.

2

In addition to these macroeconomic trends and market factors, our future performance is dependent on our ability to attract new capital. We believe the following factors will influence our future performance:

· The extent to which investors favor directly originated private credit investments. Our ability to attract additional capital is dependent on investors’ views of directly originated private credit investments relative to traditional assets. We believe fundraising efforts will continue to be impacted by certain fundamental asset management trends that include: (i) the increasing importance of directly originated private credit investment strategies for institutional investors; (ii) increasing demand for directly originated private credit investments from retail investors; (iii) recognition by the consultant channel, which serves endowment and pension fund investors, that directly originated private credit is an important component of asset allocation; (iv) increasing demand from insurance companies seeking alternatives to investing in the liquid credit markets; and (v) de-leveraging of the global banking system, bank consolidation and increased bank regulatory requirements. 

· Our ability to generate strong, stable returns and retain investor capital throughout market cycles. The capital we are able to attract and retain drives the growth of our AUM, fee earning AUM and management fees. We believe we are well positioned to invest through market cycles given our AUM is in either permanent capital vehicles or long-dated private funds and SMAs.

· Our ability to source investments with attractive risk-adjusted returns. Our ability to grow our revenue is dependent on our continued ability to source attractive investments and deploy the capital that we have raised. We believe that the current economic environment provides attractive investment opportunities. Our ability to identify attractive investments and execute on those investments is dependent on a number of factors, including the general macroeconomic environment, valuation, size and the liquidity of these investment opportunities. A significant decrease in the quality or quantity of investment opportunities in the directly originated private credit market, a substantial increase in corporate default rates, an increase in competition from new entrants providing capital to the private debt market and a decrease in recovery rates of directly originated private credit could adversely affect our ability to source investments with attractive risk-adjusted returns.

· The attractiveness of our product offering to investors. We believe defined contribution plans, retail investors, public institutional investors, pension funds, endowments, sovereign wealth funds and insurance companies are increasing exposure to directly originated private credit investment products to seek differentiated returns and current yield. Our permanent capital vehicles benefit from this demand by offering institutional and retail investors the ability to invest in our private credit investment strategy. We believe that the breadth, diversity and number of investment vehicles we offer allow us to maximize our reach with investors.

· The strength of our investment process, operating platform and client servicing capabilities. Following the most recent financial crisis, investors in alternative investments, including those managed by us, have heightened their focus on matters such as manager due diligence, reporting transparency and compliance infrastructure. Since inception, we have invested heavily in our investment monitoring systems, compliance and enterprise risk management systems to proactively address investor expectations and the evolving regulatory landscape. We believe these investments in operating infrastructure will continue to support our growth in AUM. 

Consolidated Variable Interest Entities

As the sole managing member of Medley LLC, Medley Management Inc. operates and controls all of the business and affairs of Medley LLC and, through Medley LLC and its subsidiaries, conducts our business. Under U.S. GAAP, Medley LLC meets the definition of a variable interest entity because the equity of Medley LLC is not sufficient to permit activities without additional subordinated financial support. Medley Management Inc. is the primary beneficiary of Medley LLC as a result of its 100% voting power and control over Medley LLC and as a result of its obligation to absorb losses and its right to receive benefits of Medley LLC that could potentially be significant to Medley LLC. Medley Management Inc. consolidates Medley LLC on its consolidated financial statements and records a non-controlling interest related to the LLC Units held by our pre-IPO owners on its consolidated balance sheets and statements of operations.

Medley LLC has one majority owned subsidiary, SIC Advisors LLC, that is a consolidated VIE. This entity was organized as a limited liability company and was legally formed to manage a designated fund and to isolate business risk. Except to the extent of the assets of this VIE that are consolidated, the holders of the consolidated VIE’s liabilities generally do not have recourse to us.

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Consolidation and Deconsolidation of Medley Funds

We consolidate certain funds in our consolidated financial statements presented elsewhere in this Form 10-Q. These funds represented approximately 22% of our fee earning AUM as of March 31, 2015 and 15% of our management fees and 81% of our performance fees for the three months ended March 31, 2015, on a standalone basis.

Under GAAP, we are required to consolidate (i) entities in which we hold a majority voting interest or have majority ownership and control over the operational, financial and investing decisions of that entity, including affiliates and affiliated funds for which we are the general partner and are presumed to have control, and (ii) entities that we concluded are Variable Interest Entities (“VIEs”), for which we are deemed to be the primary beneficiary. However, we are not required under GAAP to consolidate in our consolidated financial statements certain investment funds that we advise because such funds provide the limited partners with the right to dissolve the fund without cause by a simple majority vote of the non-affiliated limited partners, which overcomes the presumption of control by us.

The assets and liabilities of our Consolidated Funds are held within separate legal entities and, as a result, the liabilities of our Consolidated Funds are non-recourse to us. Generally, the consolidation of our Consolidated Funds has a significant gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to our consolidated results or on our total controlling equity. The majority of the net economic ownership interests of our Consolidated Funds are reflected as non-controlling interests in Consolidated Funds on our consolidated financial statements.

We had consolidated MOF I LP in our consolidated financial statements under the voting interest model in accordance with ASC 810-20, as we were the general partner and the limited partners lacked substantive kick out or participating rights. Effective January 1, 2015, we completed our role as investment manager of MOF I LP and transitioned the management of the residual assets of this fund to another asset manager. As a result of this transition, we deconsolidated the financial statements of this fund, on January 1, 2015. 

Components of our Results of Operations

Management Fees. Management fees include both base management fees as well as Part I incentive fees. In our consolidated results, our base management fees attributable to our Consolidated Funds are eliminated in our consolidated results of operations.

· Base Management Fees. Base management fees are generally based on a defined percentage of (i) average or total gross assets, including assets acquired with leverage, (ii) total commitments, (iii) net invested capital, (iv) NAV or (v) lower of cost or market value of a fund’s portfolio investments. These fees are calculated quarterly and are paid in cash in advance or in arrears depending on each specific fund. Base management fees are recognized as revenue in the period advisory services are rendered, subject to our assessment of collectability.

In addition, we also receive non-asset based management fees that may include special fees such as origination fees, transaction fees and similar fees paid to us in connection with portfolio investments of our funds. These fees are specific to particular transactions and the contractual terms of the portfolio investments, and are recognized when earned.

· Part I Incentive Fees. We also include Part I incentive fees that we receive from our permanent capital vehicles in Management Fees due to their predictable and consistent nature. Part I incentive fees are paid quarterly, in cash, and are driven primarily by net interest income on senior secured loans. These fees are not subject to clawbacks or netting against realized losses, which would benefit us during a time of asset price distress, as we would continue to earn fees so long as the loans we invest in are paying current interest. Given we are primarily an asset manager of yield-oriented products and our incentive fees are primarily derived from spread income rather than trading or capital gains, we believe Part I incentive fees will continue to be consistent and predictable. In addition, we also carefully manage interest rate risk. We are generally positioned to benefit from a raising rate environment, which should benefit fees paid to us from our vehicles and funds.

MCC Part I incentive fees are equal to 20.0% of net investment income (before MCC Part I incentive fees and MCC Part II incentive fees), subject to a fixed “hurdle rate” of 2.0% per quarter, calculated on the prior quarter net asset value. No fee is earned until MCC’s net investment income exceeds the 2.0% hurdle rate. There is a “catch-up” provision that allocates to us all investment income above the hurdle rate but below a 2.5% return on the prior quarter net asset value. Thereafter, we receive 20.0% of MCC’s net investment income above a 2.5% return on the prior quarter net asset value. We believe MCC Part I incentive fees are predictable and are recurring in nature. MCC Part I incentive fees are not subject to repayment (or clawback), and are paid quarterly in cash.

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SIC Part I incentive fees are equal to 20.0% of its net investment income (before SIC Part I incentive fees and SIC Part II incentive fees), subject to a fixed “hurdle rate” of 1.75% per quarter, calculated on the prior quarter net asset value. No fee is earned until SIC’s net investment income exceeds the 1.75% hurdle rate. There is a “catch-up” provision that allocates to us all investment income above the hurdle rate but below a 2.1875% return on the prior quarter net asset value. Thereafter, we receive 20.0% of SIC’s net investment income above a 2.1875% return on the prior quarter net assets value. We believe SIC Part I incentive fees are predictable and are recurring in nature. SIC Part I incentive fees are not subject to repayment (or clawback), and are paid quarterly in cash.

Performance Fees. Our long-dated private funds and SMAs have industry standard carried interest performance fee structures and are typically 15% or 20% of the total return over a 6.0% or 8.0% annualized preferred return. We record these fees on an accrual basis, to the extent such amounts are contractually due but not paid, and we present this revenue as a separate line item on our consolidated statements of operations. These fees are subject to clawbacks, and netted against unrealized and realized losses. However, similar to Part I incentive fees, the key driver of these fees are interest income on senior secured loans, which are generally held to maturity. As such, similar to Part I incentive fees, we believe there is a high degree of predictability associated with these fees as compared to performance fees associated with more volatile trading or private equity investment strategies.

The timing and amount of performance fees generated by our funds is uncertain. If we were to have a realization event in a particular quarter or year, it may have a significant impact on our results for that particular quarter or year that may not be replicated in subsequent periods. Refer to "Risk Factors – Risks Related to Our Business and Industry" included in our Annual Report on Form 10-K.

We may be liable to certain funds for previously realized performance fees if the fund's investment values decline, which vary from fund to fund, and in all cases each investment fund is considered separately in evaluating performance fees. If upon a liquidation of a fund's investments at the then current fair values, previously recognized and distributed performance fees could be required to be returned. As of March 31, 2015 and December 31, 2014, we had not received any performance fee distributions, except for tax distributions related to our allocation of net income, which included an allocation of performance fees. Pursuant to the organizational documents of each respective fund, tax distributions are not subject to clawback. If the funds were liquidated at their fair values at March 31, 2015 and December 31, 2014, there would have been no clawback obligation or liability. Additionally, if we assumed that all existing investments were valued at $0 at March 31, 2015, there would have been no clawback obligation or liability.

For any given period, performance fee revenue on our consolidated statements of operations may include reversals of previously recognized performance fees due to a decrease in the value of a particular fund that results in a decrease of cumulative performance fees earned to date. Since fund return hurdles are cumulative, previously recognized fees also may be reversed in a period of appreciation that is lower than the particular fund's hurdle rate. For the period ended March 31, 2015, the Company reversed $0.1 million of previously recognized performance fees on a standalone and consolidated basis. The Company did not reverse any previously recognized performance fees for the period ended March 31, 2014. Cumulative performance fees recognized through March 31, 2015 were $26.7 million and $6.8 million on a standalone and consolidated basis, respectively.

· Part II Incentive Fees. For our permanent capital vehicles, Part II incentive fees generally represent 20.0% of each fund’s cumulative realized capital gains (net of realized capital losses and unrealized capital depreciation). We have not received these fees historically, and do not expect such fees to be material in the future given our focus on senior secured lending.

Other Revenues and Fees. We provide administrative services to certain of our affiliated funds that are reported as other revenues and fees. Such fees are recognized as revenue in the period that administrative services are rendered. These fees are generally based on expense reimbursements for the portion of overhead and other expenses incurred by certain professionals directly attributable to each respective fund. These fees are reported within total revenues in our unaudited condensed consolidated financial statements included in this Form 10-Q.

In certain cases, the entities that receive management and incentive fees from our funds are owned by Medley LLC together with other persons. See Part I., Item 1., of our Annual Report on Form 10-K. See "Critical Accounting Policies" and Note 2, "Summary of Significant Accounting Policies," to our unaudited condensed consolidated financial statements included in this Form 10-Q for additional information regarding the manner in which management fees, performance fees and other fees are generated.

Expenses

Compensation and Benefits. Compensation and benefits generally includes salaries, discretionary bonuses and benefits paid and payable to our employees. Compensation also includes stock-based compensation associated with the grants of equity-based awards to our employees. Compensation expenses relating to restricted stock units are measured at fair value as of the grant date, taking into consideration expected forfeitures, and are expensed over the vesting period on a straight line basis. Bonuses are accrued over the service period to which they relate.

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Prior to the Reorganization and IPO on September 29, 2014, all payments made to our senior professionals who are members of Medley LLC, including guaranteed payments, were reflected as distributions from members' capital. Subsequent to the reorganization and IPO, all guaranteed payments made to our senior professionals who are members of Medley LLC are recognized as compensation expense.

Performance Fee Compensation. Performance fee compensation includes compensation directly related to performance fees, which generally consists of profit interests that we grant to our employees. Depending on the nature of each fund, the performance fee participation is generally structured as a fixed percentage or as an annual award. The liability is recorded subject to the vesting of the profits interest granted and is calculated based upon the net present value of the projected performance fees. Payments to profit interest holders are payable when the performance fees are paid to Medley LLC by the respective fund. It is possible that we may record performance fee compensation during a period in which we do not record any performance fee revenue or we have a reversal of previously recognized performance fee revenue. We have an obligation to pay our employees a portion of the performance fees earned from certain funds, including revenue from Consolidated Funds that is eliminated in consolidation.

Consolidated Funds Expenses. Consolidated Funds expenses consist primarily of costs incurred by our Consolidated Funds, including professional fees, research expenses, trustee fees and other costs associated with administering these funds. These expenses are generally attributable to the related funds’ limited partners and are allocated to non-controlling interests. As such, these expenses have no material impact on the net income attributable to Medley and its consolidated subsidiaries.

General, Administrative and Other Expenses. General and administrative expenses include costs primarily related to professional services, office rent and equipment expenses, depreciation and amortization, general insurance, recruiting, travel and related expenses, information technology, communication and information services, placement fees, SIC expenses under an investment advisory and expense support and reimbursement agreements and other general operating items. These expenses are not borne by fund investors and are not offset by credits attributable to fund investors’ non-controlling interests in Consolidated Funds. Depreciation of fixed assets is normally calculated using the straight-line method over their estimated useful lives, ranging from three to seven years, taking into consideration any residual value. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected term of the lease.

As a newly public company, we will continue to implement additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to these steps and, among other things, additional expenses related to directors' and officers' liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, hiring additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses.

Other Income/Expense

Dividend Income. Dividend income consists of dividends associated with our equity method investment in SIC. Dividends are recognized on an accrual basis to the extent that such amounts are expected to be collected.

Interest Expense. Interest expense consists primarily of interest expense relating to debt incurred by us.

Other Expenses, net. Other expenses, net consists primarily of expenses associated with our revenue share payable and unrealized gains (losses) associated with our equity method investments.

Interest and Other Income of Consolidated Funds. Interest and other income of Consolidated Funds relates to interest and dividend income generated from the underlying investments securities. Interest and other income are recognized on an accrual basis to the extent such amounts are expected to be collected. These sources of revenue are generally attributable to the related funds’ limited partners and are allocated to non-controlling interests. As such, these sources of revenue have no direct material impact on the net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC.

Interest Expense of Consolidated Funds. Interest expense of Consolidated Funds relates to interest and dividend income generated from the underlying investments securities attributable to the counterparty to the loan participations. Interest expense on secured borrowings of our Consolidated Funds is recognized on the basis as the underlying interest and other income. As such, this interest expense has no direct material impact on the net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC.

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Net Realized Gain (Loss) on Investments of Consolidated Funds. Net realized gain (loss) on investments of Consolidated Funds consists of realized gains and losses arising from dispositions of investments held by our Consolidated Funds. Substantially all of the net investment gains (losses) of our Consolidated Funds are generally attributable to the related funds’ limited partners and allocated to non-controlling interests.

Net Change in Unrealized Appreciation (Depreciation) on Investment of Consolidated Funds. Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds reflects both unrealized gains and losses on investments from periodic changes in fair value of investments held by our Consolidated Funds and the reversal upon disposition of investments of unrealized gains and losses previously recognized for those investments. The net change in unrealized appreciation (depreciation) on investment of Consolidated Funds is generally attributable to the related funds’ limited partners and allocated to non-controlling interests.

Net Change in Unrealized Depreciation (Appreciation) on Secured Borrowings of Consolidated Funds. Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds reflects both unrealized gains and losses from periodic changes in the fair value of these secured borrowings attributable to loan participations of our Consolidated Funds and the reversal upon repayments of these secured borrowings of unrealized gains and losses previously recognized for these secured borrowings. The net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds is attributable to the counterparty to the loan participations. As such, these unrealized gains and losses have no material impact on the net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC.

Provision for Income Taxes. Prior to our Reorganization and IPO, our business was organized as a partnership for tax purposes and was not subject to United States federal, state and local corporate income taxes. A provision for income taxes was made for certain entities that were subject to New York City’s unincorporated business tax. As a result of the Reorganization and IPO, Medley Management Inc. is subject to United States federal, state and local income tax on its allocable portion of the income of Medley LLC at prevailing corporate tax rates. Our effective income tax rate is dependent on many factors, including the impact of nondeductible items and a rate benefit attributable to the fact that a portion of the Corporation’s earnings are not subject to corporate level taxes.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent it is more likely than not that the deferred tax assets will not be recognized, a valuation allowance is provided to offset their benefit.

We recognize the benefit of an income tax position only if it is more likely than not that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit is recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% percent likelihood of being realized upon ultimate settlement. Interest expense and penalties related to income tax matters are recognized as a component of the provision for income taxes.

Net Income Attributable to Non-Controlling Interests in Consolidated Funds. Net income (loss) attributable to non-controlling interests in Consolidated Funds represents the ownership interests that third parties hold in Consolidated Funds that are consolidated in our financial statements.

Our private funds are closed-end funds, and accordingly do not permit investors to redeem their interests other than in limited circumstances that are beyond our control, such as instances in which retaining the limited partnership interest could cause the limited partner to violate a law, regulation or rule. In addition, separately managed accounts for a single investor may allow such investor to terminate the investment management agreement at the discretion of the investor pursuant to the terms of the applicable documents. We manage assets for MCC and SIC, both of which are business development companies (BDCs). The capital managed by MCC and SIC is permanently committed to these funds and cannot be redeemed by investors. MCC is a publicly traded entity on the New York Stock Exchange. Investors can trade shares in the secondary market through this platform.

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Managing Business Performance

Standalone Financial Information 

Under U.S. GAAP, we are required to consolidate entities in which we hold a majority voting interest or have majority ownership and control over the operational, financial and investing decisions of that entity, including affiliated funds, for which we are the general partner and are presumed to have control, and entities that we conclude are VIEs, for which we are deemed the primary beneficiary. See “Critical Accounting Policies — Principles of Consolidation” and Note 2, “Summary of Significant Accounting Policies,” to our unaudited condensed consolidated financial statements included in this Form 10-Q. In order to make operating decisions, assess performance and allocate resources, management uses information derived from our consolidated balance sheets and statements of operations that have been adjusted to eliminate the consolidating effects of the Consolidated Funds, on our consolidated balance sheets and statements of operations, which we refer to as “standalone financial information” or information presented on a “standalone basis”. Revenues from management fees, performance fees and investment income on a standalone basis are greater than those presented on a consolidated basis in accordance with GAAP because certain revenues recognized from Consolidated Funds are eliminated in consolidation. Furthermore, expenses on a standalone basis are lower than related amounts presented on a consolidated basis in accordance with GAAP due to the exclusion of the expenses of the Consolidated Funds.

Core Net Income. Core Net Income is an income measure that is used by management to assess the performance of our business through the removal of non-core items, as well as non-recurring expenses associated with our IPO. It is calculated by adjusting standalone net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs to our employees and amortization of stock-based compensation expense associated with grants of restricted stock units at the time of our IPO.

Core Earnings Before Interest, Income Taxes, Depreciation and Amortization (Core EBITDA). Core EBITDA is an income measure also used by management to assess the performance of our business. Core EBITDA is calculated as Core Net Income before interest expense, income taxes, depreciation and amortization.

 Pro-Forma Weighted Average Shares Outstanding. The calculation of Pro-Forma Weighted Average Shares Outstanding assumes that the following transactions had occurred at the beginning of each year presented: (i) the issuance of 6,000,000 shares of Class A common stock in connection with our IPO (ii) the conversion by the pre-IPO holders of 23,333,333 LLC Units for 23,333,333 shares of Class A common stock and (iii) the grant of 1,151,389 restricted stock units on the date of our IPO, adjusted for actual forfeitures and additional grants during the period.

Core Net Income Per Share. Core Net Income Per Share is Core Net Income adjusted for corporate income taxes assuming that all of our standalone pre-tax earnings are subject to federal, state and local corporate income taxes. In determining corporate income taxes we used an annual effective corporate tax rate of 43.0%. Please refer to the calculation of Core Net Income Per Share in “Reconciliation of Certain Standalone Performance Measures to Consolidated GAAP Financial Measures.”

Core Net Income Margin. Core Net Income Margin equals Core Net Income Per Share divided by total standalone revenue per share.

These standalone financial measures supplement and should be considered in addition to and not in lieu of the results of operations discussed further under “Overview of Consolidated Results of Operations,” which are prepared in accordance with U.S. GAAP. For a reconciliation of these measures to the most comparable measure in accordance with U.S. GAAP, see Note 15, “Segment Reporting,” of our unaudited condensed consolidated financial statements included in this Form 10-Q.

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Key Performance Indicators

When we review our performance we focus on the indicators described below: 

	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands, except AUM, share and per share data)
Consolidated Financial Data:
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	$	9,077		$	5,788
Standalone Data:
Core Net Income (1)	$	11,767		$	5,843
Core EBITDA		15,462			6,798
Core Net Income Per Share	$	0.25		$	0.11
Core Net Income Margin		29.7	%		20.3	%
Pro-Forma Weighted Average Shares Outstanding		30,475,937			30,484,722
Other Data (at period end, in millions):
AUM	$	3,924		$	2,602
Fee Earning AUM		3,165			2,177

⁽¹⁾ In respect to the three months ended March 31, 2014, Core Net Income includes a pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO these payments were recorded as distributions from members’ capital.

AUM

AUM refers to the assets of our funds. We view AUM as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital. For our funds, our AUM equals the sum of the following:

· Gross asset values or NAV of such funds;

· the drawn and undrawn debt (at the fund-level, including amounts subject to restrictions); and

· uncalled committed capital (including commitments to funds that have yet to commence their investment periods).

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The table below provides the year-to-date roll forward of AUM.

										% of AUM
	Permanent			Long-dated						Permanent			Long-dated
	Capital			Private Funds						Capital			Private Funds
	Vehicles			and SMAs			Total			Vehicles			and SMAs
	(Dollars in millions)
Beginning balance, December 31, 2014	$	2,253		$	1,429		$	3,682			61	%		39	%
Commitments (1)		248			15			263
Capital Reduction (2)		(8	)		(17	)		(25	)
Distributions (3)		(30	)		(7	)		(37	)
Change in fund value (4)		24			17			41
Ending balance, March 31, 2015	$	2,487		$	1,437		$	3,924			63	%		37	%

⁽¹⁾ With respect to permanent capital vehicles, represents increases during the period through equity and debt offerings, as well as any increases in available undrawn borrowings or capital commitments. With respect to long-dated private funds and SMAs, represents new commitments or gross inflows, respectively, as well as any increases in available undrawn borrowings.

⁽²⁾ Represents the permanent reduction in equity or leverage during the period.

⁽³⁾ Represents distributions of income and return of capital.

⁽⁴⁾ Includes fund net income, including interest income, realized and unrealized gains (losses), fees and expenses.

AUM Roll Forward

AUM increased by $0.2 billion, or 7%, to $3.9 billion as of March 31, 2015 compared to AUM as of December 31, 2014.

· Our permanent capital vehicles increased AUM by $233.9 million, or 10%, primarily associated with new equity issuances and increased leverage capacity at SIC during the period. Our long-dated private funds and SMAs increased AUM by $7.6 million, or 1%, primarily associated with new capital commitments from MOF III, partly offset by the deconsolidation of MOF I.  

Fee Earning AUM

Fee earning AUM refers to the AUM on which we directly earn base management fees. We view fee earning AUM as a metric to measure changes in the assets from which we earn management fees. Our fee earning AUM is the sum of all the individual fee earning assets of our funds that contribute directly to our management fees and generally equals the sum of:

· for our permanent capital vehicles, the average or total gross asset value, including assets acquired with the proceeds of leverage (see “Fee earning AUM based on gross asset value” in the “Components of fee earning AUM” table below for the amount of this component of fee earning AUM as of each period);

· for certain funds within the investment period in the long-dated private funds, the amount of limited partner capital commitments (see “Fee earning AUM based on capital commitments” in the “Components of fee earning AUM” table below for the amount of this component of fee earning AUM as of each period); and

· for the aforementioned funds beyond the investment period, certain managed accounts within their investment period, the amount of limited partner invested capital or the NAV of the fund (see “Fee earning AUM based on invested capital or NAV” in the “Components of fee earning AUM” table below for the amount of this component of fee earning AUM as of each period).

Our calculations of fee earning AUM and AUM may differ from the calculations of other asset managers and, as a result, this measure may not be comparable to similar measures presented by others. In addition, our calculations of fee earning AUM and AUM may not be based on any definition of fee earning AUM or AUM that is set forth in the agreements governing the investment funds that we advise.

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Components of Fee Earning AUM

	As of		As of
	March 31,		December 31,
	2015		2014
	(Amounts in millions)
Fee earning AUM based on gross asset value	$	2,123	$	2,047
Fee earning AUM based on capital commitments		103		88
Fee earning AUM based on invested capital or NAV		939		923
Total fee earning AUM	$	3,165	$	3,058

As of March 31, 2015, fee earning AUM based on gross asset value increased by $74.9 million, or 4%, compared to December 31, 2014. The increase in fee earning AUM based on gross asset value was due primarily to an increase in AUM of SIC that resulted from additional equity raised during the period and additional leverage commitments or capacity raised or utilized during the period.

As of March 31, 2015, fee earning AUM based on capital commitments increased by $15.2 million or 17%, compared to December 31, 2014. The increase in fee earning AUM based on capital commitments was due to the increase in AUM of MOF III that resulted from new capital commitments.

As of March 31, 2015, fee earning AUM based on invested capital or NAV increased by $16.2 million, or 2%, compared to December 31, 2014. The increase in fee earning AUM based on invested capital or NAV was due primarily to net commitments of MOF II and SMAs, partly offset by the deconsolidation of MOF I.

The table below presents the year-to-date roll forward of Fee Earning AUM.

										% of AUM
	Permanent			Long-dated						Permanent			Long-dated
	Capital			Private Funds						Capital			Private Funds
	Vehicles			and SMAs			Total			Vehicles			and SMAs
	(Dollars in millions)
Beginning balance, December 31, 2014	$	2,047		$	1,011		$	3,058			67	%		33	%
Commitments (1)		90			86			176
Capital Reduction (2)		(8	)		(17	)		(25	)
Distributions (3)		(30	)		(41	)		(71	)
Change in fund value (4)		24			3			27
Ending balance, March 31, 2015	$	2,123		$	1,042		$	3,165			67	%		33	%

⁽¹⁾ With respect to permanent capital vehicles, represents increases during the period through equity and debt offerings, as well as any increases in capital commitments. With respect to long-dated private funds and SMAs, represents new commitments or gross inflows, respectively.

⁽²⁾ Represents the permanent reduction in equity or leverage during the period.

⁽³⁾ Represents distributions of income and return of capital.

⁽⁴⁾ Includes fund net income, including interest income, realized and unrealized gains (losses), fees and expenses.

Total fee earning AUM increased by $107 million, or 3%, to $3.2 billion as of March 31, 2015 compared to total fee earning AUM as of December 31, 2014 and was due primarily to increased commitments from permanent capital vehicles, MOF II and SMAs.

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Returns

The following section sets forth historical performance for our active funds.

Sierra Income Corporation (SIC)

We launched SIC, our first public non-traded permanent capital vehicle, in April 2012. SIC primarily focuses on direct lending to middle market borrowers in the United States. Since inception, we have provided capital for a total of 173 investments and have invested a total of $884 million. As of March 31, 2015, the fee earning AUM was $851 million. The performance for SIC as of March 31, 2015 is summarized below:

Annualized Net Total Return(1):	8.2	%
Annualized Realized Losses on Invested Capital:	0.2	%
Average Recovery:	86.5	%

Medley Capital Corporation (MCC)

We launched MCC, our first permanent capital vehicle in January 2011. MCC primarily focuses on direct lending to private middle market borrowers in the United States. Since inception, we have provided capital for a total of 140 investments and have invested a total of $1.7 billion. As of March 31, 2015, excluding Medley SBIC LP, the fee earning AUM was $1.1 billion. The performance for MCC as of March 31, 2015 is summarized below:

Annualized Net Total Return(2):	9.1	%
Annualized Realized Losses on Invested Capital:	0.3	%
Average Recovery(3):	NM

Medley SBIC LP (Medley SBIC)

We launched Medley SBIC in March 2013 as a wholly owned subsidiary of MCC. Medley SBIC lends to smaller middle market private borrowers that we otherwise would not target in our other funds, due primarily to size. Since inception, we have provided capital for a total of 18 investments and have invested a total of $216 million. As of March 31, 2015, the fee earning AUM was $183 million. The performance for Medley SBIC fund as of March 31, 2015 is summarized below:

Gross Internal Rate of Return(4):	16.7	%
Net Internal Rate of Return(5):	14.3	%
Annualized Realized Losses on Invested Capital:	0.0	%
Average Recovery:	N/A

Medley Opportunity Fund II LP (MOF II)

MOF II is a long-dated private investment fund that we launched in December 2010. MOF II lends to middle market private borrowers, with a focus on providing senior secured loans. Since inception, we have provided capital for a total of 61 investments and have invested a total of $848 million. As of March 31, 2015, the fee earning AUM was $580 million. MOF II is currently fully invested and actively managing its assets. The performance for MOF II as of March 31, 2015 is summarized below:

Gross Internal Rate of Return(4):	15.4	%
Net Internal Rate of Return(6):	8.0	%
Annualized Realized Losses on Invested Capital:	0.0	%
Average Recovery:	N/A

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Medley Opportunity Fund III LP (MOF III)

MOF III is a long-dated private investment fund that we launched in December 2014. MOF III lends to middle market private borrowers in the U.S., with a focus on providing senior secured loans. As of March 31, 2015, the fee earning AUM was $103 million, the total number of investments made was three and total capital invested was $18 million. The performance for MOF III as of March 31, 2015 is not meaningful given the fund’s limited operations and capital invested to date.

Separately Managed Accounts (SMAs)

In the case of our separately managed accounts, the investor, rather than us, may control the assets or investment vehicle that holds or has custody of the related investments. Certain subsidiaries of Medley LLC serve as the investment adviser for our SMAs. Since inception, we have provided capital for a total of 61 investments and have invested a total of $461 million. As of March 31, 2015, the fee earning AUM in our SMAs was $360 million. The performance for our SMAs as of March 31, 2015 is summarized below:

Gross Internal Rate of Return(4):	13.4	%
Net Internal Rate of Return(7):	10.1	%
Annualized Realized Losses on Invested Capital:	0.2	%
Average Recovery(3):	NM

(1) Annualized Net Total Return for SIC represents the annualized return assuming an investment at the initial public offering price, reinvestments of all dividends and distributions at prices obtained under SIC’s dividend reinvestment plan and selling at the closing price as of the measurement date.

(2) Annual Net Total Return for MCC represents the annualized return assuming an investment at the initial public offering price, reinvestments of all dividends and distributions at prices obtained under MCC's dividend reinvestment plan and selling at the closing price as of the measurement date.

(3) Average Recovery includes only those realized investments in which we experience a loss of principal on a cumulative cash flow basis and is calculated by dividing the total actual cash inflows for each respective investment, including all interest, principal and fee note repayments, dividends and transactions fees, if applicable, by the total actual cash outflows for each respective investment. For MCC and the SMAs, we have presented the Average Recovery as “NM” or “Not Meaningful” because we believe the number of realized losses for each respective vehicle is not sufficient to provide an accurate representation of the expected Average Recovery for each vehicle.

(4) For MOF II, SMAs and Medley SBIC, the Gross Internal Rate of Return represents the cumulative investment performance from inception of each respective fund through March 31, 2015. The Gross Internal Rate of Return includes both realized and unrealized investments and excludes the impact of base management fees, incentive fees and other fund related expenses. For realized investments, the investment returns were calculated based on the actual cash outflows and inflows for each respective investment and include all interest, principal and fee note repayments, dividends and transactions fees, if applicable. For unrealized investments, the investment returns were calculated based on the actual cash outflows and inflows for each respective investment and include all interest, principal and fee note repayments, dividends and transactions fees, if applicable. The investment return assumes that the remaining unrealized portion of the investment is realized at the investment’s most recent fair value, as calculated in accordance with GAAP. There can be no assurance that the investments will be realized at these fair values and actual results may differ significantly.

(5) Earnings from Medley SBIC are paid to MCC. Accordingly, the Net Internal Rate of Return for Medley SBIC reflects an assumed proportional allocation of applicable MCC management and incentive fees, including general fund related expenses. As of March 31, 2015, Medley SBIC Net Internal Rate of Return on a cash basis was 17.6%.

(6) Net Internal Rate of Return for MOF II was calculated using the Gross Internal Rate of Return, as described in note 4, and includes the actual management fees, incentive fees and general fund related expenses.

(7) Net Internal Rate of Return for our SMAs was calculated using the Gross Internal Rate of Return, as described in note 4, and includes the actual management fees, incentive fees and general fund related expenses.

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Consolidated Results of Operations

The following table and discussion sets forth information regarding our consolidated results of operations for the three months ended March 31, 2015 and 2014.

The unaudited condensed consolidated financial statements of Medley have been prepared on substantially the same basis for all historical periods presented; however, our Consolidated Funds are not the same entities in all periods shown due to changes in ownership percentages of certain funds. We consolidated funds where through our management contract and other interests we are deemed to have the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance. As further described below, the consolidation of these funds had the impact of increasing interest and other income of Consolidated Funds, interest and other expenses of Consolidated Funds and net investment gains (losses) of Consolidated Funds, but had no net effect on the net income attributable to our unaudited condensed consolidated results for the three months ended March 31, 2015 and 2014.

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	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands)
Revenues
Management fees	$	16,194		$	13,228
Performance fees		1,212			755
Other revenues and fees		1,624			2,013
Total revenues		19,030			15,996
Expenses
Compensation and benefits		7,221			3,759
Performance fee compensation		112			1,518
Consolidated Funds expenses		793			320
General, administrative and other expenses		4,507			4,229
Total expenses		12,633			9,826
Other income (expense)
Dividend income		222			222
Interest expense		(2,085	)		(633	)
Other expenses, net		(383	)		(931	)
Interest and other income of Consolidated Funds		18,727			13,421
Interest expense of Consolidated Funds		(3,804	)		(1,312	)
Net realized gain (loss) on investments of Consolidated Funds		952			1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		4,022			(7,813	)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		(416	)		(324	)
Total other income, net		17,235			3,987
Income before income taxes		23,632			10,157
Provision for income taxes		1,690			504
Net income		21,942			9,653
Net income attributable to non-controlling interests in Consolidated Funds		11,575			3,912
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries		1,290			(47	)
Net income attributable to non-controlling interests in Medley LLC		7,803		$	5,788
Net income attributable to Medley Management Inc.	$	1,274
Other data (at period end, in millions):
AUM	$	3,924		$	2,602
Fee earning AUM	$	3,165		$	2,177

15

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

Revenues

Management Fees. Total management fees increased by $3.0 million, or 22%, to $16.2 million for the three months ended March 31, 2015 compared to the three months ended March 31, 2014.

· Our permanent capital vehicles generated an additional $4.6 million in management fees for the three months ended March 31, 2015 compared to the same period in 2014. Management fees from MCC increased $1.8 million due to a 27% increase in fee earning AUM over that period. Management fees from SIC increased $2.8 million due to a 226% increase in fee earning AUM over that period. 

· Our management fees from long-dated private funds and SMAs decreased by $1.5 million for the three months ended March 31, 2015 compared to the same period in 2014. The decrease was due primarily to a decrease in origination fees.

Performance Fees. Performance fees increased by $0.5 million or 61%, to $1.2 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to performance fees of MOF II for the three months ended March 31, 2015, as a result of positive investment valuations.

Other Revenues and Fees. Other revenues and fees decreased by $0.4 million, or 19%, to $1.6 million for the three months ended March 31, 2015 compared to the same period in 2014. The decrease was due primarily to a decrease of $0.9 million of reimbursements from SIC for organizational and offering expense. As of October 31, 2014, we were fully reimbursed by SIC, as such there was no revenue associated with these reimbursements during the three months ended March 31, 2015. The decrease was partially offset by an increase of $0.5 million of administrative fees from our permanent capital vehicles.

Expenses

Compensation and Benefits. Compensation and benefits increased by $3.5 million, or 92% to $7.2 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to increases in base salary and bonuses, stock compensation incurred with the grant of restricted stock units in connection with our IPO and compensation associated with guaranteed payments to Medley LLC members that prior to the Company’s Reorganization and IPO were recorded as distributions from member’s capital. The increase in base salary and bonus is resulting from a 39% increase in average headcount for the three months ended March 31, 2015 compared to the same period in 2014.

Performance Fee Compensation. Performance fee compensation decreased by $1.4 million, or 93%, to $0.1 million for the three months ended March 31, 2015 compared to the same period in 2014. The variance in performance fee compensation was primarily due to a grant of fully vested profits interests in January 2014 versus a grant of profit interests in February 2015 which are subject to vesting.

Consolidated Funds Expenses. Consolidated Funds Expenses increased by $0.5 million, to $0.8 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to the consolidation of MOF III LP and increased deal-related expenses.

General, Administrative and Other Expenses. General, administrative and other expenses increased by $0.3 million, or 7%, to $4.5 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to expense support agreement expenses related to SIC, professional fees expenses, including legal, audit and accounting services, and corporate insurance. The increase was partially offset by a decrease in organization and offering expenses of SIC as a result of Medley not being liable for these expenses as of June 2, 2014.

Other Income (Expense)

When evaluating the changes in other income (expense), we separately analyze the returns generated by our investment portfolio from the investment returns generated by our Consolidated Funds.

Dividend income of $0.2 million remained consistent during the three months ended March 31, 2015 compared to the same period in 2014.

16

Interest expense increased by $1.5 million to $2.1 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was a direct result of our $110.0 million debt refinancing with Credit Suisse AG Cayman Islands Branch. Average debt outstanding during the three months ended March 31, 2015 and 2014 was $106.4 million and $38.8 million, respectively.

Other expenses, net decreased by $0.5 million to $0.4 million for the three months ended March 31, 2015 compared to the same period in 2014. The decrease was due primarily to a decrease in expense associated with our revenue share payable.

Investments of Consolidated Funds

Interest and other income of Consolidated Funds, excluding the amount attributable to loan participations, increased by $2.8 million, or 23%, to $14.9 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase in net interest income was due primarily to an increase in the invested capital of MOF II LP.

Net gain (loss) on investments of Consolidated Funds, excluding the amount attributable to loan participations, increased by $11.3 million, or 167%, to $4.6 million net gain for the three months ended March 31, 2015 compared to $6.8 million net loss for the same period in 2014. The increase in net gain (loss) on investments was due to a $11.7 million increase in net unrealized appreciation, offset by a $0.4 million decrease in net realized gain.

Provision for Income Taxes

Our effective consolidated income tax rate was 7.2% and 5.0% for the three months ended March 31, 2015 and 2014, respectively. The increase in the effective tax rate is due primarily to the corporate income tax impact of net income attributed to Medley Management Inc. which is subject to federal, state and local corporate incomes taxes for the three months ended March 31, 2015. For the three months ended March 31, 2014, the Company was only subject to New York City’s unincorporated business tax.

Non-Controlling Interests

Net income attributable to non-controlling interests in consolidated entities increased by $9.0 million to $12.9 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to an increase in net income of the Consolidated Funds which was attributed to an increase in invested capital of MOF II and an increase in unrealized appreciation on investments as a result of investment valuations.

Standalone Results of Operations

The following table sets forth our standalone results of operations for the three months ended March 31, 2015 and 2014. Due to the GAAP requirement that certain funds be consolidated into Medley’s financial statements, we have presented certain standalone financial data below, which deconsolidates such funds in order to present operating results that we believe are most reflective of our performance.  In addition to analyzing the Company’s results of operations, management also makes operating decisions and assesses business performance based on the financial and operating metrics and data that are presented without the consolidation of any funds, which are also reflected in the table below.

17

Discussed below are our results of operations on a standalone basis.  

	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands)
Revenues
Management fees	$	17,520		$	14,991
Performance fees		6,336			76
Other revenues and fees		1,624			2,013
Total revenues		25,480			17,080
Expenses
Compensation and benefits		7,221			3,759
Performance fee compensation		112			1,518
General, administrative and other expenses		4,507			4,229
Total expenses		11,840			9,506
Other income (expense)
Dividend income		222			222
Interest expense		(2,085	)		(633	)
Other expenses, net		(262	)		(1,192	)
Total other expense, net		(2,125	)		(1,603	)
Income before income taxes		11,515			5,971
Provision for income taxes		1,148			230
Net income		10,367			5,741
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290			(47	)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		9,077			5,788
Reimbursable fund startup expenses (1)		1,923			1,275
Severance expense (1)		121			6
IPO date award stock-based compensation (1)		646			-
Adjustment for pre-IPO guaranteed payments to members (1)(2)		-			(1,226	)
Core Net Income	$	11,767		$	5,843
Interest expense		2,085			633
Income taxes		1,499			230
Depreciation and amortization		111			92
Core EBITDA	$	15,462		$	6,798
Core Net Income Per Share	$	0.25		$	0.11
Pro-Forma Weighted Average Shares Outstanding		30,475,937			30,484,722

⁽¹⁾ Presented net of income taxes.

⁽²⁾ Represents a pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO these payments were recorded as distributions from members’ capital.

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The following table provides the details of management fees and performance fees for the three months ended March 31, 2015 and 2014.

	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands)
Management Fees
Base Management fees
Permanent capital vehicles	$	9,268		$	5,221
Long-dated private funds and SMAs		3,538			5,519
Part I incentive fees on permanent capital vehicles		4,714			4,251
Total Management fees		17,520			14,991
Performance fees		6,336			76
Other revenues and fees		1,624			2,013
Total fee revenues	$	25,480		$	17,080
Total fee revenue as a percentage of average fee earning AUM for the period		0.8	%		0.8	%

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

Revenues

Management Fees. Total management fees increased by $2.5 million, or 17%, to $17.5 million for the three months ended March 31, 2015 compared to the three months ended March 31, 2014.

· Our permanent capital vehicles generated an additional $4.5 million in management fees for the three months ended March 31, 2015 compared to the same period in 2014. Management fees from MCC increased $1.8 million due to a 27% increase in fee earning AUM over that period. Management fees from SIC increased $2.7 million due to a 226% increase in fee earning AUM over that period.

· Our management fees from private funds and SMAs decreased by $2.0 million for the three months ended March 31, 2015 compared to the same period in 2014. The decrease was due primarily to a decrease in management fees of $2.2 million from MOF II as a result of a decrease in origination fees. The decrease in management fees for the period was partially offset by an increase in management fees of $0.6 million from MOF III and SMAs, which experienced a $326.5 million increase in fee earning AUM over that period.

Performance Fees. Performance fees increased to $6.3 million for the three months ended March 31, 2015 compared to $0.1 million for the same period in 2014. The increase was due primarily to performance fees of MOF II and SMAs for the three months ended March 31, 2015 as a result of positive investment valuations.

Other Revenues and Fees. Other revenues and fees decreased by $0.4 million, or 19%, to $1.6 million for the three months ended March 31, 2015 compared to the same period in 2014. The decrease was due primarily to a decrease of $0.9 million of reimbursements from SIC for organizational and offering expense. As of October 31, 2014, we were fully reimbursed by SIC, as such there was no revenue associated with these reimbursements during the three months ended March 31, 2015. The decrease was partially offset by an increase of $0.5 million of administrative fees from our permanent capital vehicles.

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Expenses

Compensation and Benefits. Compensation and benefits increased by $3.5 million, or 92%, to $7.2 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to increases in base salary and bonuses, stock compensation incurred with the grant of restricted stock units in connection with our IPO and compensation associated with guaranteed payments to Medley LLC members that prior to the Company’s Reorganization and IPO were recorded as distributions from member’s capital. The increase in base salary and bonus is resulting from a 39% increase in average headcount for the three months ended March 31, 2015 compared to the same period in 2014. 

Performance Fee Compensation. Performance fee compensation decreased by $1.4 million, or 93%, to $0.1 million for the three months ended March 31, 2015 compared to the same period in 2014. The variance in performance fee compensation was primarily due to a grant of fully vested profits interests in January 2014 versus a grant of profit interests in February 2015 which are subject to vesting.

General, Administrative and Other Expenses. General, administrative and other expenses increased by $0.3 million, or 7%, to $4.5 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was due primarily to expense support agreement expenses related to SIC, professional fees expenses, including legal, audit and accounting services, and corporate insurance. The increase was partially offset by a decrease in organization and offering expenses of SIC as a result of Medley not being liable for these expenses as of June 2, 2014.

Other Income (Expense)

Dividend income of $0.2 million remained consistent during the three months ended March 31, 2015 compared to the same period in 2014.

Interest expense increased by $1.5 million to $2.1 million for the three months ended March 31, 2015 compared to the same period in 2014. The increase was a direct result of our $110.0 million debt refinancing with Credit Suisse AG Cayman Islands Branch. Average debt outstanding during the three months ended March 31, 2015 and 2014 was $106.4 million and $38.8 million, respectively.

Other expenses, net decreased by $0.9 million to $0.3 million for the three months ended March 31, 2015 compared to the same period in 2014. The decrease was due primarily to a decrease in expense associated with our revenue share payable.

Provision for Income Taxes

Our effective income tax rate was 10.0% and 3.9% for the three months ended March 31, 2015 and 2014, respectively. The increase in the effective tax rate is due primarily to the corporate income tax impact of net income attributed to Medley Management Inc. which is subject to federal, state and local corporate incomes taxes for the three months ended March 31, 2015. For the three months ended March 31, 2014, the Company was only subject to New York City’s unincorporated business tax.

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Reconciliation of Certain Standalone Performance Measures to Consolidated GAAP Financial Measures

Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC is the GAAP financial measure most comparable to Core Net Income. The following table is a reconciliation of net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC on a consolidated basis to Core Net Income and Core EBITDA on a standalone basis. 

	For the Three Months Ended
	March 31,
	(unaudited)
	2015		2014
	(Amounts in thousands, except share and per share amounts)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	$	9,077	$	5,788
Reimbursable fund startup expenses (1)		1,923		1,275
Severance expense (1)		121		6
IPO date award stock-based compensation (1)		646		-
Adjustment for pre-IPO guaranteed payments to members (1)(2)		-		(1,226	)
Core Net Income	$	11,767	$	5,843
Interest expense		2,085		633
Income taxes		1,499		230
Depreciation and amortization		111		92
Core EBITDA	$	15,462	$	6,798
Core Net Income Per Share:	$	0.25	$	0.11
Pro-Forma Weighted Average Shares Outstanding(3)		30,475,937		30,484,722

⁽¹⁾ Presented net of income taxes.

⁽²⁾ Represents a pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO these payments were recorded as distributions from member’s capital.

⁽³⁾ Assumes that the following transactions had occurred at the beginning of each year presented: (i) the issuance of 6,000,000 shares of Class A common stock in connection with our IPO, (ii) the conversion by the pre-IPO holders of 23,333,333 LLC units for 23,333,333 shares of Class A common stock and (iii) the grant of 1,151,389 restricted stock units on the date of our IPO, adjusted for actual forfeitures and additional grants during the period.

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The calculation of Core Net Income Per Share is presented in the table below:

	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands, except share and per share amounts)
Numerator
Core Net Income	$	11,767		$	5,843
Add: Income taxes		1,499			230
Pre-Tax Core Net Income		13,266			6,073
Denominator
Class A shares issued in IPO		6,000,000			6,000,000
Conversion of LLC Units to Class A shares		23,333,333			23,333,333
Restricted stock units		1,142,604			1,151,389
Pro-Forma Weighted Average Shares Outstanding		30,475,937			30,484,722
Pre-Tax Core Net Income Per Share	$	0.44		$	0.20
Less: corporate income taxes per share (1)		(0.19	)		(0.09	)
Core Net Income Per Share	$	0.25		$	0.11

⁽¹⁾ Assumes that all of our standalone pre-tax earnings are subject to federal, state and local income taxes. In determining corporate income taxes we used a combined effective corporate tax rate of 43.0%.

Liquidity and Capital Resources

We manage our liquidity and capital requirements by focusing on our cash flows before giving effect to our Consolidated Funds. Our primary cash flow activities on a standalone basis involve: (i) generating cash flow from operations, which largely includes management fees; (ii) realizations generated from our investment activities; (iii) funding capital commitments that we have made to our funds; (iv) making distributions to our owners; and (v) borrowings, interest payments and repayments under our debt facilities. As of March 31, 2015, our cash and cash equivalents were $71.8 million.

Our material sources of cash from our operations include: (i) management fees, which are collected quarterly; (ii) performance fees, which can be less predictable as to amount and timing; and (iii) fund distributions related to our investments in products that we manage. We primarily use cash flow from operations to pay compensation and benefits, general, administrative and other expenses, federal, state and local income tax, debt service, capital expenditures and distributions. Our cash flows, together with the proceeds from equity and debt issuances, are also used to fund investments in limited partnerships, fixed assets and other capital items. If cash flow from operations were insufficient to fund distributions, we expect that we would suspend paying such distributions.

Our consolidated financial statements reflect the cash flows of our operating businesses as well as the results of our Consolidated Funds. The assets of our Consolidated Funds, on a gross basis, are significantly larger than the assets of our operating businesses and therefore have a substantial effect on our reported cash flows. The primary cash flow activities of our Consolidated Funds include: (i) raising capital from third party investors, which is reflected as non-controlling interests of our Consolidated Funds; (ii) purchasing and selling investment securities; (iii) collecting interest and dividend income; (iv) generating cash through the realization of certain investments; and (v) distributing cash to investors. Our Consolidated Funds are treated as investment companies for financial accounting purposes under GAAP; therefore, the character and classification of all Consolidated Fund transactions are presented as cash flows from operations.

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Debt Instruments 

Senior Secured Credit Facilities

On August 14, 2014, we entered into a $110.0 million senior secured term loan credit facility (the “Term Loan Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent thereunder, Credit Suisse Securities (USA) LLC, as bookrunner and lead arranger, and the lenders from time to time party thereto, which will mature on June 15, 2019. As of such date, the aggregate principal amount of indebtedness outstanding under the Term Loan Facility was $110.0 million. We used the proceeds of the borrowings under the Term Loan Facility, together with cash on hand, to repay all of the approximately $33.2 million of indebtedness outstanding under our senior secured term loan and revolving credit facility with another financial institution, to pay related fees and expenses of approximately $2.6 million and to fund a $74.5 million distribution to Medley LLC’s members.

On August 19, 2014, we entered into a $15.0 million senior secured revolving credit facility with City National Bank (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”), as administrative agent and collateral agent thereunder, and the lenders from time to time party thereto, which will mature on August 19, 2017, with a one-year extension at the option of the borrower, provided certain conditions are met. We intend to use any proceeds of borrowings under the Revolving Credit Facility for general corporate purposes, including funding our working capital needs. We have not incurred any borrowings under the Revolving Credit Facility through the date of this filing. We refer to the entry into the Senior Secured Credit Facilities, the incurrence of $110.0 million of indebtedness under the Term Loan Facility, the repayment of the $33.2 million of outstanding indebtedness, the payment of $2.6 million of related fees and expenses and the $74.5 million distribution to Medley LLC’s members, collectively, as the “Refinancing Transactions.”

Medley LLC is the borrower under the Senior Secured Credit Facilities. In addition, the Term Loan Facility also provides us with the option to raise incremental credit facilities (including an uncommitted incremental facility that provides the borrower the option to increase the amount available under the Term Loan Credit Facility by an aggregate of up to $15.0 million, subject to additional increases, provided that the net leverage ratio as of the last day of any four-fiscal quarter period commencing with the four-fiscal quarter period ending December 31, 2014, shall not exceed 2.0 to 1.0).

Interest Rate and Fees

Borrowings under the Term Loan Facility bear interest, at our option, at a rate equal to either (i) a Eurodollar margin over an adjusted LIBOR rate (with a “floor” of 1.0%) or (ii) a base rate margin over an adjusted base rate determined by reference to the highest of (a) the term loan administrative agent’s prime rate; (b) the federal funds effective rate in effect on such day plus 0.5%; and (c) an adjusted LIBOR rate plus 1.0%. The applicable margins for the Term Loan Facility are 5.5%, in the case of Eurodollar loans and 4.5%, in the case of adjusted base rate loans.

Borrowings under the Revolving Credit Facility bear interest, at our option, at a rate equal to either (1) a Eurodollar margin over an adjusted LIBOR rate or (2) a base rate margin over an adjusted base rate determined by reference to the highest of (a) the term loan administrative agent’s prime rate; (b) the federal funds effective rate in effect on such day plus 0.5%; and (c) an adjusted LIBOR rate plus 1.0%. The applicable margins for the Revolving Credit Facility are (i) if the ratio of net debt to Core EBITDA is less than 1.0 to 1.0, 1.5% in the case of adjusted base rate loans, and, in the case of Eurodollar loans, (x) 3.0% until February 19, 2015 or until maturity if the Offering Transactions have occurred on or before such date, or (y) 3.25% after February 19, 2015 if the Offering Transactions have not occurred on or before such date; and (ii) if the ratio of net debt to Core EBITDA is greater than or equal to 1.0 to 1.0, 2.50% in the case of adjusted base rate loans, and, in the case of Eurodollar loans, (x) 3.25% until February 19, 2015 or until maturity if the Offering Transactions have occurred on or before such date, or (y) 4.00% after February 19, 2015 if the Offering Transactions have not occurred on or before such date.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facilities, (i) on the closing date of the Term Loan Facility we were required to pay commitment fees to the lenders under the Term Loan Facility in an amount equal to 1% of the aggregate amount of term loans borrowed on the closing date of the Term Loan Facility; and (ii) in respect of the Revolving Credit Facility, we are required to pay an unused line fee of 0.25% per annum of the unused portion of the commitments.

Prepayments

The Senior Secured Credit Facilities require us to prepay outstanding term loans, subject to certain exceptions, with:

· 100% of the net cash proceeds (including insurance and condemnation proceeds) of all nonpermitted asset sales or other dispositions of property by the borrower and its subsidiaries, subject to de minimis thresholds, if those net cash proceeds are not reinvested in like assets, financial assets, or other financial services investment strategies within 12 months of the receipt of such net cash proceeds;

· 100% of the net proceeds of any incurrence of debt by the borrower or any of its restricted subsidiaries, other than debt permitted to be incurred or issued under the senior secured credit facilities; and

· 100% of the amount of any equity contributions made to the borrower for the purpose of causing the borrowing to be in compliance with the financial maintenance covenant set forth in the Term Loan Facility.

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The foregoing mandatory prepayments will be applied, first, to the next succeeding four scheduled installments due in respect of the term loans in direct order of maturity and, thereafter, pro rata to the remaining scheduled installments of the term loans.

We have the ability to voluntarily repay outstanding loans at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR rate loans and a make-whole premium on voluntary prepayments of term loans on or prior to August 14, 2016 to the extent such prepayments exceed $33,000,000 in the aggregate, which make-whole premium will be in an amount equal to the then present value of the required interest payments not yet made (assuming an interest rate equal to the adjusted LIBOR rate with a one month interest period made on the date of such prepayment or assignment plus the applicable Eurodollar margin with respect thereto) on the principal amount of the term loan so prepaid that but for such prepayment would have been payable through June 15, 2019 using a discount rate equal to the treasury rate as of the date of such prepayment or assignment plus 50 basis points.

In October 2014, we voluntarily prepaid $15.0 million of the outstanding term loans under this facility using a portion of the proceeds received from our initial public offering. The $15.0 million prepayment is being applied against the upcoming quarterly installments that would have been due commencing on March 31, 2015.

Amortization

The Term Loan Facility requires principal repayments in quarterly installments equal to $1,375,000 (which amount may be adjusted as a result of prepayment or incremental term loans drawn), with the remaining amount payable on the applicable maturity date with respect to such term loans.

Guarantees and Collateral

The obligations under the Senior Secured Credit Facilities are unconditionally and irrevocably guaranteed by certain of Medley LLC’s subsidiaries, including Medley Capital LLC, MOF II Management LLC, MOF III Management LLC, Medley SMA Advisors LLC, Medley GP Holdings LLC, and Medley GP LLC (the “credit agreement guarantors”). In addition, the Senior Secured Credit Facilities are collateralized by first priority or equivalent security interests in (i) all the capital stock of, or other equity interests in, the borrower and each of the borrower’s and credit agreement guarantors’ direct or indirect domestic subsidiaries and 65% of the capital stock of, or other equity interests in, each of the borrower’s or any subsidiary guarantors’ direct wholly owned first-tier restricted foreign subsidiaries, and (ii) certain tangible and intangible assets of the borrower and the credit agreement guarantors (subject to certain exceptions and qualifications).

As of the closing date for the Term Loan Facility, none of MCC Advisors LLC, SIC Advisors LLC, MOF II GP LLC, MOF III GP LLC, our domestic subsidiaries substantially all of the assets of which consist of equity interests or indebtedness of one or more foreign subsidiaries, our non-wholly owned domestic subsidiaries, nor our subsidiaries that are a direct or indirect subsidiary of a foreign subsidiary, are obligated to guarantee the Term Loan Facility, and as of the closing date of the Revolving Credit Facility, none of such entities are obligated to guarantee the Revolving Credit Facility.

Certain Covenants and Events of Default

The Senior Secured Credit Facilities contain a number of significant affirmative and negative covenants and customary events of default. Such covenants, among other things, will limit or restrict, subject to certain exceptions, the ability of the borrower and its restricted subsidiaries to:

· incur additional indebtedness, make guarantees and enter into hedging arrangements;

· create liens on assets;

· enter into sale and leaseback transactions;

· engage in mergers or consolidations;

· make fundamental changes;

· pay dividends and distributions or repurchase our capital stock;

· make investments, loans and advances, including acquisitions;

· engage in certain transactions with affiliates;

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· make changes in the nature of their business; and

· make prepayments of junior debt.

In addition, the credit agreements governing our Senior Secured Credit Facilities contain a financial covenant that requires us to maintain, with respect to each four quarter period commencing with the four quarter period ending December 31, 2014, a ratio of net debt to Core EBITDA not greater than 3.5 to 1.0. The ratio of net debt to Core EBITDA in respect of the Senior Secured Credit Facilities is calculated using our standalone financial results and includes the adjustments made to calculate Core EBITDA. 

 Our Senior Secured Credit Facilities contain certain customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, the lenders under the Senior Secured Credit Facilities will be entitled to take various actions, including the acceleration of amounts due under the Senior Secured Credit Facilities and all actions permitted to be taken by a secured creditor.

Non-Recourse Promissory Notes

In April 2012, we borrowed $5.0 million under a non-recourse promissory note with a foundation, and $5.0 million under a non-recourse promissory note with a trust. Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations. Interest on the notes is paid quarterly and is equal to the dividends received by us related to the pledged shares. We may prepay the notes in whole or in part at any time without penalty. The notes are scheduled to mature in March 2019. The proceeds from the notes were recorded net of issuance costs of $3.8 million and are being accrued, using the effective interest method, over the term of the non-recourse promissory notes.

Notes Payable

In March 2014, we issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carries no interest, has quarterly amortization payments of $0.3 million and matures in March 2016. As of March 31, 2015, $1.6 million was outstanding in respect of this note.

Cash Flows

The significant captions and amounts from our consolidated financial statements, which include the effects of our Consolidated Funds in accordance with GAAP, are summarized below. Negative amounts represent a net outflow, or use of cash.

	For the Three Months Ended
	March 31,
	(unaudited)
	2015			2014
	(Amounts in thousands)
Statements of cash flows data
Net cash used in operating activities	$	(33,049	)	$	(96,546	)
Net cash used in investing activities		(107	)		(84	)
Net cash provided by financing activities		17,784			93,204
Net increase (decrease) in cash and cash equivalents	$	(15,372	)	$	(3,426	)

Operating Activities

Net cash used in operating activities is primarily driven by our earnings in the respective periods after adjusting for non-cash items, such as net change in unrealized depreciation on investments, net realized loss (gain) on investments, interest income paid-in-kind and accretion of original issue discount that are included in net income. Cash used to purchase investments, as well as the proceeds from the sale of such investments, is also reflected in our operating activities as investing activities of our Consolidated Funds. Prior to our Reorganization and IPO, all guaranteed payments to the senior Medley LLC professionals were reflected as distributions from members' capital rather than as compensation expense. Cash distributions made to these senior professionals are not presented in cash flows from operations, rather these payments are presented in financing activities. Subsequent to the Reorganization and IPO, all guaranteed payments made to these senior professionals are recognized as compensation expense and are presented in cash flows from operations.

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Our net cash flow used in operating activities was $33 million and $96.5 million for the three months ended March 31, 2015 and 2014, respectively. These amounts primarily include net purchases of investments by our Consolidated Funds, of $10.1 million and $101.4 million, respectively, and decreases in cash and cash equivalents of the Consolidated Funds of $42.9 million and $5.7 million, respectively. These amounts also represent the variances between net income and cash flows from operations and are reflected as operating activities pursuant to investment company accounting guidance. The growth of our business is reflected by the increase in net cash provided by operating activities of our core segment, while the fund-related activities requirements vary based upon the specific investment activities being conducted during such period. The movements within our Consolidated Funds do not adversely impact our liquidity or earnings trends. We believe that our ability to generate cash from operations provides us the necessary liquidity to manage short-term fluctuations in working capital as well as to meet our short-term commitments.

Investing Activities

Our investing activities generally reflect cash used for certain acquisitions of property and equipment. Purchases of property and equipment were $0.1 million for each of the three months ended March 31, 2015 and 2014, respectively.

Financing Activities

Net contributions from non-controlling interests in our Consolidated Funds were $33.2 million and $88.6 million for the three months ended March 31, 2015 and 2014, respectively. Distributions to our senior professionals are presented as a use of cash from financing activities and were $25.6 million for the three months ended March 31, 2014. During the three months ended March 31, 2015 and 2014, we had a net repayment of debt obligations which provided a net outflow of cash to us of $0.3 and a net issuance of debt obligations which provided a net inflow of cash to us of $17.5 million, respectively. During the three months ended March 31, 2015 and 2014, we had net repayments from secured borrowings of $4.6 million and net proceeds from secured borrowings of $11.8 million, respectively.

Sources and Uses of Liquidity

Our sources of liquidity are (i) cash on hand, (ii) net working capital, (iii) cash flows from operations, including performance fees, (iv) realizations on our investments, (v) net proceeds from borrowings under the Senior Secured Credit Facilities and (vi) other potential financings. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the foreseeable future. We expect that our primary liquidity needs will be comprised of cash to (i) provide capital to facilitate the growth of our existing investment management business, (ii) fund our commitments to funds that we advise, (iii) provide capital to facilitate our expansion into businesses that are complementary to our existing investment management business, (iv) pay operating expenses, including cash compensation to our employees and payments under the TRA, (v) fund capital expenditures, (vi) pay income taxes, and (vii) make distributions to our shareholders in accordance with our dividend policy.

We intend to use a portion of our available liquidity to make cash dividends to our common shareholders on a quarterly basis. Our ability to make cash dividends to our common shareholders is dependent on a myriad of factors, including among others: general economic and business conditions; our strategic plans and prospects; our business and investment opportunities; timing of capital calls by our funds in support of our commitments; our financial condition and operating results; working capital requirements and other anticipated cash needs; contractual restrictions and obligations; legal, tax and regulatory restrictions; restrictions on the payment of distributions by our subsidiaries to us; and other relevant factors.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe the following critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates or judgments. See Note 2, “Summary of Significant Accounting Policies,” to our unaudited condensed consolidated financial statements included in this Form 10-Q for a summary of our significant accounting policies.

Principles of Consolidation

In accordance with ASC 810, Consolidation, we consolidate those entities where we have a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, we consolidate entities that we conclude are VIEs, for which we are deemed to be the primary beneficiary and entities in which we hold a majority voting interest or have majority ownership and control over the operational, financial and investing decisions of that entity.

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An entity in which we have a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk (as a group) lack either the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the success of the legal entity or the obligation to absorb the expected losses or right to receive the expected residual returns or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns of the legal entity, or both, and substantially all of the legal entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. Entities that do not qualify as VIEs are generally assessed for consolidation under the voting interest model.

For those entities that qualify as a VIE, we perform an analysis to determine if we are the primary beneficiary. With respect to certain VIEs that qualify for accounting treatment under ASU 2010-10, we determine that we are the primary beneficiary only if our involvement, through holding interests directly or indirectly in the VIE or contractually through other variable interests (e.g., carried interest and management fees), would be expected to absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both. In order to qualify for this accounting treatment, certain conditions have to be met, including if the entities have all the attributes of an investment company and are not securitization or asset-backed financing entities. For all other entities, we determine that we are the primary beneficiary if we hold a controlling financial interest defined as possessing both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We determine whether we are the primary beneficiary of a VIE at the time we become initially involved with the VIE and reconsider that conclusion continuously. In making our assessment we take into consideration all fee and substantive arrangements, terms and transactions that may exist. The assessment of whether an entity is a VIE and the determination of whether we consolidate such VIE requires judgments and is dependent on the particular facts and circumstances. Each entity is assessed for consolidation on a case by case basis.

For those entities evaluated under the voting interest model, we consolidate those entities we control through a majority voting interest or through other means whereby we are general partner and are presumed to have control. We would not consolidate an entity in which the presumption of control by the general partner has been overcome through either the granting of substantive rights to the unaffiliated investors to either dissolve the entity or remove the general partner (“kick-out-rights’) or the granting of substantive participating rights.

Consolidation and Deconsolidation

Generally, the consolidation of our Consolidated Funds has a significant gross-up effect on our assets, liabilities and cash flows but does not have a net effect on the net income attributable to our consolidated results or to total controlling equity. The majority of the net economic ownership interests of our Consolidated Funds are reflected as non-controlling interests in Consolidated Funds in our condensed unaudited consolidated financial statements included in this Form 10-Q. The assets and liabilities of our Consolidated Funds are generally held within separate legal entities and, as a result, the liabilities of our Consolidated Funds are non-recourse to us. The funds that we advise are deconsolidated when we are no longer deemed to control the entity.

Fair Value Measurement

The Consolidated Funds apply fair value accounting to all of its financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value and establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Consolidated Funds have categorized their financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.

Financial assets and liabilities measured and reported at fair value are classified as follows:

· Level I - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

· Level II - Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.

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· Level III - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence.

In some instances, an instrument may fall into different levels of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. Our assessment of the significance of an input requires judgment and considers factors specific to the instrument. As of March 31, 2015 and December 31, 2014, substantially all of our investments and other fair value instruments were classified as Level III. See Note 4, “Fair Value Measurements,” to our unaudited condensed consolidated financial statements included in this Form 10-Q for a summary of our valuation of investments and other financial instruments by fair value hierarchy levels.

Performance Fees

Performance fees are based on certain specific hurdle rates as defined in the non-consolidated funds and Consolidated Funds' applicable investment management or partnership agreements. Performance fees are recorded on an accrual basis to the extent such amounts are contractually due.

We have elected to adopt Method 2 of ASC 605 for revenue based on a formula. Under this method, we are entitled to performance-based fees that can amount to as much as 20.0% of a fund's profits, subject to certain hurdles. Performance-based fees are assessed as a percentage of the investment performance of the funds. The performance fee for any period is based upon an assumed liquidation of the fund's net assets on the reporting date, and distribution of the net proceeds in accordance with the fund 's income allocation provisions. The performance fees may be subject to reversal to the extent that the performance fees recorded exceeds the amount due to the general partner or investment manager based on a fund's cumulative investment returns.

Performance fees receivable is presented separately in our unaudited condensed consolidated statements of financial condition included in this Form 10-Q and represents performance fees recognized but not yet collected. The timing of the payment of performance fees due to the general partner or investment manager varies depending on the terms of the applicable fund agreements.

Performance Fee Compensation Payable

We have an obligation to pay our professionals a portion of the performance fees earned from certain funds, including performance fees from Consolidated Funds that are eliminated in consolidation. These amounts are accounted for as compensation expense in conjunction with the recognition of the related performance fee revenue and, until paid, are recognized as performance fee compensation payable. Performance fee compensation is recognized in the same period that the related performance fees are recognized. Performance fee compensation can be reversed during periods when there is a decline in performance fees that were previously recognized.

Income Taxes

Prior to our Reorganization and IPO, our business has been organized as a partnership for tax purposes and was not subject to United States federal, state and local income tax. A provision for income taxes was made for certain entities that were subject to New York City’s unincorporated business tax. As a result of the Reorganization and IPO, Medley Management Inc. is subject to United States federal, state and local income tax on its allocable portion of the income of Medley LLC at prevailing corporate tax rates. Our effective income tax rate is dependent on many factors, including the impact of nondeductible items and a rate benefit attributable to the fact that a portion of Medley's earnings are not subject to corporate level taxes.

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 Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent it is more likely than not that the deferred tax assets will not be recognized, a valuation allowance is provided to offset their benefit.

The Company recognizes the benefit of an income tax position only if it is more likely than not that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit is recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% percent likelihood of being realized upon ultimate settlement. Interest expense and penalties related to income tax matters are recognized as a component of interest expense and general and administrative expenses, respectively.

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new information becomes available. 

Investment Valuations

In the absence of observable market prices, we value our investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist. Our determination of fair value is then based on the best information available in the circumstances and may incorporate our own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.

The valuation techniques used by us to measure fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs. The valuation techniques applied to our Consolidated Funds vary depending on the nature of the investment.

The fair value of corporate debt, bonds, and bank loans is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs. These investments are generally classified within Level II. We obtain prices from independent pricing services which generally utilize broker quotes and may use various other pricing techniques that take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. If the pricing services are only able to obtain a single broker quote or utilize a pricing model, such securities will be classified as Level III. If the pricing services are unable to provide prices, we will attempt to obtain one or more broker quotes directly from a dealer, price such securities at the last bid price obtained and classify such securities as Level III.

Stock-based Compensation

We account for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Under the fair value recognition provision of this guidance, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period.

Stock-based compensation expense recognized during the three months ended March 31, 2015 is based on awards ultimately expected to vest and have been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The effect of such change in estimated forfeitures is recognized through a cumulative catch-up adjustment that is included in the period of the change in estimate.

The value of the portion of the award that is ultimately expected to vest is recognized as a component of compensation and benefits over the requisite service periods in the Company's consolidated statements of operations. The Company elected to use the straight-line method for all awards with graded vesting features. 

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements and their impact on Medley can be found in Note 2, “Summary of Significant Accounting Policies,” to our unaudited condensed consolidated financial statements included in this Form 10-Q.

Off-Balance Sheet Arrangements

In the normal course of business, we engage in off-balance sheet arrangements, including transactions in guarantees, commitments, indemnifications and potential contingent repayment obligations.

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See Note 9, “Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included in this Form 10-Q for a discussion of guarantees and contingent obligations.

Contractual Obligations, Commitments and Contingencies

As of March 31, 2015, there were no material changes to our contractual obligations, commitments and contingencies since December 31, 2014. Refer to our Annual Report on Form 10-K for additional information regarding our contractual obligations and commercial commitments.

Indemnifications

In the normal course of business, we enter into contracts that contain indemnities for our affiliates, persons acting on our behalf or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the maximum exposure under these arrangements, if any, cannot be determined and has neither been recorded in our consolidated financial statements. As of March 31, 2015 and December 31, 2014, we have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

Contingent Obligations

The partnership documents governing our funds generally include a clawback provision that, if triggered, may give rise to a contingent obligation that may require the general partner to return amounts to the fund for distribution to investors. Therefore, performance fees, generally, are subject to reversal in the event that the funds incur future losses. These losses are limited to the extent of the cumulative performance fees recognized in income to date, net of taxes paid. Due in part to our investment performance and the fact that our performance fees are generally determined on a liquidation basis, as of March 31, 2014 and December 31, 2014, if the funds were liquidated at their fair values at that date, there would have been no clawback obligation or liability. There can be no assurance that we will not incur a clawback obligation in the future. If all of the existing investments were valued at $0, the amount of cumulative revenues that has been recognized would be reversed. We believe that the possibility of all of the existing investments becoming worthless is remote. At March 31, 2015, had we assumed all existing investments were valued at $0, the net amount of performance fees subject to reversal would have been approximately $26.7 million.

Performance fees are also affected by changes in the fair values of the underlying investments in the funds that we advise. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, bond yields and industry trading multiples. Under the governing agreements of certain of our funds, we may have to fund additional amounts on account of clawback obligations beyond what we received in performance fee compensation on account of distributions of performance fee compensation made to current or former professionals from such funds if they do not fund their respective shares of such clawback obligations. We will generally retain the right to pursue any remedies that we have under such governing agreements against those carried interest recipients who fail to fund their obligations.

Additionally, at the end of the life of the funds there could be a payment due to a fund by us if we have recognized more performance fees than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our primary exposure to market risk is related to our role as general partner or investment adviser to our investment funds and the sensitivity to movements in the fair value of their investments, including the effect on management fees, performance fees and investment income.

The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions which are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

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Effect on Management Fees

Management fees are generally based on a defined percentage of gross asset values, total committed capital, net invested capital and NAV of the investment funds managed by us as well as a percentage of net interest income over a performance hurdle. Management fees calculated based on fair value of assets or net investment income are affected by short-term changes in market values.

The overall impact of a short-term change in market value may be mitigated by a number of factors including, but not limited to, the way in which Part I incentive fees are charged, which does not offset net income related incentive fees against Part II incentive fees which are driven by realized or unrealized gains and losses. As such, the impact of short-term changes in market value does not meaningfully impact our Part I incentive fee component of management fees. In addition, the overall impact of a short-term change in market value may be mitigated by fee definitions that are not based on market value including invested capital and committed capital, market value definitions that exclude the impact of realized and/or unrealized gains and losses, market value definitions based on beginning of the period values or a form of average market value including daily, monthly or quarterly averages, as well as monthly or quarterly payment terms.

As such, based on an incremental 10% short-term increase in fair value of the investments in our permanent capital vehicles, long-dated private funds and SMA's as of March 31, 2015, we calculated an $0.7 million and $0.8 million increase in the management fees on a consolidated and standalone basis, respectively. In the case of a 10% short-term decline in fair value of the investments in our permanent capital, long-dated funds and SMA’s as of March 31, 2015, we calculated a $0.8 million and $1.0 million decrease in the management fees on a consolidated and standalone basis, respectively.

Effect on Performance Fees

Performance fees are based on certain specific hurdle rates as defined in the funds' applicable investment management or partnership agreements. The performance fees for any period are based upon an assumed liquidation of the fund's net assets on the reporting date, and distribution of the net proceeds in accordance with the fund's income allocation provisions, which can result in a performance-based fee to us, subject to certain hurdles and benchmarks. The performance fees may be subject to reversal to the extent that the performance fees recorded exceed the amount due to the general partner or investment manager based on a fund's cumulative investment returns.

Short-term changes in the fair values of funds' investments may materially impact accrued performance fees depending on the respective funds' performance relative to applicable hurdles. The overall impact of a short-term change in market value may be mitigated by a number of factors including, but not limited to, the way in which carried interest performance fees are calculated, which is not ultimately dependent on short-term moves in fair market value, but rather realize cumulative performance of the investments through the end of the long-dated private funds and SMA's lives. However, short term moves can meaningfully impact our ability to accrue performance fees and receive cash payments in any given period.

As such, based on an incremental 10% short-term increase in fair value of the investments in our long-dated private funds and SMA's as of March 31, 2014, we calculated a $9.0 million and $29.1 million increase in the performance fees on a consolidated and standalone basis, respectively. In the case of a 10% short-term decline in fair value of investments in our long-dated private funds and SMA's as of March 31, 2015, we calculated a $3.7 million and $23.6 million decrease in the performance fees on a consolidated and standalone basis, respectively.

Effect on Part I and Part II Incentive Fees

Incentive fees are based on certain specific hurdle rates as defined in our permanent capital vehicles' applicable investment management agreements. The Part II incentive fees for any applicable period are based upon realized gains netted against cumulative realized and unrealized losses. The Part I incentive fees are not subject to clawbacks as our carried interest performance fees are.

Short-term changes in the fair values of the investments of our permanent capital vehicles may materially impact Part II incentive fees depending on the respective vehicle's performance relative to applicable hurdles to the extent there were realized gains that we would otherwise earn Part II incentive fees on.

As such, based on an incremental 10% short-term increase in fair value of the investments in our permanent capital vehicles as of March 31, 2015, we calculated a $13.3 million increase in the Part II incentive fees on both a consolidated and standalone basis. In the case of a 10% short-term decline in fair value of the investments in our permanent capital vehicles as of March 31, 2015, we calculated a $0.4 million increase in the Part I incentive fees on both a consolidated and standalone basis.

31

Interest Rate Risk

As of March 31, 2015, we had $102.9 million of debt outstanding, presented as loans payable on our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. The annual interest rate on the loans was 6.50% as of March 31, 2015.

Based on the floating rate component of our debt obligations payable as of March 31, 2015 we estimate that in the event of a change of 100 basis point in interest rates and the outstanding balance as of March 31, 2015, interest expense related to variable rates would increase or decrease by 15% or $0.4 million.

As credit-oriented investors, we are also subject to interest rate risk through the securities we hold in our Consolidated Funds. A 100 basis point increase in interest rates would be expected to negatively affect prices of securities that accrue interest income at fixed rates and therefore negatively impact net change in unrealized appreciation on the consolidated funds' investments. The actual impact is dependent on the average duration of such holdings. Conversely, securities that accrue interest at variable rates would be expected to benefit from a 100 basis points increase in interest rates because these securities would generate higher levels of current income and therefore positively impact interest and dividend income, subject to LIBOR. In the cases where our funds pay management fees based on NAV, we would expect management fees to experience a change in direction and magnitude corresponding to that experienced by the underlying portfolios.

Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.  

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our co-principal executive officers and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Our management, with the participation of our Co-Chief Executive Officers and our Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, and subject to the foregoing, our Co-Chief Executive Officers and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. Except as described below, we are not currently party to any material legal proceedings.

On July 25, 2014, Fourth Third LLC instituted a foreclosure proceeding against Security National Guaranty, Inc. (the “SNG” or the “borrower”), Tanam Corp. and Abbat Corp., following the borrower’s failure to repay a loan made in 2008.  MOF I held the beneficial interest in the Fourth Third LLC loan.  SNG filed a counterclaim against Fourth Third LLC on September 2, 2014.  SNG also named MCC as a defendant, alleging that MCC acted as Fourth Third LLC’s agent.  The counterclaim alleged $300 million in damages arising from Fourth Third LLC’s alleged breach of an oral agreement to accept a discounted payoff.  MCC did not act as agent or have any interest in the loan SNG defaulted on or any relationship whatsoever with SNG.  Fourth Third has transferred its interest in the loan to CK Holdings LLC and CK Holdings has entered into an agreement with the borrower pursuant to which it has agreed to accept a discounted payoff and the borrower has released its claims against Fourth Third. The claims against MCC remain pending. It is possible that we or other of our subsidiaries could be joined to this proceeding in the future, but we believe SNG’s claims are without merit and MCC intends to defend the counterclaim vigorously. 

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in Part I., Item 1A. of our Annual Report on Form 10-K, which is accessible on the SEC’s website at www.sec.gov.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The required exhibits are listed in the Exhibit Index and are incorporated herein by reference.

33

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.

	MEDLEY MANAGEMENT INC.
	(Registrant)
Date: May 14, 2015	By:	/s/ Richard T. Allorto, Jr.
		Richard T. Allorto, Jr.
		Chief Financial Officer
		(Principal Financial Officer and Authorized Signatory)

34

EXHIBIT INDEX

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of Medley Management Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36638) filed on September 29, 2014)
3.2	Amended and Restated By-Laws of Medley Management Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36638) filed on September 29, 2014)
10.1*†	Second Amendment to Award Agreement of Jeffrey Tonkel, dated September 23, 2014
10.2*†	Second Amendment to Award Agreement of Richard T. Allorto, Jr., dated as of September 23, 2014
10.3*†	Award Agreement of John D. Fredericks, dated as of June 1, 2013
10.4*†	Amendment to Award Agreement of John D. Fredericks, dated as of May 29, 2014
10.5*†	Second Amendment to Award Agreement of John D. Fredericks, dated as of September 23, 2014
10.6*†	Form of Restrictive Covenant Agreement
10.7*†	Letter Agreement, dated as of October 27, 2010, with Messrs. Brook and Seth Taube
31.1*	Certification by Co-Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification by Co-Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
31.3*	Certification by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Co-Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Co-Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

† Management contract or compensatory plan in which directors and/or executive officers are eligible to participate

35

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

36

EX-10.1

Exhibit 10.1

Second Amendment to Award Agreement

This Second Amendment to Award Agreement (this “Amendment”) is dated as of September 23, 2014, between Medley LLC, a Delaware limited liability company (the “Company”), and Jeffrey B. Tonkel (“Participant”).

RECITALS

A. Pursuant to that certain Class C Unit Award Agreement under the Amended and Restated Limited Liability Company Agreement of Medley LLC dated and effective as of December 14, 2012, effective as of January 7, 2013, as amended by the Amendment to Award Agreement dated as of May 29, 2014 (the “Award Agreement”), the Company granted to Participant 3,000,000 Class B Units (the “Existing Units”).

B. Concurrently herewith, the Members of the Company are entering into the Fourth Amended and Restated Limited Liability Company Agreement of Medley LLC (the “Amended LLC Agreement”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Amended LLC Agreement.

NOW, THEREFORE, in consideration of the premises and agreements of the parties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Participant hereby agree as follows:

1. Approval of Amended LLC Agreement. Participant hereby approves the Amended LLC Agreement in the form previously presented to Participant and attached hereto.

2. Reclassification of Existing Units. Upon the effectiveness the Amended LLC Agreement (the “Effective Time”), the Existing Units shall be reclassified as 1,818,182 Class A Units, which Class A Units are fully vested.

3. Amendment of Award Agreement. Upon the Effective Time, the Award Agreement shall be amended as follows:

a. Each of the following sections of the Award Agreement is deleted in its entirety and replaced with “Reserved”: Section 1, Section 3(c), Section 4, Section 6, Section 8, Section 9(a), Section 9(b) and Section 9(c).

b. The second sentence of Section 18 of the Award Agreement is deleted in its entirety and replaced with:

“The provisions of Section 11.10 of the LLC Agreement shall apply, mutatis mutandis, to any and all disputes arising out of, relating to or in connection with this Agreement.”

c. All references in the Award Agreement to: (i) “Class B Unit” shall refer to “Class A Unit”; (ii) “Class B Member” shall refer to “Member”; and (iii) “Board of Managers” shall refer to “Managing Member”.

4. Acknowledgment of Restrictive Covenants Agreement. Participant hereby acknowledges that, in connection herewith, Participant has entered into a Confidentiality, Non-Interference and Invention Assignment Agreement, dated as of the date hereof, with Medley Management Inc.

5. Ratification. Except as expressly amended and modified under this Amendment, the terms and provisions of the Award Agreement are hereby ratified and affirmed in their entirety.

6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware.

7. Counterparts; Headings. This Amendment may be signed in any number of counterparts each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Any such counterpart may be executed by facsimile transmission. Headings in this Amendment are for purposes of reference only and shall not limit or affect the meaning of the provisions hereof.

8. Complete Agreement. This Amendment constitutes the entire agreement of the parties with respect to the amendment of the Award Agreement and all prior or contemporaneous agreements or understandings, verbal or written, with respect thereto are hereby superseded and merged herein.

[Remainder of Page Intentionally Left Blank]

2

IN WITNESS WHEREOF, the Company and Participant have duly executed this Amendment as of the date first written above.

PARTICIPANT
By:	/s/ Jeffrey B. Tonkel
Name:	Jeffrey B. Tonkel
Address for Notices:		7 Eldridge Court
		New York, NY 10580
MEDLEY LLC
By:	Medley Management Inc.,
	its Managing Member
By:	/s/ Brook Taube
Name:	Brook Taube
Title:	Co-Chief Executive Officer and
	Chief Investment Officer

[Signature Page – Award Agreement Amendment]

EX-10.2

Exhibit 10.2

Second Amendment to Award Agreement

This Second Amendment to Award Agreement (this “Amendment”) is dated as of September 23, 2014, between Medley LLC, a Delaware limited liability company (the “Company”), and Richard T. Allorto (“Participant”).

RECITALS

A. Pursuant to that certain Class C Unit Award Agreement under the Amended and Restated Limited Liability Company Agreement of Medley LLC dated and effective as of December 14, 2012, effective as of January 7, 2013 (the “Initial Agreement”), as amended by the Amendment to Award Agreement dated as of May 29, 2014 (the “First Amendment”; the Initial Agreement, as amended by the First Amendment, the “Award Agreement”), the Company granted to Participant 1,000,000 Class B Units (the “Existing Units”).

B. Concurrently herewith, the Members of the Company are entering into the Fourth Amended and Restated Limited Liability Company Agreement of Medley LLC (the “Amended LLC Agreement”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Amended LLC Agreement.

NOW, THEREFORE, in consideration of the premises and agreements of the parties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Participant hereby agree as follows:

1. Approval of Amended LLC Agreement. Participant hereby approves the Amended LLC Agreement in the form previously presented to Participant and attached hereto.

2. Reclassification of Existing Units. Upon the effectiveness the Amended LLC Agreement (the “Effective Time”), the Existing Units shall be reclassified as 606,061 Class A Units, which Class A Units are fully vested.

3. Amendment of Award Agreement. Upon the Effective Time, the Award Agreement shall be amended as follows:

a. Each of the following sections of the Award Agreement is deleted in its entirety and replaced with “Reserved”: Section 1, Section 3, Section 5, Section 7, Section 8(a), Section 8(b) and Section 8(c).

b. The second sentence of Section 17 of the Award Agreement is deleted in its entirety and replaced with:

“The provisions of Section 11.10 of the LLC Agreement shall apply, mutatis mutandis, to any and all disputes arising out of, relating to or in connection with this Agreement.”

c. All references in the Award Agreement to: (i) “Class B Unit” shall refer to “Class A Unit”; (ii) “Class B Member” shall refer to “Member”; and (iii) “Board of Managers” shall refer to “Managing Member”.

4. Explanatory Note Regarding First Amendment. It is understood that in the First Amendment: (i) all references to Section 9 shall be read to refer to Section 8 (Restrictive Covenants) of the Initial Agreement and (ii) the reference to Section 11 shall be read to refer to Section 10 (Transferability of Units) of the Initial Agreement.

5. Acknowledgment of Restrictive Covenants Agreement. Participant hereby acknowledges that, in connection herewith, Participant has entered into a Confidentiality, Non-Interference and Invention Assignment Agreement, dated as of the date hereof, with Medley Management Inc.

6. Ratification. Except as expressly amended and modified under this Amendment, the terms and provisions of the Award Agreement are hereby ratified and affirmed in their entirety.

7. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware.

8. Counterparts; Headings. This Amendment may be signed in any number of counterparts each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Any such counterpart may be executed by facsimile transmission. Headings in this Amendment are for purposes of reference only and shall not limit or affect the meaning of the provisions hereof.

9. Complete Agreement. This Amendment constitutes the entire agreement of the parties with respect to the amendment of the Award Agreement and all prior or contemporaneous agreements or understandings, verbal or written, with respect thereto are hereby superseded and merged herein.

[Remainder of Page Intentionally Left Blank]

2

IN WITNESS WHEREOF, the Company and Participant have duly executed this Amendment as of the date first written above.

PARTICIPANT
By:	/s/ Richard T. Allorto
Name:	Richard T. Allorto
Address for Notices:		19 Isaac Graham Road
		Flemington, NJ 08822
MEDLEY LLC
By:	Medley Management Inc.,
	its Managing Member
By:	/s/ Brook Taube
Name:	Brook Taube
Title:	Co-Chief Executive Officer and
	Chief Investment Officer

[Signature Page – Award Agreement Amendment]

EX-10.3

Exhibit 10.3

Class C Unit Award Agreement
under the Amended and Restated
Limited Liability Company Agreement of Medley LLC
Dated and effective as of December 14, 2012

This Award Agreement ("Agreement") dated as of June 25, 2013, is made effective as of June 1, 2013 (the "Grant Date"), and is between Medley LLC, a Delaware limited liability company (the "Company"), and John D. Fredericks (the "Participant"). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Amended and Restated Limited Liability Company Agreement of Medley LLC, dated and effective December 14, 2012, as may be amended from time to time (the "LLC Agreement").

1.          Unit Grant. In accordance with the terms of the LLC Agreement and subject to the terms and conditions of this Agreement, the Company hereby grants to the Participant an aggregate of 123,110 of the Company's Class C Units (the "Units"). The Units will vest and become nonforfeitable in accordance with the provisions of Sections 4, 6, 7 and 8. With respect to the Units:

(a)          The aggregate Profits Interest Hurdle is $125,000,000.00.

(b)          The aggregate Class C Member Guaranteed Payment is $25,000.00 per month, subject to downward adjustment in 2015 to the extent total cash payments to Participant exceed $750,000. In addition, Participant will receive additional Guaranteed Payments to the extent the total cash payments (including tax distributions) by Medley to Participant in 2013 are less than $325,000 or the total cash payments (including tax distributions) by Medley to Participant in 2014 are less than $600,000. The foregoing additional Guaranteed Payments, if any amount is due, will be made by January 15, 2014 and January 15, 2015, respectively.¹

(c)          The Participant’s total Capital Account is $0.00.

(d)          The Earned Redemption Quarter number as of the Grant Date shall be zero (0), which number shall increase as provided in the LLC Agreement.

2.Services, Title and Duties. Participant shall have the titles of “Partner”, “General Counsel”, and “Chief Compliance Officer”. Participant shall report to the Company’s Board of Managers and, while a Class C Member, the Services to be performed shall include such duties and assignments as may be reasonably assigned to Participant consistent with his position as determined by the Board of Managers. Participant’s duties shall include:

(i)          legal advice concerning general corporate and governance matters;

(ii)         legal advice and supervision concerning securities and legal compliance matters;

(iii)        monitoring use of outside counsel;

(iv)        legal input on investment policies, procedures; and

(v)         legal input on portfolio investments.

¹ Participant may be eligible for additional performance based bonuses in the sole and absolute discretion of the Board of Managers.

Participant will devote substantially all of his business time, energy, attention and skill to the performance of Participant’s duties and to the promotion and advancement of the Company’s business and interests. Participant shall not, directly or indirectly, engage in any other business or professional activity (whether or not such activity is pursued for gain, profit or other pecuniary advantage and whether or not during normal business hours) or have any interest in any such other business or professional activity. Notwithstanding the foregoing, Participant may invest in any business, provided that (i) the investment is passive, (i.e., Participant is not required to, and in fact does not, provide any services on behalf of such business) and (ii) the business invested in is not competitive with any aspect of the Company or any of its affiliates as determined by the Company’s Managers in their sole discretion, except that the limitation imposed by this clause (ii) shall not apply to investment in the securities of a publicly traded company as long as Participant does not own at any time more than five percent (5%) of any class of the securities of such company.

3.          Additional Terms.

(a)          Participant will be eligible for participation in the 401(k), health plan, and any other benefit plans provided by the Company to the extent a non-employee is eligible to participate without adverse consequence.

(b)          The Company will reimburse Participant for reasonable expenses incurred by Participant in performance of Participant’s duties under this Award Agreement in accordance with the Company’s policies with respect to reimbursement of such expenses and the documentation required therefor.

(c)          Participant will hold a non-voting observer seat on the Board of Managers of the Company, already defined as Company, and Medley GP Holdings LLC. Participant shall receive notice of and shall attend all meetings of the foregoing Boards of Managers, provided, however, that Company reserves the right to exclude Participant from access to any material or meeting or portion thereof if Company believes that such exclusion is reasonably necessary to preserve attorney-client, work product or similar privilege, to protect highly confidential proprietary information or where Participant’s presence would result in a conflict of interest.

(d)          The Company shall indemnify Participant and hold Participant harmless from and against any claim, loss or cause of action arising from or out of Participant’s performance or status as an officer of, board observer of or service provider of the Company or any of its parents, subsidiaries or affiliates or in any other capacity, including any fiduciary capacity, in which Participant serves at the request of the Company or any of its parents, subsidiaries or affiliates, to the extent arising as a result of any action or omission performed or omitted by Participant in good faith on behalf of the Company or any of its parents, subsidiaries or affiliates and in a manner reasonably believed to be within the scope of the authority conferred on Participant by Company or any of its parents, subsidiaries or affiliates pursuant to this Agreement or otherwise, except that Participant shall not be entitled to be indemnified in respect of any loss, damage or claim incurred by Participant by reason of Participant's gross negligence or willful misconduct with respect to such acts or omissions. The Company undertakes to advance all defense expenses associated with defending against any indemnified claim.

4.          Conditions to Award. The Award contemplated herein is conditioned upon the Participant executing (i) this Agreement, (ii) the LLC Agreement, (iii) an election under Section 83(b) of the Code (attached hereto as Exhibit A.)

5.          Reserved.

6.          Vesting of the Units. Except as otherwise provided in this Agreement, the Units shall vest, and thereby be deemed Unrestricted Class C Units for purposes of the LLC Agreement as follows:

None. As of the Effective Date, Participant shall be deemed fully vested in all of the Units.

At all times prior to vesting or upon the Participant’s termination of Service for Cause, Units shall be deemed Restricted Class C Units for purposes of the LLC Agreement.

7.          Termination of Service. Any reference herein to a termination of Service or the Participant ceasing his Service shall be defined as an event that constitutes a “separation from service” for purposes of Section 409A of the Code. “Service” shall mean services rendered to the Company by the Participant as a service provider, as an employee, independent contractor or Member.

8.          Redemption Payments. Upon a termination of Service, all Units shall be subject to the redemption provisions as provided in the LLC Agreement.

9.          Restrictive Covenants.

(a)          The Participant agrees to the following Restrictive Covenants:

(i)          Confidentiality.

(A)         The Participant acknowledges that his Service creates a relationship of confidence and trust between Participant and the Company with respect to certain information pertaining to the business of the Company, its affiliates and their respective portfolio companies and investments (collectively, the “Company and Affiliates”) which may be made known to the Participant by the Company and Affiliates or learned by the Participant during the period of his Service with the Company.

(B)         The Company and Affiliates possess and will continue to possess information that has been created, discovered or developed by, or otherwise becomes known to them (including, without limitation, information created, discovered or developed by, or made known to, Participant during the period of his Service which pertains to the Company and Affiliate’s actual or contemplated business, products, intellectual property or processes) or in which property rights have been or may be assigned or otherwise conveyed to the Company and Affiliates, which information has commercial value in the business in which the Company and Affiliates is engaged and is treated by the Company and Affiliates as confidential.

(C)         Any and all inventions, products, discoveries, improvements, processes, marketing and services methods or techniques, formulae, designs, styles, specifications, data bases, computer programs (whether in source code or object code), know-how, strategies and data, whether or not patentable or eligible to be registered under copyright or similar statutes, made, developed or created by Participant (whether at the request or suggestion of the Company and Affiliates or otherwise, whether alone or in conjunction with others, and whether during regular hours of work or otherwise) during the period of Participant’s Service with the Company which pertains to the Company and Affiliates' actual or contemplated business, products, intellectual property or processes (collectively hereinafter referred to as "Developments"), shall be the sole property of the Company and will be promptly and fully disclosed by Participant to the Company without any additional compensation therefore, including, without limitation, all papers, drawings, models, data, documents and other material pertaining to or in any way relating to any Developments made, developed or created by Participant as aforesaid. The Company shall own all right, title and interest in and to the Developments and such Developments shall be considered "works made for hire" for the Company under U.S. Copyright Law. If any of the Developments are held for any reason not to be "works made for hire" for the Company or if ownership of all right, title and interest in and to the Developments has not vested exclusively and immediately in the Company upon creation, Participant irrevocably assigns, without further consideration, any and all right, title and interest in and to the Developments to the Company, including any and all moral rights, and "shop rights" in the Developments recognized by applicable law. Participant irrevocably agrees to execute any document requested by the Company to give effect to this Section 9(a)(i)(c) such as assignment of invention or other general assignments of intellectual property rights, without additional compensation therefore.

(D)         Participant will keep confidential and will hold for the Company's sole benefit any Development which is to be the exclusive property of the Company under this Section 8(a)(i)(D) irrespective of whether any patent, copyright, trademark or other right or protection is issued or has been sought in connection therewith.

(E)         Participant also agrees that Participant will not, without the prior approval of the Board of Managers, use for Participant’s benefit or disclose at any time during Participant’s Service with the Company, or thereafter, except to the extent required by the performance by Participant of Participant’s duties, any information obtained or developed by Participant while in the Service of the Company with respect to any Developments or with respect to any customers, clients, suppliers, specialized training, products, services, prices, employees, financial affairs, mergers, acquisitions, joint ventures, or methods of design, distribution, marketing, service, procurement or manufacture of the Company and Affiliates or any confidential matter, except information which at the time is generally known to the public other than as a result of disclosure by Participant not permitted hereunder. Notwithstanding the foregoing, the following will not constitute confidential information for purposes of this Agreement: (i) information which is or becomes publicly available other than as a result of disclosure by the Participant; (ii) information designated in writing by the Company and Affiliates as no longer confidential; or (iii) information known by Participant as of the date of this Agreement and identified as such in writing to the Company. Participant will comply with all intellectual property disclosure policies established by the Company from time to time with respect to the Company and Affiliates' confidential information, including without limitation with respect to Developments.

(ii)         Non-Competition.        During the term of this Agreement, and for an additional period equal to the greater of (A) six (6) months after the termination of Participant’s Service with the Company for any reason or (B) the term of any payments to the Participant related to Earned Redemption Quarters following the termination of Participant’s Service with the Company for any reason, unless mutually agreed otherwise by the Participant and the Company, Participant shall not, directly or indirectly, provide services in the capacity of a principal, agent, manager, owner, lender, investor, partner, officer, employee, consultant, or otherwise, to any entity that directly or indirectly competes with Company and Affiliates.

(iii)        Non-Solicitation.         Participant shall not, during his Service with the Company and for an additional period equal to the greater of (A) twelve (12) months after the termination of Participant’s Service with the Company for any reason or (B) the term of any payments to the Participant related to Earned Redemption Quarters following the termination of Participant’s Service with the Company for any reason, for any reason, either directly or indirectly: (a) directly or indirectly call on or solicit for similar services, or, encourage or take away any of the Company and Affiliates’ clients or potential clients about whom Participant became aware or with whom Participant had contact as a result of Participant’s Service with the Company, either for the benefit of Participant or for any other person or entity; or (b) directly or indirectly solicit, induce, recruit, or encourage any of the Company and Affiliates’ employees or contractors to leave the employ of the Company and Affiliates or cease providing services to the Company and Affiliates on behalf of the Participant or on behalf of any other person or entity; or (c) hire for himself or any other person or entity any employee or contractor who was employed or engaged by the Company and Affiliates within six months prior to the termination of Participant’s Service.

(b)          The Participant acknowledges that his access to confidential information will enable him to benefit from the Company and Affiliates’ goodwill and know-how. The Participant further acknowledges that it would be inherent in the performance of his duties as an owner, investor, director, officer, partner, employee, agent or consultant of any person or entity that competes with the Company and Affiliates or that intends to compete with or may compete with the Company and Affiliates to disclose confidential information, as well as to misappropriate the Company and Affiliates’ goodwill and know-how, to or for the benefit of such other person or entity. The Participant acknowledges that, in exchange for his agreement to the restrictions set forth in this Section 9(b), he has and will receive substantial, valuable consideration, including the consideration set forth in Section 1.

(c)          In the event of a material breach of any of the Restrictive Covenants, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, Participant’s breach shall constitute Cause for termination of Participant’s Services in accordance with the LLC Agreement.

(d)          If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section is invalid or unenforceable, the parties agree that (i) the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, (ii) the parties shall request that the court exercise that power, and (iii) this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed. The Participant acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of this Section 9(d) would be inadequate and, therefore, agrees that the Company shall be entitled to injunctive relief in addition to any other available rights and remedies in cases of any such breach or threatened breach, including those remedies provided in Section (c) above.

10.         Distributions. The Participant will be entitled to distributions with respect to the Units as provided by the LLC Agreement.

11.         Transferability of Units. As provided in the LLC Agreement, the Participant may not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Unit.

12.         Securities Law Requirements. No person who acquires Units under this Agreement may sell the Units, unless they make the offer and sale pursuant to an effective registration statement under the Securities Exchange Act, which is current and includes the Units to be sold, or an exemption from the registration requirements of that Act.

13.         No Limitation on Rights of the Company. The grant of the Units does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

14.         LLC Agreement and Agreement Not a Contract of Employment or Service. Neither the LLC Agreement nor this Agreement is a contract of employment or Service, and no terms of the Participant's Service will be affected in any way by the LLC Agreement, this Agreement or related instruments, except to the extent specifically expressed therein. Neither the LLC Agreement nor this Agreement will be construed as conferring any legal rights on the Participant to continue to remain in Service with the Company, nor will it interfere with the Company's or any Affiliate’s right to discharge the Participant or to deal with him or her regardless of the existence of the LLC Agreement, this Agreement or the Unit.

15.         Participant to Have No Rights as a Member. Before the date as of which he or she is recorded on the books of the Company as the holder of any Units, the Participant will have no rights as a member with respect to those Units.

16.         Notice. Any notice or other communication required or permitted under this Agreement shall be in writing, signed by the party giving such notice and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy or by registered or certified mail (return receipt requested, with postage prepaid), to the respective parties at the addresses noted in the LLC Agreement.

17.         Successors. All obligations of the Company under this Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise.

18.         Governing Law. To the extent not preempted by federal law, this Agreement will be construed and enforced in accordance with, and governed by, the laws of the State of Delaware, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. Any action or proceeding arising out of or in connection with the LLC Agreement or this Agreement shall be brought only in the courts in the State of Delaware, including the Federal Courts located therein, should Federal jurisdiction requirements exist, and the Participant shall consent to submit to the exclusive jurisdiction of the such court for purposes of any action or proceeding arising out of or in connection with the LLC Agreement or this Agreement and hereby waives any right to a jury trial with respect to such action or proceeding.

19.         LLC Agreement Controls. The rights granted under this Agreement are in all respects subject to the provisions set forth in the LLC Agreement to the same extent and with the same effect as if set forth fully in this Agreement. If the terms of this Agreement conflict with the terms of the LLC Agreement document, the LLC Agreement document will control.

20.         Amendment of the Agreement. The Company and the Participant may amend this Agreement only as provided in the LLC Agreement.

21.         Counterparts. The parties may execute this Agreement in one or more counterparts, all of which together shall constitute but one Agreement.

22.         Section 409A. Each payment made with respect to the Units pursuant to the LLC Agreement shall be deemed a "separate payment" for purposes of Section 409A of the Code. Payments under this Agreement are intended to qualify for exemption from or, in the alternative, comply with, Section 409A of the Code. This Agreement and shall be construed and interpreted in accordance with such intent. If any provision of this Agreement needs to be revised to satisfy the requirements of Section 409A of the Code, then such provision shall be modified or restricted to the extent and in the manner necessary to be in compliance with such requirements of Section 409A of the Code and any such modification shall attempt to maintain the same economic results as were intended under this Agreement. The Company does not guarantee that payments under this Agreement will satisfy all applicable requirements for exemption from Section 409A of the Code. Payments made to a Participant under this Agreement in error shall be returned to the Company and do not create a legally binding right to such payments.

23.         Agreement Administration. This Agreement will be administered by the Board of Managers. Except as limited by law, the Board of Managers will have full power to construe and interpret this Agreement and the LLC Agreement, to establish, amend or waive rules and regulations for this Agreement's administration, and to make all other determinations that may be necessary or advisable to administer this Agreement. As permitted by law, the Board of Managers may delegate some or all of its authority under this Agreement. All determinations and decisions made by the Board of Managers (or its delegate) pursuant to the provisions of this Agreement will be final, conclusive and binding on all Persons, including, without limitation, the Company, its Members, all Affiliates, Participants and their estates and beneficiaries.

IN WITNESS WHEREOF, the Company and the Participant have duly executed this Agreement as of the date first written above.

Medley LLC
		/s/ John D. Fredericks
		(Participant's Signature)
By:	/s/ Brook Taube	Participant's Name and Address for notices:
Name:	/s/ Brook Taube
Its:	Managing Member	John D. Fredericks
		216 2nd Street
		Sausalito, CA 94965

EX-10.4

Exhibit 10.4

Amendment to Award Agreement

This Amendment to Award Agreement ("Amendment") is dated as of May 29, 2014, between Medley LLC, a Delaware limited liability company (the "Company"), and John D. Fredericks (the "Participant").

RECITALS

A.           Pursuant to that certain Class C Unit Award Agreement under the Amended and Restated Limited Liability Company Agreement of Medley LLC dated and effective as of December 14, 2012, effective as of June 1, 2013 (the “Award Agreement”), Company granted to Participant 123,110 of the Company's Class C Units (the “Existing Units”).

B.           Pursuant to that certain Class C Unit Award Agreement under the Limited Liability Company Agreement of Medley GP Holdings LLC effective as of June 1, 2013 (the “Holdings Award Agreement”), Medley GP Holdings LLC granted to Participant 123,110 of Medley GP Holdings LLC's Class C Units (the “Holdings Units”).

C.           Pursuant to that certain Exchange Agreement of even date herewith, Participant has transferred to Medley, and Medley has received from Holder, the Holdings Units in exchange for 2,687 additional Class C Units of Medley (together with the Initial Units, the “Existing Units”).

D.           Concurrently herewith, the Members of the Company are amending and restating the Amended and Restated Limited Liability Company Agreement of Medley LLC (the “LLC Agreement”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the LLC Agreement.

E.           In connection with the amendment and restatement of the LLC Agreement, Participant is exchanging the Existing Units for 500,000 new Class B Units in accordance with the terms of the LLC Agreement and the Award Agreement, as amended by this Amendment.

NOW, THEREFORE, in consideration of the premises and agreements of the parties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Company and Participant hereby agree as follows:

1.          Exchange of Existing Units for New Class B Units. Participant hereby exchanges his Existing Units for 500,000 Class B Units subject to the terms of the LLC Agreement and this Award Agreement.

2.          Amendment of Award Agreement. The Award Agreement is amended as follows:

a.           (a)          All references in the Award Agreement to Class C shall refer to Class B, including, but not limited to, “Class C Units” shall refer to “Class B Units,” “Class C Member” shall refer to “Class B Member.”

b.           Section 1 of the Award Agreement is amended as follows:

(i)          Section 1(a) of the Award Agreement is deleted in its entirety and replaced with the following, “The aggregate Profits Interest Hurdle is $0.00.”

(ii)         Section 1(d) of the Award Agreement is deleted in its entirety and replaced with the following, “As of March 31, 2014, Participant shall be deemed to have earned three (3) Earned Redemption Quarters, which number shall increase as provided in the LLC Agreement.

c.           Sections 9(a)(ii) and 9(a)(iii) of the Award Agreement are deleted in their entirety and replaced with:

(ii)         Non-Competition.         During the term of this Agreement, and for an additional period equal to one year after the termination of Participant’s Service with the Company for any reason other than Good Reason, unless mutually agreed otherwise by the Participant and the Company, Participant shall not, directly or indirectly, provide services in the capacity of a principal, agent, manager, owner, lender, investor, partner, officer, employee, consultant, or otherwise, to any entity that directly or indirectly competes with Company and Affiliates.

(iii)        Non-Solicitation.         Participant shall not, during his Service with the Company and for an additional period equal to two years after the termination of Participant’s Service with the Company for any reason, either directly or indirectly: (a) directly or indirectly call on or solicit for similar services, or, encourage or take away any of the Company and Affiliates’ clients or potential clients about whom Participant became aware or with whom Participant had contact as a result of Participant’s Service with the Company, either for the benefit of Participant or for any other person or entity; or (b) directly or indirectly solicit, induce, recruit, or encourage any of the Company and Affiliates’ employees or contractors to leave the employ of the Company and Affiliates or cease providing services to the Company and Affiliates on behalf of the Participant or on behalf of any other person or entity; or (c) hire for himself or any other person or entity any employee or contractor who was employed or engaged by the Company and Affiliates within six months prior to the termination of Participant’s Service.

d.           Section 9(c) is deleted in its entirety and replaced with:

(c)          If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section is invalid or unenforceable, the parties agree that (i) the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, (ii) the parties shall request that the court exercise that power, and (iii) this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed. The Participant acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of this Section 9(d) would be inadequate and, therefore, agrees that the Company shall be entitled to injunctive relief in addition to any other available rights and remedies in cases of any such breach or threatened breach.

e.           Section 9(d) is deleted in its entirety and replaced with:

(d)          Notwithstanding the definition of “Cause” in the LLC Agreement, with respect to Participant, “Cause” shall mean:

(a)          such Member's fraud or embezzlement;

(b)          any conviction of, or the entering of a plea of guilty or nolo contendere to, a financial crime that constitutes a felony (or any state-law equivalent) or that involves moral turpitude; and

(c)          any conviction of any other criminal act that has a material adverse effect on the property, operations, business or reputation of the Company or any of the Company Subsidiaries.

The Company shall bear the burden of proof in any legal proceeding with respect to any determination of Cause.

f.            Section 11 is deleted in its entirety and replaced with, “Reserved.”

3.          Ratification. Except as expressly amended and modified under this Amendment, the terms and provisions of the Award Agreement are hereby ratified and affirmed in their entirety.

4.          Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware.

5.          Counterparts; Headings. This Amendment may be signed in any number of counterparts each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Any such counterpart may be executed by facsimile transmission. Headings in this Amendment are for purposes of reference only and shall not limit or affect the meaning of the provisions hereof.

6.          Complete Agreement. This Amendment constitutes the entire agreement of the parties with respect to the amendment of the Agreement and all prior or contemporaneous agreements or understandings, verbal or written, with respect thereto are hereby superseded and merged herein.

IN WITNESS WHEREOF, the Company and the Participant have duly executed this Amendment as of the date first written above.

MEDLEY LLC
By:	/s/ Seth Taube	/s/ John D. Frederciks
		(Participant's Signature)
Name:	Seth Taube	Participant's Name and Address for notices:
		John D. Fredericks
		216 2nd Street
Its:	Manager	Sausalito, CA 94965

EX-10.5

Exhibit 10.5

Second Amendment to Award Agreement

This Second Amendment to Award Agreement (this “Amendment”) is dated as of September 23, 2014, between Medley LLC, a Delaware limited liability company (the “Company”), and John D. Fredericks (“Participant”).

RECITALS

A. Pursuant to that certain Class C Unit Award Agreement under the Amended and Restated Limited Liability Company Agreement of Medley LLC dated and effective as of December 14, 2012, effective as of June 1, 2013, as amended by the Amendment to Award Agreement dated as of May 29, 2014 (the “Award Agreement”), the Company granted to Participant 500,000 Class B Units (the “Existing Units”).

B. Concurrently herewith, the Members of the Company are entering into the Fourth Amended and Restated Limited Liability Company Agreement of Medley LLC (the “Amended LLC Agreement”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Amended LLC Agreement.

NOW, THEREFORE, in consideration of the premises and agreements of the parties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Participant hereby agree as follows:

1. Approval of Amended LLC Agreement. Participant hereby approves the Amended LLC Agreement in the form previously presented to Participant and attached hereto.

2. Reclassification of Existing Units. Upon the effectiveness the Amended LLC Agreement (the “Effective Time”), the Existing Units shall be reclassified as 303,030 Class A Units, which Class A Units are fully vested.

3. Amendment of Award Agreement. Upon the Effective Time, the Award Agreement shall be amended as follows:

a. Each of the following sections of the Award Agreement is deleted in its entirety and replaced with “Reserved”: Section 1, Section 3(c), Section 4, Section 6, Section 8, Section 9(a), Section 9(b) and Section 9(c).

b. The second sentence of Section 18 of the Award Agreement is deleted in its entirety and replaced with:

“The provisions of Section 11.10 of the LLC Agreement shall apply, mutatis mutandis, to any and all disputes arising out of, relating to or in connection with this Agreement.”

c. All references in the Award Agreement to: (i) “Class B Unit” shall refer to “Class A Unit”; (ii) “Class B Member” shall refer to “Member”; and (iii) “Board of Managers” shall refer to “Managing Member”.

4. Acknowledgment of Restrictive Covenants Agreement. Participant hereby acknowledges that, in connection herewith, Participant has entered into a Confidentiality, Non-Interference and Invention Assignment Agreement, dated as of the date hereof, with Medley Management Inc.

5. Ratification. Except as expressly amended and modified under this Amendment, the terms and provisions of the Award Agreement are hereby ratified and affirmed in their entirety.

6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware.

7. Counterparts; Headings. This Amendment may be signed in any number of counterparts each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Any such counterpart may be executed by facsimile transmission. Headings in this Amendment are for purposes of reference only and shall not limit or affect the meaning of the provisions hereof.

8. Complete Agreement. This Amendment constitutes the entire agreement of the parties with respect to the amendment of the Award Agreement and all prior or contemporaneous agreements or understandings, verbal or written, with respect thereto are hereby superseded and merged herein.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Company and Participant have duly executed this Amendment as of the date first written above.

PARTICIPANT
By:	/s/ John D. Fredericks
Name:	John D. Fredericks
Address for Notices:		216 2nd Street
		Sausalito, CA 94965
MEDLEY LLC
By:	Medley Management Inc.,
	its Managing Member
By:	/s/ Brook Taube
Name:	Brook Taube
Title:	Co-Chief Executive Officer and
	Chief Investment Officer

[Signature Page – Award Agreement Amendment]

EX-10.6

Exhibit 10.6

CONFIDENTIALITY, NON-INTERFERENCE, AND INVENTION ASSIGNMENT AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, I agree to the terms and conditions of this Confidentiality, Non-Interference, and Invention Assignment Agreement (the “Restrictive Covenants Agreement”):

Section 1.            Confidential Information.

(a)          Company Group Information. I acknowledge that, during the course of my services, I will have access to information about the Company and its affiliates (together with the Company, the “Company Group”) and that my services with the Company shall bring me into close contact with confidential and proprietary information of the Company Group. In recognition of the foregoing, I agree, at all times during the term of my services with the Company and thereafter, to hold in confidence, and not to use, except for the benefit of the Company Group, or to disclose to any person, firm, corporation, or other entity without written authorization of the Company, any Confidential Information that I obtain or create. I further agree not to make copies of such Confidential Information except as authorized by the Company. I understand that “Confidential Information” means information that the Company Group has or will develop, acquire, create, compile, discover, or own, that has value in or to the business of the Company Group that is not generally known and that the Company wishes to maintain as confidential. I understand that Confidential Information includes, but is not limited to, any and all non-public information that relates to the actual or anticipated business and/or products, research, or development of the Company, or to the Company’s technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s products or services and markets, customer lists, and customers (including, but not limited to, customers of the Company on whom I called or with whom I may become acquainted during the term of my services), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information disclosed by the Company either directly or indirectly in writing, orally, or by drawings or inspection of premises, parts, equipment, or other Company property. Notwithstanding the foregoing, Confidential Information shall not include (i) any of the foregoing items that have become publicly and widely known through no unauthorized disclosure by me or others who were under confidentiality obligations as to the item or items involved or (ii) any information that I am required to disclose to, or by, any governmental or judicial authority; provided, however, that in such event I will give the Company prompt written notice thereof so that the Company Group may seek an appropriate protective order and/or waive in writing compliance with the confidentiality provisions of this Restrictive Covenants Agreement. Without limiting the foregoing, Confidential Information shall include any information, whether public or not, which (i) represents, or is aggregated in such a way as to represent, or purport to represent, all or any portion of the investment results of, or any other information about the investment “track record” of, (A) the Company Group, (B) a business group of the Company Group, (C) one or more funds managed by the Company Group, or (D) any individual or group of individuals during their time at the Company Group, or (ii) describes an individual’s role in achieving or contributing to any such investment results.

(b)          Former Employer Information. I represent that my performance of all of the terms of this Restrictive Covenants Agreement as a member of the Company Group has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge, or data acquired by me in confidence or trust prior or subsequent to the commencement of my services with the Company, and I will not disclose to any member of the Company Group, or induce any member of the Company Group to use, any developments, or confidential or proprietary information or material I may have obtained in connection with employment or services with any prior employer or service recipient in violation of a confidentiality agreement, nondisclosure agreement, or similar agreement with such prior employer or service recipient.

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Section 2.            Developments.

(a)          Developments Retained and Licensed. I have attached hereto, as Schedule A, a list describing with particularity all developments, original works of authorship, developments, improvements, and trade secrets that were created or owned by me prior to the commencement of my services (collectively referred to as “Prior Developments”), that belong solely to me or belong to me jointly with another, that relate in any way to any of the proposed businesses, products, or research and development of any member of the Company Group, and that are not assigned to the Company hereunder, or if no such list is attached, I represent that there are no such Prior Developments. If, during any period during which I perform or performed services for the Company Group both before or after the date hereof (the “Assignment Period”), whether as an officer, employee, director, independent contractor, consultant, or agent, or in any other capacity, I incorporate (or have incorporated) into a Company Group product or process a Prior Development owned by me or in which I have an interest, I hereby grant the Company, and the Company Group shall have, a non-exclusive, royalty-free, irrevocable, perpetual, transferable worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell, and otherwise distribute such Prior Development as part of or in connection with such product or process.

(b)          Assignment of Developments. I agree that I will, without additional compensation, promptly make full written disclosure to the Company, and will hold in trust for the sole right and benefit of the Company all developments, original works of authorship, inventions, concepts, know-how, improvements, trade secrets, and similar proprietary rights, whether or not patentable or registrable under copyright or similar laws, which I may (or have previously) solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the Assignment Period, whether or not during regular working hours, provided they either: (i) relate at the time of conception or reduction to practice of the invention to the business of any member of the Company Group, or actual or demonstrably anticipated research or development of any member of the Company Group; (ii) result from or relate to any work performed for any member of the Company Group; or (iii) are developed through the use of equipment, supplies, or facilities of any member of the Company Group, or any Confidential Information, or in consultation with personnel of any member of the Company Group (collectively referred to as “Developments”). I further acknowledge that all Developments made by me (solely or jointly with others) within the scope of and during the Assignment Period are “works made for hire” (to the greatest extent permitted by applicable law) for which I am, in part, compensated by my guaranteed pay, unless regulated otherwise by law, but that, in the event any such Development is deemed not to be a work made for hire, I hereby assign to the Company, or its designee, all my right, title, and interest throughout the world in and to any such Development.

(c)          Maintenance of Records. I agree to keep and maintain adequate and current written records of all Developments made by me (solely or jointly with others) during the Assignment Period. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, or any other format. The records will be available to and remain the sole property of the Company Group at all times. I agree not to remove such records from the Company’s place of business except as expressly permitted by Company Group policy, which may, from time to time, be revised at the sole election of the Company Group for the purpose of furthering the business of the Company Group.

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(d)          Intellectual Property Rights. I agree to assist the Company, or its designee, at the Company’s expense, in every way to secure the rights of the Company Group in the Developments and any copyrights, patents, trademarks, service marks, database rights, domain names, mask work rights, moral rights, and other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments that the Company shall deem necessary in order to apply for, obtain, maintain, and transfer such rights and in order to assign and convey to the Company Group the sole and exclusive right, title, and interest in and to such Developments, and any intellectual property and other proprietary rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of the Assignment Period until the expiration of the last such intellectual property right to expire in any country of the world; provided, however, the Company shall reimburse me for my reasonable expenses incurred in connection with carrying out the foregoing obligation. If the Company is unable because of my mental or physical incapacity or unavailability for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Developments or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact to act for and in my behalf and stead to execute and file any such applications or records and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance, and transfer of letters patent or registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to the Company any and all claims, of any nature whatsoever, that I now or hereafter have for past, present, or future infringement of any and all proprietary rights assigned to the Company.

Section 3.            Returning Company Group Documents.

I agree that, at the time of termination of my services with the Company for any reason, I will deliver to the Company (and will not keep in my possession, recreate, or deliver to anyone else) any and all Confidential Information and all other documents, materials, information, and property developed by me pursuant to my services or otherwise belonging to the Company. I agree further that any property situated on the Company’s premises and owned by the Company (or any other member of the Company Group), including disks and other storage media, filing cabinets, and other work areas, is subject to inspection by personnel of any member of the Company Group at any time with or without notice.

Section 4.            Disclosure of Agreement.

As long as it remains in effect, I will disclose the existence of this Restrictive Covenants Agreement to any prospective employer, service recipient, partner, co-venturer, investor, or lender prior to entering into an employment, services, partnership, or other business relationship with such person or entity.

Section 5.            Restrictions on Interfering.

(a)          Non-Competition. During the period of my services with the Company (the “Services Period”) and the Post-Termination Restricted Period, I shall not, directly or indirectly, individually or on behalf of any person, company, enterprise, or entity, or as a sole proprietor, partner, stockholder, director, officer, principal, agent, or executive, or in any other capacity or relationship, engage in any Competitive Activities within the United States of America or any other jurisdiction in which any member of the Company Group engages in business, derives a material portion of its revenues, or has demonstrable plans to commence business activities.

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(b)          Non-Interference.

(i)          During the Services Period and the Post-Termination Employee Non-Interference Period, I shall not, directly or indirectly for my own account or for the account of any other individual or entity, engage in (A) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Person employed by, or providing consulting services to, any member of the Company Group to terminate such Person’s employment or services (or in the case of a consultant, materially reducing such services) with the Company Group, or (B) hiring any individual who was employed by the Company Group within the six (6) month period prior to the date of such hiring.

(ii)         During the Services Period and the Post-Termination Business Relation Non-Interference Period, I shall not, directly or indirectly for my own account or for the account of any other individual or entity, engage in encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Business Relation to cease doing business with or reduce the amount of business conducted with the Company Group, or in any way interfering with the relationship between any such Business Relation and the Company Group.

(c)          Definitions. For purposes of this agreement:

(i)          “Business Relation” shall mean any current or prospective client, customer, licensee, supplier, or other business relation of the Company Group, or any such relation that was a client, customer, licensee or other business relation within the prior six (6) month period, in each case, with whom I transacted business or whose identity became known to me in connection with my relationship with, or provision of services to, the Company.

(ii)         “Competitive Activities” shall mean any business activities related to asset management, direct lending, corporate credit investments, investment management, investment advisory services and investment banking services, or any other business activity that is materially competitive with the then current or demonstrably planned business activities of the Company Group.

(iii)        “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

(iv)        “Post-Termination Business Relation Non-Interference Period” shall mean the period commencing on the date of the termination of the Services Period for any reason and ending on the six (6) month anniversary of such date of termination.

(v)         “Post-Termination Employee Non-Interference Period” shall mean the period commencing on the date of the termination of the Services Period for any reason and ending on the twelve (12) month anniversary of such date of termination.

(vi)        “Post-Termination Restricted Period” shall mean the period commencing on the date of the termination of the Services Period for any reason and ending on the six month anniversary of such date of termination.

(d)          Non-Disparagement. I agree that during the Services Period, and at all times thereafter, I will not make any disparaging or defamatory comments regarding any member of the Company Group or their respective current or former directors, officers, or employees in any respect or make any comments concerning any aspect of my relationship with any member of the Company Group or any conduct or events which precipitated any termination of my services from any member of the Company Group. However, my obligations under this subsection (d) shall not apply to disclosures required by applicable law, regulation, or order of a court or governmental agency.

4

Section 6.            Reasonableness of Restrictions.

I acknowledge and recognize the highly competitive nature of the Company’s business, that access to Confidential Information renders me special and unique within the Company’s industry, and that I will have the opportunity to develop substantial relationships with existing and prospective clients, accounts, customers, consultants, contractors, investors, and strategic partners of the Company Group during the course of and as a result of my services with the Company. In light of the foregoing, I recognize and acknowledge that the restrictions and limitations set forth in this Restrictive Covenants Agreement are reasonable and valid in geographical and temporal scope and in all other respects and are essential to protect the value of the business and assets of the Company Group. I further acknowledge that the restrictions and limitations set forth in this agreement will not materially interfere with my ability to earn a living following the termination of my services with the Company and that my ability to earn a livelihood without violating such restrictions is a material condition to my services with the Company.

Section 7.            Independence; Severability; Blue Pencil.

Each of the rights enumerated in this Restrictive Covenants Agreement shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to the Company Group at law or in equity. If any of the provisions of this Restrictive Covenants Agreement or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of this Restrictive Covenants Agreement, which shall be given full effect without regard to the invalid portions. If any of the covenants contained herein are held to be invalid or unenforceable because of the duration of such provisions or the area or scope covered thereby, I agree that the court making such determination shall have the power to reduce the duration, scope, and/or area of such provision to the maximum and/or broadest duration, scope, and/or area permissible by law, and in its reduced form said provision shall then be enforceable.

Section 8.            Injunctive Relief.

I expressly acknowledge that any breach or threatened breach of any of the terms and/or conditions set forth in this Restrictive Covenants Agreement may result in substantial, continuing, and irreparable injury to the members of the Company Group. Therefore, I hereby agree that, in addition to any other remedy that may be available to the Company, any member of the Company Group shall be entitled to seek injunctive relief, specific performance, or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of this Restrictive Covenants Agreement without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach. Notwithstanding any other provision to the contrary, I acknowledge and agree that each of the Post-Termination Restricted Period, the Post-Termination Business Relation Non-Interference Period, and the Post-Termination Employee Non-Interference Period shall be tolled during any period of violation of any of the covenants in Section 5 hereof and during any other period required for litigation during which the Company or any other member of the Company Group seeks to enforce such covenants against me if it is ultimately determined that I was in breach of such covenants.

5

Section 9.            Cooperation.

I agree that, following any termination of my services, I will continue to provide reasonable cooperation to the Company and/or any other member of the Company Group and its or their respective counsel in connection with any investigation, administrative proceeding, or litigation relating to any matter that occurred during my services in which I was involved or of which I have knowledge. As a condition of such cooperation, the Company shall reimburse me for reasonable out-of-pocket expenses incurred at the request of the Company with respect to my compliance with this Section 9. I also agree that, in the event I am subpoenaed by any person or entity (including, but not limited to, any government agency) to give testimony or provide documents (in a deposition, court proceeding, or otherwise), that in any way relates to my services with the Company and/or any other member of the Company Group, I will give prompt notice of such request to the Company and will make no disclosure until the Company and/or the other member of the Company Group has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure.

Section 10.          General Provisions.

(a)          Governing Law; Waiver of Jury Trial. The validity, interpretation, construction, and performance of this RESTRICTIVE COVENANTS Agreement shall be governed by the laws of the United States of America and the State of Delaware, without giving effect to the principles of conflict of laws. BY EXECUTION OF THIS RESTRICTIVE COVENANTS AGREEMENT, I HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THIS RESTRICTIVE COVENANTS AGREEMENT.

(b)          Entire Agreement. This Restrictive Covenants Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us. No modification or amendment to this Restrictive Covenants Agreement, nor any waiver of any rights under this Restrictive Covenants Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, obligations, rights, or compensation will not affect the validity or scope of this Restrictive Covenants Agreement.

(c)          No Right of Continued Services. I acknowledge and agree that nothing contained herein shall be construed as granting me any right to continued services with the Company, and the right of the Company to terminate my services at any time and for any reason, with or without cause, is specifically reserved.

(d)          Successors and Assigns. This Restrictive Covenants Agreement will be binding upon my heirs, executors, administrators, and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. I expressly acknowledge and agree that this Restrictive Covenants Agreement may be assigned by the Company without my consent to any other member of the Company Group as well as any purchaser of all or substantially all of the assets or stock of the Company, whether by purchase, merger, or other similar corporate transaction, provided that the license granted pursuant to Section 2(a) may be assigned to any third party by the Company without my consent.

(e)          Survival. The provisions of this Restrictive Covenants Agreement shall survive the termination of my services with the Company and/or the assignment of this Restrictive Covenants Agreement by the Company to any successor in interest or other assignee.

*      *      *

6

The undersigned has executed this Confidentiality, Non-Interference, and Invention Assignment Agreement on the respective date set forth below:

Date:
	(Signature)

[Signature Page to Confidentiality, Non-Interference, and Invention Assignment Agreement]

SCHEDULE A

LIST OF PRIOR DEVELOPMENTS
AND ORIGINAL WORKS OF AUTHORSHIP
EXCLUDED FROM SECTION 2

Title Date Identifying Number or Brief Description

_____ No Developments or Improvements

_____ Additional Sheets Attached

Signature of Member: ________________________

Print Name of Member:_______________________

Date: ________________________

EX-10.7

Exhibit 10.7

MEDLEY CAPITAL HOLDINGS LLC
375 Park Avenue, Suite 3304
New York, NY 10152

October 27, 2010

Windsor Advisors LLC

T3 Group LLC

c/o Medley Capital Holdings LLC

375 Park Avenue, Suite 3304

New York, NY 10152

Dear Sirs:

Reference is made to that certain Limited Liability Company Agreement effective as of October 27, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “Operating Agreement”) of Medley Capital Holdings LLC, a Delaware limited liability company (the “Company”), by and among the members party thereto. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement.

The Company hereby agrees that, effective as of October 27, 2010, as monthly compensation to each of the Principals, on the first day of each month, the Company shall make a distribution on account of the Class B Units owned directly or indirectly by each Principal from Distributable Cash (calculated before reduction for the guaranteed payments provided hereby) in the form of guaranteed payments (which shall be “guaranteed payments” under Code §707(c)). The guaranteed payments on account of the Class B Units owned directly or indirectly by each Principal shall be conditioned on the Principal who is the direct or indirect owner of such Class B Units complying with the Minimum Commitment. The Board of Managers shall determine the amount of the guaranteed payment with respect to each such Principal and the amount of the guaranteed payment with respect to each such Principal need not be the same as that determined for any of the other Principals. The maximum guaranteed payment per each such Principal shall be:

(a)        $750,000 per annum (paid monthly) while the Company's total assets under management (on which Management Fees are collected) across all of the Funds are less than $1 billion.

(b)        $1,000,000 per annum (paid monthly) while the Company's total assets under management (on which Management Fees are collected) across all of the Funds are equal to or greater than $1 billion, but less than $1.5 billion.

(c)        $1,500,000 per annum (paid monthly) while the Company's total assets under management (on which Management Fees are collected) across all of the Funds are equal to or greater than $1.5 billion, but less than $2.0 billion.

(d)        $2,500,000 per annum (paid monthly) while the Company's total assets under management (on which Management Fees are collected) across all of the Funds are equal to or greater than $2.0 billion.

Subject to Section 14.1(a)(ix) of the Operating Agreement, the maximum guaranteed payments may be modified as determined by the Board of Managers from time to time. With respect to The guaranteed payment with respect to any such Principal who fails to provide the Minimum Commitment shall be ratably adjusted. In addition, all Principals shall be entitled to reimbursement by the Company of out-of-pocket expenses reasonably incurred in connection with meetings of the Board of Managers or other activities requested or approved by a Majority of the Board of Managers. The guaranteed payments shall be paid from Management Fees and Incentive Fees received by the Company from the Funds after the satisfaction of operating expenses of the Company. To the extent that there are insufficient funds to pay the full amount of guaranteed payments set forth in this letter agreement after the satisfaction of operating expenses of the Company, the guaranteed payments shall be paid to the extent of any such available funds and any deficiency will be accrued and paid to on account of the Class B Units owned directly or indirectly by such Principals when there are available funds from Management Fees and Incentive Fees received from the Funds in excess of operating expenses of the Company.

This letter agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding any conflict of laws rule or principle that may refer the governance, construction or interpretation of this letter agreement to the laws of another state.

In accordance with Section 14.1(a)(ix) of the Operating Agreement, this letter agreement may not be amended without the consent of all of the Class A Members, and any amendment hereto in violation thereof shall not be valid or effective against the Company.

[Intentionally Left Blank]

If the foregoing accurately reflects the agreement between us, please countersign the enclosed copy of this letter and return it to us.

Very truly yours,
MEDLEY CAPITAL HOLDINGS LLC
By:	/s/ Brook Taube
Name:	Brook Taube
Title:	Manager

AGREED TO AND ACCEPTED:

PRINCIPALS:		SOLE CLASS A MEMBER:
By:	/s/ Andrew Fentress	SMH PARTNERS, LLC
	Andrew Fentress
		By:	/s/ Bernard L. Schwartz
By:	/s/ Seth Taube	Name:	Bernard L. Schwartz
	Seth Taube	Title:	Authorized Person
By:	/s/ Brook Taube
	Brook Taube
CLASS B MEMBERS:
Windsor Advisors LLC
BY:	/s/ Andrew Fentress
Its Authorized Representative
T3 Group LLC
BY:	Brook Taube
Its Authorized Representative

EX-31.1

Exhibit 31.1

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

I, Brook Taube, certify that:    

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 of Medley Management Inc.;

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 officers 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)) 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;

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 officers 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.

By:	/s/ Brook Taube
	Brook Taube
	Co-Chief Executive Officer and Co-Chairman
	(Co-Principal Executive Officer)
	May 14, 2015

EX-31.2

Exhibit 31.2

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

I, Seth Taube, certify that:    

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 of Medley Management Inc.;

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 officers 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)) 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;

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 officers 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.

By:	/s/ Seth Taube
	Seth Taube
	Co-Chief Executive Officer and Co-Chairman
	(Co-Principal Executive Officer)
	May 14, 2015

EX-31.3

Exhibit 31.3

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Richard T. Allorto, Jr., certify that:    

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 of Medley Management Inc.;

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 officers 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)) 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;

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 officers 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.

By:	/s/ Richard T. Allorto, Jr.
	Richard T. Allorto, Jr.
	Chief Financial Officer
	(Principal Financial Officer)
	May 14, 2015

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 on Form 10-Q of Medley Management Inc. (the “Company”) for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brook Taube, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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 results of operations of the Company.

By:	/s/ Brook Taube
	Brook Taube
	Co-Chief Executive Officer and Co-Chairman
	(Co-Principal Executive Officer)

May 14, 2015

A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

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 on Form 10-Q of Medley Management Inc. (the “Company”) for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Seth Taube, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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 results of operations of the Company.

By:	/s/ Seth Taube
	Seth Taube
	Co-Chief Executive Officer and Co-Chairman
	(Co-Principal Executive Officer)

May 14, 2015

A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.3

Exhibit 32.3

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 on Form 10-Q of Medley Management Inc. (the “Company”) for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard T. Allorto, Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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 results of operations of the Company.

By:	/s/ Richard T. Allorto, Jr.
	Richard T. Allorto, Jr.
	Chief Financial Officer
	(Principal Financial Officer)

May 14, 2015

A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

INVESTMENTS (Investments in Consolidated Funds) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	$ 735,623	$ 734,870
Investment Owned, Percent of Net Assets	100.00%	100.00%
Investment Owned, Costs	606,918	790,677
Collectibles [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	0
Collectibles [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		688
Investment Owned, Percent of Net Assets	0.00%	0.10%
Equity Interests in LLCs [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	35,993	40,944
Equity Interests in LLCs [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	49,654	48,784
Investment Owned, Percent of Net Assets	6.80%	6.60%
Equity Interests in LLCs [Member] | Banking, Finance, Insurance and Real Estate [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	45,336	42,338
Investment Owned, Percent of Net Assets	6.20%	5.80%
Equity Interests in LLCs [Member] | Construction and Building [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	3,540	3,297
Investment Owned, Percent of Net Assets	0.50%	0.40%
Equity Interests in LLCs [Member] | Containers, Packaging and Glass [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	331	320
Investment Owned, Percent of Net Assets	0.00%	0.00%
Equity Interests in LLCs [Member] | Energy: Oil and Gas [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		2,596
Investment Owned, Percent of Net Assets	0.00%	0.40%
Equity Interests in LLCs [Member] | Healthcare and Pharmaceuticals [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	447	63
Investment Owned, Percent of Net Assets	0.10%	0.00%
Equity Interests in LLCs [Member] | Telecommunications [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		170
Investment Owned, Percent of Net Assets	0.00%	0.00%
Equity Securities [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	3,584	22,528
Equity Securities [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	21,752	19,913
Investment Owned, Percent of Net Assets	2.90%	2.70%
Common Stock [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	157	8,913
Common Stock [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	53	964
Investment Owned, Percent of Net Assets	0.00%	0.10%
Preferred Stock [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	0	10,187
Preferred Stock [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		545
Investment Owned, Percent of Net Assets	0.00%	0.10%
Warrant [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	3,427	3,428
Warrant [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	21,699	18,404
Investment Owned, Percent of Net Assets	2.90%	2.50%
Warrant [Member] | Banking, Finance, Insurance and Real Estate [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	10,656	10,363
Investment Owned, Percent of Net Assets	1.40%	1.40%
Warrant [Member] | Construction and Building [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	154	113
Investment Owned, Percent of Net Assets	0.00%	0.00%
Warrant [Member] | Containers, Packaging and Glass [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	615	105
Investment Owned, Percent of Net Assets	0.10%	0.00%
Warrant [Member] | Energy: Oil and Gas [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	3,182	1,793
Investment Owned, Percent of Net Assets	0.40%	0.30%
Warrant [Member] | Healthcare and Pharmaceuticals [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	6,306	5,137
Investment Owned, Percent of Net Assets	0.90%	0.70%
Warrant [Member] | Retail [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	786	893
Investment Owned, Percent of Net Assets	0.10%	0.10%
North America [Member] | Senior Secured Loans And Notes [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	704,698	711,398
North America [Member] | Senior Secured Loans And Notes [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	664,217	662,655
Investment Owned, Percent of Net Assets	90.30%	90.20%
North America [Member] | Senior Secured Loans And Notes [Member] | Automotive [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	21,710	21,937
Investment Owned, Percent of Net Assets	3.00%	3.00%
North America [Member] | Senior Secured Loans And Notes [Member] | Banking, Finance, Insurance and Real Estate [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	188,471	206,424
Investment Owned, Percent of Net Assets	25.50%	28.10%
North America [Member] | Senior Secured Loans And Notes [Member] | Beverage, Food and Tobacco [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	14,859	14,934
Investment Owned, Percent of Net Assets	2.00%	2.00%
North America [Member] | Senior Secured Loans And Notes [Member] | Capital Equipment [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	8,000
Investment Owned, Percent of Net Assets	1.10%	0.00%
North America [Member] | Senior Secured Loans And Notes [Member] | Chemicals, Plastics and Rubber [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	21,144	21,196
Investment Owned, Percent of Net Assets	2.90%	2.90%
North America [Member] | Senior Secured Loans And Notes [Member] | Construction and Building [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	52,985	53,547
Investment Owned, Percent of Net Assets	7.20%	7.30%
North America [Member] | Senior Secured Loans And Notes [Member] | Consumer goods: Non-durable [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	34,948	34,687
Investment Owned, Percent of Net Assets	4.80%	4.70%
North America [Member] | Senior Secured Loans And Notes [Member] | Containers, Packaging and Glass [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	26,411	26,823
Investment Owned, Percent of Net Assets	3.50%	3.70%
North America [Member] | Senior Secured Loans And Notes [Member] | Energy: Oil and Gas [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	30,333	32,736
Investment Owned, Percent of Net Assets	4.10%	4.60%
North America [Member] | Senior Secured Loans And Notes [Member] | Healthcare and Pharmaceuticals [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	97,120	81,921
Investment Owned, Percent of Net Assets	13.20%	11.10%
North America [Member] | Senior Secured Loans And Notes [Member] | High Tech Industries [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	25,532	25,329
Investment Owned, Percent of Net Assets	3.50%	3.40%
North America [Member] | Senior Secured Loans And Notes [Member] | Hotel, Gaming and Leisure [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	10,403	11,494
Investment Owned, Percent of Net Assets	1.40%	1.60%
North America [Member] | Senior Secured Loans And Notes [Member] | Media: Advertising, Printing and Publishing [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		346
Investment Owned, Percent of Net Assets	0.00%	0.00%
North America [Member] | Senior Secured Loans And Notes [Member] | Metals and Mining [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	25,525	26,042
Investment Owned, Percent of Net Assets	3.50%	3.50%
North America [Member] | Senior Secured Loans And Notes [Member] | Retail and Commercial Kitchen Appliances [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	24,715	24,886
Investment Owned, Percent of Net Assets	3.40%	3.40%
North America [Member] | Senior Secured Loans And Notes [Member] | Services: Business [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	38,928	34,808
Investment Owned, Percent of Net Assets	5.30%	4.70%
North America [Member] | Senior Secured Loans And Notes [Member] | Services: Consumer [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value	43,133	45,545
Investment Owned, Percent of Net Assets	5.90%	6.20%
South America [Member] | Senior Secured Loans And Notes [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	0	13,049
South America [Member] | Senior Secured Loans And Notes [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		1,453
Investment Owned, Percent of Net Assets	0.00%	0.20%
South America [Member] | Senior Secured Loans And Notes [Member] | Banking, Finance, Insurance and Real Estate [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		1,029
Investment Owned, Percent of Net Assets	0.00%	0.10%
South America [Member] | Senior Secured Loans And Notes [Member] | Energy: Oil and Gas [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		424
Investment Owned, Percent of Net Assets	0.00%	0.10%
Asia [Member] | Senior Secured Loans And Notes [Member]
Schedule of Investments [Line Items]
Investment Owned, Costs	0
Asia [Member] | Senior Secured Loans And Notes [Member] | Banking, Finance, Insurance and Real Estate [Member] | Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment Owned, at Fair Value		$ 1,377
Investment Owned, Percent of Net Assets	0.00%	0.20%

XML

RELATED PARTY TRANSACTIONS (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Apr. 30, 2012	Dec. 31, 2014
Non-recourse Promissory Notes [Member]
Related Party Transaction [Line Items]
Debt instrument, face amount	$ 2,500,000		$ 10,000,000
Nonrecourse Promissory Note Zero Interest [Member]
Related Party Transaction [Line Items]
Debt instrument, face amount	2,500,000
Debt instrument, interest rate, effective percentage	0.00%
Debt instrument, periodic payment, principal	312,500
Debt instrument, maturity date	Mar. 31, 2016
Debt instrument, issuance date	Mar. 31, 2014
MCC Admin Agreement [Member]
Related Party Transaction [Line Items]
Administrative services revenue	1,100,000	800,000
Accrued fees and other revenue receivable	1,100,000			1,100,000
SIC Admin Agreement [Member]
Related Party Transaction [Line Items]
Administrative services revenue	600,000	200,000
Accrued fees and other revenue receivable	600,000			400,000
SIC [Member] | Investment Advisory Agreement [Member]
Related Party Transaction [Line Items]
Gross proceeds benchmark	300,000,000
Fee percentage for orgainization and offereing costs	1.25%
Organization and Offering Expenses		700,000
Reimbursement revenue		900,000
SIC [Member] | Expense Support and Reimbursement Agreement [Member]
Related Party Transaction [Line Items]
Operating expenses percentage	100.00%
Expense support and reimbursement agreement expenses	2,200,000	1,300,000
ESA Liability	$ 4,100,000			$ 5,200,000

XML

LOANS PAYABLE (Schedule of Maturities of Long-term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Loans Payable [Abstract]
Remaining in 2015	$ 937
2016	312
2017	2,875
2018	5,500
2019	96,626
Long-term debt, gross	$ 106,250

XML

EARNINGS PER CLASS A SHARE (Narrative) (Details) (USD $)	3 Months Ended	0 Months Ended
	Mar. 31, 2015	Nov. 10, 2014
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Dividends declared per Class A common stock	$ 0.20
Antidilutive securities excluded from computation of earnings per share (shares)	23,333,333
Common Class A [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Dividends declared per Class A common stock		$ 0.20

XML

LOANS PAYABLE (Narrative) (Details) (USD $)	3 Months Ended		0 Months Ended	1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Aug. 14, 2014	Oct. 31, 2014	Apr. 30, 2012	Dec. 31, 2014
Debt Instrument [Line Items]
Proceeds from issuance of long-term debt		$ 17,500,000
Repayments of long-term debt	313,000
Partners capital account, distributions	9,044,000
Ratio of indebtedness to net capital	3.5
Long-term Debt	102,932,000					103,057,000
London Interbank Offered Rate L I B O R [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, face amount			15,000,000
Line of credit facility, initiation date	Aug. 14, 2014
Debt Instrument, Interest Rate Terms	Borrowings under the Revolving Credit Facility bear interest at the option of the Company, either (i) at an Alternate Base Rate, as defined, plus an applicable margin not to exceed 3.25% or (ii) at an Adjusted LIBOR plus an applicable margin not to exceed 4.0%
CNB Credit Agreement [Member]
Debt Instrument [Line Items]
Repayments of long-term debt	33,200,000
Credit Suisse Term Loan Facility [Member]
Debt Instrument [Line Items]
Debt instrument, issuance date	Aug. 14, 2014
Debt instrument, face amount	110,000,000
Debt instrument, maturity date	Jun. 15, 2019
Proceeds from issuance of long-term debt			108,900,000
Debt instrument, unamortized discount (premium), net	948,000		1,100,000			1,006,000
Repayments of long-term debt				15,000,000
Debt instrument, fee amount	2,600,000
Deferred finance costs, net	2,400,000
Partners capital account, distributions	74,500,000
Debt instrument, interest rate during period	6.50%
Debt instrument, frequency of periodic payment	quarterly installments
Debt instrument, periodic payment, principal	1,400,000
Debt instrument benchmark, aggregate, maximum	33,000,000
Interest expense, debt	1,600,000
Debt Instrument, Interest Rate Terms	Borrowings under the Term Loan Facility bear interest, at the borrower's option, at a rate equal to either a Eurodollar margin over an adjusted LIBOR (with a "floor" of 1.0%) or a base rate margin over an adjusted base rate determined by reference to the highest of (i) the term loan administrative agent's prime rate; (ii) the federal funds effective rate in effect on such day plus 0.5%; and (iii) an adjusted LIBOR plus 1.0%. The applicable margins for the Term Loan Facility are 5.5%, in the case of Eurodollar loans and 4.5%, in the case of adjusted base rate loans
Debt Instrument, Covenant Description	The Term Loan Facility also contains a financial covenant that requires the Company to maintain a Maximum Net Leverage Ratio commencing with the quarter ending on December 31, 2014 of not greater than 3.5 to 1.0
Debt Instrument Additional Borrowing Covenant Description	subject to additional increases, provided that the net leverage ratio as of the last day of any four-fiscal quarter period, commencing with the four-fiscal quarter period ending December 31, 2014, shall not exceed 2.0 to 1.0
Long-term Debt	94,052,000					93,994,000
Credit Suisse Term Loan Facility [Member] | Federal Funds Effective Swap Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.50%
Credit Suisse Term Loan Facility [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	5.50%
Credit Suisse Term Loan Facility [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	4.50%
Credit Suisse Term Loan Facility [Member] | Term Loan Credit Facility [Member]
Debt Instrument [Line Items]
Ratio of indebtedness to net capital	2.0
Debt Instrument, Additional Borrowings Capacity	15,000,000
Non-recourse Promissory Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	2,500,000				10,000,000
Debt instrument, unamortized discount (premium), net	2,370,000					2,500,000
Unamortized Debt Issuance Expense					3,800,000
Interest expense, debt	300,000	400,000
Sale of stock, number of shares issued in transaction					1,108,033
Notes payable, fair value disclosure	10,300,000
Debt Instrument, Collateral	Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations.
Non-recourse Promissory Notes [Member] | CNB Credit Agreement [Member]
Debt Instrument [Line Items]
Long-term Debt	8,880,000					9,063,000
Nonrecourse Promissory Note Zero Interest [Member]
Debt Instrument [Line Items]
Debt instrument, issuance date	Mar. 31, 2014
Debt instrument, face amount	2,500,000
Debt instrument, maturity date	Mar. 31, 2016
Debt instrument, interest rate, effective percentage	0.00%
Debt instrument, periodic payment, principal	312,500
Long-term Debt	$ 1,300,000					$ 1,600,000
Non Recourse Promissory Notes Due March 2019 [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Mar. 31, 2019
Maximum [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate L I B O R [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	4.00%
Maximum [Member] | Revolving Credit Facility [Member] | Alternate Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	3.25%
Maximum [Member] | Credit Suisse Term Loan Facility [Member]
Debt Instrument [Line Items]
Ratio of indebtedness to net capital	3.5
Minimum [Member] | Credit Suisse Term Loan Facility [Member] | London Interbank Offered Rate L I B O R [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following presents the standalone financial results of the Company’s operating results for the three months ended March 31, 2015 and 2014:

	For the Three Months Ended
	March 31,
	(unaudited)
	2015		2014
	(Amounts in thousands)
Revenues
Management fees	$	17,520	$	14,991
Performance fees		6,336		76
Other revenues and fees		1,624		2,013
Total revenues		25,480		17,080
Expenses
Compensation and benefits		7,221		3,759
Performance fee compensation		112		1,518
General, administrative and other expenses		4,507		4,229
Total expenses		11,840		9,506
Other income (expense)
Dividend income		222		222
Interest expense		(2,085)		(633)
Other expenses, net		(262)		(1,192)
Total other expense, net		(2,125)		(1,603)
Income before income taxes		11,515		5,971
Provision for income taxes		1,148		230
Net income		10,367		5,741
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290		(47)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	$	9,077	$	5,788
Reimbursable fund startup expenses (1)		1,923		1,275
Severance expense (1)		121		6
IPO date award stock-based compensation (1)		646		-
Adjustment for pre-IPO guaranteed payments to members (1)(2)		-		(1,226)
Core Net Income	$	11,767	$	5,843
Interest expense		2,085		633
Income taxes		1,499		230
Depreciation and amortization		111		92
Core EBITDA	$	15,462	$	6,798

(1)Presented net of income taxes.

(2)Represents a pro forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO, these payments were recorded as distributions from member’s capital.

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following tables reconcile the Company’s segment results to its consolidated results of operations:

	For the Three Months Ended March 31, 2015
	(unaudited)
			Consolidation
			Adjustments
			and
			Reconciling			Consolidated
	Standalone		Items			Results
	(Amounts in thousands)
Revenues	$	25,480	$	(6,450)	(1)	$	19,030
Expenses		11,840		793	(2)		12,633
Other income (expense), net		(2,125)		19,360	(3)		17,235
Provision for income taxes		1,148		542	(4)		1,690
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290		-			1,290
Net income attributable to non-controlling interests in Consolidated Funds		-		11,575			11,575
Net income attributable to non-controlling interests in Medley LLC		7,803		-			7,803
Net income attributable to Medley Management Inc.		1,274		-			1,274
Add: Net income attributable to non-controlling interests in Medley LLC		7,803		-			7,803
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		9,077		-			9,077
Reimbursable fund startup expenses		1,923		-			1,923
Severance expenses		121		-			121
IPO date award stock-based compensation		646		-			646
Core Net Income	$	11,767	$	-		$	11,767

	For the Three Months Ended March 31, 2014
	(unaudited)
			Consolidation
			Adjustments
			and
			Reconciling			Consolidated
	Standalone		Items			Results
	(Amounts in thousands)
Revenues	$	17,080	$	(1,084)	(1)	$	15,996
Expenses		9,506		320	(2)		9,826
Other income (expense)		(1,603)		5,590	(3)		3,987
Provision for income taxes		230		274	(4)		504
Net income attributable to non-controlling interests in consolidated subsidiaries		(47)					(47)
Net income attributable to non-controlling interests in Consolidated Funds		-		3,912			3,912
Net income attributable to non-controlling interests in Medley LLC		5,788		-			5,788
Net income attributed to Medley Management Inc.		-		-			-
Add: Net income attributable to non-controlling interests in Medley LLC		5,788		-			5,788
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		5,788		-			5,788
Reimbursable fund startup expenses		1,275		-			1,275
Severance expenses		6		-			6
Adjustment for pre-IPO guaranteed payments to members		(1,226)		-			(1,226)
Core Net Income	$	5,843	$	-		$	5,843

(1)Adjustments and reconciling items to revenues represent management and performance fees earned from Consolidated Funds which were eliminated in consolidation. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Management fees from Consolidated Funds eliminated in consolidation	$	(1,326)	$	(1,763)
Performance fees eliminated in consolidation		(5,124)		679
Total consolidated adjustments and reconciling items	$	(6,450)	$	(1,084)

(2)Adjustments and reconciling items to expenses represent expenses from Consolidated Funds which were eliminated in consolidation. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Consolidated Funds Expenses	$	793	$	320
Total consolidated adjustments and reconciling items	$	793	$	320

(3)Adjustments and reconciling items to other income primarily represent net interest income and net investment income from Consolidated Funds. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Interest and other income of Consolidated Funds	$	18,727	$	13,421
Interest expense on secured borrowings of Consolidated Funds		(3,804)		(1,312)
Net realized gain (loss) on investment of Consolidated Funds		952		1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		4,022		(7,813)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		(416)		(324)
Elimination of equity income (loss) from Consolidated Funds		(121)		261
Total consolidated adjustments and reconciling items	$	19,360	$	5,590

(4)Adjustments and reconciling items to the provision for income taxes represent income taxes from Consolidated Funds.For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Consolidated Funds provision for income taxes	$	542	$	274
Total consolidated adjustments and reconciling items	$	542	$	274

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INCOME TAXES (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income Taxes [Abstract]
Deferred Tax Assets, Net of Valuation Allowance	$ 1,200,000		$ 1,200,000
Deferred Tax Liabilities, Gross	517,000		245,000
Effective Income Tax Rate Reconciliation, Percent	7.20%	5.00%
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	0	0
Unrecognized Tax Benefits	$ 0		$ 0
Income Tax Examination, Description	Certain subsidiaries of the Company are no longer subject to tax examinations by taxing authorities for tax years prior to 2010 and, presently, have no open examinations for tax years before 201

XML

INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2015

Investments [Abstract]

Composition of Investments

The composition of investments is as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Equity method investments, at fair value	$	11,539	$	9,901
Investments of Consolidated Funds, at fair value		735,623		734,870
Total Investments	$	747,162	$	744,771

Investments in Consolidated Funds

The following table presents a summary of the investments held by the Consolidated Funds and as a percentage of total investments of Consolidated Funds.

	Investments of Consolidated Funds
	Fair Value				Percentage
	March 31,				March 31,
	2015		December 31,		2015		December 31,
	(unaudited)		2014		(unaudited)		2014
	(Amounts in thousands)
Geographic Region/Investment Type/Industry Description:
North America:
Senior secured loans and notes:
Automotive	$	21,710	$	21,937	3.0	%	3.0	%
Banking, Finance, Insurance and Real Estate		188,471		206,424	25.5	%	28.1	%
Beverage, Food and Tobacco		14,859		14,934	2.0	%	2.0	%
Capital Equipment		8,000		-	1.1	%	0.0	%
Chemicals, Plastics and Rubber		21,144		21,196	2.9	%	2.9	%
Construction and Building		52,985		53,547	7.2	%	7.3	%
Consumer goods: Non-durable		34,948		34,687	4.8	%	4.7	%
Containers, Packaging and Glass		26,411		26,823	3.5	%	3.7	%
Energy: Oil and Gas		30,333		32,736	4.1	%	4.6	%
Healthcare and Pharmaceuticals		97,120		81,921	13.2	%	11.1	%
High Tech Industries		25,532		25,329	3.5	%	3.4	%
Hotel, Gaming and Leisure		10,403		11,494	1.4	%	1.6	%
Media: Advertising, Printing and Publishing		-		346	0.0	%	0.0	%
Metals and Mining		25,525		26,042	3.5	%	3.5	%
Retail and Commercial Kitchen Appliances		24,715		24,886	3.4	%	3.4	%
Services: Business		38,928		34,808	5.3	%	4.7	%
Services: Consumer		43,133		45,545	5.9	%	6.2	%
Total Senior Secured Loans and Notes, North America (cost of $704,698 and $711,398, respectively)	$	664,217	$	662,655	90.3	%	90.2	%
South America:
Senior secured loans and notes:
Banking, Finance, Insurance and Real Estate	$	-	$	1,029	0.0	%	0.1	%
Energy: Oil and Gas		-		424	0.0	%	0.1	%
Total Senior Secured Loans and Notes, South America (cost of $0 and $13,049, respectively)	$	-	$	1,453	0.0	%	0.2	%
Asia:
Banking, Finance, Insurance and Real Estate (cost of $0 and $1,373)	$	-	$	1,377	0.0	%	0.2	%

	Investments of Consolidated Funds
	Fair Value				Percentage
	March 31,				March 31,
	2015		December 31,		2015		December 31,
	(unaudited)		2014		(unaudited)		2014
	(Amounts in thousands)
Geographic Region/Investment Type/Industry Description:
North America:
Equity interests in limited liability companies:
Banking, Finance, Insurance and Real Estate	$	45,336	$	42,338	6.2	%	5.8	%
Construction and Building		3540		3,297	0.5	%	0.4	%
Containers, Packaging and Glass		331		320	0.0	%	0.0	%
Energy: Oil and Gas		-		2,596	0.0	%	0.4	%
Healthcare and Pharmaceuticals		447		63	0.1	%	0.0	%
Telecommunications		-		170	0.0	%	0.0	%
Total Equity Interest in Limited Liability Companies (cost of $35,993 and $40,944, respectively)	$	49,654	$	48,784	6.8	%	6.6	%
Equity securities:
Common Stock (cost of $157 and $8,913 , respectively)	$	53	$	964	0.0	%	0.1	%
Preferred Stock (cost of $0 and $10,187, respectively)	$	-	$	545	0.0	%	0.1	%
Warrants:
Banking, Finance, Insurance and Real Estate	$	10,656	$	10,363	1.4	%	1.4	%
Construction and Building		154		113	0.0	%	0.0	%
Containers, Packaging and Glass		615		105	0.1	%	0.0	%
Energy: Oil and Gas		3,182		1,793	0.4	%	0.3	%
Healthcare and Pharmaceuticals		6,306		5,137	0.9	%	0.7	%
Retail		786		893	0.1	%	0.1	%
Total Warrants (cost of $3,427 and $3,428, respectively)		21,699		18,404	2.9	%	2.5	%
Total Equity Securities (cost of $3,584 and $22,528, respectively)	$	21,752	$	19,913	2.9	%	2.7	%
Collectibles (cost of $0 and $1,385)	$	-	$	688	0.0	%	0.1	%
Total Investments of Consolidated Funds (cost of $606,918 and $790,677, respectively)	$	735,623	$	734,870	100.0	%	100.0	%

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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Components of Accounts Payable, Accrued Expenses, and Other Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts payable, accrued expenses and other liabilities of Medley:
Accrued compensation and benefits	$ 2,841	$ 8,575
Due to affiliates (Note 9)	4,120	6,998
Revenue share payable (Note 8)	6,744	6,669
Dividends payable	1,366	1,423
Income taxes payable	742	741
Professional fees	499	545
Deferred rent	427	474
Deferred tax liabilities	517	245
Secured borrowings of Consolidated Funds, at fair value	136,806	141,135
Accounts payable and accrued expenses	2,067	1,913
Total accounts payable and accrued expenses	19,323	27,583
Total accounts payable, accrued expenses and other liabilities	284,162	289,349
Medley And Consolidated Funds [Member]
Accounts payable, accrued expenses and other liabilities of Medley:
Total accounts payable and accrued expenses	33,047	33,350
Consolidated Funds [Member]
Accounts payable, accrued expenses and other liabilities of Medley:
Secured borrowings of Consolidated Funds, at fair value	136,806	141,135
Total accounts payable and accrued expenses	$ 13,724	$ 5,767

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FAIR VALUE MEASUREMENTS (Reconciliation of Level III Investments) (Details) (Consolidated Funds [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year	$ 744,680
Amortization	(2,140)
Paid in-kind interest income	939
Purchases	54,097
Sales and settlements	(43,983)
Realized and unrealized appreciation (depreciation), net	4,342
Deconsolidation of MOF I	(11,336)
Transfer out of level 3	(105)
Balance, end of period	746,494
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	3,912
Secured Borrowings of Consolidated Funds [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year, Liabilities	141,119
Unrealized depreciation on secured borrowings of Consolidated Funds, net	418
Proceeds from secured borrowings, net	(4,744)
Balance, end of year, Liabilities	136,793
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	420
Equity Method Investments [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year	9,901
Realized and unrealized appreciation (depreciation), net	(130)
Deconsolidation of MOF I	1,768
Balance, end of period	11,539
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	(130)
Senior Secured Loans And Notes [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year	664,108
Amortization	(2,140)
Paid in-kind interest income	921
Purchases	51,065
Sales and settlements	(43,983)
Realized and unrealized appreciation (depreciation), net	2,498
Deconsolidation of MOF I	(8,252)
Balance, end of period	664,217
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	2,068
Equity Interest [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year	48,784
Paid in-kind interest income	18
Purchases	3,032
Realized and unrealized appreciation (depreciation), net	(810)
Deconsolidation of MOF I	(1,370)
Balance, end of period	49,654
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	(810)
Equity Securities [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year	19,822
Realized and unrealized appreciation (depreciation), net	2,784
Deconsolidation of MOF I	(1,417)
Transfer out of level 3	(105)
Balance, end of period	21,084
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	2,784
Investments In Tangible Assets [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Balance, beginning of year	2,065
Deconsolidation of MOF I	$ (2,065)

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INVESTMENTS (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Investments [Line Items]
Equity method investment, at fair value	$ 11,539	$ 9,901
Consolidated Funds [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	606,918	790,677
Sierra Income Corporation [Member]
Schedule of Investments [Line Items]
Equity method investment, at fair value	10,000	9,900
Equity Interests in LLCs [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	35,993	40,944
Equity Securities [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	3,584	22,528
Common Stock [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	157	8,913
Preferred Stock [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	0	10,187
Warrant [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	3,427	3,428
Collectibles [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	0
North America [Member] | Senior Secured Loans And Notes [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	704,698	711,398
Asia [Member] | Senior Secured Loans And Notes [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	0
South America [Member] | Senior Secured Loans And Notes [Member]
Schedule of Investments [Line Items]
Investment owned, at cost	$ 0	$ 13,049

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) (USD $)	3 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Apr. 30, 2012	Dec. 31, 2014
Commitments And Contingencies [Line Items]
Lease expiration period	various times through December 2020
Rent expense	$ 700,000	$ 600,000
Consolidated Funds [Member]
Commitments And Contingencies [Line Items]
Unfunded capital commitments	900,000			1,100,000
Non-recourse Promissory Notes [Member]
Commitments And Contingencies [Line Items]
Debt instrument, face amount	2,500,000		10,000,000
Proceeds from issuance of debt			10,000,000
Present value of future cash flows expected to be paid			4,400,000
Contractual obligation	$ 6,700,000			$ 6,700,000

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CONSOLIDATING SCHEDULES (Consolidated Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 71,834	$ 87,206	$ 1,969	$ 5,395
Investments, at fair value	735,623	734,870
Investments, at fair value	11,539	9,901
Management fees receivable	15,024	15,173
Performance fees receivable	6,785	5,573
Other assets	9,084	9,230
Total assets	935,369	910,399
Liabilities and equity
Loans payable	102,932	103,057
Accounts payable, accrued expenses and other liabilities	19,323	27,583
Secured borrowings	136,806	141,135
Performance fee compensation payable	11,377	11,807
Total liabilities	284,162	289,349
Stockholders' Equity
Additional paid-in-capital	(1,606)	(2,384)
Retained earnings	180	272
Total stockholders' equity, Medley Management Inc.	(1,366)	(2,052)
Total (deficit) equity	651,207	621,050
Total liabilities and equity	935,369	910,399
Common Class A [Member]
Stockholders' Equity
Common stock value	60	60
Consolidated Funds [Member]
Assets
Cash and cash equivalents	77,725	38,111
Investments, at fair value	735,623	734,870
Other assets	1,340	3,681
Interest and dividends receivable	6,415	6,654
Liabilities and equity
Accounts payable, accrued expenses and other liabilities	13,724	5,767
Secured borrowings	136,806	141,135
Stockholders' Equity
Non-controlling interests	654,970	625,548
Consolidated Subsidiaries [Member]
Stockholders' Equity
Non-controlling interests	2,816	1,526
Medley LLC [Member]
Assets
Other assets	9,084	9,230
Stockholders' Equity
Non-controlling interests	(5,213)	(3,972)
Standalone [Member]
Assets
Cash and cash equivalents	71,834	87,206
Investments, at fair value	27,588	22,143
Management fees receivable	15,024	15,173
Performance fees receivable	6,785	5,573
Other assets	9,338	9,230
Total assets	130,569	139,325
Liabilities and equity
Loans payable	102,932	103,057
Accounts payable, accrued expenses and other liabilities	20,023	28,959
Performance fee compensation payable	11,377	11,807
Total liabilities	134,332	143,823
Stockholders' Equity
Additional paid-in-capital	(1,606)	(2,384)
Retained earnings	180	272
Total stockholders' equity, Medley Management Inc.	(1,366)	(2,052)
Total (deficit) equity	(3,763)	(4,498)
Total liabilities and equity	130,569	139,325
Standalone [Member] | Common Class A [Member]
Stockholders' Equity
Common stock value	60	60
Standalone [Member] | Consolidated Subsidiaries [Member]
Stockholders' Equity
Non-controlling interests	2,816	1,526
Standalone [Member] | Medley LLC [Member]
Stockholders' Equity
Non-controlling interests	(5,213)	(3,972)
Consolidated Funds [Member]
Assets
Total assets	821,803	784,692
Liabilities and equity
Secured borrowings	136,806	141,135
Total liabilities	150,784	146,902
Stockholders' Equity
Members' equity of consolidated funds	671,019	637,790
Total (deficit) equity	671,019	637,790
Total liabilities and equity	821,803	784,692
Consolidated Funds [Member] | Consolidated Funds [Member]
Assets
Cash and cash equivalents	77,725	38,111
Investments, at fair value	735,623	734,870
Other assets	2,040	5,057
Interest and dividends receivable	6,415	6,654
Liabilities and equity
Accounts payable, accrued expenses and other liabilities	13,978	5,767
Consolidation, Eliminations [Member]
Assets
Investments, at fair value	(16,049)	(12,242)
Other assets	(254)
Total assets	(17,003)	(13,618)
Liabilities and equity
Accounts payable, accrued expenses and other liabilities	(700)	(1,376)
Total liabilities	(954)	(1,376)
Stockholders' Equity
Members' equity of consolidated funds	(671,019)	(637,790)
Total (deficit) equity	(16,049)	(12,242)
Total liabilities and equity	(17,003)	(13,618)
Consolidation, Eliminations [Member] | Consolidated Funds [Member]
Assets
Other assets	(700)	(1,376)
Liabilities and equity
Accounts payable, accrued expenses and other liabilities	(254)
Stockholders' Equity
Non-controlling interests	$ 654,970	$ 625,548

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SEGMENT REPORTING (Reconciliation of Operating Profit (Loss) from Segments to Consolidated) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Segment Reporting Information [Line Items]
Revenues	$ 19,030		$ 15,996
Expenses	12,633		9,826
Other income (expense), net	17,235		3,987
Income taxes	1,690		504
Net income attributable to Medley Management Inc.	1,274
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	21,942		9,653
Reimbursable fund startup expenses	1,923		1,275
Severance expenses	121		6
IPO date award stock-based compensation	646
Adjustment for pre-IPO guaranteed payments to members			(1,226)
Core Net Income	11,767		5,843
Standalone [Member]
Segment Reporting Information [Line Items]
Revenues	25,480		17,080
Expenses	11,840		9,506
Other income (expense), net	(2,125)		(1,603)
Income taxes	1,148		230
Net income attributable to non-controlling interests	1,290		(47)
Net income attributable to Medley Management Inc.	1,274
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	10,367		5,741
Reimbursable fund startup expenses	1,923	[1]	1,275	[1]
Severance expenses	121	[1]	6	[1]
IPO date award stock-based compensation	646	[1]		[1]
Adjustment for pre-IPO guaranteed payments to members			(1,226)	[1],[2]
Core Net Income	11,767		5,843
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Revenues	(6,450)		(1,084)
Expenses	793		320
Other income (expense), net	19,360		5,590
Income taxes	542		274
Consolidated Subsidiaries [Member]
Segment Reporting Information [Line Items]
Net income attributable to non-controlling interests	1,290		(47)
Consolidated Subsidiaries [Member] | Standalone [Member]
Segment Reporting Information [Line Items]
Net income attributable to non-controlling interests	1,290		(47)
Consolidated Funds [Member]
Segment Reporting Information [Line Items]
Net income attributable to non-controlling interests	11,575		3,912
Consolidated Funds [Member] | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Expenses	793		320
Income taxes	542		274
Net income attributable to non-controlling interests	11,575		3,912
Medley LLC [Member]
Segment Reporting Information [Line Items]
Net income attributable to non-controlling interests	7,803		5,788
Medley LLC [Member] | Standalone [Member]
Segment Reporting Information [Line Items]
Net income attributable to non-controlling interests	7,803		5,788
Medley Management Inc. And Non Controlling Interests In Medley LLC [Member]
Segment Reporting Information [Line Items]
Net income attributable to Medley Management Inc.	9,077		5,788
Medley Management Inc. And Non Controlling Interests In Medley LLC [Member] | Standalone [Member]
Segment Reporting Information [Line Items]
Net income attributable to Medley Management Inc.	$ 9,077		$ 5,788

[1] Presented net of income taxes.

[2] Represents a pro forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO, these payments were recorded as distributions from member’s capital.

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LOANS PAYABLE (Schedule of Debt) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Aug. 14, 2014
Debt Instrument [Line Items]
Long-term Debt	$ 102,932	$ 103,057
Credit Suisse Term Loan Facility [Member]
Debt Instrument [Line Items]
Long-term Debt	94,052	93,994
Debt instrument, unamortized discount (premium), net	948	1,006	1,100
Non-recourse Promissory Notes [Member]
Debt Instrument [Line Items]
Debt instrument, unamortized discount (premium), net	2,370	2,500
Non-recourse Promissory Notes [Member] | CNB Credit Agreement [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 8,880	$ 9,063

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Principles of Consolidation

In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity.

An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk (as a group) lack either the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the success of the legal entity or the obligation to absorb the expected losses or right to receive the expected residual returns or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns of the legal entity, or both, and substantially all of the legal entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. Entities that do not qualify as VIEs are generally assessed for consolidation under the voting interest model.

For those entities that qualify as a VIE, the Company performs an analysis to determine if it is the primary beneficiary. With respect to certain VIEs that qualify for accounting treatment under Accounting Standard Update (“ASU”) 2010-10, the Company determines that it is the primary beneficiary only if its involvement, through holding interests directly or indirectly in the VIE or contractually through other variable interests (e.g., carried interest and management fees), would be expected to absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both. In order to qualify for this accounting treatment, certain conditions have to be met, including if the entities have all the attributes of an investment company and are not securitization or asset-backed financing entities. For all other entities, the Company determines that it is the primary beneficiary if it holds a controlling financial interest defined as possessing both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. In making its assessment the Company takes into consideration all fee and substantive arrangements, terms and transactions that may exist. The assessment of whether an entity is a VIE and the determination of whether the Company should consolidate such VIE requires judgments and is dependent on the particular facts and circumstances. Each entity is assessed for consolidation on a case-by-case basis.

For those entities evaluated under the voting interest model, the Company consolidates those entities it controls through a majority voting interest or through other means whereby the Company is the general partner and is presumed to have control. The Company would not consolidate an entity in which the presumption of control by the general partner has been overcome through either the granting of substantive rights to the unaffiliated investors to either dissolve the entity or remove the general partner (“kick-out-rights”) or the granting of substantive participating rights.

Consolidated Variable Interest Entities

Medley Management Inc. is the sole managing member of Medley LLC and, as such, it operates and controls all of the business and affairs of Medley LLC and, through Medley LLC, conducts its business. Under ASC 810, Medley LLC meets the definition of a variable interest entity because the equity of Medley LLC is not sufficient to permit activities without additional subordinated financial support. Since Medley Management Inc. has the obligation to absorb expected losses that could be significant to Medley LLC and holds 100% of the voting power, Medley Management Inc. is considered to be the primary beneficiary of Medley LLC.

As a result, Medley Management Inc. consolidates the financial results of Medley LLC and its subsidiaries and records a non-controlling interest for the economic interest in Medley LLC held by the non-managing members. Medley Management Inc.’s and the non-managing members’ economic interests in Medley LLC is 20.5% and 79.5%, respectively, as of March 31, 2015 and December 31, 2014. Net income attributable to the non-controlling interest in Medley LLC on the consolidated statements of operations represents the portion of earnings attributable to the economic interest in Medley LLC held by its non-managing members. Non-controlling interests in Medley LLC on the consolidated balance sheets represents the portion of net assets of Medley LLC attributable to the non-managing members based on total LLC Units of Medley LLC owned by such non-managing members.

Medley LLC has one majority owned subsidiary, SIC Advisors LLC, that is a consolidated VIE. This entity was organized as a limited liability company and was legally formed to manage a designated fund and to isolate business risk. As of March 31, 2015 and December 31, 2014, total assets, after eliminating entries, of this VIE reflected in the consolidated balance sheets were $18.6 million and $18.0 million, respectively. Total liabilities, after eliminating entries, of this VIE were $18.7 million and $19.6 million as of March 31, 2015 and December 31, 2014, respectively. Except to the extent of the assets of this VIE that are consolidated, the holders of the consolidated VIE’s liabilities generally do not have recourse to the Company.

Consolidated Funds

With respect to the Consolidated Funds, which represent limited partnerships, Medley LLC earns a fixed management fee based on either (i) limited partners’ capital commitments to the funds, (ii) invested capital, (iii) net asset value (“NAV”), or (iv) lower of cost or market value of a fund’s portfolio investments. In addition, Medley earns a performance fee based upon the investment returns in excess of a stated hurdle rate. The Company considered the accounting treatment under ASU 2010-10 as all the respective conditions have been met and determined that the funds were not VIEs. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, these funds have been consolidated under the voting interest model in accordance with ASC 810-20, Control of Partnerships and Similar Entities.

In December 2014, the Company formed the Medley Opportunity Fund III LP (MOF III), which is structured as a limited partnership.  One of the Company’s wholly owned subsidiaries is the general partner and investment manager of MOF III. The Company considered the accounting treatment under ASU 2010-10 as all the respective conditions have been met and determined that MOF III was not a VIE. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, this fund has been consolidated under the voting interest model in accordance with ASC 810-20.

Deconsolidation of a Fund

The Company had consolidated the Medley Opportunity Fund LP (MOF I LP) in its consolidated financial statements under the voting interest model in accordance with ASC 810-20, as the Company was the general partner and the limited partners lacked substantive kick out or participating rights. Effective January 1, 2015, the Company completed its role as investment manager of MOF I LP and transitioned the management of the residual assets of this fund to another asset manager. As a result of this transition, the Company deconsolidated the financial statements of this fund, on January 1, 2015. There was no gain or loss recognized upon deconsolidation.

Basis of Accounting

Management has determined that the Company’s Consolidated Funds are investment companies under U.S. GAAP for the purposes of financial reporting. U.S. GAAP requires that investments held by an investment company be recorded at fair value and any unrealized appreciation (depreciation) in an investment’s fair value be recognized on a current basis in the consolidated statements of operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the specialized accounting guidance for the Consolidated Funds under U.S. GAAP. As such, all of the investments held by the Consolidated Funds are presented at their estimated fair values in the Company’s condensed consolidated balance sheets. Interest income of the Consolidated Funds is included in interest and other income of Consolidated Funds in the Company’s consolidated statements of operations.

Concentrations of Credit and Market Risk

In the normal course of business, the Company encounters significant credit and market risk. Credit risk is the risk of default on investments in debt securities, loans and derivatives that result from a borrower’s or derivative counterparty’s inability or unwillingness to make required or expected payments. Credit risk is increased in situations where the Company is investing in distressed assets or unsecured or subordinate loans or in securities that are a material part of its respective business. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors.

The Company may make investments outside of the United States. These non-U.S. investments are subject to the same risks associated with U.S. investments, as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing the investments, potentially adverse tax consequences, and the burden of complying with a wide variety of foreign laws.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Indemnification

In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has not experienced any prior claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.

Non-Controlling Interests in Consolidated Entities

Non-controlling interests in Consolidated Funds and consolidated subsidiaries represent the component of equity in such consolidated entities held by third party investors. These interests are adjusted for general partner allocations and, for funds, by subscriptions and redemptions that occur during the reporting period.

Class A Earnings per Share

The Company computes and presents earnings per share using the two-class method. Under the two-class method, the Company allocates earnings between common stock and participating securities. The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. For purposes of calculating earnings per share, the Company reduces its reported net earnings by the amount allocated to participating securities to arrive at the earnings allocated to Class A common stockholders. Earnings is then divided by the weighted average number of Class A common stock outstanding to arrive at basic earnings per share. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in our earnings. Participating securities consist of the Company’s unvested restricted stock units that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in its basic and diluted calculations.

Investments

Investments include equity method investments that are not consolidated but in which the Company exerts significant influence, and investments held by the Consolidated Funds. Medley measures the fair value of the equity method investments that do not have a readily determinable fair value at net asset value or market value. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investees is reflected as a component of other income (expense) in the condensed consolidated statements of operations.

The Consolidated Funds reflect their investments at fair value with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net change in unrealized depreciation on investments of Consolidated Funds in the condensed consolidated statements of operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price).

Fair Value Measurements

The Consolidated Funds apply fair value accounting to all of their financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Consolidated Funds have categorized their financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 4. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Consolidated Funds’ own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. The Company weights the use of third-party broker quotes, if any, in determining fair value based on the Company’s understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by the Company based upon inputs by third-party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time.

The Consolidated Funds use third-party valuation firms to assist in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. Based on market data obtained from the third-party valuation firms, the Consolidated Funds use a market yield analysis under the income approach or an enterprise model of valuation under the market approach, or a combination thereof. In applying the market yield analysis, the value of the Consolidated Funds’ loans is determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, the Consolidated Funds use a waterfall analysis that takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital structure. To estimate the enterprise value of the portfolio company, some or all of the traditional market valuation methods and factors are weighed based on the individual circumstances of the portfolio company in order to estimate the enterprise value.

The methodologies and information that the Company utilizes when applying the Market Approach for performing investments includes, among other things:

· valuations of comparable public companies (Guideline Comparable approach);

· recent sales of private and public comparable companies (Guideline Comparable approach);

· recent acquisition prices of the company, debt securities or equity securities (Acquisition Price Approach);

· external valuations of the portfolio company, offers from third parties to buy the company (Estimated Sales Proceeds approach);

· subsequent sales made by the company of its investments (Expected Sales Proceeds approach); and

· estimating the value to potential buyers.

The methodologies and information that the Company utilizes when applying the Income Approach for performing investments includes:

· discounting the forecasted cash flows of the portfolio company or securities (Discounted Cash Flow “DCF” approach); and

· Black-Scholes model or simulation models or a combination thereof (Income Approach – Option Model) with respect to the valuation of warrants.

For non-performing investments, the Company may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model (Income Approach – Expected Recovery Analysis or Estimated Liquidation Proceeds).

A multi-step valuation process is undertaken each quarter when valuing portfolio investments for which market quotations are not readily available, as described below:

· The quarterly valuation process begins with each portfolio investment being initially valued by the Company’s internal valuation team;

· An independent valuation firm engaged by the Consolidated Funds prepares an independent valuation report for approximately one-third of the portfolio investments each quarter on a rotating quarterly basis on non-fiscal year-end quarters, such that each of these investments will be valued by independent valuation firms at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms; and

· Preliminary valuation conclusions are then documented and discussed with senior management.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Consolidated Funds’ investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Revenues

Management Fees

Medley provides investment management services to both public and private investment vehicles. Management fees include both base management fees, other management fees, and Part I incentive fees, as described below.

Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) the net asset value or (v) lower of cost or market value of a fund’s portfolio investments. For the private funds, Medley receives base management fees during a specified period of time, which is generally ten years from the initial closing date. However, such termination date may be earlier in certain limited circumstances or later if extended for successive one-year periods, typically up to a maximum of two years. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided.

Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the portfolio companies of the Consolidated Funds, as well as separately managed accounts. These fees are recognized when Medley becomes entitled to such fees.

Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net interest income (excluding gains and losses) above a hurdle rate. These fees are not subject to repayment, clawbacks or netting against realized losses. Part I incentive fees are paid quarterly and are recognized as earned over the period the services are provided.

Performance Fees

Performance fees consist principally of the allocation of profits from certain funds, including separately managed accounts, to which Medley provides management services. Medley is generally entitled to an allocation of income as a performance fee after returning the invested capital plus a specified preferred return as set forth in each respective agreement. Medley recognizes revenues attributable to performance fees based upon the amount that would be due pursuant to the respective agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized reflects Medley’s share of the gains and losses of the associated funds’ underlying investments measured at their current fair values. Performance fee revenue may include reversals of previously recognized performance fees due to a decrease in the net income of a particular fund that results in a decrease of cumulative performance fees earned to date. Since fund return hurdles are cumulative, previously recognized performance fees also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. For the three months ended March 31, 2015, the Company reversed $0.1 million of previously recognized performance fees on a standalone and consolidated basis. The Company did not reverse any previously recognized performance fees for the period ended March 31, 2014. Cumulative performance fees recognized through March 31, 2015 were $26.7 million and $6.8 million on a standalone and consolidated basis, respectively.

Performance fees received in prior periods may be required to be returned by Medley in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, performance fees can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments at their then current fair values previously recognized and distributed performance fees would be required to be returned, a liability is established for the potential clawback obligation. As of March 31, 2015, the Company had not received any performance fee distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of performance fees. Pursuant to the organizational documents of each respective fund, tax distributions are not subject to clawback. As such, no amounts have been accrued for clawback obligations in the accompanying condensed consolidated financial statements.

Other Revenues and Fees

Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective agreement. These fees are recognized as revenue in the period administrative services are rendered.

Included in other revenues and fees are reimbursements received by Medley from SIC under its investment advisory agreement. Expenses incurred by Medley under this agreement are recorded within general, administrative, and other expenses in the consolidated statements of operations. For additional information on these reimbursements, refer to Note 10.

Performance Fee Compensation

Medley has issued profit interests in certain subsidiaries to selected employees. These profit-sharing arrangements are accounted for under ASC 710, Compensation — General, which requires compensation expense to be measured at fair value at the grant date and expensed over the vesting period, which is usually the period over which the service is provided. The fair value of the profit interests are re-measured at each balance sheet date and adjusted for changes in estimates of cash flows and vesting percentages. The impact of such changes is recorded in the consolidated statements of operations as an increase or decrease to performance fee compensation.

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Under the fair value recognition provision of this guidance, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period.

Stock-based compensation expense recognized for the year ended December 31, 2014 is based on awards ultimately expected to vest and have been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The effect of such change in estimated forfeitures is recognized through a cumulative catch-up adjustment that is included in the period of the change in estimate.

The value of the portion of the award that is ultimately expected to vest on a straight-line basis over the requisite service period is included within compensation and benefits on the Company’s condensed consolidated statements of operations.

Income Taxes

The Company accounts for income taxes using the asset and liability approach, which requires the recognition of tax benefits or expenses for temporary differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to recognize interest and penalties on uncertain tax positions and other tax matters as a component of income tax expense. For interim periods, the Company accounts for income taxes based on its estimate of the effective tax rate for the year. Discrete items and changes in its estimate of the annual effective tax rate are recorded in the period they occur.

Prior to the Company’s Reorganization and IPO, no provision was made for U.S. federal income taxes in the accompanying condensed consolidated financial statements since the Company was a group of pass-through entities for U.S. and state income tax purposes and its profits and losses were allocated to the partners who are individually responsible for reporting such amounts. A provision for income taxes was made for certain entities that were subject to New York City’s unincorporated business tax.

Following the IPO, Medley LLC and its subsidiaries continue to operate as pass-through entities for U.S. income tax purposes. Accordingly, these entities in some cases continue to be subject to New York City’s unincorporated business tax. Medley Management Inc. is subject to U.S. federal, state and local corporate income taxes, which are reflected in the Company’s consolidated financial statements.

Secured Borrowings of Consolidated Funds

The Consolidated Funds follow the guidance in ASC 860, Transfers and Servicing, when accounting for loan participations and other partial loan sales. Such guidance provides accounting and reporting standards for transfers and servicing of financial assets and requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance. Under ASC 860, the Company applies a control-oriented approach to participating interests whereby control is considered to have been surrendered only if (i) the transferred financial assets have been isolated from the transferor, (ii) the transferee has the right to pledge or exchange the transferred financial assets it received, and (iii) the transferor, its consolidated affiliates in the financial statements being presented, or its agents do not maintain effective control over the transferred financial assets. Participations or other partial loan sales which do not meet all of these conditions remain on the Company’s condensed consolidated balance sheets and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

For these participations or partial loan sales accounted for as secured borrowings, the interest income earned on the entire loan balance is recorded within interest and other income of Consolidated Funds and the interest income earned by the buyer in the partial loan sale is recorded as interest expense of Consolidated Funds in the accompanying consolidated statements of operations. Changes in the fair value of secured borrowings of Consolidated Funds are included in net change in unrealized depreciation (appreciation) on secured borrowings in the consolidated statements of operations.

Revisions to Previously Issued Financial Statements

The Company accounts for certain loan participations as secured borrowings that in previously issued financial statements had been accounted for as true sales, as defined in ASC 860.  These loan participation agreements did not contain any prohibited constraints on exchange or transfer and the assets were legally isolated from the transferor. Upon further analysis, the Company determined that a provision in the asset management agreement between the transferee and a consolidated affiliate of the transferor had a standard provision that restricted transfer of the assets for a period of time. As a result of this constraint, the Company determined that, in accordance with ASC 860-10-40-5, the transactions should be reported as secured borrowings. The Company has determined that the impact on its previously issued financial statements was not material.  As a result, prior periods were revised as follows: (i) interest and other income of Consolidated Funds increased by $1.3 million for the three months ended March 31, 2014, with direct offsetting amounts to interest expense of Consolidated Funds, (ii) the recording of unrealized appreciation (depreciation) on investments of Consolidated Funds of $0.3 for the three months ended March 31, 2014, with direct offsetting amounts to unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds, and (iii) a change in net cash used in operating activities of $11.8 million for the three months ended March 31, 2014, with offsetting changes in cash provided by financing activities. These changes had no impact on consolidated and standalone equity or net income.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers(Topic 606). This guidance 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 amendments are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact, if any, that this ASU will have on its condensed consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation – Principal versus Agent Analysis. This guidance requires an entity to evaluate whether it should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This guidance is effective for interim and annual periods beginning after December 15, 2015 and early application is permitted. The Company is currently evaluating the impact, if any, that this ASU will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Under current accounting standards, such costs are reflected as an asset on the Company's condensed consolidated balance sheets. While the new guidance is effective for the Company beginning January 1, 2016, early application is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated balance sheets.

In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).  Under the amendments in this update, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient should not be categorized in the fair value hierarchy. Removing those investments from the fair value hierarchy not only eliminates the diversity in practice resulting from the way in which investments measured at net asset value per share (or its equivalent) with future redemption dates are classified, but also ensures that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share (or its equivalent), but for which the practical expedient is notapplied will continue to be included in the fair value hierarchy. The amendments in this update are effective for the Company beginning January 1, 2016. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

XML

SEGMENT REPORTING (Adjustments and Reconciliations to Revenues) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Management fees from Consolidated Funds eliminated in consolidation	$ 16,194	$ 13,228
MOF II Performance fees eliminated in consolidation	1,212	755
Total revenues	19,030	15,996
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Management fees from Consolidated Funds eliminated in consolidation	(1,326)	(1,763)
MOF II Performance fees eliminated in consolidation	(5,124)	679
Total revenues	$ (6,450)	$ (1,084)

XML

FAIR VALUE MEASUREMENTS (Summary of Quantitative Inputs and Assumptions) (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	747,162,000	744,771,000
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	136,806,000	141,135,000
Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount		141,119,000
Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	136,806,000	141,135,000
LTM EBITDA And Revenue Multiples [Member] | Minimum [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.50
LTM EBITDA And Revenue Multiples [Member] | Maximum [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.65
LTM EBITDA And Revenue Multiples [Member] | Weighted Average [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.58
Discount Rate [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	5,000,000
Discount Rate [Member] | Minimum [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Discount Rate [Member] | Maximum [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Discount Rate [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Market Yield [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	119,857,000	130,157,000
Market Yield [Member] | Minimum [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	9.63%	10.00%
Market Yield [Member] | Maximum [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	13.50%	15.21%
Market Yield [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	11.31%	12.45%
Recent Arms-length Transaction Input [Member] | Recent Arms-length Transaction [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	4,988,000
Capitalization Rate [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount		5,000,000
Capitalization Rate [Member] | Minimum [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Capitalization Rate		8.70%
Capitalization Rate [Member] | Maximum [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Capitalization Rate		8.70%
Capitalization Rate [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Capitalization Rate		8.70%
EBITDA Multiple [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	6,637,000	5,947,000
EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.50	5.50
EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	6.00	6.00
EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.75	5.75
EBITDA, other Multiple [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount		15,000
EBITDA, other Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		4.00
EBITDA, other Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		8.31
EBITDA, other Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		5.20
LTM and NTM EBITDA Multiple [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	311,000
LTM and NTM EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	7.50
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	7.00
LTM and NTM EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	8.50
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	8.00
LTM and NTM EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	8.50
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	8.00
Senior Secured Loans And Notes [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	664,217,000	664,108,000
Senior Secured Loans And Notes [Member] | Price per acre [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Acre		8,000
Senior Secured Loans And Notes [Member] | Price per acre [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Acre		41,000
Senior Secured Loans And Notes [Member] | Price per acre [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Acre		24,500
Senior Secured Loans And Notes [Member] | Price per room [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Room		43,200
Senior Secured Loans And Notes [Member] | Price per room [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Room		71,429
Senior Secured Loans And Notes [Member] | Price per room [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Room		57,315
Senior Secured Loans And Notes [Member] | Price per unit [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Unit		155,734
Senior Secured Loans And Notes [Member] | Price per unit [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Unit		228,009
Senior Secured Loans And Notes [Member] | Price per unit [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Unit		191,872
Senior Secured Loans And Notes [Member] | Expected Sales Proceeds [Member] | Maximum [Member] | Negotiated Sales Proceeds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs Expected Proceeds		4,000,000
Senior Secured Loans And Notes [Member] | Expected Sales Proceeds [Member] | Weighted Average [Member] | Negotiated Sales Proceeds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs Expected Proceeds		1,932,000
Senior Secured Loans And Notes [Member] | LTM Revenue Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.60
Senior Secured Loans And Notes [Member] | LTM Revenue Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.60
Senior Secured Loans And Notes [Member] | LTM Revenue Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.45
Senior Secured Loans And Notes [Member] | LTM EBITDA multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple		3.10
Senior Secured Loans And Notes [Member] | LTM EBITDA multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple		3.62
Senior Secured Loans And Notes [Member] | LTM EBITDA multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple		3.60
Senior Secured Loans And Notes [Member] | LTM EBITDA And Revenue Multiples [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple		3.10
Senior Secured Loans And Notes [Member] | LTM EBITDA And Revenue Multiples [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple		5.50
Senior Secured Loans And Notes [Member] | LTM EBITDA And Revenue Multiples [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple		4.30
Senior Secured Loans And Notes [Member] | Discount Rate [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	14.50%	12.00%
Senior Secured Loans And Notes [Member] | Discount Rate [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	18.00%	35.00%
Senior Secured Loans And Notes [Member] | Discount Rate [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	16.66%	20.50%
Senior Secured Loans And Notes [Member] | Discount Rate, Other [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate		14.00%
Senior Secured Loans And Notes [Member] | Discount Rate, Other [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate		18.00%
Senior Secured Loans And Notes [Member] | Discount Rate, Other [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate		16.45%
Senior Secured Loans And Notes [Member] | Asset Coverage [Member] | Minimum [Member] | Liquidation Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Asset coverage		144,531
Senior Secured Loans And Notes [Member] | Asset Coverage [Member] | Maximum [Member] | Liquidation Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Asset coverage		144,531
Senior Secured Loans And Notes [Member] | Asset Coverage [Member] | Weighted Average [Member] | Liquidation Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Asset coverage		144,531
Senior Secured Loans And Notes [Member] | Market Yield [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	9.55%	10.00%
Senior Secured Loans And Notes [Member] | Market Yield [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	15.05%	15.21%
Senior Secured Loans And Notes [Member] | Market Yield [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	11.90%	12.45%
Senior Secured Loans And Notes [Member] | EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		5.50
Senior Secured Loans And Notes [Member] | EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		6.00
Senior Secured Loans And Notes [Member] | EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		5.75
Senior Secured Loans And Notes [Member] | EBITDA, other Multiple [Member] | Minimum [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		6.00
Senior Secured Loans And Notes [Member] | EBITDA, other Multiple [Member] | Maximum [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		7.00
Senior Secured Loans And Notes [Member] | EBITDA, other Multiple [Member] | Weighted Average [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		7.00
Senior Secured Loans And Notes [Member] | EBITDA Multiple/Estimated Liquidation Proceeds [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	2.00	2.00
Fair Value Inputs, Liquidation Proceeds	205,800,000	205,800,000
Senior Secured Loans And Notes [Member] | LTM and 2015 EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	4.50
Senior Secured Loans And Notes [Member] | LTM and 2015 EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.50
Senior Secured Loans And Notes [Member] | LTM and 2015 EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.25
Senior Secured Loans And Notes [Member] | Rev Multiple/ EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		4.09
Fair Value Inputs, Revenue Multiple		0.43
Senior Secured Loans And Notes [Member] | 2015 EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.50
Senior Secured Loans And Notes [Member] | 2015 EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	6.00
Senior Secured Loans And Notes [Member] | 2015 EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.75
Equity Interests in LLCs [Member] | Discount Rate [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	14.50%	14.00%
Equity Interests in LLCs [Member] | Discount Rate [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	18.00%	18.00%
Equity Interests in LLCs [Member] | Discount Rate [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	18.00%	18.00%
Equity Interests in LLCs [Member] | Discount Rate, Other [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Equity Interests in LLCs [Member] | Discount Rate, Other [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Equity Interests in LLCs [Member] | Discount Rate, Other [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Equity Interests in LLCs [Member] | Market Yield [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	12.23%	13.14%
Equity Interests in LLCs [Member] | Market Yield [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	12.23%	13.14%
Equity Interests in LLCs [Member] | Market Yield [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Market yield Rate	12.23%	13.14%
Equity Interests in LLCs [Member] | Capitalization Rate [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Capitalization Rate		8.70%
Equity Interests in LLCs [Member] | Capitalization Rate [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Capitalization Rate		8.70%
Equity Interests in LLCs [Member] | Capitalization Rate [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Capitalization Rate		8.70%
Equity Interests in LLCs [Member] | EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		6.25
Equity Interests in LLCs [Member] | EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		8.50
Equity Interests in LLCs [Member] | EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		6.70
Equity Interests in LLCs [Member] | EBITDA Multiple / Volatility [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		3.75
Fair Value Assumptions, Expected Volatility Rate		50.00%
Equity Interests in LLCs [Member] | Investment Portfolio Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Investment Portfolio Multiple	1.10	1.10
Equity Interests in LLCs [Member] | Investment Portfolio Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Investment Portfolio Multiple	1.1	1.10
Equity Interests in LLCs [Member] | Investment Portfolio Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Investment Portfolio Multiple	1.10	1.10
Equity Interests in LLCs [Member] | LTM and NTM EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	6.00
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	5.50
Equity Interests in LLCs [Member] | LTM and NTM EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	7.00
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	6.50
Equity Interests in LLCs [Member] | LTM and NTM EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	6.50
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	6.00
Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	7.50
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	7.50
Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	8.50
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	8.50
Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	8.50
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	8.50
Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple, Other [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	4.50
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	4.50
Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple, Other [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.50
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	5.50
Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple, Other [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.25
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	5.25
Equity Interests in LLCs [Member] | LTM, NTM EBITDA, and Volatility Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	3.50
Fair Value Assumptions, Expected Volatility Rate	40.40%
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	4.00
Equity Interests in LLCs [Member] | LTM, NTM EBITDA, and Volatility Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	4.00
Fair Value Assumptions, Expected Volatility Rate	72.40%
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	4.00
Equity Interests in LLCs [Member] | LTM, NTM EBITDA, and Volatility Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	3.75
Fair Value Assumptions, Expected Volatility Rate	70.00%
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	3.75
Equity Interests in LLCs [Member] | Unsolicited Offer Price [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Unsolicited Offer Price		12,000,000
Equity Interests in LLCs [Member] | Unsolicited Offer Price [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Unsolicited Offer Price		12,000,000
Equity Interests in LLCs [Member] | Unsolicited Offer Price [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Unsolicited Offer Price		12,000,000
Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	21,752,000	19,913,000
Equity Securities [Member] | LTM Revenue Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.50
Equity Securities [Member] | LTM Revenue Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.65
Equity Securities [Member] | LTM Revenue Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Revenue Multiple		0.58
Equity Securities [Member] | LTM EBITDA multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	4.50	5.00
Equity Securities [Member] | LTM EBITDA multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	5.50	5.50
Equity Securities [Member] | LTM EBITDA multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	4.50	5.25
Equity Securities [Member] | Discount Rate [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate		13.00%
Equity Securities [Member] | Discount Rate [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate		18.00%
Equity Securities [Member] | Discount Rate [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Discount Rate		16.40%
Equity Securities [Member] | EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		4.00
Equity Securities [Member] | EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		8.31
Equity Securities [Member] | EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple		5.20
Equity Securities [Member] | EBITDA Multiple/Estimated Liquidation Proceeds [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	2.00
Fair Value Inputs, Liquidation Proceeds	205.80
Equity Securities [Member] | LTM EBITDARD multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization, Rent And Donation Multiple		10.40
Equity Securities [Member] | LTM EBITDARD multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization, Rent And Donation Multiple		11.10
Equity Securities [Member] | LTM EBITDARD multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization, Rent And Donation Multiple		10.75
Equity Securities [Member] | NTM EBITDARD Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization, Rent And Donation Multiple		9.50
Equity Securities [Member] | NTM EBITDARD Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization, Rent And Donation Multiple		10.80
Equity Securities [Member] | NTM EBITDARD Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization, Rent And Donation Multiple		10.15
Equity Securities [Member] | LTM and NTM EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	4.00
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	3.50
Equity Securities [Member] | LTM and NTM EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	8.50
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	8.00
Equity Securities [Member] | LTM and NTM EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Last Twelve Months Earnings before Interest, Taxes, Depreciation, and Amortization Multiple	5.66
Fair Value Inputs, Next Twelve Months Earnings before Interest, Taxes, Depreciation, Amortization Multiple	5.23
Equity Securities [Member] | Volatility [Member] | Minimum [Member] | Option Model [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Assumptions, Expected Volatility Rate		90.80%
Equity Securities [Member] | Volatility [Member] | Maximum [Member] | Option Model [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Assumptions, Expected Volatility Rate		90.80%
Equity Securities [Member] | Volatility [Member] | Weighted Average [Member] | Option Model [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Assumptions, Expected Volatility Rate		90.80%
Equity Securities [Member] | Tangible Book Value Multiple / Volatility [Member] | Option Model [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Tangible Book Value Multiple		1.30
Fair Value Assumptions, Expected Volatility Rate		41.50%
Equity Securities [Member] | Revenue Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Revenue Multiple		0.30
Equity Securities [Member] | Revenue Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Revenue Multiple		0.60
Equity Securities [Member] | Revenue Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Revenue Multiple		0.45
Equity Securities [Member] | 2015 EBITDA Multiple [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.50
Equity Securities [Member] | 2015 EBITDA Multiple [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	6.00
Equity Securities [Member] | 2015 EBITDA Multiple [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, EBITDA Multiple	5.75
Investments In Tangible Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		2,065,000
Investments In Tangible Assets [Member] | Price per square meter [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Square Meter		1,146
Investments In Tangible Assets [Member] | Price per square meter [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Square Meter		1,274
Investments In Tangible Assets [Member] | Price per square meter [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Square Meter		1,210
Investments In Tangible Assets [Member] | Appraisal of Assets [Member] | Minimum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Appraisal of assets		500,000
Investments In Tangible Assets [Member] | Appraisal of Assets [Member] | Maximum [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Appraisal of assets		2,200,000
Investments In Tangible Assets [Member] | Appraisal of Assets [Member] | Weighted Average [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Appraisal of assets		1,350,000
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	746,494,000	744,680,000
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	136,793,000	141,119,000
Fair Value, Inputs, Level 3 [Member] | Secured Borrowings of Consolidated Funds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	136,793,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	664,217,000	664,108,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Price per acre [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		4,009,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Expected Sales Proceeds [Member] | Negotiated Sales Proceeds [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		193,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | LTM Revenue Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		403,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | LTM EBITDA multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		346,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | LTM EBITDA And Revenue Multiples [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		1,167,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Discount Rate [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	21,360,000	1,989,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Discount Rate, Other [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		21,005,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Asset Coverage [Member] | Liquidation Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		144,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Market Yield [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	573,254,000	566,010,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Recent Arms-length Transaction Input [Member] | Recent Arms-length Transaction [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	40,115,000	37,600,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		15,859,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | EBITDA, other Multiple [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		5,095,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | EBITDA Multiple/Estimated Liquidation Proceeds [Member] | Enterprise Valuation Analysis [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	1,378,000	1,378,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | LTM and 2015 EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	10,411,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | Rev Multiple/ EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		8,910,000
Fair Value, Inputs, Level 3 [Member] | Senior Secured Loans And Notes [Member] | 2015 EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	17,699,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Discount Rate [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	15,136,000	14,516,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Discount Rate, Other [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	15,000,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Market Yield [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	622,000	581,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Recent Arms-length Transaction Input [Member] | Recent Arms-length Transaction [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	9,617,000	6,000,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Capitalization Rate [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		15,000,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		3,099,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | EBITDA Multiple / Volatility [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		2,595,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Investment Portfolio Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	6,029,000	5,623,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | LTM and NTM EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	2,919,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | LTM and 2015 EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	331,000
Fair Value, Inputs, Level 3 [Member] | Equity Interests in LLCs [Member] | Unsolicited Offer Price [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		1,370,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	21,084,000	19,822,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | LTM EBITDA multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	4,700,000	545,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | Discount Rate [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		417,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | Recent Arms-length Transaction Input [Member] | Recent Arms-length Transaction [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	10,657,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		7,936,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | LTM EBITDARD multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		194,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | LTM and NTM EBITDA Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	5,727,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | Volatility [Member] | Option Model [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		105,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | Tangible Book Value Multiple / Volatility [Member] | Option Model [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		10,364,000
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | Revenue Multiple [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		261,000
Fair Value, Inputs, Level 3 [Member] | Investments In Tangible Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		2,065,000
Fair Value, Inputs, Level 3 [Member] | Investments In Tangible Assets [Member] | Price per square meter [Member] | Sales Comparison Approach [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		1,377,000
Fair Value, Inputs, Level 3 [Member] | Investments In Tangible Assets [Member] | Appraisal of Assets [Member] | Market Approach Valuation Technique [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure		688,000
Fair Value, Inputs, Level 3 [Member] | Equity Method Investments [Member] | Net Asset Value of Underlying Fund [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments, Fair Value Disclosure	11,539,000	9,901,000

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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2015

Accounts Payable, Accrued Expenses and Other Liabilities [Abstract]

Components of Accounts Payable, Accrued Expenses, and Other Liabilities

The components of accounts payable, accrued expenses and other liabilities are as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Accounts payable, accrued expenses and other liabilities of Medley LLC:
Accrued compensation and benefits	$	2,841	$	8,575
Due to affiliates (Note 10)		4,120		6,998
Revenue share payable (Note 9)		6,744		6,669
Dividends payable		1,366		1,423
Income taxes payable		742		741
Professional fees		499		545
Deferred rent		427		474
Deferred tax liabilities		517		245
Accounts payable and accrued expenses		2,067		1,913
Total accounts payable, accrued expenses and other liabilities of Medley LLC		19,323		27,583
Accounts payable, accrued expenses and other liabilities of Consolidated Funds		13,724		5,767
Total accounts payable, accrued expenses and other liabilities	$	33,047	$	33,350

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LOANS PAYABLE (Tables)

3 Months Ended

Mar. 31, 2015

Loans Payable [Abstract]

Schedule of Debt

The Company’s loans payable consist of the following:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Term loans under the Credit Suisse Term Loan Facility, net of unamortized discount of $948 and $1,006, respectively	$	94,052	$	93,994
Non-recourse promissory notes, net of unamortized discount of $2,370 and $2,500, respectively		8,880		9,063
Total loans payable	$	102,932	$	103,057

Schedule of Maturities of Long-term Debt

As of March 31, 2015, future principal payments due under the loans payable are as follows (in thousands): 

Remaining 2015	$	937
2016		312
2017		2,875
2018		5,500
2019		96,626
	$	106,250

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EARNINGS PER CLASS A SHARE (Basic and Diluted Income per Class A Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Numerator
Net income attributable to Medley Management Inc.	$ 1,274
Denominator
Weighted average shares of Class A shares outstanding	6,000,000
Common Class A [Member]
Numerator
Net income attributable to Medley Management Inc.	1,274
Less: Dividends	(1,200)	[1]
Less: Undistributed net income available to participating securities	15	[2]
Undistributed net income available to class A common stockholders	(77)
Denominator
Weighted average shares of Class A shares outstanding	7,142,604
Less: weighted average of participating securities	(1,142,604)	[2]
Weighted Average Number of Shares Outstanding, Basic, Total	6,000,000
Add: dilutive effects of conversion of LLC Units		[3]
Weighted Average Number of Shares Outstanding, Diluted, Total	6,000,000
Basic and diluted, Distributable earnings	$ 0.20
Basic and diluted, Undistributed income	$ (0.01)
Net income per Class A share	$ 0.19
Participating Securities [Member]
Numerator
Less: Dividends	$ (166)	[2]

[1] The Company declared a $0.20 per share dividend on Class A common stock on March 29, 2015.

[2] Participating securities relate to the Company’s grant of restricted stock units in connection with its IPO, adjusted for actual forfeitures and additional grants during the period.

[3] Excludes the assumed conversion of 23,333,333 LLC units to Class A shares as the impact would be antidilutive.

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OTHER ASSETS (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other Asset [Abstract]
Property, plant, and equipment, accumulated depreciation	$ 1,343	$ 1,232
Deferred finance costs, accumulated amortization	$ 349	$ 217

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies [Abstract]

Future Minimum Rental Payments

Future minimum rental payments under non-cancelable leases are as follows (in thousands):

Remaining 2015	$	1,831
2016		784
2017		452
2018		457
2019		463
Thereafter		469
Total future minimum lease payments	$	4,456

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EARNINGS PER CLASS A SHARE (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Class A Share [Abstract]

Basic and Diluted Income per Class A Share

The table below presents basic and diluted net income per Class A share using the two-class method for the three months ended March 31, 2015:

	For the Three Months Ended
	March 31, 2015
	(unaudited)
	(Amounts in thousands,
	except per share amounts)
Basic and diluted net income per share:
Numerator
Net income attributable to Medley Management Inc.	$	1,274
Less: Dividends declared on Class A common stock (1)		(1,200)
Less: Dividends payable to participating securities (2)		(166)
Less: Overdistributed net income available to participating securities (2)		15
Undistributed net income available to class A common stockholders	$	(77)
Denominator
Weighted average shares of Class A shares outstanding, including participating securities		7,142,604
Less: weighted average of participating securities (2)		(1,142,604)
Weighted average Class A common stock outstanding: Basic		6,000,000
Weighted average shares of Class A shares outstanding: Diluted		6,000,000
Add: dilutive effects of conversion of LLC Units (3)		-
Weighted average dilutive shares outstanding		6,000,000
Net income per Class A share: Basic and Diluted
Distributable earnings	$	0.20
Undistributed income		(0.01)
Net income per Class A share	$	0.19

(1)The Company declared a $0.20per share dividend on Class A common stock on March 29, 2015.

(2)Participating securities relate to the Company’s grant of restricted stock units in connection with its IPO, adjusted for actual forfeitures and additional grants during the period.

(3)Excludes the assumed conversion of 23,333,333 LLC units to Class A shares as the impact would be antidilutive

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ORGANIZATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2015

Organization and Basis of Presentation [Abstract]

Organization and Basis of Presentation

1. ORGANIZATION AND BASIS OF PRESENTATION

Medley Management Inc. (the “Corporation”) is an asset management firm offering yield solutions to retail and institutional investors. The Corporation’s national direct origination franchise provides capital to the middle market in the U.S. The Corporation, through its consolidated subsidiary Medley LLC, provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts and serves as the general partner to the private funds, which are generally organized as pass-through entities. Medley LLC is headquartered in New York City and has an office in San Francisco.

Initial Public Offering of Medley Management Inc.

Medley Management Inc. was incorporated on June 13, 2014 and commenced operations on September 29, 2014 upon the completion of its initial public offering (“IPO”) of its Class A common stock. Medley Management Inc. raised $100.4 million, net of underwriting discount, through the issuance of 6,000,000 shares of Class A common stock at an offering price to the public of $18.00 per share. Medley Management Inc. used the offering proceeds to purchase 6,000,000 newly issued LLC Units (defined below) from Medley LLC. Prior to the IPO, Medley Management Inc. had not engaged in any business or other activities except in connection with its formation and IPO.

In connection with the IPO, Medley Management Inc. issued 100 shares of Class B common stock to Medley Group LLC (“Medley Group”), an entity wholly owned by the pre-IPO members of Medley LLC. For as long as the pre-IPO members and then-current Medley personnel hold at least 10% of the aggregate number of shares of Class A common stock and LLC Units (defined below) (excluding those LLC Units held by Medley Management Inc.) then outstanding, the Class B common stock entitles Medley Group to a number of votes that is equal to 10 times the aggregate number of LLC Units held by all non-managing members of Medley LLC that do not themselves hold shares of Class B common stock and entitle each other holder of Class B common stock, without regard to the number of shares of Class B common stock held by such other holder, to a number of votes that is equal to 10 times the number of membership units held by such holder. The Class B shares do not participate in dividends and do not have any liquidation rights.

Medley LLC Reorganization

In connection with the IPO, Medley LLC amended and restated its limited liability agreement to modify its capital structure by reclassifying the 23,333,333 interests held by the pre-IPO members into a single new class of units (“LLC Units”). The pre-IPO members also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right, from and after the first twelve month anniversary of the date of the closing of the IPO, subject to the terms of an exchange agreement, to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. In addition, pursuant to the amended and restated limited liability agreement, Medley Management Inc. became the sole managing member of Medley LLC. 

The pre-IPO owners, are, subject to limited exceptions, prohibited from transferring any LLC Units held by them or any shares of Class A common stock received upon exchange of such LLC Units, until the third anniversary of the date of the closing of the IPO without the Company’s consent. Thereafter and prior to the fourth and fifth anniversaries of the closing of the IPO, such holders may not transfer more than 33 1/3% and 66 2/3%, respectively, of the number of LLC Units held by them, together with the number of any shares of Class A common stock received by them upon exchange therefor, without the Company’s consent.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Medley Management Inc., Medley LLC and its consolidated subsidiaries together with certain funds (individually “Consolidated Funds”, collectively, “Medley” or the “Company”). Additionally, the accompanying condensed consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP may be omitted. In the opinion of management, the unaudited condensed consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim period included herein. Therefore, this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “Annual Report on Form 10-K”). The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the full year ending December 31, 2015.

The Consolidated Funds have been consolidated in the accompanying financial statements for the periods presented in accordance with U.S. GAAP. Including the results of the Consolidated Funds significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows of the Company; however, the Consolidated Funds’ results included herein have no direct effect on the net income attributable to members or on total equity. The economic ownership interests of the investors in the Consolidated Funds are reflected as “Non-controlling interests in Consolidated Funds” and as “Net income attributable to non-controlling interests in Consolidated Funds” in the accompanying condensed consolidated financial statements.

Prior to the Reorganization and IPO on September 29, 2014, all compensation for services rendered by senior Medley LLC professionals were reflected as distributions from members’ capital rather than as compensation expense. Subsequent to the Reorganization and IPO, all guaranteed payments made to these senior professionals are recognized as compensation expense.

2.

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COMPENSATION EXPENSE (Tables)

3 Months Ended

Mar. 31, 2015

Compensation Expense [Abstract]

Schedule of Nonvested RSU Activity

			Weighted
			Average Grant
	Number of RSUs		Date Fair Value
Balance at December 31, 2014		1,197,915	$	17.91
Granted		82,000		12.68
Forfeited		(168,000)		18.00
Vested		-		-
Balance at March 31, 2015		1,111,915	$	17.51

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FAIR VALUE MEASUREMENTS (Narrative) (Details) (Consolidated Funds [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Jan. 31, 2015
Consolidated Funds [Member]
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount		$ 100
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	$ 105

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COMMITMENTS AND CONTINGENCIES (Future Minimum Rental Payments) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Commitments and Contingencies [Abstract]
Remaining 2015	$ 1,831
2016	784
2017	452
2018	457
2019	463
Thereafter	469
Total future minimum lease payments	$ 4,456

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 71,834	$ 87,206	$ 1,969	$ 5,395
Investments, at fair value	11,539	9,901
Investments, at fair value	735,623	734,870
Management fees receivable	15,024	15,173
Performance fees receivable	6,785	5,573
Other assets	9,084	9,230
Total assets	935,369	910,399
Liabilities and Equity
Loans payable	102,932	103,057
Accounts payable, accrued expenses and other liabilities	19,323	27,583
Secured borrowings	136,806	141,135
Performance fee compensation payable	11,377	11,807
Total liabilities	284,162	289,349
Equity
Capital deficit	(1,606)	(2,384)
Retained earnings	180	272
Total stockholder's deficit, Medley Management Inc.	(1,366)	(2,052)
Total equity	651,207	621,050
Total liabilities and equity	935,369	910,399
Consolidated Funds [Member]
Assets
Cash and cash equivalents	77,725	38,111
Investments, at fair value	735,623	734,870
Interest and dividends receivable	6,415	6,654
Other assets	1,340	3,681
Liabilities and Equity
Accounts payable, accrued expenses and other liabilities	13,724	5,767
Secured borrowings	136,806	141,135
Equity
Non-controlling interests	654,970	625,548
Consolidated Subsidiaries [Member]
Equity
Non-controlling interests	2,816	1,526
Medley LLC [Member]
Assets
Other assets	9,084	9,230
Equity
Non-controlling interests	(5,213)	(3,972)
Common Class A [Member]
Equity
Common Stock, Value, Issued	$ 60	$ 60

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OTHER ASSETS (Components of Other Assets) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other Assets of Medley:
Deferred tax assets	$ 1,200	$ 1,200
Total other assets	9,084	9,230
Consolidated Funds [Member]
Other Assets of Medley:
Deferred tax assets	207	340
Restricted cash		3,000
Other receivables	1,133	341
Total other assets	1,340	3,681
Medley And Consolidated Funds [Member]
Other Assets of Medley:
Total other assets	10,424	12,911
Medley LLC [Member]
Other Assets of Medley:
Property and equipment, net of accumulated depreciation	1,363	1,367
Security deposits	1,218	1,218
Administrative fees receivable	1,652	1,500
Deferred tax assets	953	874
Deferred financing costs, net	2,197	2,329
Due from affiliates	256	382
Prepaid expenses	468	627
Other assets	977	933
Total other assets	$ 9,084	$ 9,230

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Consolidated Statements of Changes in Equity (Parenthetical) (USD $)	Mar. 31, 2015
Statement of Stockholders' Equity [Abstract]
Dividends declared, amount per share	$ 0.20

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COMPENSATION EXPENSE (Schedule of RSU Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $)	3 Months Ended
	Mar. 31, 2015
Restricted Stock Units (RSUs) [Member]
Number of RSUs
Beginning Balance	1,197,915
Granted	82,000
Forfeited	(168,000)
Vested
Ending Balance	1,111,915
Weighted Average Grant Date Fair Value
Beginning Balance	$ 17.91
Granted	$ 12.68
Forfeited	$ 18.00
Vested
Ending Balance	$ 17.51

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ORGANIZATION AND BASIS OF PRESENTATION (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended	0 Months Ended
	Jun. 13, 2014	Mar. 31, 2015	Sep. 29, 2014
Organization And Basis Of Presentation [Line Items]
Date of incorporation	Jun. 13, 2014
Commencement of operations date	Sep. 29, 2014
Transfer of Units to Common Stock, Threshold before Fourth Anniversary		33.33%
Transfer of Units to Common Stock, Threshold before Fifth Anniversary		66.66%
Medley LLC [Member]
Organization And Basis Of Presentation [Line Items]
Conversion of pre-IPO interests to LLC Units, shares		23,333,333
Basis of exchange of LLC Units for Class A shares		exchange their LLC Units for shares of Medley Management Inc.'s Class A common stock on a one-for-one basis
Common Class A [Member]
Organization And Basis Of Presentation [Line Items]
Proceeds from Initial Public Offering, net of underwriting discount			$ 100.4
Issuance of shares in Initial Public Offering (in shares)			6,000,000
Percentage of common stock owned by LLC personnel for voting rights entitlement, minimum		10.00%
Issuance of Class A shares, offering price per share			$ 18.00
Common Class B [Member]
Organization And Basis Of Presentation [Line Items]
Issuance of shares in Initial Public Offering (in shares)			100
Voting rights multiplier upon LLC ownership threshold		10x

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SEGMENT REPORTING (Provision For Income Taxes Adjustment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Total segment provision for taxes	$ 1,690	$ 504
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Total segment provision for taxes	542	274
Consolidated Funds [Member] | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Total segment provision for taxes	$ 542	$ 274

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

15.SEGMENT REPORTING 

The Company’s business is currently comprised of only one reportable segment, the investment management segment, and substantially all Company operations are conducted through this segment. The investment management segment provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts. The Company conducts its investment management business in the United States, where substantially all of its revenues are generated.

In addition to analyzing the Company’s results on a GAAP basis, management also makes operating decisions and assesses business performance based on the financial and operating metrics and data that are presented without the consolidation of any funds. Core Net Income and Core EBITDA are income measures that are used by management to assess the performance of its business.

Core Net Income. Core Net Income is an income measure that is used by management to assess the performance of the business through the removal of non-core items, as well as other non-recurring expenses. It is calculated by adjusting standalone net income attributable to members of Medley to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs and stock-based compensation associated with RSUs that were granted to employees in connection with the Company’s IPO.

Core Earnings before interest, income taxes, depreciation and amortization(Core EBITDA). Core EBITDA is calculated as Core Net Income before interest expense, income taxes and depreciation.

The following presents the standalone financial results of the Company’s operating results for the three months ended March 31, 2015 and 2014:

	For the Three Months Ended
	March 31,
	(unaudited)
	2015		2014
	(Amounts in thousands)
Revenues
Management fees	$	17,520	$	14,991
Performance fees		6,336		76
Other revenues and fees		1,624		2,013
Total revenues		25,480		17,080
Expenses
Compensation and benefits		7,221		3,759
Performance fee compensation		112		1,518
General, administrative and other expenses		4,507		4,229
Total expenses		11,840		9,506
Other income (expense)
Dividend income		222		222
Interest expense		(2,085)		(633)
Other expenses, net		(262)		(1,192)
Total other expense, net		(2,125)		(1,603)
Income before income taxes		11,515		5,971
Provision for income taxes		1,148		230
Net income		10,367		5,741
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290		(47)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC	$	9,077	$	5,788
Reimbursable fund startup expenses (1)		1,923		1,275
Severance expense (1)		121		6
IPO date award stock-based compensation (1)		646		-
Adjustment for pre-IPO guaranteed payments to members (1)(2)		-		(1,226)
Core Net Income	$	11,767	$	5,843
Interest expense		2,085		633
Income taxes		1,499		230
Depreciation and amortization		111		92
Core EBITDA	$	15,462	$	6,798

(1)Presented net of income taxes.

(2)Represents a pro forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO, these payments were recorded as distributions from member’s capital.

The following tables reconcile the Company’s segment results to its consolidated results of operations:

	For the Three Months Ended March 31, 2015
	(unaudited)
			Consolidation
			Adjustments
			and
			Reconciling			Consolidated
	Standalone		Items			Results
	(Amounts in thousands)
Revenues	$	25,480	$	(6,450)	(1)	$	19,030
Expenses		11,840		793	(2)		12,633
Other income (expense), net		(2,125)		19,360	(3)		17,235
Provision for income taxes		1,148		542	(4)		1,690
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290		-			1,290
Net income attributable to non-controlling interests in Consolidated Funds		-		11,575			11,575
Net income attributable to non-controlling interests in Medley LLC		7,803		-			7,803
Net income attributable to Medley Management Inc.		1,274		-			1,274
Add: Net income attributable to non-controlling interests in Medley LLC		7,803		-			7,803
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		9,077		-			9,077
Reimbursable fund startup expenses		1,923		-			1,923
Severance expenses		121		-			121
IPO date award stock-based compensation		646		-			646
Core Net Income	$	11,767	$	-		$	11,767

	For the Three Months Ended March 31, 2014
	(unaudited)
			Consolidation
			Adjustments
			and
			Reconciling			Consolidated
	Standalone		Items			Results
	(Amounts in thousands)
Revenues	$	17,080	$	(1,084)	(1)	$	15,996
Expenses		9,506		320	(2)		9,826
Other income (expense)		(1,603)		5,590	(3)		3,987
Provision for income taxes		230		274	(4)		504
Net income attributable to non-controlling interests in consolidated subsidiaries		(47)					(47)
Net income attributable to non-controlling interests in Consolidated Funds		-		3,912			3,912
Net income attributable to non-controlling interests in Medley LLC		5,788		-			5,788
Net income attributed to Medley Management Inc.		-		-			-
Add: Net income attributable to non-controlling interests in Medley LLC		5,788		-			5,788
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC		5,788		-			5,788
Reimbursable fund startup expenses		1,275		-			1,275
Severance expenses		6		-			6
Adjustment for pre-IPO guaranteed payments to members		(1,226)		-			(1,226)
Core Net Income	$	5,843	$	-		$	5,843

(1)Adjustments and reconciling items to revenues represent management and performance fees earned from Consolidated Funds which were eliminated in consolidation. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Management fees from Consolidated Funds eliminated in consolidation	$	(1,326)	$	(1,763)
Performance fees eliminated in consolidation		(5,124)		679
Total consolidated adjustments and reconciling items	$	(6,450)	$	(1,084)

(2)Adjustments and reconciling items to expenses represent expenses from Consolidated Funds which were eliminated in consolidation. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Consolidated Funds Expenses	$	793	$	320
Total consolidated adjustments and reconciling items	$	793	$	320

(3)Adjustments and reconciling items to other income primarily represent net interest income and net investment income from Consolidated Funds. For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Interest and other income of Consolidated Funds	$	18,727	$	13,421
Interest expense on secured borrowings of Consolidated Funds		(3,804)		(1,312)
Net realized gain (loss) on investment of Consolidated Funds		952		1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		4,022		(7,813)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		(416)		(324)
Elimination of equity income (loss) from Consolidated Funds		(121)		261
Total consolidated adjustments and reconciling items	$	19,360	$	5,590

(4)Adjustments and reconciling items to the provision for income taxes represent income taxes from Consolidated Funds.For the three months ended March 31, 2015 and 2014, such adjustments and reconciling items were as follows:

	2015		2014
	(Amounts in thousands)
Consolidated Funds provision for income taxes	$	542	$	274
Total consolidated adjustments and reconciling items	$	542	$	274

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Percent of voting power in Medley LLC		100.00%
Management fees	$ 16,194,000		$ 13,228,000
Fair value of investments	747,162,000	744,771,000
Reversal of performance fee			0
Cumulative performance fees	6,800,000
Remaining maturity period, max	60 days
Secured borrowings	136,806,000	141,135,000
Interest and other income of Consolidated Funds	18,727,000		13,421,000
Net change in unrealized depreciation on investments of Consolidated Funds	4,022,000		(7,813,000)
Adjustments for Change in Accounting Principle [Member]
Summary Of Significant Accounting Policies [Line Items]
Interest and other income of Consolidated Funds			1,300,000
Net change in unrealized depreciation on investments of Consolidated Funds			300,000
Net proceeds from secured borrowings			11,800,000
Standalone [Member]
Summary Of Significant Accounting Policies [Line Items]
Management fees	17,520,000		14,991,000
Reversal of performance fee	100,000
Cumulative performance fees	26,700,000
Sierra Income Corporation [Member]
Summary Of Significant Accounting Policies [Line Items]
Total assets of consolidated variable interest entity	18,600,000	18,000,000
Total liabilities of consolidated variable interest entity	$ 18,700,000	$ 19,600,000
Medley LLC [Member]
Summary Of Significant Accounting Policies [Line Items]
Parent ownership percentage of LLC		20.50%
Medley LLC [Member] | Non Management [Member]
Summary Of Significant Accounting Policies [Line Items]
Noncontrolling interest ownership percentage of LLC		79.50%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity.

An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk (as a group) lack either the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the success of the legal entity or the obligation to absorb the expected losses or right to receive the expected residual returns or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns of the legal entity, or both, and substantially all of the legal entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. Entities that do not qualify as VIEs are generally assessed for consolidation under the voting interest model.

For those entities that qualify as a VIE, the Company performs an analysis to determine if it is the primary beneficiary. With respect to certain VIEs that qualify for accounting treatment under Accounting Standard Update (“ASU”) 2010-10, the Company determines that it is the primary beneficiary only if its involvement, through holding interests directly or indirectly in the VIE or contractually through other variable interests (e.g., carried interest and management fees), would be expected to absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both. In order to qualify for this accounting treatment, certain conditions have to be met, including if the entities have all the attributes of an investment company and are not securitization or asset-backed financing entities. For all other entities, the Company determines that it is the primary beneficiary if it holds a controlling financial interest defined as possessing both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. In making its assessment the Company takes into consideration all fee and substantive arrangements, terms and transactions that may exist. The assessment of whether an entity is a VIE and the determination of whether the Company should consolidate such VIE requires judgments and is dependent on the particular facts and circumstances. Each entity is assessed for consolidation on a case-by-case basis.

For those entities evaluated under the voting interest model, the Company consolidates those entities it controls through a majority voting interest or through other means whereby the Company is the general partner and is presumed to have control. The Company would not consolidate an entity in which the presumption of control by the general partner has been overcome through either the granting of substantive rights to the unaffiliated investors to either dissolve the entity or remove the general partner (“kick-out-rights”) or the granting of substantive participating rights.

Consolidated Variable Interest Entities

Consolidated Variable Interest Entities

Medley Management Inc. is the sole managing member of Medley LLC and, as such, it operates and controls all of the business and affairs of Medley LLC and, through Medley LLC, conducts its business. Under ASC 810, Medley LLC meets the definition of a variable interest entity because the equity of Medley LLC is not sufficient to permit activities without additional subordinated financial support. Since Medley Management Inc. has the obligation to absorb expected losses that could be significant to Medley LLC and holds 100% of the voting power, Medley Management Inc. is considered to be the primary beneficiary of Medley LLC.

As a result, Medley Management Inc. consolidates the financial results of Medley LLC and its subsidiaries and records a non-controlling interest for the economic interest in Medley LLC held by the non-managing members. Medley Management Inc.’s and the non-managing members’ economic interests in Medley LLC is 20.5% and 79.5%, respectively, as of March 31, 2015 and December 31, 2014. Net income attributable to the non-controlling interest in Medley LLC on the consolidated statements of operations represents the portion of earnings attributable to the economic interest in Medley LLC held by its non-managing members. Non-controlling interests in Medley LLC on the consolidated balance sheets represents the portion of net assets of Medley LLC attributable to the non-managing members based on total LLC Units of Medley LLC owned by such non-managing members.

Medley LLC has one majority owned subsidiary, SIC Advisors LLC, that is a consolidated VIE. This entity was organized as a limited liability company and was legally formed to manage a designated fund and to isolate business risk. As of March 31, 2015 and December 31, 2014, total assets, after eliminating entries, of this VIE reflected in the consolidated balance sheets were $18.6 million and $18.0 million, respectively. Total liabilities, after eliminating entries, of this VIE were $18.7 million and $19.6 million as of March 31, 2015 and December 31, 2014, respectively. Except to the extent of the assets of this VIE that are consolidated, the holders of the consolidated VIE’s liabilities generally do not have recourse to the Company.

Consolidated Funds

Consolidated Funds

With respect to the Consolidated Funds, which represent limited partnerships, Medley LLC earns a fixed management fee based on either (i) limited partners’ capital commitments to the funds, (ii) invested capital, (iii) net asset value (“NAV”), or (iv) lower of cost or market value of a fund’s portfolio investments. In addition, Medley earns a performance fee based upon the investment returns in excess of a stated hurdle rate. The Company considered the accounting treatment under ASU 2010-10 as all the respective conditions have been met and determined that the funds were not VIEs. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, these funds have been consolidated under the voting interest model in accordance with ASC 810-20, Control of Partnerships and Similar Entities.

In December 2014, the Company formed the Medley Opportunity Fund III LP (MOF III), which is structured as a limited partnership.  One of the Company’s wholly owned subsidiaries is the general partner and investment manager of MOF III. The Company considered the accounting treatment under ASU 2010-10 as all the respective conditions have been met and determined that MOF III was not a VIE. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, this fund has been consolidated under the voting interest model in accordance with ASC 810-20.

Deconsolidation of a Fund

Deconsolidation of a Fund

The Company had consolidated the Medley Opportunity Fund LP (MOF I LP) in its consolidated financial statements under the voting interest model in accordance with ASC 810-20, as the Company was the general partner and the limited partners lacked substantive kick out or participating rights. Effective January 1, 2015, the Company completed its role as investment manager of MOF I LP and transitioned the management of the residual assets of this fund to another asset manager. As a result of this transition, the Company deconsolidated the financial statements of this fund, on January 1, 2015. There was no gain or loss recognized upon deconsolidation.

Basis of Accounting

Basis of Accounting

Management has determined that the Company’s Consolidated Funds are investment companies under U.S. GAAP for the purposes of financial reporting. U.S. GAAP requires that investments held by an investment company be recorded at fair value and any unrealized appreciation (depreciation) in an investment’s fair value be recognized on a current basis in the consolidated statements of operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the specialized accounting guidance for the Consolidated Funds under U.S. GAAP. As such, all of the investments held by the Consolidated Funds are presented at their estimated fair values in the Company’s condensed consolidated balance sheets. Interest income of the Consolidated Funds is included in interest and other income of Consolidated Funds in the Company’s consolidated statements of operations.

Concentrations of Credit Risk

Concentrations of Credit and Market Risk

In the normal course of business, the Company encounters significant credit and market risk. Credit risk is the risk of default on investments in debt securities, loans and derivatives that result from a borrower’s or derivative counterparty’s inability or unwillingness to make required or expected payments. Credit risk is increased in situations where the Company is investing in distressed assets or unsecured or subordinate loans or in securities that are a material part of its respective business. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors.

The Company may make investments outside of the United States. These non-U.S. investments are subject to the same risks associated with U.S. investments, as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing the investments, potentially adverse tax consequences, and the burden of complying with a wide variety of foreign laws.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Indemnification

Indemnification

In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has not experienced any prior claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.

Non-Controlling Interests in Consolidated Subsidiaries

Non-Controlling Interests in Consolidated Entities

Non-controlling interests in Consolidated Funds and consolidated subsidiaries represent the component of equity in such consolidated entities held by third party investors. These interests are adjusted for general partner allocations and, for funds, by subscriptions and redemptions that occur during the reporting period.

Class A Earnings per Share

Class A Earnings per Share

The Company computes and presents earnings per share using the two-class method. Under the two-class method, the Company allocates earnings between common stock and participating securities. The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. For purposes of calculating earnings per share, the Company reduces its reported net earnings by the amount allocated to participating securities to arrive at the earnings allocated to Class A common stockholders. Earnings is then divided by the weighted average number of Class A common stock outstanding to arrive at basic earnings per share. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in our earnings. Participating securities consist of the Company’s unvested restricted stock units that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in its basic and diluted calculations.

Investments

Investments

Investments include equity method investments that are not consolidated but in which the Company exerts significant influence, and investments held by the Consolidated Funds. Medley measures the fair value of the equity method investments that do not have a readily determinable fair value at net asset value or market value. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investees is reflected as a component of other income (expense) in the condensed consolidated statements of operations.

The Consolidated Funds reflect their investments at fair value with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net change in unrealized depreciation on investments of Consolidated Funds in the condensed consolidated statements of operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price).

Fair Value Measurements

Fair Value Measurements

The Consolidated Funds apply fair value accounting to all of their financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Consolidated Funds have categorized their financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 4. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Consolidated Funds’ own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. The Company weights the use of third-party broker quotes, if any, in determining fair value based on the Company’s understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by the Company based upon inputs by third-party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time.

The Consolidated Funds use third-party valuation firms to assist in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. Based on market data obtained from the third-party valuation firms, the Consolidated Funds use a market yield analysis under the income approach or an enterprise model of valuation under the market approach, or a combination thereof. In applying the market yield analysis, the value of the Consolidated Funds’ loans is determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, the Consolidated Funds use a waterfall analysis that takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital structure. To estimate the enterprise value of the portfolio company, some or all of the traditional market valuation methods and factors are weighed based on the individual circumstances of the portfolio company in order to estimate the enterprise value.

The methodologies and information that the Company utilizes when applying the Market Approach for performing investments includes, among other things:

· valuations of comparable public companies (Guideline Comparable approach);

· recent sales of private and public comparable companies (Guideline Comparable approach);

· recent acquisition prices of the company, debt securities or equity securities (Acquisition Price Approach);

· external valuations of the portfolio company, offers from third parties to buy the company (Estimated Sales Proceeds approach);

· subsequent sales made by the company of its investments (Expected Sales Proceeds approach); and

· estimating the value to potential buyers.

The methodologies and information that the Company utilizes when applying the Income Approach for performing investments includes:

· discounting the forecasted cash flows of the portfolio company or securities (Discounted Cash Flow “DCF” approach); and

· Black-Scholes model or simulation models or a combination thereof (Income Approach – Option Model) with respect to the valuation of warrants.

For non-performing investments, the Company may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model (Income Approach – Expected Recovery Analysis or Estimated Liquidation Proceeds).

A multi-step valuation process is undertaken each quarter when valuing portfolio investments for which market quotations are not readily available, as described below:

· The quarterly valuation process begins with each portfolio investment being initially valued by the Company’s internal valuation team;

· An independent valuation firm engaged by the Consolidated Funds prepares an independent valuation report for approximately one-third of the portfolio investments each quarter on a rotating quarterly basis on non-fiscal year-end quarters, such that each of these investments will be valued by independent valuation firms at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms; and

· Preliminary valuation conclusions are then documented and discussed with senior management.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Consolidated Funds’ investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Revenues

Revenues

Management Fees

Medley provides investment management services to both public and private investment vehicles. Management fees include both base management fees, other management fees, and Part I incentive fees, as described below.

Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) the net asset value or (v) lower of cost or market value of a fund’s portfolio investments. For the private funds, Medley receives base management fees during a specified period of time, which is generally ten years from the initial closing date. However, such termination date may be earlier in certain limited circumstances or later if extended for successive one-year periods, typically up to a maximum of two years. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided.

Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the portfolio companies of the Consolidated Funds, as well as separately managed accounts. These fees are recognized when Medley becomes entitled to such fees.

Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net interest income (excluding gains and losses) above a hurdle rate. These fees are not subject to repayment, clawbacks or netting against realized losses. Part I incentive fees are paid quarterly and are recognized as earned over the period the services are provided.

Performance Fees

Performance fees consist principally of the allocation of profits from certain funds, including separately managed accounts, to which Medley provides management services. Medley is generally entitled to an allocation of income as a performance fee after returning the invested capital plus a specified preferred return as set forth in each respective agreement. Medley recognizes revenues attributable to performance fees based upon the amount that would be due pursuant to the respective agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized reflects Medley’s share of the gains and losses of the associated funds’ underlying investments measured at their current fair values. Performance fee revenue may include reversals of previously recognized performance fees due to a decrease in the net income of a particular fund that results in a decrease of cumulative performance fees earned to date. Since fund return hurdles are cumulative, previously recognized performance fees also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. For the three months ended March 31, 2015, the Company reversed $0.1 million of previously recognized performance fees on a standalone and consolidated basis. The Company did not reverse any previously recognized performance fees for the period ended March 31, 2014. Cumulative performance fees recognized through March 31, 2015 were $26.7 million and $6.8 million on a standalone and consolidated basis, respectively.

Performance fees received in prior periods may be required to be returned by Medley in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, performance fees can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments at their then current fair values previously recognized and distributed performance fees would be required to be returned, a liability is established for the potential clawback obligation. As of March 31, 2015, the Company had not received any performance fee distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of performance fees. Pursuant to the organizational documents of each respective fund, tax distributions are not subject to clawback. As such, no amounts have been accrued for clawback obligations in the accompanying condensed consolidated financial statements.

Other Revenues and Fees

Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective agreement. These fees are recognized as revenue in the period administrative services are rendered.

Included in other revenues and fees are reimbursements received by Medley from SIC under its investment advisory agreement. Expenses incurred by Medley under this agreement are recorded within general, administrative, and other expenses in the consolidated statements of operations. For additional information on these reimbursements, refer to Note 10.

Performance Fee Compensation

Performance Fee Compensation

Medley has issued profit interests in certain subsidiaries to selected employees. These profit-sharing arrangements are accounted for under ASC 710, Compensation — General, which requires compensation expense to be measured at fair value at the grant date and expensed over the vesting period, which is usually the period over which the service is provided. The fair value of the profit interests are re-measured at each balance sheet date and adjusted for changes in estimates of cash flows and vesting percentages. The impact of such changes is recorded in the consolidated statements of operations as an increase or decrease to performance fee compensation.

Stock-based Compensation

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Under the fair value recognition provision of this guidance, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period.

Stock-based compensation expense recognized for the year ended December 31, 2014 is based on awards ultimately expected to vest and have been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The effect of such change in estimated forfeitures is recognized through a cumulative catch-up adjustment that is included in the period of the change in estimate.

The value of the portion of the award that is ultimately expected to vest on a straight-line basis over the requisite service period is included within compensation and benefits on the Company’s condensed consolidated statements of operations.

Income Taxes

Income Taxes

The Company accounts for income taxes using the asset and liability approach, which requires the recognition of tax benefits or expenses for temporary differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to recognize interest and penalties on uncertain tax positions and other tax matters as a component of income tax expense. For interim periods, the Company accounts for income taxes based on its estimate of the effective tax rate for the year. Discrete items and changes in its estimate of the annual effective tax rate are recorded in the period they occur.

Prior to the Company’s Reorganization and IPO, no provision was made for U.S. federal income taxes in the accompanying condensed consolidated financial statements since the Company was a group of pass-through entities for U.S. and state income tax purposes and its profits and losses were allocated to the partners who are individually responsible for reporting such amounts. A provision for income taxes was made for certain entities that were subject to New York City’s unincorporated business tax.

Following the IPO, Medley LLC and its subsidiaries continue to operate as pass-through entities for U.S. income tax purposes. Accordingly, these entities in some cases continue to be subject to New York City’s unincorporated business tax. Medley Management Inc. is subject to U.S. federal, state and local corporate income taxes, which are reflected in the Company’s consolidated financial statements.

Secured Borrowings of Consolidated Funds

Secured Borrowings of Consolidated Funds

The Consolidated Funds follow the guidance in ASC 860, Transfers and Servicing, when accounting for loan participations and other partial loan sales. Such guidance provides accounting and reporting standards for transfers and servicing of financial assets and requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance. Under ASC 860, the Company applies a control-oriented approach to participating interests whereby control is considered to have been surrendered only if (i) the transferred financial assets have been isolated from the transferor, (ii) the transferee has the right to pledge or exchange the transferred financial assets it received, and (iii) the transferor, its consolidated affiliates in the financial statements being presented, or its agents do not maintain effective control over the transferred financial assets. Participations or other partial loan sales which do not meet all of these conditions remain on the Company’s condensed consolidated balance sheets and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

For these participations or partial loan sales accounted for as secured borrowings, the interest income earned on the entire loan balance is recorded within interest and other income of Consolidated Funds and the interest income earned by the buyer in the partial loan sale is recorded as interest expense of Consolidated Funds in the accompanying consolidated statements of operations. Changes in the fair value of secured borrowings of Consolidated Funds are included in net change in unrealized depreciation (appreciation) on secured borrowings in the consolidated statements of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers(Topic 606). This guidance 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 amendments are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact, if any, that this ASU will have on its condensed consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation – Principal versus Agent Analysis. This guidance requires an entity to evaluate whether it should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This guidance is effective for interim and annual periods beginning after December 15, 2015 and early application is permitted. The Company is currently evaluating the impact, if any, that this ASU will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Under current accounting standards, such costs are reflected as an asset on the Company's condensed consolidated balance sheets. While the new guidance is effective for the Company beginning January 1, 2016, early application is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated balance sheets.

In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).  Under the amendments in this update, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient should not be categorized in the fair value hierarchy. Removing those investments from the fair value hierarchy not only eliminates the diversity in practice resulting from the way in which investments measured at net asset value per share (or its equivalent) with future redemption dates are classified, but also ensures that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share (or its equivalent), but for which the practical expedient is notapplied will continue to be included in the fair value hierarchy. The amendments in this update are effective for the Company beginning January 1, 2016. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net income	$ 21,942	$ 9,653
Adjustments to reconcile net income to net cash used in operating activities:
Net change in unrealized depreciation (appreciation) on investments	131	(22)
Non-cash stock-based compensation	778
Depreciation and amortization	111	92
Amortization of deferred financing costs	132	44
Accretion of original issue discount	188	121
Net realized (gain) loss on investments	(952)	(1,357)
Changes in operating assets and liabilities:
Management fees receivable	149	(735)
Performance fees receivable	(1,212)	(755)
Other assets	(67)	(827)
Accounts payable, accrued expenses and other liabilities	(8,475)	(1,978)
Performance fee compensation payable	(430)	1,067
Net cash used in operating activities	(33,049)	(96,546)
Cash flows from investing activities
Purchases of property and equipment	(107)	(84)
Net cash used in investing activities	(107)	(84)
Cash flows from financing activities
Proceeds from issuance of debt obligations		17,500
Repayment of loans payable	(313)
Distributions to members	(9,044)	(25,588)
Dividends paid	(1,423)
Contribution from non-controlling interest in consolidated subsidiaries		928
Net cash provided by financing activities	17,784	93,204
Net increase (decrease) in cash and cash equivalents	(15,372)	(3,426)
Cash and cash equivalents, beginning of period	87,206	5,395
Cash and cash equivalents, end of period	71,834	1,969
Supplemental disclosure of non-cash financing activities
Non-cash debt		2,500
Dividends declared but not paid	1,366
Investment in MOF I attributed to deconsolidation	1,768
Standalone [Member]
Adjustments to reconcile net income to net cash used in operating activities:
Benefit from deferred taxes	349	90
Consolidated Funds [Member]
Adjustments to reconcile net income to net cash used in operating activities:
Net change in unrealized depreciation (appreciation) on investments	(3,916)	7,813
Benefit from deferred taxes	(243)	(252)
Accretion of original issue discount	1,899	(328)
Interest income paid-in-kind	(837)	(1,949)
Net realized (gain) loss on investments	(1,059)	(1,357)
Net change in unrealized (depreciation) appreciation on secured borrowings of Consolidated Funds	416	324
Changes in operating assets and liabilities:
Other assets	(793)	(911)
Accounts payable, accrued expenses and other liabilities	10,950	449
Cash and cash equivalents	(42,949)	(5,699)
Cost of investments purchased	(49,072)	(105,039)
Proceeds from sales and repayments of investments	38,959	3,653
Cash flows from financing activities
Contribution from non-controlling interest in consolidated subsidiaries	33,169	88,603
Proceeds from secured borrowings of Consolidated Funds	10,834	12,000
Repayments on secured borrowings of Consolidated Funds	(15,439)	(239)
Cash and cash equivalents, beginning of period	38,111
Cash and cash equivalents, end of period	$ 77,725

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Common Class A [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized	3,000,000,000	3,000,000,000
Common Stock, Shares, Issued	6,000,000	6,000,000
Common Stock, Shares, Outstanding	6,000,000	6,000,000
Common Class B [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized	1,000,000	1,000,000
Common Stock, Shares, Issued	100	100
Common Stock, Shares, Outstanding	100	100

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

10.RELATED PARTY TRANSACTIONS

Substantially all of Medley’s revenue is earned through agreements with its consolidated and non-consolidated funds for which it collects management and performance fees for providing investment and management services.

In April 2012, Medley entered into an investment advisory agreement (“IAA”) with SIC. Pursuant to the terms of the IAA, Medley agreed to bear all organization and offering expenses (“O&O Expenses”) related to SIC until the earlier of the end of the SIC offering period or such time that SIC has raised $300 million in gross proceeds in connection with the sale of shares of its common stock. Effective June 2, 2014, Medley was no longer liable for these expenses as SIC had reached the $300 million in gross proceeds threshold. The SIC IAA also requires SIC to reimburse Medley for O&O Expenses incurred by Medley in an amount equal to 1.25% of the aggregate gross proceeds in connection with the sale of shares of its common stock until the earlier of the end of the SIC offering period, which is currently scheduled to terminate in April 2016, or Medley has been repaid in full. As of March 31, 2015 and December 31, 2014, there were no reimbursements that were due to Medley.

Medley did not incur O&O Expenses or receive reimbursements of O&O during the three months ended March 31, 2015. During the three months ended March 31, 2014, Medley incurred O&O Expenses of $0.7 million which were recorded within general, administrative, and other expenses in the condensed consolidated statements of operations. Reimbursements of O&O are recorded in other revenues and fees on the condensed consolidated statements of operations and were $0.9 million during the three months ended March 31, 2014.

In June 2012, Medley entered into an Expense Support and Reimbursement Agreement (“ESA”) with SIC. Under the ESA, until June 30, 2015, unless extended, Medley will pay up to 100% of SIC’s operating expenses in order for SIC to achieve a reasonable level of expenses relative to its investment income. Pursuant to the ESA, SIC has a conditional obligation to reimburse Medley for any amounts they funded under the ESA if, within three years of the date on which Medley funded such amounts, SIC meets certain financial levels. For the three months ended March 31, 2015 and 2014, Medley recorded $2.2 million and $1.3 million, respectively, for ESA expenses under this agreement. The ESA expenses are recorded within general, administrative, and other expense in the condensed consolidated statements of operations. Medley recorded a liability of $4.1 million and $5.2 million as of March 31, 2015 and December 31, 2014, respectively, for ESA expenses related to this agreement. These amounts are included in accounts payable, accrued expenses and other liabilities as due to affiliates on the condensed consolidated balance sheets.

In January 2011, Medley entered into an administration agreement with MCC (the “MCC Admin Agreement”), whereby Medley agreed to provide administrative services necessary for the operations of MCC. MCC agreed to pay Medley for the costs and expenses incurred in providing such administrative services, including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of MCC’s officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the condensed consolidated statement of operations. During the three months ended March 31, 2015 and 2014, the Company recorded $1.1 million and $0.8 million, respectively, of revenue related to the MCC Admin Agreement. As of March 31, 2015 and December 31, 2014, the Company had $1.1 million of administrative fees receivable under the MCC Admin Agreement, which are included in other assets on the condensed consolidated balance sheets.

In April 2012, Medley entered into an administration agreement with SIC (the “SIC Admin Agreement”), whereby Medley agreed to provide administrative services necessary for the operations of SIC. SIC agreed to pay Medley for the costs and expenses incurred in providing such administrative services including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of SIC’s officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the condensed consolidated statement of operations. For the three months ended March 31, 2015 and 2014, the Company recorded $0.6 million and $0.2 million, respectively, of revenue related to the SIC Admin Agreement. As of March 31, 2015 and December 31, 2014, the Company had $0.6 million and $0.4 million, respectively, of administrative fees receivable under the SIC Admin Agreement, which are included in other assets on the condensed consolidated balance sheets.

Promissory Note

In March 2014, the Company issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carries no interest, has quarterly amortization payments of $312,500, and matures in March 2016.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2015	May 13, 2015
Document Information [Line Items]
Entity Registrant Name	MEDLEY MANAGEMENT INC.
Entity Central Index Key	0001611110
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Trading Symbol	mdly
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		6,000,000
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		100

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EARNINGS PER CLASS A SHARE

3 Months Ended

Mar. 31, 2015

Earnings Per Class A Share [Abstract]

Earnings Per Class A Share

11.EARNINGS PER CLASS A SHARE

The table below presents basic and diluted net income per Class A share using the two-class method for the three months ended March 31, 2015:

	For the Three Months Ended
	March 31, 2015
	(unaudited)
	(Amounts in thousands,
	except per share amounts)
Basic and diluted net income per share:
Numerator
Net income attributable to Medley Management Inc.	$	1,274
Less: Dividends declared on Class A common stock (1)		(1,200)
Less: Dividends payable to participating securities (2)		(166)
Less: Overdistributed net income available to participating securities (2)		15
Undistributed net income available to class A common stockholders	$	(77)
Denominator
Weighted average shares of Class A shares outstanding, including participating securities		7,142,604
Less: weighted average of participating securities (2)		(1,142,604)
Weighted average Class A common stock outstanding: Basic		6,000,000
Weighted average shares of Class A shares outstanding: Diluted		6,000,000
Add: dilutive effects of conversion of LLC Units (3)		-
Weighted average dilutive shares outstanding		6,000,000
Net income per Class A share: Basic and Diluted
Distributable earnings	$	0.20
Undistributed income		(0.01)
Net income per Class A share	$	0.19

(1)The Company declared a $0.20per share dividend on Class A common stock on March 29, 2015.

(2)Participating securities relate to the Company’s grant of restricted stock units in connection with its IPO, adjusted for actual forfeitures and additional grants during the period.

(3)Excludes the assumed conversion of 23,333,333 LLC units to Class A shares as the impact would be antidilutive

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Revenues
Management fees	$ 16,194
Performance fees	1,212
Other revenues and fees	1,624
Total revenues	19,030
Expenses
Compensation and benefits	7,221
Performance fee compensation	112
Consolidated Funds expenses	793
General, administrative and other expenses	4,507
Total expenses	12,633
Other income (expense)
Dividend income	222
Interest expense	(2,085)
Other expenses, net	(383)
Interest and other income of Consolidated Funds	18,727
Net realized gain (loss) on investments of Consolidated Funds	952
Net change in unrealized depreciation on investments of Consolidated Funds	4,022
Total other income, net	17,235
Income before income taxes	23,632
Provision for income taxes	1,690
Net income	21,942
Net income attributable to Medley Management Inc.	1,274
Dividends declared per Class A common stock	$ 0.20
Net income per share attributable to stockholders of Class A common stock of Medley Management Inc:
Earnings Per Share, Basic (in dollars per share)	$ 0.19
Earnings Per Share, Diluted (in dollars per share)	$ 0.19
Weighted Average Number of Shares Outstanding, Basic and Diluted (in shares)	6,000,000
Consolidated Funds [Member]
Expenses
Consolidated Funds expenses	793
Other income (expense)
Interest and other income of Consolidated Funds	18,727
Interest expense of Consolidated Funds	3,804
Net realized gain (loss) on investments of Consolidated Funds	1,059
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds	(416)
Net income (loss) attributable to noncontrolling interest	11,575
Consolidated Subsidiaries [Member]
Other income (expense)
Net income (loss) attributable to noncontrolling interest	1,290
Medley LLC [Member]
Other income (expense)
Net income (loss) attributable to noncontrolling interest	$ 7,803

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OTHER ASSETS

3 Months Ended

Mar. 31, 2015

Other Asset [Abstract]

Other Assets

5. OTHER ASSETS

The components of other assets are as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Other Assets of Medley LLC:
Property and equipment, net of accumulated depreciation of $1,343 and $1,232, respectively	$	1,363	$	1,367
Security deposits		1,218		1,218
Administrative fees receivable (Note 10)		1,652		1,500
Deferred tax assets		953		874
Deferred financing costs, net of accumulated amortization of $349 and $217, respectively		2,197		2,329
Due from affiliates (Note 10)		256		382
Prepaid expenses		468		627
Other receivables		977		933
Total other assets of Medley LLC		9,084		9,230
Other Assets of Consolidated Funds
Restricted cash		-		3,000
Deferred tax assets		207		340
Other receivables		1,133		341
Total other assets of Consolidated Funds		1,340		3,681
Total other assets	$	10,424	$	12,911

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

 4.FAIR VALUE MEASUREMENTS

The Company follows ASC 820 for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the condensed consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows:

· Level I - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

· Level II - Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.

· Level III - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence.

Fair Value Measurement on a Recurring Basis

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

In addition to using the above inputs in investment valuations, the Company continues to employ a valuation policy that is consistent with ASC 820 (Note 2). Consistent with the Company’s valuation policy, management evaluates the source of inputs, including any markets in which the investments are trading, in determining fair value.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

The Company’s equity method investments are valued based on their proportionate share of the net assets of the underlying fund. The terms of the investments generally preclude the ability to redeem the investments. Distributions from these investments will be received as the underlying assets in the funds are liquidated, the timing of which cannot be readily determined. 

The following tables present the fair value measurements of investments, by major class according to the fair value hierarchy:

	As of March 31, 2015
	(unaudited)
	Level I		Level II		Level III		Total
	(Amounts in thousands)
Assets
Senior secured loans and notes	$	-	$	-	$	664,217	$	664,217
Equity interests in LLCs		-		-		49,654		49,654
Equity securities		-		668		21,084		21,752
Equity method investments		-		-		11,539		11,539
Total assets	$	-	$	668	$	746,494	$	747,162
Secured borrowings of Consolidated Funds	$	-	$	13	$	136,793	$	136,806

	As of December 31, 2014
	Level I		Level II		Level III		Total
	(Amounts in thousands)
Assets
Senior secured loans and notes	$	-	$	-	$	664,108	$	664,108
Equity interests in LLCs		-		-		48,784		48,784
Equity securities		62		29		19,822		19,913
Investments in tangible assets		-		-		2,065		2,065
Equity method investment		-		-		9,901		9,901
Total assets	$	62	$	29	$	744,680	$	744,771
Secured borrowings of Consolidated Funds	$	16	$	-	$	141,119	$	141,135

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting all levels of the fair value hierarchy are reported as transfers in or out of Level I, II or III category as of the beginning of the quarter in which the reclassifications occur. During the three months ended March 31, 2015, one of our warrants with a fair value of $0.1 million transferred from Level III to Level II because of the increase in availability of the transaction data or the inputs to the valuation became observable. During the three months ended March 31, 2015, one of our warrants with a fair value of $0.1 million transferred from Level I to Level II based on changes in valuation methodology.

The following tables provide a reconciliation of the beginning and ending balances for the Consolidated Funds’ Level III investments and the Company’s investments in its equity method investees:

	As of March 31, 2015
	(unaudited)
	Financial Assets												Liabilities
	Investments of Consolidated Funds												Secured
	Senior						Investment						borrowings
	Secured		Equity				in		Equity				of
	Loans and		Interests in		Equity		Tangible		Method				Consolidated
	Notes		LLCs		Securities		Assets		Investments		Total		Funds
	(Amounts in thousands)
Balance, beginning of year	$	664,108	$	48,784	$	19,822	$	2,065	$	9,901	$	744,680	$	141,119
Deconsolidation of MOF I		(8,252)		(1,370)		(1,417)		(2,065)		1,768		(11,336)		-
Transfer out of level III		-		-		(105)		-		-		(105)		-
Amortization		(2,140)		-		-		-		-		(2,140)		-
Paid in-kind interest income		921		18		-		-		-		939		-
Purchases		51,065		3,032		-		-		-		54,097		-
Sales and settlements		(43,983)		-		-		-		-		(43,983)		-
Realized and unrealized appreciation (depreciation), net		2,498		(810)		2,784		-		(130)		4,342		-
Unrealized appreciation (depreciation) on secured borrowings of Consolidated Funds, net		-		-		-		-		-		-		418
Proceeds (repayments) from secured borrowings, net		-		-		-		-		-		-		(4,744)
Balance, end of period	$	664,217	$	49,654	$	21,084	$	-	$	11,539	$	746,494	$	136,793
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	$	2,068	$	(810)	$	2,784	$	-	$	(130)	$	3,912	$	420

Total realized and unrealized appreciation (depreciation) recorded for the Consolidated Funds’ Level III investments is included in net realized gain (loss) on investments of Consolidated Funds and net change in unrealized depreciation on investments of Consolidated Funds in the consolidated statements of operations, respectively. 

The following tables summarize the quantitative inputs and assumptions used for the Consolidated Funds’ Level III inputs and the Company’s investments in its equity method investees as of March 31, 2015 and December 31, 2014:

	March 31, 2015				Range				Weighted
Assets	(unaudited)		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Senior Secured Loans and Notes	$	573,254	Income Approach (DCF)	Market Yield		9.55%		15.05%		11.90%
		40,115	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		21,360	Income Approach (DCF)	Discount Rate		14.50%		18.00%		16.66%
		17,699	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		10,411	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		4.50x		5.50x		5.25x
		1,378	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
Equity Interests in LLCs		6,029	Market Approach (Guideline Comparable)	Investment Portfolio Multiple		1.10x		1.10x		1.10x
		9,617	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		331	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		7.50x / 7.50x		8.50x / 8.50x		8.50x / 8.50x
		2,919	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		6.00x / 5.50x		7.00x / 6.50x		6.50x / 6.00x
		-	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple/Volatility		3.50x / 4.00x / 40.40%		4.00x / 4.00x / 72.40%		3.75x / 3.75x / 70.00%
		622	Income Approach (DCF)	Market Yield		12.23%		12.23%		12.23%
		15,136	Income Approach (DCF)	Discount Rate		14.50%		18.00%		18.00%
		15,000	Income Approach (DCF)	Discount Rate		10.00%		10.00%		10.00%
		-	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		4.50x / 4.50x		5.50x / 5.50x		5.25x / 5.25x
Equity Securities		4,700	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		4.50x		5.50x		4.50x
		-	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		5,727	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		4.00x / 3.50x		8.50x / 8.00x		5.66x / 5.23x
		-	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
		10,657	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
Equity Method Investments		11,539	Net Asset Value of Underlying Fund	N/A		N/A		N/A		N/A
	$	746,494

	Fair Value as of
	March 31, 2015				Range				Weighted
Liability	(unaudited)		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Secured borrowings of Consolidated Funds	$	311	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		7.50x / 7.00x		8.50x / 8.00x		8.50x / 8.00x
		5,000	Income Approach (DCF)	Discount Rate		10.00%		10.00%		10.00%
		6,637	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		119,857	Income Approach (DCF)	Market Yield		9.63%		13.50%		11.31%
		4,988	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
	$	136,793

	Fair Value as of				Range				Weighted
Assets	December 31, 2014		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Senior Secured Loans and Notes	$	193	Negotiated Sales Proceeds	Expected Sales Proceeds	$	-	$	4,000,000	$	1,932,000
		4,009	Sales Comparison Approach	Price per Acre	$	8,000	$	41,000	$	24,500
				Price per Room	$	43,200	$	71,429	$	57,315
				Price per Unit	$	155,734	$	228,009	$	191,872
		403	Market Approach (Guideline Comparable)	LTM Revenue Multiple		0.60x		0.60x		0.45x
		346	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		3.10x		3.62x		3.60x
		1,167	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		3.10x		5.50x		4.30x
				LTM Revenue Multiple		0.50x		0.65x		0.58x
		1,989	Income Approach (DCF)	Discount Rate		12.0%		35.0%		20.5%
		144	Liquidation Approach	Asset Coverage	$	144,531	$	144,531	$	144,531
		566,010	Income approach	Market Yield		10.00%		15.21%		12.45%
		37,600	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		21,005	Income approach	Discount Rate		14.00%		18.00%		16.45%
		15,859	Market Approach (Guideline Comparable)	EBITDA Multiple		5.50x		6.00x		5.75x
		5,095	Enterprise Valuation Analysis	EBITDA Multiple		6.00x		7.00x		7.00x
		8,910	Market Approach (Guideline Comparable)	Rev Multiple / EBITDA Multiple		0.43x / 4.09x		0.43x / 4.09x		0.43x / 4.09x
		1,378	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
Equity Interests in LLCs		1,370	Market Approach	Unsolicited Offer Price	$	12,000,000	$	12,000,000	$	12,000,000
		5,623	Market Approach (Guideline Comparable)	Investment Portfolio Multiple		1.10x		1.10x		1.10x
		3,099	Market Approach (Guideline Comparable)	EBITDA Multiple		6.25x		8.50x		6.70x
		2,595	Market Approach (Guideline Comparable)	EBITDA Multiple / Volatility		3.75x / 50%		3.75x / 50%		3.75x / 50%
		581	Income Approach (DCF)	Market Yield		13.14%		13.14%		13.14%
		14,516	Income Approach (DCF)	Discount Rate		14.00%		18.00%		18.00%
		15,000	Income Approach (DCF)	Capitalization Rate		8.70%		8.70%		8.70%
		6,000	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
Equity Securities		7,936	Market Approach (Guideline Comparable)	EBITDA Multiple		4.00x		8.31x		5.20x
		10,364	Option Model	Tangible Book Value Multiple / Volatility		1.30x / 41.5%		1.30x / 41.5%		1.30x / 41.5%
		105	Option Model	Volatility		90.80%		90.80%		90.80%
		194	Market Approach (Guideline Comparable)	LTM EBITDARD Multiple		10.40x		11.10x		10.75x
				NTM EBITDARD Multiple		9.50x		10.80x		10.15x
		261	Market Approach (Guideline Comparable)	Revenue Multiple		0.30x		0.60x		0.45x
		417	Income Approach (DCF)	Discount Rate		13.0%		18.0%		16.4%
		545	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		5.00x		5.50x		5.25x
				LTM Revenue Multiple		0.50x		0.65x		0.58x
Tangible Assets		688	Market Approach	Appraisal of assets	$	500,000	$	2,200,000	$	1,350,000
		1,377	Sales Comparison Approach	Price per SQM		1,146		1,274		1,210
Equity Method Investment		9,901	Net Asset Value of Underlying Fund	N/A		N/A		N/A		N/A
	$	744,680

	Fair Value as of				Range				Weighted
Liability	December 31, 2014		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Secured borrowings of Consolidated Funds	$	130,157	Income approach	Market Yield		10.00%		15.21%		12.45%
		5,947	Market Approach (Guideline Comparable)	EBITDA Multiple		5.50x		6.00x		5.75x
		5,000	Income Approach (DCF)	Capitalization Rate		8.70%		8.70%		8.70%
		15	Market Approach (Guideline Comparable)	EBITDA Multiple		4.00x		8.31x		5.20x
	$	141,119

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in senior secured loans include discount due to lack of marketability, discount rate, market yield, earnings before interest, tax, depreciation and amortization (“EBITDA”) and revenue multiples, expected proceeds, and asset coverage. Significant increases or decreases in discount rates, market yields, EBITDA multiples in isolation would result in a significantly higher or lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in equity interests in LLCs include discount rates, long term growth rates, and portfolio multiples. Significant increases or decreases in discount rates, growth rates and portfolio multiples would result in lower or higher fair value measurements.

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in equity securities include revenue, EBITDA and revenue multiples, price per ton, expected proceeds, discount rates, and stock price valuation. Significant increases or decreases in these factors would result in a significantly higher or lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Consolidated Funds’ investments in tangible assets include price per ton, price per acre, price per room, price per unit appraisals and price per square foot. Significant increases or decreases in these factors would result in a significantly higher or lower fair value measurement.

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CONSOLIDATING SCHEDULES

3 Months Ended

Mar. 31, 2015

Organization and Basis of Presentation [Abstract]

Consolidating Schedules

16.CONSOLIDATING SCHEDULES

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company’s financial condition as of March 31, 2015 and December 31, 2014, and the Company’s results from operations for the three months ended March 31, 2015 and 2014. The financial condition and results of operations for Medley are presented in the tables below under the “Standalone” column.

	For the Three Months Ended March 31, 2015
	(unaudited)
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Revenues:
Management fees	$	17,520	$	-	$	(1,326)	$	16,194
Performance fees		6,336		-		(5,124)		1,212
Other revenues and fees		1,624		-		-		1,624
Total revenues		25,480		-		(6,450)		19,030
Expenses:
Compensation and benefits		7,221		-		-		7,221
Performance fee compensation		112		-		-		112
Consolidated Funds expenses		-		2,119		(1,326)		793
General, administrative and other expenses		4,507		-		-		4,507
Total expenses		11,840		2,119		(1,326)		12,633
Other income (expense):
Dividend income		222		-		-		222
Interest expense		(2,085)		-		-		(2,085)
Other income (expenses), net		(262)		-		(121)		(383)
Interest and other income of Consolidated Funds		-		18,727		-		18,727
Interest expense of Consolidated Funds		-		(3,804)		-		(3,804)
Net realized gain (loss) on investments of Consolidated Funds		-		952		-		952
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		-		4,022		-		4,022
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		-		(416)		-		(416)
Total other income (expense), net		(2,125)		19,481		(121)		17,235
Income before income taxes		11,515		17,362		(5,245)		23,632
Provision for income taxes		1,148		542		-		1,690
Net income		10,367		16,820		(5,245)		21,942
Net income attributable to non-controlling interests in Consolidated Funds		-		-		11,575		11,575
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290		-		-		1,290
Net income attributable to non-controlling interests in Medley LLC		7,803		-		-		7,803
Net income attributable to Medley Management Inc.	$	1,274	$	16,820	$	(16,820)	$	1,274

	As of March 31, 2015
	(unaudited)
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Assets
Cash and cash equivalents	$	71,834	$	-	$	-	$	71,834
Investments, at fair value		27,588		-		(16,049)		11,539
Management fees receivable		15,024		-		-		15,024
Performance fees receivable		6,785		-		-		6,785
Other assets		9,338		-		(254)		9,084
Assets of Consolidated Funds:
Cash and cash equivalents		-		77,725		-		77,725
Investments, at fair value		-		735,623		-		735,623
Interest and dividends receivable		-		6,415		-		6,415
Other assets		-		2,040		(700)		1,340
Total assets	$	130,569	$	821,803	$	(17,003)	$	935,369
Liabilities and equity
Loans payable	$	102,932	$	-	$	-	$	102,932
Accounts payable, accrued expenses and other liabilities		20,023		-		(700)		19,323
Performance fee compensation payable		11,377		-		-		11,377
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		-		13,978		(254)		13,724
Secured borrowings		-		136,806		-		136,806
Total liabilities		134,332		150,784		(954)		284,162
Equity
Class A Common Stock		60		-		-		60
Class B Common Stock		-		-		-		-
Capital deficit		(1,606)		-		-		(1,606)
Retained earnings		180		-		-		180
Total stockholders' deficit, Medley Management Inc.		(1,366)		-		-		(1,366)
Non-controlling interests in Consolidated Funds		-		-		654,970		654,970
Non-controlling interests in consolidated subsidiaries		2,816		-		-		2,816
Non-controlling interests in Medley LLC		(5,213)		-		-		(5,213)
Members' equity of consolidated funds		-		671,019		(671,019)		-
Total (deficit) equity		(3,763)		671,019		(16,049)		651,207
Total liabilities and equity	$	130,569	$	821,803	$	(17,003)	$	935,369

	For the Three Months Ended March 31, 2014
	(unaudited)
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Revenues:
Management fees	$	14,991	$	-	$	(1,763)	$	13,228
Performance fees		76		-		679		755
Other revenues and fees		2,013		-		-		2,013
Total revenues		17,080		-		(1,084)		15,996
Expenses:
Compensation and benefits		3,759		-		-		3,759
Performance fee compensation		1,518		-		-		1,518
Consolidated Funds expenses		-		2,083		(1,763)		320
General, administrative and other expenses		4,229		-		-		4,229
Total expenses		9,506		2,083		(1,763)		9,826
Other income (expense):
Dividend income		222		-		-		222
Interest expense		(633)		-		-		(633)
Other income (expenses), net		(1,192)		-		261		(931)
Interest and other income of Consolidated Funds		-		13,421		-		13,421
Interest expense of Consolidated Funds		-		(1,312)		-		(1,312)
Net realized gain (loss) on investments of Consolidated Funds		-		1,357		-		1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		-		(7,813)		-		(7,813)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		-		(324)		-		(324)
Total other income (expense), net		(1,603)		5,329		261		3,987
Income before income taxes		5,971		3,246		940		10,157
Provision for income taxes		230		274		-		504
Net income		5,741		2,972		940		9,653
Net income attributable to non-controlling interests in Consolidated Funds		-		-		3,912		3,912
Net income attributable to non-controlling interests in consolidated subsidiaries		(47)		-		-		(47)
Net income attributable to Medley LLC	$	5,788	$	2,972	$	(2,972)	$	5,788

	As of December 31, 2014
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Assets
Cash and cash equivalents	$	87,206	$	-	$	-	$	87,206
Investments, at fair value		22,143		-		(12,242)		9,901
Management fees receivable		15,173		-		-		15,173
Performance fees receivable		5,573		-		-		5,573
Other assets		9,230		-		-		9,230
Assets of Consolidated Funds:
Cash and cash equivalents		-		38,111		-		38,111
Investments, at fair value		-		734,870		-		734,870
Interest and dividends receivable		-		6,654		-		6,654
Other assets		-		5,057		(1,376)		3,681
Total assets	$	139,325	$	784,692	$	(13,618)	$	910,399
Liabilities and equity
Loans payable	$	103,057	$	-	$	-	$	103,057
Accounts payable, accrued expenses and other liabilities		28,959		-		(1,376)		27,583
Performance fee compensation payable		11,807		-		-		11,807
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		-		5,767		-		5,767
Secured borrowings		-		141,135		-		141,135
Total liabilities		143,823		146,902		(1,376)		289,349
Equity
Class A Common Stock		60		-		-		60
Class B Common Stock		-		-		-		-
Capital deficit		(2,384)		-		-		(2,384)
Retained earnings		272		-		-		272
Total stockholders' deficit, Medley Management Inc.		(2,052)		-		-		(2,052)
Non-controlling interests in Consolidated Funds		-		-		625,548		625,548
Non-controlling interests in consolidated subsidiaries		1,526		-		-		1,526
Non-controlling interests in Medley LLC		(3,972)		-		-		(3,972)
Members' equity of consolidated funds		-		637,790		(637,790)		-
Total (deficit) equity		(4,498)		637,790		(12,242)		621,050
Total liabilities and equity	$	139,325	$	784,692	$	(13,618)	$	910,399

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INCOME TAXES

3 Months Ended

Mar. 31, 2015

Income Taxes [Abstract]

Income Taxes

12.INCOME TAXES

Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s condensed consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years.  As of March 31, 2015 and December 31, 2014, the Company had total deferred tax assets of $1.2 million which consists primarily of temporary differences relating to certain accrued expenses and, as of March 31, 2015, stock compensation and a tax benefit relating to tax goodwill. Total deferred tax liabilities were $0.5 million and $0.2 million as of March 31, 2015 and December 31, 2014, respectively, which consists primarily of temporary differences relating to accrued fee income and accumulated net unrealized losses. The tax provision for deferred income taxes results from temporary differences arising principally from certain accrued expenses, deferred rent, fee income accruals, and depreciation.

The Company’s effective tax rate was 7.2% and 5.0% for the three months ended March 31, 2015 and 2014, respectively.  The quarterly provision for income taxes is determined based on the Company’s estimated full year effective tax rate adjusted by the amount of tax attributable to infrequent or unusual items that are separately recognized on a discrete basis in the income tax provision in the quarter in which they occur.  The Company’s effective tax rate includes a rate benefit attributable to the fact that the Company’s subsidiaries operate as limited liability companies, which are not subject to federal or state income tax. Accordingly, a portion of the Company’s earnings attributable to the non-controlling interest are not subject to corporate level taxes. For the three months ended March 31, 2015, the Company was only subject to federal and state income taxes on its pre-tax income attributable to Medley Management Inc.  The Company was not subject to any federal and state income taxes during the three months ended March 31, 2014.

Interest expense and penalties related to income tax matters are recognized as a component of the provision for income taxes. There were no such amounts incurred during the three months ended March 31, 2015 and 2014. As of March 31, 2015 and December 31, 2014 and during the three months ended March 31, 2015 and 2014, there were no uncertain tax positions taken that were not more likely than not to be sustained. Certain subsidiaries of the Company are no longer subject to tax examinations by taxing authorities for tax years prior to 2010 and, presently, have no open examinations for tax years before 2014.

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SECURED BORROWINGS

3 Months Ended

Mar. 31, 2015

Secured Borrowings [Abstract]

Secured Borrowings

8.SECURED BORROWINGS OF CONSOLIDATED FUNDS

The Consolidated Funds have loan participations which do not meet the definition of a “participating interest”, as defined in ASC 860, Transfers and Servicing. As such, these loan participations remain on the Company’s condensed consolidated balance sheets and are recorded at fair value, as secured borrowings of Consolidated Funds.

As of March 31, 2015, secured borrowings of Consolidated Funds at cost and fair value totaled $137.4 million and $136.8 million, respectively. The fair value of the investments that are associated with these secured borrowings was $136.8 million. During the three months ended March 31, 2015, the Consolidated Funds received net repayments on secured borrowings of $4.6 million. During the three months ended March 31, 2014, the Consolidated Funds received net proceeds from secured borrowings of $11.8 million.

As of December 31, 2014, secured borrowings of Consolidated Funds at cost and fair value totaled $143.0 million and $141.1 million, respectively. The fair value of the investments that are associated with these secured borrowings was $141.1 million.

For the three months ended March 31, 2015 and 2014, the Company recorded interest expense related to the secured borrowings of the Consolidated Funds of $3.8 million and $1.3 million, respectively.

Future minimum repayments under the secured borrowings of the Consolidated Funds are  $2.0 million, $4.0 million, $8.7 million, $36.9 million and $81.0 million for the years ended December 31, 2015, 2016, 2017, 2018 and 2019, respectively, and $5.7 million thereafter.

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SEGMENT REPORTING (Schedule of Segment Reporting Information, by Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Revenues
Management fees	$ 16,194		$ 13,228
Performance Fees	1,212		755
Other revenues and fees	1,624		2,013
Total revenues	19,030		15,996
Expenses
Compensation and benefits	7,221		3,759
Performance fee compensation	112		1,518
General, administrative and other expenses	4,507		4,229
Expenses	12,633		9,826
Other income (expense)
Dividend income	222		222
Interest Expense	(2,085)		(633)
Other expenses, net	(383)		(931)
Total other expense, net	17,235		3,987
Income before income taxes	23,632		10,157
Provision for income taxes	1,690		504
Net income	21,942		9,653
Net income	1,274
Reimbursable fund startup expenses	1,923		1,275
Severance expense	121		6
Share-based Compensation	778
Adjustment For Pre-IPO Guaranteed Payments			(1,226)
Core Net Income	11,767		5,843
Interest expense	2,085		633
Depreciation and amortization	111		92
Standalone [Member]
Revenues
Management fees	17,520		14,991
Performance Fees	6,336		76
Other revenues and fees	1,624		2,013
Total revenues	25,480		17,080
Expenses
Compensation and benefits	7,221		3,759
Performance fee compensation	112		1,518
General, administrative and other expenses	4,507		4,229
Expenses	11,840		9,506
Other income (expense)
Dividend income	222		222
Interest Expense	(2,085)		(633)
Other expenses, net	(262)		(1,192)
Total other expense, net	(2,125)		(1,603)
Income before income taxes	11,515		5,971
Provision for income taxes	1,148		230
Net income	10,367		5,741
Net income attributable to non-controlling interests in consolidated subsidiaries	1,290		(47)
Net income	1,274
Reimbursable fund startup expenses	1,923	[1]	1,275	[1]
Severance expense	121	[1]	6	[1]
Adjustment For Pre-IPO Guaranteed Payments			(1,226)	[1],[2]
Core Net Income	11,767		5,843
Interest expense	2,085		633
Income taxes	1,499		230
Depreciation and amortization	111		92
Core EBITDA	15,462		6,798
Consolidated Subsidiaries [Member]
Other income (expense)
Net income attributable to non-controlling interests in consolidated subsidiaries	1,290		(47)
Consolidated Subsidiaries [Member] | Standalone [Member]
Other income (expense)
Net income attributable to non-controlling interests in consolidated subsidiaries	1,290		(47)
Medley Management Inc. And Non Controlling Interests In Medley LLC [Member]
Other income (expense)
Net income	9,077		5,788
Medley Management Inc. And Non Controlling Interests In Medley LLC [Member] | Standalone [Member]
Other income (expense)
Net income	9,077		5,788
Medley LLC [Member]
Other income (expense)
Net income attributable to non-controlling interests in consolidated subsidiaries	7,803		5,788
Medley LLC [Member] | Standalone [Member]
Other income (expense)
Net income attributable to non-controlling interests in consolidated subsidiaries	$ 7,803		$ 5,788

[1] Presented net of income taxes.

[2] Represents a pro forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense. Prior to the Company’s Reorganization and IPO, these payments were recorded as distributions from member’s capital.

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LOANS PAYABLE

3 Months Ended

Mar. 31, 2015

Loans Payable [Abstract]

Loans Payable

6.LOANS PAYABLE

The Company’s loans payable consist of the following:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Term loans under the Credit Suisse Term Loan Facility, net of unamortized discount of $948 and $1,006, respectively	$	94,052	$	93,994
Non-recourse promissory notes, net of unamortized discount of $2,370 and $2,500, respectively		8,880		9,063
Total loans payable	$	102,932	$	103,057

Credit Suisse Term Loan Facility

On August 14, 2014, the Company entered into a $110.0 million senior secured term loan credit facility (“Term Loan Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent thereunder, Credit Suisse Securities (USA) LLC, as bookrunner and lead arranger, and the lenders from time-to-time party thereto, which will mature on June 15, 2019. The proceeds from the term loans amounting to $108.9 million after a $1.1 million issuer discount, together with cash on hand, were used to: (i) pay off an existing loan with a different financial institution in the amount of $33.2 million, (ii) pay fees and expenses incurred in connection with this financing in the amount of $2.6 million, of which $2.4 million have been deferred, and (iii) pay a distribution to Medley LLC’s members in the amount of $74.5 million. In connection with this financing, the Company terminated its pre-existing credit agreement with City National Bank.

Borrowings under the Term Loan Facility bear interest, at the borrower’s option, at a rate equal to either a Eurodollar margin over an adjusted LIBOR (with a “floor” of 1.0%) or a base rate margin over an adjusted base rate determined by reference to the highest of (i) the term loan administrative agent’s prime rate; (ii) the federal funds effective rate in effect on such day plus 0.5%; and (iii) an adjusted LIBOR plus 1.0%. The applicable margins for the Term Loan Facility are 5.5%, in the case of Eurodollar loans and 4.5%, in the case of adjusted base rate loans. Outstanding borrowings under the Term Loan Facility bore interest at a rate of 6.5% as of March 31, 2015 and December 31, 2014. In addition, the Term Loan Facility also provides the borrower with the option to raise incremental credit facilities (including an uncommitted incremental facility that provides the borrower the option to increase the amount available under the Term Loan Credit Facility by an aggregate of up to $15.0 million, subject to additional increases, provided that the net leverage ratio as of the last day of any four-fiscal quarter period, commencing with the four-fiscal quarter period ending December 31, 2014, shall not exceed 2.0 to 1.0). Borrowings are collateralized by substantially all of the equity interests in Medley LLC and its wholly owned subsidiaries.

The Term Loan Facility requires principal repayments in quarterly installments equal to $1.4 million (which amount may be adjusted as a result of prepayment or incremental term loans drawn) commencing on March 31, 2015, with the remaining amount payable at maturity. The Company can also make voluntary repayments, without penalty, at any time prior to August 14, 2016, not to exceed $33.0 million in the aggregate. As of March 31, 2015 and December 31, 2014, outstanding borrowings under this facility was $94.1 million and $94.0 million, respectively, which is reflected net of unamortized discount of $0.9 million and $1.0 million, respectively. The discount under the term loans is being accreted, using the effective interest method, over the term of the notes. Total interest expense under this Term Loan Facility, including accretion of the note discount, was $1.6 million for the three months ended March 31, 2015. The fair value of the outstanding balance of Term Loan Facility approximated its par value as of March 31, 2015.

 In October 2014, the Company voluntarily prepaid $15.0 million of the outstanding term loans under this facility using a portion of the proceeds received from its initial public offering. The $15.0 million prepayment is being applied against the upcoming quarterly installments that would have been due commencing on March 31, 2015.

The Term Loan Facility also contains a financial covenant that requires the Company to maintain a Maximum Net Leverage Ratio commencing with the quarter ending on December 31, 2014 of not greater than 3.5 to 1.0, with which the Company is compliant. This ratio is calculated on a trailing twelve months basis and is the ratio of Total Net Debt, as defined, to Core EBITDA, as defined, and is calculated using the Company’s standalone financial results and includes the adjustments made to calculate Core EBITDA (Note 14). Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the Term Loan Facility. The Term Loan Facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. There were no events of default under the Term Loan Facility as of March 31, 2015. 

CNB Credit Agreement

On August 14, 2014, the Company entered into a $15.0 million senior secured revolving credit facility with City National Bank (the “Revolving Credit Facility”). The Company intends to use any proceeds of borrowings under the Revolving Credit Facility for general corporate purposes, including funding of its working capital needs. Borrowings under the Revolving Credit Facility bear interest at the option of the Company, either (i) at an Alternate Base Rate, as defined, plus an applicable margin not to exceed 3.25% or (ii) at an Adjusted LIBOR plus an applicable margin not to exceed 4.0%. As of and during the period ended March 31, 2015, there were no amounts drawn under the Revolving Credit Facility.

The Revolving Credit Facility also contains a financial covenant that requires the Company to maintain a Maximum Net Leverage Ratio commencing with the quarter ending on December 31, 2014 of not greater than 3.5 to 1.0, with which the Company is compliant. This ratio is calculated on a trailing twelve months basis and is the ratio of Total Net Debt, as defined, to Core EBITDA, as defined, and is calculated using the Company’s standalone financial results and includes the adjustments made to calculate Core EBITDA (Note 14). Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the Revolving Credit Facility. The Revolving Credit Facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. There were no events of default under the Revolving Credit Facility as of March 31, 2015. 

Non-Recourse Promissory Notes 

In April 2012, the Company borrowed $10.0 million under two non-recourse promissory notes. Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations. Interest on the notes is paid quarterly and is equal to the dividends received by the Company related to the pledged shares. The Company may prepay the notes in whole or in part at any time without penalty and the lenders may call the notes if certain conditions are met. The notes are scheduled to mature in March 2019. The proceeds from the notes were recorded net of issuance costs of $3.8 million and are being accreted, using the effective interest method, over the term of the non-recourse promissory notes. Total interest expense under these non-recourse promissory notes, including accretion of the note discount, was $0.3 million and $0.4 million for the three months ended March 31, 2015 and 2014, respectively. The fair value of the outstanding balance of the notes was $10.3 million as of March 31, 2015 and December 31, 2014.

In March 2014, the Company issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carries no interest, has quarterly amortization payments of $312,500, and matures in March 2016. As of March 31, 2015 and December 31, 2014, the balance under this note was$1.3 million and$1.6 million, respectively.

Contractual Maturities of Loans Payable

As of March 31, 2015, future principal payments due under the loans payable are as follows (in thousands): 

Remaining 2015	$	937
2016		312
2017		2,875
2018		5,500
2019		96,626
	$	106,250

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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES

3 Months Ended

Mar. 31, 2015

Accounts Payable, Accrued Expenses and Other Liabilities [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

7.ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES

The components of accounts payable, accrued expenses and other liabilities are as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Accounts payable, accrued expenses and other liabilities of Medley LLC:
Accrued compensation and benefits	$	2,841	$	8,575
Due to affiliates (Note 10)		4,120		6,998
Revenue share payable (Note 9)		6,744		6,669
Dividends payable		1,366		1,423
Income taxes payable		742		741
Professional fees		499		545
Deferred rent		427		474
Deferred tax liabilities		517		245
Accounts payable and accrued expenses		2,067		1,913
Total accounts payable, accrued expenses and other liabilities of Medley LLC		19,323		27,583
Accounts payable, accrued expenses and other liabilities of Consolidated Funds		13,724		5,767
Total accounts payable, accrued expenses and other liabilities	$	33,047	$	33,350

As of March 31, 2015 and December 31, 2014, dividends payable was comprised of $1.2 million due to the Company’s Class A common stockholders and $0.2 million payable to the Company’s restricted stock unit holders.  Dividends payable to Class A common holders represents a $0.20 per share of Class A common stock dividend that was declared on March 29, 2015 and November 10, 2014, respectively, to shareholders of record as of the close of business on April 23, 2015 and December 17, 2014, respectively, but not paid until May 6, 2015 and January 5, 2015, respectively.  As the restricted stock units are participating securities, the Company calculated the amount due to the holders of the restricted stock units based on the $0.20 per share of Class A common stock dividend declaration amount and the number of restricted stock units expected to vest.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9.COMMITMENTS AND CONTINGENCIES 

Operating Leases

Medley leases office space in New York City and San Francisco under non-cancelable lease agreements that expire at various times through December 2020. Rent expense was $0.7 million and $0.6 million for the three months ended March 31, 2015 and 2014, respectively.

Future minimum rental payments under non-cancelable leases are as follows (in thousands):

Remaining 2015	$	1,831
2016		784
2017		452
2018		457
2019		463
Thereafter		469
Total future minimum lease payments	$	4,456

Capital Commitments to Funds

As of March 31, 2015 and December 31, 2014, the Company had aggregate unfunded commitments of $0.9 million and $1.1 million, respectively, to certain long-dated private funds.

Other Commitments

In April 2012, the Company entered into an obligation to pay a fixed percentage of management and incentive fees received by the Company from SIC. The agreement was entered into contemporaneously with the $10 million non-recourse promissory notes that were issued to the same parties (Note 6). The two transactions were deemed to be related freestanding contracts and the $10 million of loan proceeds were allocated to the contracts using their relative fair values. At inception, the Company recognized an obligation of $4.4 million representing the present value of the future cash flows expected to be paid under this agreement. As of March 31, 2015 and December 31, 2014, the obligation amounted to $6.7 million and is recorded as revenue share payable, a component of accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets. The change in the estimated cash flows for this obligation is recorded in other income (expense) on the condensed consolidated statements of operations.

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SEGMENT REPORTING (Adjustment to Interest and Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Interest and other income of Consolidated Funds	$ 18,727	$ 13,421
Net realized gain (loss) on investments of Consolidated Funds	952	1,357
Net change in unrealized (depreciation) appreciation on investments of Consolidated Funds	4,022	(7,813)
Total segment other income (expense), net	17,235	3,987
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Interest and other income of Consolidated Funds	18,727	13,421
Interest expense of Consolidated Funds	(3,804)	(1,312)
Net realized gain (loss) on investments of Consolidated Funds	952	1,357
Net change in unrealized (depreciation) appreciation on investments of Consolidated Funds	4,022	(7,813)
Net change in unrealized depreciation (appreciation) on secured borrowings	(416)	(324)
Elimination of equity income from Consolidated Funds	(121)	261
Total segment other income (expense), net	19,360	5,590
Consolidated Funds [Member]
Segment Reporting Information [Line Items]
Interest and other income of Consolidated Funds	18,727	13,421
Interest expense of Consolidated Funds	3,804	1,312
Net realized gain (loss) on investments of Consolidated Funds	1,059	1,357
Net change in unrealized depreciation (appreciation) on secured borrowings	$ (416)	$ (324)

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CONSOLIDATING SCHEDULES (Consolidated Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues:
Management fees	$ 16,194	$ 13,228
Performance fees	1,212	755
Other revenues and fees	1,624	2,013
Total revenues	19,030	15,996
Expenses:
Compensation and benefits	7,221	3,759
Performance fee compensation	112	1,518
Consolidated Funds expenses	793	320
General, administrative and other expenses	4,507	4,229
Total operating expenses	12,633	9,826
Other income (expense):
Dividend income	222	222
Interest Expense	(2,085)	(633)
Other expense, net	(383)	(931)
Interest and other income of Consolidated Funds	18,727	13,421
Net realized loss on investments of Consolidated Funds	952	1,357
Net change in unrealized depreciation on investments of Consolidated Funds	4,022	(7,813)
Total other expense, net	17,235	3,987
Income before income taxes	23,632	10,157
Provision for income taxes	1,690	504
Net income	21,942	9,653
Net income attributable to Medley Management Inc.	1,274
Consolidated Funds [Member]
Expenses:
Consolidated Funds expenses	793	320
Other income (expense):
Interest expense of Consolidated Funds	3,804	1,312
Interest and other income of Consolidated Funds	18,727	13,421
Net realized loss on investments of Consolidated Funds	1,059	1,357
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds	(416)	(324)
Net income attributable to non-controlling interests	11,575	3,912
Consolidated Subsidiaries [Member]
Other income (expense):
Net income attributable to non-controlling interests	1,290	(47)
Medley LLC [Member]
Other income (expense):
Net income attributable to non-controlling interests	7,803	5,788
Standalone [Member]
Revenues:
Management fees	17,520	14,991
Performance fees	6,336	76
Other revenues and fees	1,624	2,013
Total revenues	25,480	17,080
Expenses:
Compensation and benefits	7,221	3,759
Performance fee compensation	112	1,518
General, administrative and other expenses	4,507	4,229
Total operating expenses	11,840	9,506
Other income (expense):
Dividend income	222	222
Interest Expense	(2,085)	(633)
Other expense, net	(262)	(1,192)
Total other expense, net	(2,125)	(1,603)
Income before income taxes	11,515	5,971
Provision for income taxes	1,148	230
Net income	10,367	5,741
Net income attributable to non-controlling interests	1,290	(47)
Net income attributable to Medley Management Inc.	1,274
Standalone [Member] | Consolidated Subsidiaries [Member]
Other income (expense):
Net income attributable to non-controlling interests	1,290	(47)
Standalone [Member] | Medley LLC [Member]
Other income (expense):
Net income attributable to non-controlling interests	7,803	5,788
Consolidated Funds [Member]
Expenses:
Consolidated Funds expenses	2,119	2,083
Total operating expenses	2,119	2,083
Other income (expense):
Interest and other income of Consolidated Funds	18,727	13,421
Net realized loss on investments of Consolidated Funds	952	1,357
Net change in unrealized depreciation on investments of Consolidated Funds	4,022	(7,813)
Total other expense, net	19,481	5,329
Income before income taxes	17,362	3,246
Provision for income taxes	542	274
Net income	16,820	2,972
Net income attributable to Medley Management Inc.	16,820
Consolidated Funds [Member] | Consolidated Funds [Member]
Other income (expense):
Interest expense of Consolidated Funds	3,804	1,312
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds	(416)	(324)
Consolidated Funds [Member] | Medley LLC [Member]
Other income (expense):
Net income attributable to non-controlling interests		2,972
Consolidation, Eliminations [Member]
Revenues:
Management fees	(1,326)	(1,763)
Performance fees	(5,124)	679
Total revenues	(6,450)	(1,084)
Expenses:
Consolidated Funds expenses	(1,326)	(1,763)
Total operating expenses	(1,326)	(1,763)
Other income (expense):
Other expense, net	(121)	261
Total other expense, net	(121)	261
Income before income taxes	(5,245)	940
Net income	(5,245)	940
Net income attributable to Medley Management Inc.	(16,820)
Consolidation, Eliminations [Member] | Consolidated Funds [Member]
Other income (expense):
Net income attributable to non-controlling interests	11,575	3,912
Consolidation, Eliminations [Member] | Medley LLC [Member]
Other income (expense):
Net income attributable to non-controlling interests		$ (2,972)

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SEGMENT REPORTING (Adjustments and Reconciliations to Expenses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Consolidated Funds Expenses	$ 793	$ 320
Total segment expenses	12,633	9,826
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Total segment expenses	793	320
Consolidated Funds [Member]
Segment Reporting Information [Line Items]
Consolidated Funds Expenses	793	320
Consolidated Funds [Member] | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Total segment expenses	$ 793	$ 320

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CONSOLIDATING SCHEDULES (Tables)

3 Months Ended

Mar. 31, 2015

Organization and Basis of Presentation [Abstract]

Consolidated Income Statement

	For the Three Months Ended March 31, 2015
	(unaudited)
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Revenues:
Management fees	$	17,520	$	-	$	(1,326)	$	16,194
Performance fees		6,336		-		(5,124)		1,212
Other revenues and fees		1,624		-		-		1,624
Total revenues		25,480		-		(6,450)		19,030
Expenses:
Compensation and benefits		7,221		-		-		7,221
Performance fee compensation		112		-		-		112
Consolidated Funds expenses		-		2,119		(1,326)		793
General, administrative and other expenses		4,507		-		-		4,507
Total expenses		11,840		2,119		(1,326)		12,633
Other income (expense):
Dividend income		222		-		-		222
Interest expense		(2,085)		-		-		(2,085)
Other income (expenses), net		(262)		-		(121)		(383)
Interest and other income of Consolidated Funds		-		18,727		-		18,727
Interest expense of Consolidated Funds		-		(3,804)		-		(3,804)
Net realized gain (loss) on investments of Consolidated Funds		-		952		-		952
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		-		4,022		-		4,022
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		-		(416)		-		(416)
Total other income (expense), net		(2,125)		19,481		(121)		17,235
Income before income taxes		11,515		17,362		(5,245)		23,632
Provision for income taxes		1,148		542		-		1,690
Net income		10,367		16,820		(5,245)		21,942
Net income attributable to non-controlling interests in Consolidated Funds		-		-		11,575		11,575
Net income attributable to non-controlling interests in consolidated subsidiaries		1,290		-		-		1,290
Net income attributable to non-controlling interests in Medley LLC		7,803		-		-		7,803
Net income attributable to Medley Management Inc.	$	1,274	$	16,820	$	(16,820)	$	1,274

	For the Three Months Ended March 31, 2014
	(unaudited)
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Revenues:
Management fees	$	14,991	$	-	$	(1,763)	$	13,228
Performance fees		76		-		679		755
Other revenues and fees		2,013		-		-		2,013
Total revenues		17,080		-		(1,084)		15,996
Expenses:
Compensation and benefits		3,759		-		-		3,759
Performance fee compensation		1,518		-		-		1,518
Consolidated Funds expenses		-		2,083		(1,763)		320
General, administrative and other expenses		4,229		-		-		4,229
Total expenses		9,506		2,083		(1,763)		9,826
Other income (expense):
Dividend income		222		-		-		222
Interest expense		(633)		-		-		(633)
Other income (expenses), net		(1,192)		-		261		(931)
Interest and other income of Consolidated Funds		-		13,421		-		13,421
Interest expense of Consolidated Funds		-		(1,312)		-		(1,312)
Net realized gain (loss) on investments of Consolidated Funds		-		1,357		-		1,357
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds		-		(7,813)		-		(7,813)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds		-		(324)		-		(324)
Total other income (expense), net		(1,603)		5,329		261		3,987
Income before income taxes		5,971		3,246		940		10,157
Provision for income taxes		230		274		-		504
Net income		5,741		2,972		940		9,653
Net income attributable to non-controlling interests in Consolidated Funds		-		-		3,912		3,912
Net income attributable to non-controlling interests in consolidated subsidiaries		(47)		-		-		(47)
Net income attributable to Medley LLC	$	5,788	$	2,972	$	(2,972)	$	5,788

Consolidated Balance Sheet

	As of March 31, 2015
	(unaudited)
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Assets
Cash and cash equivalents	$	71,834	$	-	$	-	$	71,834
Investments, at fair value		27,588		-		(16,049)		11,539
Management fees receivable		15,024		-		-		15,024
Performance fees receivable		6,785		-		-		6,785
Other assets		9,338		-		(254)		9,084
Assets of Consolidated Funds:
Cash and cash equivalents		-		77,725		-		77,725
Investments, at fair value		-		735,623		-		735,623
Interest and dividends receivable		-		6,415		-		6,415
Other assets		-		2,040		(700)		1,340
Total assets	$	130,569	$	821,803	$	(17,003)	$	935,369
Liabilities and equity
Loans payable	$	102,932	$	-	$	-	$	102,932
Accounts payable, accrued expenses and other liabilities		20,023		-		(700)		19,323
Performance fee compensation payable		11,377		-		-		11,377
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		-		13,978		(254)		13,724
Secured borrowings		-		136,806		-		136,806
Total liabilities		134,332		150,784		(954)		284,162
Equity
Class A Common Stock		60		-		-		60
Class B Common Stock		-		-		-		-
Capital deficit		(1,606)		-		-		(1,606)
Retained earnings		180		-		-		180
Total stockholders' deficit, Medley Management Inc.		(1,366)		-		-		(1,366)
Non-controlling interests in Consolidated Funds		-		-		654,970		654,970
Non-controlling interests in consolidated subsidiaries		2,816		-		-		2,816
Non-controlling interests in Medley LLC		(5,213)		-		-		(5,213)
Members' equity of consolidated funds		-		671,019		(671,019)		-
Total (deficit) equity		(3,763)		671,019		(16,049)		651,207
Total liabilities and equity	$	130,569	$	821,803	$	(17,003)	$	935,369

	As of December 31, 2014
			Consolidated
	Standalone		Funds		Eliminations		Consolidated
	(Amounts in thousands)
Assets
Cash and cash equivalents	$	87,206	$	-	$	-	$	87,206
Investments, at fair value		22,143		-		(12,242)		9,901
Management fees receivable		15,173		-		-		15,173
Performance fees receivable		5,573		-		-		5,573
Other assets		9,230		-		-		9,230
Assets of Consolidated Funds:
Cash and cash equivalents		-		38,111		-		38,111
Investments, at fair value		-		734,870		-		734,870
Interest and dividends receivable		-		6,654		-		6,654
Other assets		-		5,057		(1,376)		3,681
Total assets	$	139,325	$	784,692	$	(13,618)	$	910,399
Liabilities and equity
Loans payable	$	103,057	$	-	$	-	$	103,057
Accounts payable, accrued expenses and other liabilities		28,959		-		(1,376)		27,583
Performance fee compensation payable		11,807		-		-		11,807
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities		-		5,767		-		5,767
Secured borrowings		-		141,135		-		141,135
Total liabilities		143,823		146,902		(1,376)		289,349
Equity
Class A Common Stock		60		-		-		60
Class B Common Stock		-		-		-		-
Capital deficit		(2,384)		-		-		(2,384)
Retained earnings		272		-		-		272
Total stockholders' deficit, Medley Management Inc.		(2,052)		-		-		(2,052)
Non-controlling interests in Consolidated Funds		-		-		625,548		625,548
Non-controlling interests in consolidated subsidiaries		1,526		-		-		1,526
Non-controlling interests in Medley LLC		(3,972)		-		-		(3,972)
Members' equity of consolidated funds		-		637,790		(637,790)		-
Total (deficit) equity		(4,498)		637,790		(12,242)		621,050
Total liabilities and equity	$	139,325	$	784,692	$	(13,618)	$	910,399

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SECURED BORROWINGS (Narratiave) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Secured borrowings at fair value	$ 136,806,000		$ 141,135,000
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year	937,000
2016	312,000
2017	2,875,000
2018	5,500,000
2019	96,626,000
Secured Debt [Member]
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year	2,000,000
2016	4,000,000
2017	8,700,000
2018	36,900,000
2019	81,000,000
Thereafter	5,700,000
Consolidated Funds [Member]
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Secured borrowings at cost	137,400,000		143,000,000
Secured borrowings at fair value	136,806,000		141,135,000
Investment associated with secured borrowings	136,800,000		141,100,000
Net proceeds from secured borrowings	(4,600,000)	11,800,000
Interest expense from secured borrowings	$ 3,804,000	$ 1,312,000

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MARKET AND OTHER RISK FACTORS

3 Months Ended

Mar. 31, 2015

Market and Other Risk Factors [Abstract]

Market and Other Risk Factors

14.MARKET AND OTHER RISK FACTORS

Due to the nature of the Consolidated Funds’ investment strategy, their portfolio of investments has significant market and credit risk. As a result, the Company is subject to market and other risk factors, including, but not limited to the following:

Market Risk

The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions that are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Credit Risk

There are no restrictions on the credit quality of the investments the Company intends to make. Investments may be deemed by nationally recognized rating agencies to have substantial vulnerability to default in payment of interest and/or principal. Some investments may have low-quality ratings or be unrated. Lower rated and unrated investments have major risk exposure to adverse conditions and are considered to be predominantly speculative. Generally, such investments offer a higher return potential than higher rated investments, but involve greater volatility of price and greater risk of loss of income and principal.

In general, the ratings of nationally recognized rating organizations represent the opinions of agencies as to the quality of the securities they rate. Such ratings, however, are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of the relevant securities. It is also possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events. The Company may use these ratings as initial criteria for the selection of portfolio assets for the Company but is not required to utilize them.

Limited Liquidity of Investments

The Company intends to invest in investments that may not be readily marketable. Illiquid investments may trade at a discount from comparable, more liquid investments and, at times there may be no market at all for such investments. Subordinate investments may be less marketable, or in some instances illiquid, because of the absence of registration under federal securities laws, contractual restrictions on transfer, the small size of the market or the small size of the issue (relative to issues of comparable interests). As a result, the Company may encounter difficulty in selling its investments or may, if required to liquidate investments to satisfy redemption requests of its investors or debt service obligations, be compelled to sell such investments at less than fair value.

Counterparty Risk

Some of the markets in which the Company may affect its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight, unlike members of exchange-based markets. This exposes the Company to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the applicable contract (whether or not such dispute is bona fide) or because of a credit or liquidity problem, causing the Company to suffer loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Company has concentrated its transactions with a single or small group of counterparties.

Currency Risk

The Company may invest in financial instruments and enter into transactions denominated in currencies other than its functional currency. Although the Company may seek to hedge currency exposure through financial instruments, the Company may still be exposed to risks that the exchange rate of its currency relative to other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Company’s assets or liabilities denominated in currencies other than the functional currency.

The Company may enter into derivative contracts to manage the risk associated with foreign currency exchange fluctuations on its non-U.S. dollar denominated holdings.

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Measurements [Abstract]

Fair Value of Investments by Class

The following tables present the fair value measurements of investments, by major class according to the fair value hierarchy:

	As of March 31, 2015
	(unaudited)
	Level I		Level II		Level III		Total
	(Amounts in thousands)
Assets
Senior secured loans and notes	$	-	$	-	$	664,217	$	664,217
Equity interests in LLCs		-		-		49,654		49,654
Equity securities		-		668		21,084		21,752
Equity method investments		-		-		11,539		11,539
Total assets	$	-	$	668	$	746,494	$	747,162
Secured borrowings of Consolidated Funds	$	-	$	13	$	136,793	$	136,806

	As of December 31, 2014
	Level I		Level II		Level III		Total
	(Amounts in thousands)
Assets
Senior secured loans and notes	$	-	$	-	$	664,108	$	664,108
Equity interests in LLCs		-		-		48,784		48,784
Equity securities		62		29		19,822		19,913
Investments in tangible assets		-		-		2,065		2,065
Equity method investment		-		-		9,901		9,901
Total assets	$	62	$	29	$	744,680	$	744,771
Secured borrowings of Consolidated Funds	$	16	$	-	$	141,119	$	141,135

Reconciliation of Level III Investments

The following tables provide a reconciliation of the beginning and ending balances for the Consolidated Funds’ Level III investments and the Company’s investments in its equity method investees:

	As of March 31, 2015
	(unaudited)
	Financial Assets												Liabilities
	Investments of Consolidated Funds												Secured
	Senior						Investment						borrowings
	Secured		Equity				in		Equity				of
	Loans and		Interests in		Equity		Tangible		Method				Consolidated
	Notes		LLCs		Securities		Assets		Investments		Total		Funds
	(Amounts in thousands)
Balance, beginning of year	$	664,108	$	48,784	$	19,822	$	2,065	$	9,901	$	744,680	$	141,119
Deconsolidation of MOF I		(8,252)		(1,370)		(1,417)		(2,065)		1,768		(11,336)		-
Transfer out of level III		-		-		(105)		-		-		(105)		-
Amortization		(2,140)		-		-		-		-		(2,140)		-
Paid in-kind interest income		921		18		-		-		-		939		-
Purchases		51,065		3,032		-		-		-		54,097		-
Sales and settlements		(43,983)		-		-		-		-		(43,983)		-
Realized and unrealized appreciation (depreciation), net		2,498		(810)		2,784		-		(130)		4,342		-
Unrealized appreciation (depreciation) on secured borrowings of Consolidated Funds, net		-		-		-		-		-		-		418
Proceeds (repayments) from secured borrowings, net		-		-		-		-		-		-		(4,744)
Balance, end of period	$	664,217	$	49,654	$	21,084	$	-	$	11,539	$	746,494	$	136,793
Changes in unrealized (gains) losses included in earnings related to financial assets still held at the reporting date	$	2,068	$	(810)	$	2,784	$	-	$	(130)	$	3,912	$	420

Summary of Quantitative Inputs and Assumptions

	March 31, 2015				Range				Weighted
Assets	(unaudited)		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Senior Secured Loans and Notes	$	573,254	Income Approach (DCF)	Market Yield		9.55%		15.05%		11.90%
		40,115	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		21,360	Income Approach (DCF)	Discount Rate		14.50%		18.00%		16.66%
		17,699	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		10,411	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		4.50x		5.50x		5.25x
		1,378	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
Equity Interests in LLCs		6,029	Market Approach (Guideline Comparable)	Investment Portfolio Multiple		1.10x		1.10x		1.10x
		9,617	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		331	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		7.50x / 7.50x		8.50x / 8.50x		8.50x / 8.50x
		2,919	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		6.00x / 5.50x		7.00x / 6.50x		6.50x / 6.00x
		-	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple/Volatility		3.50x / 4.00x / 40.40%		4.00x / 4.00x / 72.40%		3.75x / 3.75x / 70.00%
		622	Income Approach (DCF)	Market Yield		12.23%		12.23%		12.23%
		15,136	Income Approach (DCF)	Discount Rate		14.50%		18.00%		18.00%
		15,000	Income Approach (DCF)	Discount Rate		10.00%		10.00%		10.00%
		-	Market Approach (Guideline Comparable)	LTM and 2015 EBITDA Multiple		4.50x / 4.50x		5.50x / 5.50x		5.25x / 5.25x
Equity Securities		4,700	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		4.50x		5.50x		4.50x
		-	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		5,727	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		4.00x / 3.50x		8.50x / 8.00x		5.66x / 5.23x
		-	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
		10,657	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
Equity Method Investments		11,539	Net Asset Value of Underlying Fund	N/A		N/A		N/A		N/A
	$	746,494

	Fair Value as of
	March 31, 2015				Range				Weighted
Liability	(unaudited)		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Secured borrowings of Consolidated Funds	$	311	Market Approach (Guideline Comparable)	LTM and NTM EBITDA Multiple		7.50x / 7.00x		8.50x / 8.00x		8.50x / 8.00x
		5,000	Income Approach (DCF)	Discount Rate		10.00%		10.00%		10.00%
		6,637	Market Approach (Guideline Comparable)	2015 EBITDA Multiple		5.50x		6.00x		5.75x
		119,857	Income Approach (DCF)	Market Yield		9.63%		13.50%		11.31%
		4,988	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
	$	136,793

	Fair Value as of				Range				Weighted
Assets	December 31, 2014		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Senior Secured Loans and Notes	$	193	Negotiated Sales Proceeds	Expected Sales Proceeds	$	-	$	4,000,000	$	1,932,000
		4,009	Sales Comparison Approach	Price per Acre	$	8,000	$	41,000	$	24,500
				Price per Room	$	43,200	$	71,429	$	57,315
				Price per Unit	$	155,734	$	228,009	$	191,872
		403	Market Approach (Guideline Comparable)	LTM Revenue Multiple		0.60x		0.60x		0.45x
		346	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		3.10x		3.62x		3.60x
		1,167	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		3.10x		5.50x		4.30x
				LTM Revenue Multiple		0.50x		0.65x		0.58x
		1,989	Income Approach (DCF)	Discount Rate		12.0%		35.0%		20.5%
		144	Liquidation Approach	Asset Coverage	$	144,531	$	144,531	$	144,531
		566,010	Income approach	Market Yield		10.00%		15.21%		12.45%
		37,600	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
		21,005	Income approach	Discount Rate		14.00%		18.00%		16.45%
		15,859	Market Approach (Guideline Comparable)	EBITDA Multiple		5.50x		6.00x		5.75x
		5,095	Enterprise Valuation Analysis	EBITDA Multiple		6.00x		7.00x		7.00x
		8,910	Market Approach (Guideline Comparable)	Rev Multiple / EBITDA Multiple		0.43x / 4.09x		0.43x / 4.09x		0.43x / 4.09x
		1,378	Enterprise Valuation Analysis	EBITDA Multiple/Estimated Liquidation Proceeds		2.00x / $205.8M		2.00x / $205.8M		2.00x / $205.8M
Equity Interests in LLCs		1,370	Market Approach	Unsolicited Offer Price	$	12,000,000	$	12,000,000	$	12,000,000
		5,623	Market Approach (Guideline Comparable)	Investment Portfolio Multiple		1.10x		1.10x		1.10x
		3,099	Market Approach (Guideline Comparable)	EBITDA Multiple		6.25x		8.50x		6.70x
		2,595	Market Approach (Guideline Comparable)	EBITDA Multiple / Volatility		3.75x / 50%		3.75x / 50%		3.75x / 50%
		581	Income Approach (DCF)	Market Yield		13.14%		13.14%		13.14%
		14,516	Income Approach (DCF)	Discount Rate		14.00%		18.00%		18.00%
		15,000	Income Approach (DCF)	Capitalization Rate		8.70%		8.70%		8.70%
		6,000	Recent Arms-length transaction	Recent Arms-length transaction		N/A		N/A		N/A
Equity Securities		7,936	Market Approach (Guideline Comparable)	EBITDA Multiple		4.00x		8.31x		5.20x
		10,364	Option Model	Tangible Book Value Multiple / Volatility		1.30x / 41.5%		1.30x / 41.5%		1.30x / 41.5%
		105	Option Model	Volatility		90.80%		90.80%		90.80%
		194	Market Approach (Guideline Comparable)	LTM EBITDARD Multiple		10.40x		11.10x		10.75x
				NTM EBITDARD Multiple		9.50x		10.80x		10.15x
		261	Market Approach (Guideline Comparable)	Revenue Multiple		0.30x		0.60x		0.45x
		417	Income Approach (DCF)	Discount Rate		13.0%		18.0%		16.4%
		545	Market Approach (Guideline Comparable)	LTM EBITDA Multiple		5.00x		5.50x		5.25x
				LTM Revenue Multiple		0.50x		0.65x		0.58x
Tangible Assets		688	Market Approach	Appraisal of assets	$	500,000	$	2,200,000	$	1,350,000
		1,377	Sales Comparison Approach	Price per SQM		1,146		1,274		1,210
Equity Method Investment		9,901	Net Asset Value of Underlying Fund	N/A		N/A		N/A		N/A
	$	744,680

	Fair Value as of				Range				Weighted
Liability	December 31, 2014		Valuation Technique(s)	Unobservable input	Minimum		Maximum		Average
	(Amounts in thousands)
Secured borrowings of Consolidated Funds	$	130,157	Income approach	Market Yield		10.00%		15.21%		12.45%
		5,947	Market Approach (Guideline Comparable)	EBITDA Multiple		5.50x		6.00x		5.75x
		5,000	Income Approach (DCF)	Capitalization Rate		8.70%		8.70%		8.70%
		15	Market Approach (Guideline Comparable)	EBITDA Multiple		4.00x		8.31x		5.20x
	$	141,119

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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Narrative) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts payable, accrued expenses and other liabilities of Medley:
Dividends payable	$ 1,366	$ 1,423
Dividends payable, amount per share	$ 0.20
Common Class A [Member]
Accounts payable, accrued expenses and other liabilities of Medley:
Dividends payable	1,200	1,200
Dividends payable, amount per share	$ 0.20
Restricted Stock Units (RSUs) [Member]
Accounts payable, accrued expenses and other liabilities of Medley:
Dividends payable	$ 200	$ 200

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FAIR VALUE MEASUREMENTS (Fair Value of Investments by Class) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	$ 747,162	$ 744,771
Secured borrowings of Consolidated Funds, at fair value	136,806	141,135
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments		62
Secured borrowings of Consolidated Funds, at fair value		16
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	668	29
Secured borrowings of Consolidated Funds, at fair value	13
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	746,494	744,680
Secured borrowings of Consolidated Funds, at fair value	136,793	141,119
Equity Method Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	11,539	9,901
Equity Method Investments [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	11,539	9,901
Senior Secured Loans And Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	664,217	664,108
Senior Secured Loans And Notes [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	664,217	664,108
Equity Interest [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	49,654	48,784
Equity Interest [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	49,654	48,784
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	21,752	19,913
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments		62
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	668	29
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments	21,084	19,822
Investments In Tangible Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments		2,065
Investments In Tangible Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of investments		$ 2,065

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Consolidated Statements of Changes in Equity (USD $) In Thousands, except Share data	Common Stock [Member] Common Class A [Member] USD ($)	Common Stock [Member] Common Class B [Member]	Additional Paid-in Capital [Member] USD ($)	Retained Earnings [Member] USD ($)	Noncontrolling Interest [Member] Consolidated Funds [Member] USD ($)	Noncontrolling Interest [Member] Consolidated Subsidiaries [Member] USD ($)	Noncontrolling Interest [Member] Medley LLC [Member] USD ($)	Total USD ($)
Balance at Dec. 31, 2014	$ 60		$ (2,384)	$ 272	$ 625,548	$ 1,526	$ (3,972)	$ 621,050
Balance (in shares) at Dec. 31, 2014	6,000,000	100
Deconsolidation of MOF I LP					(15,321)			(15,321)
Net income				1,274	11,575	1,290	7,803	21,942
Stock-based compensation			778					778
Dividends declared on common stock				(1,366)				(1,366)
Contributions					33,168			33,168
Distributions							(9,044)	(9,044)
Balance at Mar. 31, 2015	$ 60		$ (1,606)	$ 180	$ 654,970	$ 2,816	$ (5,213)	$ 651,207
Balance (in shares) at Mar. 31, 2015	6,000,000	100

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INVESTMENTS

3 Months Ended

Mar. 31, 2015

Investments [Abstract]

Investments

3.INVESTMENTS

The composition of investments is as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Equity method investments, at fair value	$	11,539	$	9,901
Investments of Consolidated Funds, at fair value		735,623		734,870
Total Investments	$	747,162	$	744,771

Equity Method Investments, at Fair Value

Medley measures its equity method investments at net asset value or at market value. Total unrealized appreciation (depreciation) recorded for the Company’s equity method investments is included in other income (expense). Equity method investments, at fair value includes Medley’s investment in Sierra Income Corporation (“SIC”) which amounted to $10.0 million and $9.9 million as of March 31, 2015 and December 31, 2014, respectively.

Investments in Consolidated Funds

The following table presents a summary of the investments held by the Consolidated Funds and as a percentage of total investments of Consolidated Funds.

	Investments of Consolidated Funds
	Fair Value				Percentage
	March 31,				March 31,
	2015		December 31,		2015		December 31,
	(unaudited)		2014		(unaudited)		2014
	(Amounts in thousands)
Geographic Region/Investment Type/Industry Description:
North America:
Senior secured loans and notes:
Automotive	$	21,710	$	21,937	3.0	%	3.0	%
Banking, Finance, Insurance and Real Estate		188,471		206,424	25.5	%	28.1	%
Beverage, Food and Tobacco		14,859		14,934	2.0	%	2.0	%
Capital Equipment		8,000		-	1.1	%	0.0	%
Chemicals, Plastics and Rubber		21,144		21,196	2.9	%	2.9	%
Construction and Building		52,985		53,547	7.2	%	7.3	%
Consumer goods: Non-durable		34,948		34,687	4.8	%	4.7	%
Containers, Packaging and Glass		26,411		26,823	3.5	%	3.7	%
Energy: Oil and Gas		30,333		32,736	4.1	%	4.6	%
Healthcare and Pharmaceuticals		97,120		81,921	13.2	%	11.1	%
High Tech Industries		25,532		25,329	3.5	%	3.4	%
Hotel, Gaming and Leisure		10,403		11,494	1.4	%	1.6	%
Media: Advertising, Printing and Publishing		-		346	0.0	%	0.0	%
Metals and Mining		25,525		26,042	3.5	%	3.5	%
Retail and Commercial Kitchen Appliances		24,715		24,886	3.4	%	3.4	%
Services: Business		38,928		34,808	5.3	%	4.7	%
Services: Consumer		43,133		45,545	5.9	%	6.2	%
Total Senior Secured Loans and Notes, North America (cost of $704,698 and $711,398, respectively)	$	664,217	$	662,655	90.3	%	90.2	%
South America:
Senior secured loans and notes:
Banking, Finance, Insurance and Real Estate	$	-	$	1,029	0.0	%	0.1	%
Energy: Oil and Gas		-		424	0.0	%	0.1	%
Total Senior Secured Loans and Notes, South America (cost of $0 and $13,049, respectively)	$	-	$	1,453	0.0	%	0.2	%
Asia:
Banking, Finance, Insurance and Real Estate (cost of $0 and $1,373)	$	-	$	1,377	0.0	%	0.2	%

	Investments of Consolidated Funds
	Fair Value				Percentage
	March 31,				March 31,
	2015		December 31,		2015		December 31,
	(unaudited)		2014		(unaudited)		2014
	(Amounts in thousands)
Geographic Region/Investment Type/Industry Description:
North America:
Equity interests in limited liability companies:
Banking, Finance, Insurance and Real Estate	$	45,336	$	42,338	6.2	%	5.8	%
Construction and Building		3540		3,297	0.5	%	0.4	%
Containers, Packaging and Glass		331		320	0.0	%	0.0	%
Energy: Oil and Gas		-		2,596	0.0	%	0.4	%
Healthcare and Pharmaceuticals		447		63	0.1	%	0.0	%
Telecommunications		-		170	0.0	%	0.0	%
Total Equity Interest in Limited Liability Companies (cost of $35,993 and $40,944, respectively)	$	49,654	$	48,784	6.8	%	6.6	%
Equity securities:
Common Stock (cost of $157 and $8,913 , respectively)	$	53	$	964	0.0	%	0.1	%
Preferred Stock (cost of $0 and $10,187, respectively)	$	-	$	545	0.0	%	0.1	%
Warrants:
Banking, Finance, Insurance and Real Estate	$	10,656	$	10,363	1.4	%	1.4	%
Construction and Building		154		113	0.0	%	0.0	%
Containers, Packaging and Glass		615		105	0.1	%	0.0	%
Energy: Oil and Gas		3,182		1,793	0.4	%	0.3	%
Healthcare and Pharmaceuticals		6,306		5,137	0.9	%	0.7	%
Retail		786		893	0.1	%	0.1	%
Total Warrants (cost of $3,427 and $3,428, respectively)		21,699		18,404	2.9	%	2.5	%
Total Equity Securities (cost of $3,584 and $22,528, respectively)	$	21,752	$	19,913	2.9	%	2.7	%
Collectibles (cost of $0 and $1,385)	$	-	$	688	0.0	%	0.1	%
Total Investments of Consolidated Funds (cost of $606,918 and $790,677, respectively)	$	735,623	$	734,870	100.0	%	100.0	%

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COMPENSATION EXPENSE (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance fee compensation	$ 112,000	$ 1,518,000
Performance fee compensation payable	11,377,000		11,807,000
Defined contribution plan, employer matching contribution, percent of employees' gross pay	3.00%
Percentage vested from participants eligibility date	100.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount	100,000	200,000
Incentive Plan shares available for grant	3,400,000		3,300,000
Stock-based compensation	778,000
Shares authorized for grant	4,500,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of units issued during period	16,000,000
Anticipated forfeiture rate	8.00%
Stock-based compensation	800,000
RSUs forfeited	168,000
Units outstanding, net of forfeitures	920,000
Unvested RSU compensation cost not yet recognized	$ 14,500,000
Recognition period for unvested RSU compensation cost	4 years 6 months
RSU vesting period	5 years
RSUs granted, units	82,000

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OTHER ASSETS (Tables)

3 Months Ended

Mar. 31, 2015

Other Asset [Abstract]

Components of Other Assets

The components of other assets are as follows:

	As of
	March 31,		As of
	2015		December 31,
	(unaudited)		2014
	(Amounts in thousands)
Other Assets of Medley LLC:
Property and equipment, net of accumulated depreciation of $1,343 and $1,232, respectively	$	1,363	$	1,367
Security deposits		1,218		1,218
Administrative fees receivable (Note 10)		1,652		1,500
Deferred tax assets		953		874
Deferred financing costs, net of accumulated amortization of $349 and $217, respectively		2,197		2,329
Due from affiliates (Note 10)		256		382
Prepaid expenses		468		627
Other receivables		977		933
Total other assets of Medley LLC		9,084		9,230
Other Assets of Consolidated Funds
Restricted cash		-		3,000
Deferred tax assets		207		340
Other receivables		1,133		341
Total other assets of Consolidated Funds		1,340		3,681
Total other assets	$	10,424	$	12,911

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INVESTMENTS (Composition of Investments) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investments [Abstract]
Equity method investment, at fair value	$ 11,539	$ 9,901
Investments of Consolidated Funds, at fair value	735,623	734,870
Total Investments	$ 747,162	$ 744,771

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COMPENSATION EXPENSE

3 Months Ended

Mar. 31, 2015

Compensation Expense [Abstract]

Compensation Expense

13.COMPENSATION EXPENSE

Compensation generally includes salaries, bonuses, and profit sharing awards. Bonuses and profit sharing awards are accrued over the service period to which they relate. Prior to the Company’s Reorganization and IPO, all payments made to the Medley LLC’s members were accounted for as distributions on the equity held by such members rather than as employee compensation. Subsequent to the Company’s Reorganization and IPO, guaranteed payments paid to Medley LLC’s members who are senior professionals will be accounted for as employee compensation.

Performance Fee Compensation

In October 2010, the Company granted shares of vested profits interests in certain subsidiaries to selected employees. These awards are viewed as a profit-sharing arrangement and are accounted for under ASC 710, which requires compensation expense to be recognized over the vesting period, which is usually the period over which service is provided. The shares were vested at grant date, subject to a divestiture percentage based on percentage of service completed from the award grant date to the employee’s termination date. The Company adjusts the related liability quarterly based on changes in estimated cash flows for the profit interests.

In January 2014, the Company granted additional shares of profit interests in certain subsidiaries to selected employees. The shares were fully vested at grant date and were not subject to a divestiture percentage.

In February 2015, the Company granted incentive cash bonus awards to selected employees.  These awards entitle employees to receive cash compensation based on distributed performance fees received by the Company from certain institutional funds. Eligibility to receive payments pursuant to these incentive awards is based on continued employment and ceases automatically upon termination of employment.  Performance compensation expense is recorded based on the fair value of the incentive awards at the date of grant and is recognized on a straight-line basis over the expected requisite service period.  The performance compensation liability is subject to re-measurement at the end of each reporting period and any changes in the liability are recognized in the then current reporting period.

For the three months ended March 31, 2015 and 2014, performance compensation was $0.1 million and $1.5 million, respectively. As of March 31, 2015 and December 31, 2014, the total performance fee compensation payable for these awards was $11.4 million and $11.8 million, respectively.

Retirement Plan

The Company sponsors a defined-contribution 401(k) retirement plan that covers all employees. Employees are eligible to participate in the plan immediately, and participants are 100% vested from the date of eligibility. The Company makes contributions to the Plan of 3% of an employee’s eligible wages, up to a maximum limit as determined by the Internal Revenue Service. The Company also pays all administrative fees related to the plan. For the three months ended March 31, 2015 and 2014, the Company’s accrued contributions to the plan were $0.1 million and $0.2 million, respectively.

Stock-Based Compensation

In connection with the IPO, the Company adopted the Medley Management Inc. 2014 Omnibus Incentive Plan (the “Plan”). The purpose of the Plan is to provide a means through which the Company may attract and retain key personnel and to provide a means whereby directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of the Company can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Medley Management Inc.’s class A common stock or Medley LLC’s unit interests, thereby strengthening their commitment to the welfare of the Company and aligning their interests with those of the Company’s stockholders. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), stock bonuses, other stock-based awards and cash awards. The maximum aggregate number of awards available to be granted under the plan, as amended, is 4,500,000, of which all or any portion may be issued as shares of Medley Management Inc.’s Class A common stock or Medley LLC’s unit interests. Shares of Class A common stock issued by the Company in settlement of awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the market or by private purchase or a combination of the foregoing. As of March 31, 2015 and December 31, 2014, there were 3.4 million and 3.3 million awards, respectively, available to be granted under the Plan.

The fair value of the RSUs granted in 2014 was determined to be the fair value of the underlying shares on the date of grant and aggregated to $16.0 million. This total fair value, which was adjusted for anticipated forfeitures of up to 8% per annum, will be charged to compensation expense on a straight-line basis over the vesting period, which is generally up to five years. For the three months ended March 31, 2015, stock-based compensation was $0.8 million.

The following summarizes RSU activity for the three months ended March 31, 2015:

			Weighted
			Average Grant
	Number of RSUs		Date Fair Value
Balance at December 31, 2014		1,197,915	$	17.91
Granted		82,000		12.68
Forfeited		(168,000)		18.00
Vested		-		-
Balance at March 31, 2015		1,111,915	$	17.51

As of March 31, 2015 there were approximately 920,000 RSUs outstanding net of estimated forfeitures, which are expected to vest. Unamortized compensation cost related to unvested RSUs at March 31, 2015 was $14.5 million and is expected to be recognized over a weighted average period of 4.5 years.