Variable Interest Entities

6 Months Ended

Jun. 30, 2020

Variable Interest Entities

Variable Interest Entities

The Company, through its Affiliates, sponsors the formation of various entities considered to be variable interest entities (“VIEs”). These VIEs are primarily Funds managed by Affiliates and other partnership interests typically owned entirely by third party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own minority interests in an Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an

assessment of whether or not the Company and its related parties are exposed to absorb more than an insignificant

amount of the risks and rewards of the entity. Typically, the Fund’s investors are entitled to substantially all of the

economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the

Company or any investment the Company has made into the Funds. The Company generally is not the primary

beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including

interests of related parties, is substantial.

The following table presents the assets and liabilities of Funds that are VIEs and consolidated by the Company (in millions):

	June 30, 2020		December 31, 2019
Assets
Investments at fair value	$	110.0	$	119.5
Other assets of consolidated Funds	117.6		85.7
Total Assets	$	227.6	$	205.2
Liabilities
Liabilities of consolidated Funds	$	4.2	$	6.2
Total Liabilities	$	4.2	$	6.2

“Investments at fair value” consist of investments in bank loans, common and preferred stock, and other securities. To the extent the Company also has consolidated Funds that are not VIEs, the assets and liabilities of those Funds are not included in the table above.

The assets of consolidated VIEs presented in the table above belong to the investors in those Funds, are available for use only by the Fund to which they belong, and are not available for use by the Company to the extent they are held by non-controlling interests. Any debt or liabilities held by consolidated Funds have no recourse to the Company's general credit.

The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIEs results are attributable to third parties. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors.

The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):

	June 30, 2020		December 31, 2019
Unconsolidated VIE assets	$	6,428.3	$	6,625.5
Unconsolidated VIE liabilities	$	4,261.7	$	4,320.6
Equity interests on the Condensed Consolidated Balance Sheets	$	16.9	$	17.5
Maximum risk of loss(1)	$	23.2	$	23.9

(1)Includes equity investments the Company has made or is required to make and any earned but uncollected management and incentive fees. The Company does not record performance or incentive allocations until the respective measurement period has ended.