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Fair Value Measurements
12 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

8. Fair Value Measurements

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

GAAP provides a framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

All financial assets or liabilities that are measured at fair value on a recurring and non-recurring basis have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

The assets and liabilities measured at fair value on a recurring and non-recurring basis are summarized in the tables below:

 

 

Fair Value as of June 30, 2023

 

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity investments

 

$

14,296

 

 

$

-

 

 

$

-

 

 

$

14,296

 

 

Total assets within the fair value hierarchy

 

$

14,296

 

 

$

-

 

 

$

-

 

 

$

14,296

 

 

Investments valued at net asset value

 

 

 

 

 

 

 

 

 

 

$

18,315

 

 

Total assets

 

 

 

 

 

 

 

 

 

 

$

32,611

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration liability

 

$

-

 

 

$

-

 

 

$

1,903

 

 

$

1,903

 

 

Total liabilities

 

$

-

 

 

$

-

 

 

$

1,903

 

 

$

1,903

 

 

 

 

 

Fair Value as of June 30, 2022

 

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity investments

 

$

27,678

 

 

$

-

 

 

$

-

 

 

$

27,678

 

 

Equity investments of Consolidated Fund

 

 

1,797

 

 

 

-

 

 

 

-

 

 

 

1,797

 

 

Total assets within the fair value hierarchy

 

$

29,475

 

 

$

-

 

 

$

-

 

 

$

29,475

 

 

Investments valued at net asset value

 

 

 

 

 

 

 

 

 

 

$

20,364

 

 

Total assets

 

 

 

 

 

 

 

 

 

 

$

49,839

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration liability

 

$

-

 

 

$

-

 

 

$

1,120

 

 

$

1,120

 

 

Total liabilities

 

$

-

 

 

$

-

 

 

$

1,120

 

 

$

1,120

 

 

There were no transfers between levels of the fair value hierarchy during the years ended June 30, 2023 and 2022.

The following is a reconciliation of changes in contingent consideration, a Level 3 liability:

 

 

For the twelve months ended June 30,

 

(in thousands)

 

2023

 

 

2022

 

Beginning balance

 

$

1,120

 

 

$

-

 

Additions

 

 

-

 

 

 

1,120

 

Change in fair value

 

 

783

 

 

 

-

 

Ending balance

 

$

1,903

 

 

$

1,120

 

The valuation techniques applied to investments held by the Company and by the Consolidated Fund vary depending on the nature of the investment.

Equity and equity-related securities

Securities traded on a national securities exchanges are stated at the close price on the valuation date. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level 1.

Investments in private funds

The Company values investments in private funds using NAV as reported by each fund’s investment manager. Investments valued using NAV as a practical expedient are not categorized within the fair value hierarchy.

As of June 30, 2023, investments in private funds primarily consisted of our investment in Monomoy UpREIT and GEOF Series D. As of June 30, 2022, investments in private funds primarily consisted of our investment in Monomoy UpREIT. Monomoy UpREIT allows redemptions annually with 90 days’ notice, subject to a one-year lockup from the date of initial investment, which are capped at 5% of its NAV. GEOF Series D allows withdrawals annually and there is no set duration for the private fund. As of June 30, 2023, there were no unfunded commitments.

See Note 5 - Acquisitions for additional discussion related to the fair value of the contingent consideration payable in conjunction with the acquisition of the Monomoy UpREIT investment management agreement and Note 13 - Related Party Notes Payable and Long-Term Debt for additional discussion related to the fair value of our notes payable and other long-term debt. The carrying value of all other financial assets and liabilities approximate their fair values.