| Fair Value Measurements The disclosures below include details of the Company’s fair value measurements, excluding those of consolidated investment products. See Note 8 – Consolidated Investment Products for information related to fair value measurements of the assets and liabilities of these entities. The assets and liability measured at fair value on a recurring basis were as follows: | | | | | | | | | | | | | | | | | | | | | | (in millions) | | Level 1 | | Level 2 | | Level 3 | | NAV as a Practical Expedient | | Total | as of June 30, 2019 | | | | | | Assets | | | | | | | | | | | Equity securities, at fair value | | | | | | | | | | | Sponsored funds | | $ | 310.9 |
| | $ | — |
| | $ | — |
| | $ | 70.9 |
| | $ | 381.8 |
| Other equity securities | | 23.6 |
| | 0.7 |
| | 1.0 |
| | 123.0 |
| | 148.3 |
| Debt securities | | | | | | | | | |
| Trading | | 0.1 |
| | 53.4 |
| | 19.3 |
| | — |
| | 72.8 |
| Available-for-sale | | — |
| | 4.4 |
| | 0.3 |
| | — |
| | 4.7 |
| Life settlement contracts | | — |
| | — |
| | 11.8 |
| | — |
| | 11.8 |
| Total Assets Measured at Fair Value | | $ | 334.6 |
| | $ | 58.5 |
| | $ | 32.4 |
|
| $ | 193.9 |
| | $ | 619.4 |
|
| | | | | | | | | | | | | | | | | | (in millions) | | Level 1 | | Level 2 | | Level 3 | | Total | as of September 30, 2018 | | | | | Assets | | | | | | | | | Investment securities, trading | | | | | | | | | Sponsored funds | | $ | 248.1 |
| | $ | — |
| | $ | — |
| | $ | 248.1 |
| Debt and other equity securities | | 26.6 |
| | 50.5 |
| | 20.5 |
| | 97.6 |
| Investment securities, available-for-sale | | | | | | | | | Sponsored funds | | 178.6 |
| | — |
| | — |
| | 178.6 |
| Debt and other equity securities | | 4.4 |
| | 10.8 |
| | 0.3 |
| | 15.5 |
| Life settlement contracts | | — |
| | — |
| | 11.8 |
| | 11.8 |
| Total Assets Measured at Fair Value | | $ | 457.7 |
| | $ | 61.3 |
| | $ | 32.6 |
| | $ | 551.6 |
| | | | | | | | | | Liability | | | | | | | | | Contingent consideration liability | | $ | — |
| | $ | — |
| | $ | 38.7 |
| | $ | 38.7 |
|
Level 1 assets consist primarily of sponsored funds and other equity securities for which the fair values are based on published NAV or quoted market prices. Level 2 assets consist of debt and equity securities for which the fair values are determined using independent third-party broker or dealer price quotes. Level 3 assets consist of debt and equity securities and life settlement contracts for which the fair values are based on discounted cash flows using significant unobservable inputs. The fair value of the contingent consideration liability was determined using the net present value of anticipated future cash flows based on estimated future revenue and profits and timing of payments. Investments for which fair value was estimated using reported NAV as a practical expedient consist of a redeemable global equity fund and nonredeemable private debt, equity, infrastructure and real estate funds. The redeemable global equity fund investment of $92.3 million at June 30, 2019 can be redeemed monthly, while the investments in nonredeemable funds are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets. The expected weighted-average life for $52.0 million of the nonredeemable investments was 1.6 years at June 30, 2019. The liquidation periods for a $48.5 million investment in a nonredeemable private debt fund and $1.1 million of investments in real estate funds are unknown. The Company’s unfunded commitments to the funds totaled $4.9 million at June 30, 2019. Changes in the Level 3 assets and liability were as follows: | | | | | | | | | | | | | | | | 2019 | | 2018 | (in millions) | | Investments | | Investments | | Contingent
Consideration
Liability | for the three months ended June 30, | | | | Balance at beginning of period | | $ | 33.9 |
| | $ | 208.1 |
| | $ | (31.2 | ) | Total realized and unrealized gains (losses) | | | | | | | Included in investment and other income (losses), net | | 2.7 |
| | 1.0 |
| | — |
| Included in general, administrative and other expense | | — |
| | — |
| | (4.4 | ) | Purchases | | 3.7 |
| | 5.4 |
| | — |
| Sales | | (0.4 | ) | | (0.4 | ) | | — |
| Settlements | | (2.5 | ) | | (1.1 | ) | | — |
| Transfers out of Level 3 | | (5.0 | ) | | — |
| | — |
| Foreign exchange revaluation | | — |
| | (8.8 | ) | | — |
| Balance at End of Period | | $ | 32.4 |
| | $ | 204.2 |
| | $ | (35.6 | ) | Change in unrealized gains (losses) included in net income relating to assets and liability held at end of period | | $ | 0.4 |
| | $ | 0.4 |
| | $ | (4.4 | ) |
| | | | | | | | | | | | | | | | | | | | 2019 | | 2018 | (in millions) | | Investments | | Contingent
Consideration
Liability | | Investments | | Contingent
Consideration
Liability | for the nine months ended June 30, | | | | | Balance at beginning of period | | $ | 32.6 |
| | $ | (38.7 | ) | | $ | 199.9 |
| | $ | (51.0 | ) | Total realized and unrealized gains (losses) | | | | | | | | | Included in investment and other income (losses), net | | 6.3 |
| | — |
| | 4.0 |
| | — |
| Included in general, administrative and other expense | | — |
| | (2.0 | ) | | — |
| | (10.0 | ) | Purchases | | 8.7 |
| | — |
| | 12.1 |
| | — |
| Sales | | (4.7 | ) | | — |
| | (0.4 | ) | | — |
| Settlements | | (3.4 | ) | | 40.7 |
| | (3.0 | ) | | 32.4 |
| Transfers out of Level 3 | | (7.1 | ) | | — |
| | — |
| | — |
| Foreign exchange revaluation and other | | — |
| | — |
| | (8.4 | ) | | (7.0 | ) | Balance at End of Period | | $ | 32.4 |
| | $ | — |
| | $ | 204.2 |
| | $ | (35.6 | ) | Change in unrealized gains (losses) included in net income relating to assets and liability held at end of period | | $ | 3.4 |
| | $ | — |
| | $ | 2.4 |
| | $ | (10.0 | ) |
There were no transfers into Level 3 during the nine months ended June 30, 2019 and 2018. Valuation techniques and significant unobservable inputs used in the Level 3 fair value measurements were as follows: | | | | | | | | | | | | (in millions) | | | | | | | | | as of June 30, 2019 | | Fair Value | | Valuation Technique | | Significant Unobservable Inputs | | Range (Weighted Average 1) | Debt securities, trading | | $ | 19.3 |
| | Discounted cash flow | | Discount rate | | 3.2%–11.8% (6.3%) | Risk premium | | 2.0%–6.8% (4.2%) | | | | | | | | | | Life settlement contracts | | 11.8 |
| | Discounted cash flow | | Life expectancy | | 20–109 months (58) | Discount rate | | 8.0%–20.0% (13.4%) |
__________________ | | 1 | Based on the relative fair value of the instruments. |
| | | | | | | | | | | | (in millions) | | | | | | | | | as of September 30, 2018 | | Fair Value | | Valuation Technique | | Significant Unobservable Inputs | | Range (Weighted Average) | Investment securities, trading – debt and other equity securities | | $ | 20.5 |
| | Discounted cash flow | | Discount rate | | 4.1%–12.3% (5.8%) | Risk premium | | 2.0%–6.7% (3.6%) | | | | | | | | | | Life settlement contracts | | 11.8 |
| | Discounted cash flow | | Life expectancy | | 20–115 months (61) | Discount rate | | 8.0%–20.0% (13.1%) | | | | | | | | | | Contingent consideration liability | | 38.7 |
| | Discounted cash flow | | Discount rate | | 13.0% |
If the relevant significant inputs used in the discounted cash flow valuations were independently higher (lower) as of June 30, 2019, the resulting fair value of the assets would be lower (higher). Financial instruments that were not measured at fair value were as follows: | | | | | | | | | | | | | | | | | | | | (in millions) | | Fair Value Level | | June 30, 2019 | | September 30, 2018 | | | Carrying Value | | Estimated Fair Value | | Carrying Value | | Estimated Fair Value | Financial Assets | | | | | | | | | | | Cash and cash equivalents | | 1 | | $ | 5,508.8 |
| | $ | 5,508.8 |
| | $ | 6,610.8 |
| | $ | 6,610.8 |
| Other investments | | | | | | | | | | | Time deposits | | 2 | | 15.9 |
| | 15.9 |
| | 12.3 |
| | 12.3 |
| Equity securities | | 3 | | 14.8 |
| | 21.7 |
| | 81.8 |
| | 103.6 |
| | | | | | | | | | | | Financial Liability | | | | | | | | | | | Debt | | 2 | | $ | 697.0 |
| | $ | 714.3 |
| | $ | 695.9 |
| | $ | 671.1 |
|
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