Variable Interest Entities

9 Months Ended

Sep. 30, 2021

Variable interest entities ("VIEs")

The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE.

The Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing investment alternatives to both its institutional and qualified retail clients. The Company holds variable interests in these funds as a result of its right to receive management and incentive fees. The Company's investment in and additional capital commitments to these hedge funds and private equity funds are also considered variable interests. The Company's additional capital commitments are subject to call at a later date and are limited to the amount committed.

The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in which it holds a variable interest in the form of general and limited partner interests. In each instance, the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity funds. The subsidiaries' general and limited partnership interests, additional capital commitments, and management fees receivable represent its maximum exposure to loss. The subsidiaries' general partnership and limited partnership interests and management fees receivable are included in other assets on the condensed consolidated balance sheet.

In addition, the Company serves as general partner of the sponsors of two Special Purpose Acquisition Companies ("SPAC”), that are seeking to effect a transaction which could be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The sponsors are consolidated VIEs as the Company is the primary beneficiary. As of September 30, 2021, the sponsors have $2.9 million in assets ($1.4 million as of December 31, 2020) and $22,000 in liabilities ($0 in liabilities as of December 31, 2020), which are included in the condensed consolidated financial statements.

The following tables set forth the total VIE assets, the carrying value of the subsidiaries' variable interests, and the Company's maximum exposure to loss in Company-sponsored non-consolidated VIEs in which the Company holds variable interests and other non-consolidated VIEs in which the Company holds variable interests as of September 30, 2021 and December 31, 2020:


(Expressed in thousands)
	As of September 30, 2021
	Total VIE Assets (1)		Carrying Value of the Company's Variable Interest				Capital Commitments		Maximum Exposure to Loss in Non-consolidated VIEs
			Assets		Liabilities
Hedge funds	$	545,896	$	—	$	—	$	—	$	—

(1) Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs.


(Expressed in thousands)
	As of December 31, 2020
	Total VIE Assets (1)		Carrying Value of the Company's Variable Interest				Capital Commitments		Maximum Exposure to Loss in Non-consolidated VIEs
			Assets		Liabilities
Hedge funds	$	643,251	$	—	$	—	$	—	$	—

(1) Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs.