Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Equity Securities: Equity securities traded on a national securities exchange are stated at the last reported sales price as of the condensed consolidated balance sheet dates, September 30, 2023 and December 31, 2022. To the extent these equity securities are actively traded and valuation adjustments are not applied, they are classified as Level I.
Exchange traded funds: Valued using the market price of the fund as of the condensed consolidated balance sheet dates, September 30, 2023 and December 31, 2022. Exchange traded funds valued using quoted prices are classified within Level 1 of the fair value hierarchy.
Mutual funds: Valued at the number of shares of the underlying fund multiplied by the closing NAV per share quoted by that fund as of the condensed consolidated balance sheet dates, September 30, 2023 and December 31, 2022. The value of the specific funds the Company has invested in are validated with a sufficient level of observable activity to support classification of the fair value measurement as Level 1 in the fair value hierarchy.
Accrued performance allocations and partnership interests: The Company generally values its investments in accrued performance allocations and partnership interests using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining a fair value. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the NAV per share practical expedient.
Other investments: Investments are accounted for using the measurement alternative to measure at cost adjusted for any impairment and observable price changes. Unrealized gains or losses on other investments are included in unrealized gains (losses) on the condensed consolidated statements of operations.
General Partner Notes Payable: Valued using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table presents assets that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 (in thousands):
Level 1 Level 2 Level 3 Measured at
NAV		 Total
September 30, 2023
Assets:
Common shares in publicly traded company $ 110  $ —  $ —  $ —  $ 110 
Exchange traded funds 1,864  —  —  —  1,864 
Mutual funds 10,826  —  —  —  10,826 
Accrued performance allocations —  —  —  377,474  377,474 
Partnership interests —  —  —  192,211  192,211 
Other investments —  —  8,272  —  8,272 
Total assets at fair value $ 12,800  $ —  $ 8,272  $ 569,685  $ 590,757 
Liabilities:
General Partner Notes Payable $ —  $ —  $ —  $ 4,165  $ 4,165 
December 31, 2022
Assets:
Common shares in publicly traded company $ 86  $ —  $ —  $ —  $ 86 
Exchange traded funds 2,117  —  —  —  2,117 
Mutual funds 12,411  —  —  —  12,411 
Accrued performance allocations —  —  —  554,723  554,723 
Partnership interests —  —  —  77,087  77,087 
Other investments —  —  8,369  —  8,369 
Total assets at fair value $ 14,614  $ —  $ 8,369  $ 631,810  $ 654,793 
Liabilities:
General Partner Notes Payable $ —  $ —  $ —  $ 8,633  $ 8,633 
The following table presents a rollforward of Level 3 assets at cost adjusted for any impairment and observable price changes (in thousands):
Other
Investments
Balance as of December 31, 2022 $ 8,369 
Purchases 1,461 
Conversion of note receivable 1,559 
Contribution of warehoused investments to managed funds (3,117)
Balance as of September 30, 2023 $ 8,272 
Accrued performance allocations, investments in funds, and investments in limited partnership interests in third-party private funds are valued using NAV of the respective vehicle. The following table presents investments carried at fair value using NAV (in thousands):
Fair Value Unfunded
Commitments
September 30, 2023:
Accrued performance allocations $ 377,474  N/A
Partnership interests:
Company-sponsored open-end fund $ 49,533  $ — 
Company-sponsored closed-end funds 133,194  18,997 
Third-party closed-end funds 9,484  593 
Total partnership interests $ 192,211  $ 19,590 
 
December 31, 2022:
Accrued performance allocations $ 554,723  N/A
Partnership interests:
Company-sponsored open-end fund $ 26,169  $ 20,755 
Company-sponsored closed-end funds 39,120  3,763 
Third-party closed-end funds 11,798  5,569 
Total partnership interests $ 77,087  $ 30,087 
The Company can redeem its investments in the Company-sponsored open-end funds with a 60-day notice. The Company’s interests in its closed-end funds are not subject to redemption, with distributions to be received through liquidation of underlying investments of the funds. The closed-end funds generally have eight- to ten-year terms, which may be extended in certain circumstances.
Fair Value Information of Financial Instruments Reported at Cost
The carrying values of cash, accounts receivable, due from and to affiliates, interest payable, and accounts payable approximate fair value due to their short-term nature and negligible credit risk.
The following table presents the carrying amounts and estimated fair values of financial instruments reported at amortized cost (in thousands):
Level 1 Level 2 Level 3 Total Carrying
Value
As of September 30, 2023:
Notes payable (private notes) $ —  $ —  $ 407,258  $ 407,258  $ 450,000 
As of December 31, 2022:
Notes payable (private notes) $ —  $ —  $ 270,270  $ 270,270  $ 300,000 
Fair values of the private notes were estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments. As of September 30, 2023, the discount rate range used in determining the fair value of the private notes was between 6.64% and 8.74%. An increase in market interest rates would decrease the estimated fair value of the private notes.