What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-08 · 90 added, 66 removed, 516 unchanged (23% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except share data) June 30,

(in thousands, except share data) September 30,

2024 December 31,

28 unchanged sentences

Common stock, $ 0.01 par value, 1,000,000,000 shares authorized;

12,233,778 shares issued and 7,082,071 shares outstanding at June 30, 2024;

12,240,990 shares issued and 7,016,433 shares outstanding at September 30, 2024;

and 12,163,228 shares issued and 7,087,728 shares outstanding at December 31, 2023

2 unchanged sentences

Accumulated other comprehensive income (loss) 230 ( 87 )

Treasury stock, at cost, 5,151,707 and 5,075,500 shares at June 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 5,224,557 and 5,075,500 shares at September 30, 2024 and December 31, 2023, respectively

( 676,832 ) ( 644,464 )

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share data) 2024 2023 2024 2023

40 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

1 unchanged sentence

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment, net of tax of $ 2 and $( 42 ) for the three months ended June 30, 2024 and 2023, respectively and $ 38 and $( 77 ) for the six months ended June 30, 2024 and 2023

Foreign currency translation adjustment, net of tax of $( 144 ) and $ 82 for the three months ended September 30, 2024 and 2023, respectively, and $( 106 ) and $ 5 for the nine months ended September 30, 2024 and 2023, respectively

430 ( 226 ) 317 ( 15 )

7 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2024 2023

24 unchanged sentences

Capital expenditures ( 3,658 ) ( 6,438 )

Acquisition of businesses, net of cash acquired of $ 4,395 for the six months ended June 30, 2023

Acquisition of businesses, net of cash acquired of $ 4,395

— ( 108,999 )

22 unchanged sentences

Common stock dividends payable $ 15,950 $ 13,788

(in thousands) June 30,

(in thousands) September 30,

2024 December 31, 2023

18 unchanged sentences

(in thousands, except per share data) Shares Par Value Shares Amount

Balances at March 31, 2023 7,288,394 $ 121 $ 1,281,509 $ 155,792 $ ( 259 ) 4,851,693 $ ( 599,248 ) $ 837,915 $ 6,382 $ 844,297 $ 106,630

Balances at June 30, 2023 7,254,786 $ 122 $ 1,286,775 $ 174,011 $ ( 147 ) 4,903,533 $ ( 609,248 ) $ 851,513 $ 5,196 $ 856,709 $ 110,399

Net income (loss) — — — 30,906 — — — 30,906 671 31,577 6,577

7 unchanged sentences

Stock-based compensation — — 6,209 — — — — 6,209 — 6,209 —

Balances at September 30, 2023 7,182,763 $ 122 $ 1,295,988 $ 190,615 $ ( 373 ) 4,977,548 $ ( 624,248 ) $ 862,104 $ 5,448 $ 867,552 $ 96,266

Balances at June 30, 2024 7,082,071 $ 122 $ 1,304,176 $ 226,540 $ ( 200 ) 5,151,707 $ ( 661,963 ) $ 868,675 $ 3,443 $ 872,118 $ 129,450

Balances at March 31, 2024 7,127,881 $ 122 $ 1,298,157 $ 223,023 $ ( 187 ) 5,096,608 $ ( 649,463 ) $ 871,652 $ 4,351 $ 876,003 $ 115,185

Net income (loss) — — — 40,980 — — — 40,980 401 41,381 7,723

7 unchanged sentences

Stock-based compensation — — 5,692 — — — — 5,692 — 5,692 —

Balances at June 30, 2024 7,082,071 $ 122 $ 1,304,176 $ 226,540 $ ( 200 ) 5,151,707 $ ( 661,963 ) $ 868,675 $ 3,443 $ 872,118 $ 129,450

Balances at September 30, 2024 7,016,433 $ 122 $ 1,314,228 $ 251,298 $ 230 5,224,557 $ ( 676,832 ) $ 889,046 $ 3,676 $ 892,722 $ 98,111

Permanent Equity Temporary Equity

19 unchanged sentences

Stock-based compensation — — 19,964 — — — — 19,964 — 19,964 —

Balances at June 30, 2023 7,254,786 $ 122 $ 1,286,775 $ 174,011 $ ( 147 ) 4,903,533 $ ( 609,248 ) $ 851,513 $ 5,196 $ 856,709 $ 110,399

Balances at September 30, 2023 7,182,763 $ 122 $ 1,295,988 $ 190,615 $ ( 373 ) 4,977,548 $ ( 624,248 ) $ 862,104 $ 5,448 $ 867,552 $ 96,266

Balances at December 31, 2023 7,087,728 $ 122 $ 1,300,999 $ 207,356 $ ( 87 ) 5,075,500 $ ( 644,464 ) $ 863,926 $ 4,363 $ 868,289 $ 104,869

8 unchanged sentences

Stock-based compensation — — 19,251 — — — — 19,251 — 19,251 —

Balances at June 30, 2024 7,082,071 $ 122 $ 1,304,176 $ 226,540 $ ( 200 ) 5,151,707 $ ( 661,963 ) $ 868,675 $ 3,443 $ 872,118 $ 129,450

Balances at September 30, 2024 7,016,433 $ 122 $ 1,314,228 $ 251,298 $ 230 5,224,557 $ ( 676,832 ) $ 889,046 $ 3,676 $ 892,722 $ 98,111

The accompanying notes are an integral part of these condensed consolidated financial statements.

7 unchanged sentences

The Company’s retail investment management services are provided to individuals through products consisting of:

mutual funds registered pursuant to the Investment Company Act of 1940, as amended (the "open-end funds") that include U.S.

mutual funds registered pursuant to the Investment Company Act of 1940, as amended that include U.S.

retail funds, exchange-traded funds ("ETFs") and variable insurance funds;

Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds (collectively, "global funds");

Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds ("global funds" and collectively with U.S.

retail funds, ETFs and variable insurance funds the "open-end funds");

closed-end funds (collectively with open-end funds, the "funds");

and retail separate accounts that include intermediary-sold and private client accounts.

and retail separate accounts that include intermediary-sold and wealth management accounts.

Basis of Presentation and Significant Accounting Policies

3 unchanged sentences

In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations.

Operating results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the "SEC").

23 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

15 unchanged sentences

Intangible amortization — ( 43,416 ) ( 43,416 ) — ( 43,416 )

Balances at June 30, 2024 $ 806,655 $ ( 447,367 ) $ 359,288 $ 42,298 $ 401,586

Balances at September 30, 2024 $ 806,655 $ ( 460,250 ) $ 346,405 $ 42,298 $ 388,703

Definite-lived intangible asset amortization for the remainder of fiscal year 2024 and succeeding fiscal years is estimated as follows:

5 unchanged sentences

Investments consist primarily of investments in the Company's sponsored products.

The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 16, at June 30, 2024 and December 31, 2023 were as follows:

(in thousands) June 30,

The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 16, at September 30, 2024 and December 31, 2023 were as follows:

(in thousands) September 30,

2024 December 31, 2023

7 unchanged sentences

The composition of the Company’s investment securities - fair value was as follows:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(in thousands) Cost Fair Value Cost Fair Value

2 unchanged sentences

Equity securities 17,674 21,693 16,353 19,871

Debt securities 25,887 25,918 — —

Total investment securities - fair value $ 120,772 $ 127,914 $ 97,147 $ 97,304

For the three and six months ended June 30, 2024, the Company recognized net realized gains of $ 1.0 million and $ 0.7 million, respectively, related to its investment securities - fair value.

For the three and six months ended June 30, 2023, the Company recognized net realized gains of $ 0.8 million and $ 2.2 million, respectively, related to its investment securities - fair value.

For the three and nine months ended September 30, 2024, the Company recognized net realized gains of $ 0.5 million and $ 1.2 million, respectively, related to its investment securities - fair value.

For the three and nine months ended September 30, 2023, the Company recognized net realized losses of $ 0.1 million and net realized gains of $ 2.1 million, respectively, related to its investment securities - fair value.

Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 16, as of June 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

June 30, 2024

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 16, as of September 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

September 30, 2024

(in thousands) Level 1 Level 2 Level 3 Total

3 unchanged sentences

Equity securities 21,693 — — 21,693

Debt securities 259 1,216 24,443 25,918

Nonqualified retirement plan assets 14,927 — — 14,927

20 unchanged sentences

Equity securities represent securities traded on active markets, are valued at the official closing price (typically the last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1.

Debt securities represent investments in corporate and government bonds and the note securities of collateralized loan obligations.

The fair values of corporate and government bonds traded on active markets are valued at the official closing price on the exchange on which the securities are primarily traded and are categorized as Level 1.

Debt securities for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service, are categorized as Level 2.

The fair values of note securities of collateralized loan obligations ("CLO") are based on valuations received from an independent valuation firm and are categorized as Level 3.

The following table presents a reconciliation of beginning and ending balances of the Company's Level 3 debt securities:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

Debt securities, beginning of period $ — $ — $ — $ —

Purchases (sales), net 24,443 24,339 24,443 24,339

Debt securities, end of period $ 24,443 $ 24,339 $ 24,443 $ 24,339

Nonqualified retirement plan assets represent mutual funds within the Company's nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

3 unchanged sentences

Contingent consideration, end of period $ 34,408 $ 54,910 $ 34,408 $ 54,910

The contingent consideration related to the Westchester Capital Management transaction as of June 30, 2024, was $ 7.8 million measured using an options pricing model valuation technique.

The contingent consideration related to the Westchester Capital Management transaction as of September 30, 2024 was $ 3.8 million, measured using an options pricing model valuation technique.

The most significant unobservable inputs used relate to revenue growth rates, discount rates (range of 5.9 %- 6.1 %) and the market price of risk adjustment ( 8.7 %).

The NFJ Investment Group contingent consideration liability as of June 30, 2024, was $ 30.6 million measured using an options pricing model valuation technique.

The NFJ Investment Group contingent consideration liability as of September 30, 2024 was $ 30.6 million, measured using an options pricing model valuation technique.

The most significant unobservable inputs used relate to the revenue growth rates, discount rates (range of 6.4 % - 7.1 %) and the market price of risk adjustment ( 7.1 %).

2 unchanged sentences

Dividends Declared

On May 15, 2024, the Company declared a quarterly cash dividend of $ 1.90 per common share to be paid on August 15, 2024 to shareholders of record at the close of business on July 31, 2024.

On August 14, 2024, the Company declared a quarterly cash dividend of $ 2.25 per common share to be paid on November 13, 2024 to shareholders of record at the close of business on October 31, 2024.

Common Stock Repurchases

During the three and six months ended June 30, 2024, the Company repurchased 55,099 and 76,207 common shares, respectively, at a weighted average price of $ 226.83 and $ 229.60 per share, respectively, for a total cost, including fees and expenses, of $ 12.5 million and $ 17.5 million, respectively, under its share repurchase program.

As of June 30, 2024, 528,338 shares remained available for repurchase.

During the three and nine months ended September 30, 2024, the Company repurchased 72,850 and 149,057 common shares, respectively, at a weighted average price of $ 204.07 and $ 217.12 per share, respectively, for a total cost, including fees and expenses, of $ 14.9 million and $ 32.4 million, respectively, under its share repurchase program.

As of September 30, 2024, 455,488 shares remained available for repurchase.

Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price, prevailing market and business conditions, tax and other financial considerations.

2 unchanged sentences

The changes in accumulated other comprehensive income (loss) were as follows:

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2024 2023

2 unchanged sentences

Balance at end of period $ 230 $ ( 373 )

(1) Consists of foreign currency translation adjustments, net of tax of $ 38 and $( 77 ) for the six months ended June 30, 2024 and 2023, respectively.

(1) Consists of foreign currency translation adjustments, net of tax of $( 106 ) and $ 5 for the nine months ended September 30, 2024 and 2023, respectively.

Stock-Based Compensation

Equity-based awards, including restricted stock units ("RSUs"), performance stock units ("PSUs"), and unrestricted shares of common stock, have been granted to officers, employees and directors of the Company pursuant to the Company's Omnibus Incentive and Equity Plan (the "Omnibus Plan").

At June 30, 2024, 818,989 shares of common stock remained available for issuance of the 3,825,000 shares that are authorized for issuance under the Omnibus Plan.

At September 30, 2024, 829,554 shares of common stock remained available for issuance of the 3,825,000 shares that are authorized for issuance under the Omnibus Plan.

Stock-based compensation expense is summarized as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

Shares that are issued upon vesting are newly issued shares from the Omnibus Plan and are not issued from treasury stock.

RSU activity, inclusive of PSUs, for the six months ended June 30, 2024 is summarized as follows:

RSU activity, inclusive of PSUs, for the nine months ended September 30, 2024 is summarized as follows:

of Shares Weighted Average

3 unchanged sentences

Settled ( 123,679 ) $ 234.81

Outstanding at June 30, 2024 343,277 $ 205.57

For the six months ended June 30, 2024 and 2023, a total of 45,117 and 76,452 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations and for which the Company paid $ 10.4 million and $ 13.2 million respectively, in minimum employee tax withholding obligations.

Outstanding at September 30, 2024 321,531 $ 205.08

For the nine months ended September 30, 2024 and 2023, a total of 49,086 and 77,583 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations and for which the Company paid $ 11.3 million and $ 13.4 million, respectively, in minimum employee tax withholding obligations.

These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting.

During the six months ended June 30, 2024 and 2023, the Company granted 26,757 and 44,583 PSUs, respectively, that contain performance-based metrics in addition to a service condition.

During the nine months ended September 30, 2024 and 2023, the Company granted 26,757 and 44,583 PSUs, respectively, that contain performance-based metrics in addition to a service condition.

Compensation expense for PSUs is generally recognized over a three-year service period based upon the value determined using a combination of (i) the intrinsic value method for awards that contain a performance metric that represents a "performance condition" in accordance with ASC 718, Stock Compensation ("ASC 718") and (ii) the Monte Carlo simulation valuation model for awards that contain a "market condition" performance metric under ASC 718.

1 unchanged sentence

Compensation expense for PSU awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period.

As of June 30, 2024, unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 40.5 million with a weighted-average remaining contractual life of 1.4 years.

As of September 30, 2024, unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 33.3 million with a weighted-average remaining contractual life of 1.3 years.

Earnings (Loss) Per Share

4 unchanged sentences

The computation of basic and diluted EPS is as follows:

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2024 2023 2024 2023

9 unchanged sentences

The following table details the securities that have been excluded from the above computation of weighted-average number of shares for diluted EPS, because the effect would be anti-dilutive.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

The provision for income taxes reflected U.S.

federal, state and local taxes at an estimated effective tax rate of 24.4 % and 23.2 % for the six months ended June 30, 2024 and 2023, respectively.

The higher estimated effective tax rate for the six months ended June 30, 2024 was primarily due to a change in excess tax benefits associated with stock-based compensation and the change in valuation allowances in the current year related to the tax effects of unrealized gains on certain Company investments.

federal, state and local taxes at an estimated effective tax rate of 24.4 % and 23.6 % for the nine months ended September 30, 2024 and 2023, respectively.

The higher estimated effective tax rate for the nine months ended September 30, 2024 was primarily due to a change in excess tax benefits associated with stock-based compensation.

Credit Agreement

The Company's credit agreement, as amended (the "Credit Agreement"), comprises (i) a $ 275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $ 175.0 million revolving credit facility with a five-year term expiring in September 2026.

The Company repaid $ 6.4 million outstanding under the Term Loan during the six months ended June 30, 2024 and had $ 252.4 million outstanding under the Term Loan at June 30, 2024.

In accordance with ASC 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheet net of related debt issuance costs, which were $ 4.8 million as of June 30, 2024.

The Company repaid $ 17.1 million outstanding under the Term Loan during the nine months ended September 30, 2024 and had $ 241.8 million outstanding under the Term Loan at September 30, 2024.

Commitments and Contingencies

8 unchanged sentences

Minority interests held in the affiliate are subject to holder put rights and Company call rights at pre-established multiples of earnings before interest, taxes, depreciation and amortization and, as such, are considered redeemable at other than fair value.

The rights are exercisable at pre-established intervals or upon certain conditions, such as

The rights are exercisable at pre-established intervals or upon certain conditions, such as retirement.

The put and call rights are not legally detachable or separately exercisable and are deemed to be embedded in the related noncontrolling interests.

1 unchanged sentence

These minority interests in the affiliate are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests.

Redeemable noncontrolling interests for the six months ended June 30, 2024 included the following amounts:

Redeemable noncontrolling interests for the nine months ended September 30, 2024 included the following amounts:

(in thousands) CIP Affiliate Noncontrolling Interests Total

5 unchanged sentences

Net subscriptions (redemptions) and other 4,771 ( 6,936 ) ( 2,165 )

Balances at June 30, 2024 $ 44,713 $ 84,737 $ 129,450

Balances at September 30, 2024 $ 39,097 $ 59,014 $ 98,111

(1) Relates to noncontrolling interests redeemable at other than fair value.

9 unchanged sentences

CIP includes both VOEs, made up primarily of U.S.

retail funds and ETFs in which the Company holds a controlling financial interest, and VIEs, which consist of collateralized loan obligations ("CLO") and certain global and private funds ("GF") of which the Company is considered the primary beneficiary.

retail funds and ETFs in which the Company holds a controlling financial interest, and VIEs, which consist of CLO and certain global and private funds ("GF") of which the Company is considered the primary beneficiary.

The consolidation and deconsolidation of these investment products have no impact on the Company's net income (loss).

1 unchanged sentence

The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company's investments in, and fees generated from, these products.

The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

VOEs VIEs VOEs VIEs

9 unchanged sentences

The majority of the Company's CIP that are VIEs are CLOs.

The financial information of certain CLOs is included on the Company's condensed consolidated financial statements on a one-month lag based upon the availability of their financial information.

A majority-owned consolidated private fund, whose primary purpose is to invest in CLOs for which the Company serves as the collateral manager, is also included.

At June 30, 2024, the Company consolidated seven CLOs.

At September 30, 2024, the Company consolidated six CLOs.

On September 30, 2024, the Company issued a new CLO and in conjunction with the issuance, made a $ 24.4 million investment in the subordinated notes.

The financial information of CLOs is included on the Company's condensed consolidated financial statements on a one-month lag based upon the availability of their financial information.

Investments of CLOs

The CLOs held investments of $ 2.0 billion at June 30, 2024, consisting of bank loan investments that comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries.

The CLOs held investments of $ 2.0 billion at September 30, 2024, consisting of bank loan investments that comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries.

These bank loan investments mature at various dates between 2025 and 2032 and generally pay interest at SOFR plus a spread.

Notes Payable of CLOs

The CLOs held notes payable with a total value, at par, of $ 2.2 billion at June 30, 2024, consisting of senior secured floating rate notes payable with a par value of $ 2.0 billion and subordinated notes with a par value of $ 217.9 million.

The CLOs held notes payable with a total value, at par, of $ 2.2 billion at September 30, 2024, consisting of senior secured floating rate notes payable with a par value of $ 1.9 billion and subordinated notes with a par value of $ 217.9 million.

These note obligations bear interest at variable rates based on SOFR plus a pre-defined spread.

1 unchanged sentence

The secured notes of the consolidated CLOs have contractual recourse only to the related assets of the CLO and are classified as financial liabilities.

Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative prescribed by ASU 2014-13, Consolidation (Topic 810) ("ASU 2014-13"), results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at June 30, 2024, as shown in the table below:

(in thousands)

3 unchanged sentences

The following table represents income and expenses of the consolidated CLOs included on the Company’s Condensed Consolidated Statements of Operations for the period indicated:

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in thousands)

8 unchanged sentences

The following table represents the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation:

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in thousands)

3 unchanged sentences

Fair Value Measurements of CIP

The assets and liabilities of CIP measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

As of June 30, 2024

The assets and liabilities of CIP measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

As of September 30, 2024

(in thousands) Level 1 Level 2 Level 3 Total

6 unchanged sentences

Short sales 415 — — 415

Derivatives 83 — — 83

Total liabilities measured at fair value $ 498 $ 1,940,085 $ — $ 1,940,583

22 unchanged sentences

The fair value of the beneficial interests held by the Company is based on third-party pricing information without adjustment.

The securities purchased payable at June 30, 2024 and December 31, 2023 approximated fair value due to the short-term nature of the instruments.

The securities purchased payable at September 30, 2024 and December 31, 2023 approximated fair value due to the short-term nature of the instruments.

The following table is a reconciliation of assets of CIP for Level 3 investments for which significant unobservable inputs were used to determine fair value:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

13 unchanged sentences

The Company has interests in certain other VIEs that the Company does not consolidate as it is not the primary beneficiary since its interest in these entities does not provide the Company with the power to direct the activities that most significantly impact the entities' economic performance.

At June 30, 2024, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 27.8 million.

At September 30, 2024, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 28.6 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements