Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Mar. 09, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | Pzena Investment Management, Inc. | ||
Entity Central Index Key | 1399249 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $130,265,234 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Class A [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 13,002,267 | ||
Class B [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 53,257,891 |
CONSOLIDATED_STATEMENTS_OF_FIN
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||
Cash and Cash Equivalents | $39,109,000 | $33,878,000 |
Restricted Cash | 2,810,000 | 316,000 |
Due from Broker | 94,000 | 58,000 |
Advisory Fees Receivable | 22,939,000 | 23,947,000 |
Investments | 27,945,000 | 7,621,000 |
Receivable from Related Parties | 107,000 | 119,000 |
Other Receivables | 647,000 | 550,000 |
Prepaid Expenses and Other Assets | 845,000 | 577,000 |
Deferred Tax Asset, Net of Valuation Allowance of $44,239 and $53,973, respectively | 14,618,000 | 12,312,000 |
Property and Equipment, Net of Accumulated Depreciation of $3,072 and $ 2,850, respectively | 2,772,000 | 835,000 |
TOTAL ASSETS | 111,886,000 | 80,213,000 |
Liabilities: | ||
Accounts Payable and Accrued Expenses | 5,974,000 | 5,570,000 |
Due to Broker | 698,000 | 5,000 |
Securities Sold Short, at Fair Value | 1,572,000 | 0 |
Liability to Selling and Converting Shareholders | 15,358,000 | 12,777,000 |
Lease Liability | 354,000 | 778,000 |
Deferred Compensation Liability | 2,211,000 | 2,339,000 |
Other Liabilities | 686,000 | 195,000 |
TOTAL LIABILITIES | 26,853,000 | 21,664,000 |
Equity: | ||
Preferred Stock (Par Value $0.01; 200,000,000 Shares Authorized; None Outstanding) | 0 | 0 |
Additional Paid-In Capital | 8,007,000 | 9,750,000 |
Retained Earnings | 10,264,000 | 6,491,000 |
Total Pzena Investment Management, Inc.'s Equity | 18,401,000 | 16,362,000 |
Non-Controlling Interests | 66,632,000 | 42,187,000 |
TOTAL EQUITY | 85,033,000 | 58,549,000 |
TOTAL LIABILITIES AND EQUITY | 111,886,000 | 80,213,000 |
Class A [Member] | ||
Equity: | ||
Common Stock | 130,000 | 121,000 |
Class B [Member] | ||
Equity: | ||
Common Stock | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_FIN1
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, except Share data, unless otherwise specified | ||||
ASSETS | ||||
Deferred Tax Asset, Valuation Allowance | 44,239 | 53,973 | 59,917 | |
Property and Equipment, Accumulated Depreciation | 3,072 | 2,850 | ||
Equity: | ||||
Preferred Stock, Par Value (in dollars per share) | 0.01 | 0.01 | ||
Preferred Stock, Shares Authorized (in shares) | 200,000,000 | 200,000,000 | ||
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 | ||
Class A [Member] | ||||
Equity: | ||||
Common Stock, Par Value (in dollars per share) | 0.01 | 0.01 | ||
Common Stock, Shares Authorized (in shares) | 750,000,000 | 750,000,000 | ||
Common Stock, Shares Issued (in shares) | 13,044,719 | 12,158,057 | ||
Common Stock, Shares Outstanding (in shares) | 13,044,719 | 12,158,057 | ||
Class B [Member] | ||||
Equity: | ||||
Common Stock, Par Value (in dollars per share) | 0.000001 | 0.000001 | ||
Common Stock, Shares Authorized (in shares) | 750,000,000 | 750,000,000 | ||
Common Stock, Shares Issued (in shares) | 52,891,939 | 52,820,720 | ||
Common Stock, Shares Outstanding (in shares) | 52,891,939 | 52,820,720 | ||
Common Stock [Member] | Class A [Member] | ||||
Equity: | ||||
Common Stock, Shares Outstanding (in shares) | 13,044,719 | 12,158,057 | 11,149,941 | 10,575,089 |
Common Stock [Member] | Class B [Member] | ||||
Equity: | ||||
Common Stock, Shares Outstanding (in shares) | 52,891,939 | 52,820,720 | 53,482,324 | 53,967,555 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Income Statement [Abstract] | ||||||
REVENUE | $112,511 | $95,769 | $76,280 | |||
EXPENSES | ||||||
Compensation and Benefits Expense | 41,273 | 36,822 | 31,755 | |||
General and Administrative Expense | 10,285 | 8,099 | 7,346 | |||
TOTAL OPERATING EXPENSES | 51,558 | 44,921 | 39,101 | |||
Operating Income | 60,953 | 50,848 | 37,179 | |||
OTHER INCOME/(EXPENSE) | ||||||
Interest Income | 71 | 112 | 200 | |||
Interest Expense | -8 | 0 | -30 | |||
Dividend Income | 337 | 211 | 148 | |||
(Losses)/ Gains and Other Investment Income | -49 | 2,449 | 1,520 | |||
Change in Liability to Selling and Converting Shareholders | -4,168 | -4,468 | -2,647 | |||
Other Expense | -219 | -125 | -54 | |||
Total Other Expense | -4,036 | -1,821 | -863 | |||
Income Before Income Taxes | 56,917 | 49,027 | 36,316 | |||
Income Tax Expense | 1,883 | 589 | 1,911 | |||
Net Income | 55,034 | 48,438 | 34,405 | |||
Less: Net Income Attributable to Non-Controlling Interests | 46,934 | 41,768 | 30,565 | |||
Net Income Attributable to Pzena Investment Management, Inc. | 8,100 | 6,670 | 3,840 | |||
Net Income for Basic Earnings per Share | 8,100 | 6,670 | 3,840 | |||
Basic Earnings per Share | $0.64 | $0.56 | $0.36 | |||
Basic Weighted Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||
Net Income for Diluted Earnings per Share | $35,685 | $30,317 | $20,821 | |||
Diluted Earnings per Share | $0.53 | $0.45 | $0.32 | |||
Diluted Weighted Average Shares Outstanding | 67,797,524 | [1] | 66,759,840 | [1] | 65,491,273 | [1] |
Cash Dividends per Share of Class A Common Stock | $0.35 | $0.25 | $0.28 | |||
[1] | The Company issues restricted Class B units that have non-forfeitable dividend rights. Under the btwo-class method,b these units are considered participating securities and are required to be included in the computation of diluted earnings per share. |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Non-Controlling Interests [Member] | Class A [Member] | Class A [Member] | Class B [Member] | Class B [Member] |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | Common Stock [Member] | Common Stock [Member] | ||
USD ($) | ||||||||
Balance at Dec. 31, 2011 | $46,224 | $12,000 | $1,832 | $32,287 | $105 | |||
Balance (in shares) at Dec. 31, 2011 | 10,575,089 | 53,967,555 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Unit Conversion | 36 | 384 | 0 | -355 | 7 | |||
Unit Conversion (in shares) | 722,521 | -722,521 | ||||||
Amortization of Non-Cash Compensation | 1,663 | 279 | 0 | 1,384 | ||||
Amortization of Non-Cash Compensation (in shares) | 199,177 | |||||||
Directors' Share Grants | 337 | 58 | 0 | 279 | 0 | |||
Directors' Shares (in shares) | 0 | |||||||
Net Income | 34,405 | 0 | 3,840 | 30,565 | 0 | |||
Repurchase and Retirement of Class A Common Stock | -746 | -745 | 0 | 0 | -1 | |||
Repurchase and Retirement of Class B Units | -190 | -157 | 0 | -33 | ||||
Common stock and Units purchased and retired (in shares) | -147,669 | -36,158 | ||||||
Options Exercised | 0 | 0 | 0 | 0 | 0 | |||
Options Exercised (in shares) | 0 | 74,271 | ||||||
Repurchase and Retirement of Class B Unit Options | -313 | -54 | 0 | -259 | 0 | |||
Repurchase and Retirement of Class B Unit Options (in shares) | 0 | |||||||
Contributions from Non-Controlling Interests | 69 | 0 | 0 | 69 | 0 | |||
Distributions to Non-Controlling Interests | -30,540 | 0 | 0 | -30,540 | 0 | |||
Class A Cash Dividends Declared and Paid | -2,979 | 0 | -2,979 | 0 | 0 | |||
Balance at Dec. 31, 2012 | 47,966 | 11,765 | 2,693 | 33,397 | 111 | |||
Balance (in shares) at Dec. 31, 2012 | 11,149,941 | 53,482,324 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Unit Conversion | 119 | 786 | 0 | -680 | 13 | |||
Unit Conversion (in shares) | 1,328,334 | -1,328,334 | ||||||
Amortization of Non-Cash Compensation | 3,160 | 600 | 0 | 2,560 | 0 | |||
Amortization of Non-Cash Compensation (in shares) | 17,414 | 602,400 | ||||||
Directors' Share Grants | 340 | 82 | 0 | 257 | 1 | |||
Directors' Shares (in shares) | 45,818 | |||||||
Net Income | 48,438 | 0 | 6,670 | 41,768 | 0 | |||
Repurchase and Retirement of Class A Common Stock | -2,414 | -2,410 | 0 | 0 | -4 | |||
Repurchase and Retirement of Class B Units | -3,727 | -699 | 0 | -3,028 | ||||
Common stock and Units purchased and retired (in shares) | -383,450 | -356,843 | ||||||
Options Exercised | 0 | 0 | 0 | 0 | 0 | |||
Options Exercised (in shares) | 0 | 421,173 | ||||||
Repurchase and Retirement of Class B Unit Options | -71 | -14 | 0 | -57 | 0 | |||
Repurchase and Retirement of Class B Unit Options (in shares) | 0 | |||||||
Contributions from Non-Controlling Interests | 147 | 0 | 0 | 147 | 0 | |||
Distributions to Non-Controlling Interests | -32,537 | 0 | 0 | -32,537 | 0 | |||
Class A Cash Dividends Declared and Paid | -2,872 | 0 | -2,872 | 0 | 0 | |||
Other | -360 | 360 | ||||||
Balance at Dec. 31, 2013 | 58,549 | 9,750 | 6,491 | 42,187 | 121 | |||
Balance (in shares) at Dec. 31, 2013 | 12,158,057 | 12,158,057 | 52,820,720 | 52,820,720 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Unit Conversion | 191 | 1,038 | 0 | -858 | 11 | |||
Unit Conversion (in shares) | 1,150,060 | -1,150,060 | ||||||
Amortization of Non-Cash Compensation | 6,666 | 1,329 | 0 | 5,336 | 1 | |||
Amortization of Non-Cash Compensation (in shares) | 28,535 | 1,215,583 | ||||||
Directors' Share Grants | 359 | 69 | 0 | 290 | 0 | |||
Directors' Shares (in shares) | 0 | |||||||
Net Income | 55,034 | 0 | 8,100 | 46,934 | 0 | |||
Repurchase and Retirement of Class A Common Stock | -3,496 | -3,492 | 0 | 0 | -4 | |||
Repurchase and Retirement of Class B Units | -901 | -173 | 0 | -728 | ||||
Common stock and Units purchased and retired (in shares) | -360,279 | -89,503 | ||||||
Options Exercised | 0 | 37 | 0 | -38 | 1 | |||
Options Exercised (in shares) | 68,346 | 95,199 | ||||||
Contributions from Non-Controlling Interests | 4,906 | 0 | 0 | 4,906 | 0 | |||
Distributions to Non-Controlling Interests | -44,154 | 0 | 0 | -44,154 | 0 | |||
Class A Cash Dividends Declared and Paid | -4,327 | 0 | -4,327 | 0 | 0 | |||
Noncontrolling Interest, Decrease from Deconsolidation | -37 | -37 | ||||||
Effect of Consolidation of Affiliates | 12,243 | 12,243 | ||||||
Other | 0 | -551 | 551 | |||||
Balance at Dec. 31, 2014 | $85,033 | $8,007 | $10,264 | $66,632 | $130 | |||
Balance (in shares) at Dec. 31, 2014 | 13,044,719 | 13,044,719 | 52,891,939 | 52,891,939 |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Stockholders' Equity [Abstract] | |||
Class A Cash Dividends Declared and Paid (in dollars per share) | $0.35 | $0.25 | $0.28 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
OPERATING ACTIVITIES | |||
Net Income | $55,034 | $48,438 | $34,405 |
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: | |||
Depreciation | 224 | 178 | 179 |
Disposal of Fixed Assets | 0 | 0 | -55 |
Non-Cash Compensation | 8,877 | 5,523 | 2,990 |
Directors' Share Grants | 359 | 315 | 337 |
Losses/ (Gains) and Other Investment Income | 49 | -2,449 | -1,520 |
Change in Liability to Selling and Converting Shareholders | 4,168 | 4,468 | 2,647 |
Deferred Income Taxes | -1,055 | -1,849 | -529 |
Changes in Operating Assets and Liabilities: | |||
Advisory Fees Receivable | 1,008 | -9,321 | 63 |
Due from Broker | -41 | -36 | 435 |
Restricted Cash | -2,494 | 714 | 0 |
Prepaid Expenses and Other Assets | -357 | -491 | 134 |
Due to Broker | 694 | -18 | 23 |
Subscriptions Receivable | 7,000 | 0 | 0 |
Accounts Payable, Accrued Expenses, and Other Liabilities | -1,660 | -48 | -2,981 |
Tax Receivable Agreement Payments | -2,668 | -2,024 | -4,451 |
Change in Lease Liability | -424 | -425 | -592 |
Purchases of Investments | -58,874 | -78,100 | -74,140 |
Proceeds from Sale of Investments | 45,572 | 79,582 | 75,013 |
Net Cash Provided by Operating Activities | 55,412 | 44,457 | 31,958 |
INVESTING ACTIVITIES | |||
Purchases of Investments | -2,494 | -1,558 | -521 |
Proceeds from Sale of Investments | 2,043 | 78 | 544 |
Payments to Related Parties | 12 | -36 | -16 |
Purchase of Property and Equipment | -2,161 | -234 | -74 |
Net Cash Used in Investing Activities | -2,600 | -1,750 | -67 |
FINANCING ACTIVITIES | |||
Repurchase and Retirement of Class A Common Stock | -3,496 | -2,414 | -746 |
Repurchase and Retirement of Class B Units | -901 | -3,727 | -190 |
Repurchase and Retirement of Class B Unit Options | 0 | -71 | -313 |
Loan Proceeds | 205 | 0 | 0 |
Distributions to Non-Controlling Interests | -44,154 | -32,537 | -30,170 |
Contributions from Non-Controlling Interests | 4,906 | 147 | 69 |
Dividends | -4,327 | -2,872 | -2,979 |
Net Cash Used in Financing Activities | -47,767 | -41,474 | -34,329 |
NET CHANGE IN CASH | 5,045 | 1,233 | -2,438 |
CASH AND CASH EQUIVALENTS b Beginning of Period | 33,878 | 32,645 | 35,083 |
Effect of Consolidation/ (Deconsolidation) of Affiliates | 186 | 0 | 0 |
Net Change in Cash | 5,045 | 1,233 | -2,438 |
CASH AND CASH EQUIVALENTS b End of Period | 39,109 | 33,878 | 32,645 |
Supplementary Cash Flow Information: | |||
In-Kind Distribution to Non-Controlling Interests of Equity Securities, at Fair Value | 0 | 0 | 370 |
Interest Paid | 0 | 0 | 30 |
Income Taxes Paid | $2,728 | $2,502 | $2,310 |
Organization
Organization | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Organization | Organization | |||
Pzena Investment Management, Inc. (the “Company”) functions as the sole managing member of its operating company, Pzena Investment Management, LLC (the “operating company”). As a result, the Company: (i) consolidates the financial results of the operating company and reflects the membership interests that it does not own as a non-controlling interest in its consolidated financial statements; and (ii) recognizes income generated from its economic interest in the operating company’s net income. | ||||
The operating company is an investment adviser which is registered under the Investment Advisers Act of 1940 and is headquartered in New York, New York. As of December 31, 2014, the operating company managed assets in a variety of value-oriented investment strategies across a wide range of market capitalizations in both U.S. and non-U.S. capital markets. | ||||
The Company has consolidated the results of operations and financial condition of the following entities as of December 31, 2014: | ||||
Legal Entity | Type of Entity (Date of Formation) | Ownership at | ||
December 31, | ||||
2014 | ||||
Pzena Investment Management, Pty | Australian Proprietary Limited Company (12/16/2009) | 100 | % | |
Pzena Financial Services, LLC | Delaware Limited Liability Company (10/15/2013) | 100 | % | |
Pzena Investment Management Special Situations, LLC | Delaware Limited Liability Company (12/01/2010) | 99.9 | % | |
Pzena Mid Cap Focused Value Fund, a series of Advisors Series Trust | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | 93.2 | % | |
Pzena Long/Short Value Fund, a series of Advisors Series Trust | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | 77.3 | % | |
Pzena Emerging Markets Focused Value Fund, a series of Advisors Series Trust | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | 12.3 | % | |
Pzena Investment Funds Trust, Pzena Large Cap Value Fund | Massachusetts Trust (11/01/2002) | 0 | % | |
Pzena International Value Service, a series of the Pzena Investment Management International, LLC | Delaware Limited Liability Company (12/22/2003) | 0 | % |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Significant Accounting Policies | Significant Accounting Policies | |||||||||||
Basis of Presentation: | ||||||||||||
The consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and related Securities and Exchange Commission (“SEC”) rules and regulations. The Company’s policy is to consolidate all majority-owned subsidiaries in which it has a controlling financial interest. Certain investment vehicles the operating company sponsors for which it is the investment advisor, are considered to be variable-interest entities (“VIEs”). The Company consolidates VIEs where the Company is deemed to be the primary beneficiary. The majority-owned subsidiaries in which the Company has a controlling financial interest and the VIEs for which the Company is deemed to be the primary beneficiary are collectively referred to as “consolidated subsidiaries.” Non-controlling interests recorded on the consolidated financial statements of the Company include the non-controlling interests of the outside investors in each of these entities, as well as those of the operating company. All significant inter-company transactions and balances have been eliminated in consolidation. | ||||||||||||
On March 31, 2014, the operating company launched the Pzena Mid Cap Focused Value Fund, Pzena Long/Short Value Fund, and Pzena Emerging Markets Focused Value Fund, for each of which it acts as the investment advisor. These funds meet the definition of VIE due to the fund's series trust structure. The shareholders of individual funds lack the ability to make decisions regarding the trustees and the key activities of the fund, because those abilities reside at the trust level. For purposes of consolidation, the Company believes it is the primary beneficiary when it, along with it's related parties and de-facto agents, owns a majority of the fund shares because the majority of the variability of the funds accrues to the Company. On March 31, 2014, the Company provided the initial cash investment for each fund in an effort to generate an investment performance track record to attract third-party investors and had an initial investment representing 100% of the ownership in each entity. As a result, the entities were consolidated with the Company as of March 31, 2014. On August 5, 2014, due to additional subscriptions into the Pzena Emerging Markets Focused Value Fund, the Company's ownership decreased to 42.9% and the entity was deconsolidated. However, as of December 19, 2014, as a result of a shift in equity ownership on that date, the Company was considered the primary beneficiary of the fund and the entity was reconsolidated. During the period when the Company was not considered the primary beneficiary of the Pzena Emerging Markets Focused Value Fund, it removed the related assets, liabilities and non-controlling interest from it's consolidated statement of financial condition, the related net investment income from its consolidated statement of operations, and classified the remaining investment as an equity method investment. The Pzena Emerging Markets Focused Value Fund, Pzena Mid Cap Focused Value Fund and Pzena Long/Short Value Fund will continue to be consolidated to the extent the Company has a majority ownership interest in them. At December 31, 2014, the aggregate of these funds' $19.3 million in net assets were included in the Company's consolidated statement of financial condition. | ||||||||||||
Pzena Large Cap Value Fund is a Massachusetts Trust in which a majority of the trustees are members of the executive committee of the operating company. A majority of the trustees do not hold equity investments in this trust. Since the holders of the equity investments in this partnership lack a controlling financial interest in it, this entity is deemed to be a VIE. The Company is considered the primary beneficiary of this VIE. At December 31, 2014, the Pzena Large Cap Value Fund’s $1.2 million in net assets were included in the Company’s consolidated statements of financial condition. | ||||||||||||
The operating company is the managing member of Pzena International Value Service. The operating company is considered the primary beneficiary of this entity. As a result, the entity was consolidated as of February 1, 2011. At December 31, 2014, Pzena International Value Service’s $2.1 million in net assets were included in the Company’s consolidated statements of financial condition. | ||||||||||||
All of the consolidated subsidiaries are investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide for Investment Companies. The Company has retained the specialized accounting for these partnerships pursuant to the Consolidation of Partnerships and Similar Entities Subtopic of the FASB ASC. Thus, the Company reports these investment partnerships’ investments in Investments, with net realized and unrealized gains and losses reported in (losses)/gains and other investment income in the consolidated statements of operations. | ||||||||||||
VIEs that are not consolidated continue to receive investment management services from the Company, and are vehicles through which the Company offers its Global Value and/or International (ex-U.S.) Value strategies. The total net assets of these VIEs was approximately $408.9 million and $244.2 million at December 31, 2014 and December 31, 2013, respectively. Neither the Company nor the operating company were exposed to losses as a result of its involvement with these entities because neither had a direct investment in them. | ||||||||||||
The Company records in its own equity its pro-rata share of transactions that impact the operating company’s net equity, including unit and option issuances, repurchases, and retirements. The operating company’s pro-rata share of such transactions are recorded as adjustments to additional paid-in capital or non-controlling interests, as applicable, on the consolidated statements of financial position. | ||||||||||||
Management’s Use of Estimates: | ||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the period. Actual results could differ from those estimates. | ||||||||||||
Fair Values of Financial Instruments: | ||||||||||||
The carrying amounts of all financial instruments in the consolidated statements of financial condition are presented at their fair value. | ||||||||||||
Revenue Recognition: | ||||||||||||
Revenue, comprised of advisory fee income, is recognized over the period in which advisory services are provided. Advisory fee income includes management fees that are calculated based on percentages of assets under management (“AUM”), generally billed quarterly, either in arrears or advance, depending on their contractual terms. Advisory fee income also includes performance fees that may be earned by the Company depending on the investment return of the assets under management. Performance fee arrangements generally entitle the Company to participate, on a fixed-percentage basis, in any returns generated in excess of an agreed-upon benchmark. The Company’s participation percentage in such return differentials is then multiplied by AUM to determine the performance fees earned. In general, returns are calculated on an annualized basis over the contract’s measurement period, which usually extends to three years. Performance fees are generally payable annually. Following the preferred method identified in the Revenue Recognition Topic of the FASB ASC, such performance fee income is recorded at the conclusion of the contractual performance period, when all contingencies are resolved. For the years ended December 31, 2014, 2013, and 2012, the Company recognized approximately $3.8 million, $3.9 million and $0.3 million, respectively, in performance fee income. | ||||||||||||
Cash and Cash Equivalents: | ||||||||||||
At December 31, 2014 and 2013, cash and cash equivalents was $39.1 million and $33.9 million, respectively. The Company considers all money market funds and highly-liquid debt instruments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company maintains its cash in bank deposit and other accounts whose balances often exceed federally insured limits. | ||||||||||||
Interest on cash and cash equivalents is recorded as interest income on an accrual basis in the consolidated statements of operations. | ||||||||||||
Restricted Cash: | ||||||||||||
The Company maintained compensating balances of $2.8 million and $0.3 million at December 31, 2014, and 2013, respectively. The Company holds letters of credit issued by a third party in lieu of cash security deposits, as required by the Company's leases for its current and future New York corporate headquarters. Such amounts are recorded in Restricted Cash in the consolidated statements of financial condition. | ||||||||||||
The Pzena Long/Short Value Fund is required to maintain cash collateral for margin accounts established to support securities sold short, not yet purchased. To satisfy this requirement, as of December 31, 2014, $1.5 million was set aside and recorded in Restricted Cash in the consolidated statements of financial condition. | ||||||||||||
Due to/from Broker: | ||||||||||||
Due to/from Broker consists primarily of amounts payable/receivable for unsettled securities transactions held/initiated at the clearing brokers of the Company’s consolidated subsidiaries. | ||||||||||||
Investments: | ||||||||||||
Investment Securities, trading | ||||||||||||
Investment securities classified as trading securities consist of investments held by the Company and its consolidated subsidiaries, as well as investments in third-party mutual funds. The Company’s investments in third-party mutual funds are held to satisfy the Company’s obligations under its deferred compensation program. Dividends associated with the investments of the Company’s consolidated subsidiaries are recorded as dividend income on an ex-dividend basis in the consolidated statement of operations. | ||||||||||||
Securities Sold Short represents securities sold short, not yet purchased by the Pzena Long/Short Value Fund, which is consolidated with the Company's financial statements. Dividend expense associated with these investments is reflected in Other Expense on an ex-dividend basis in the consolidated statement of operations. | ||||||||||||
All such investments are recorded at fair value, with net realized and unrealized gains and losses reported in earnings. Net realized and unrealized gains and losses are a component of (Losses)/ Gains and Other Investment Income in the consolidated statements of operations. | ||||||||||||
Investments in equity method investees | ||||||||||||
Investments in non-controlled affiliates in which the Company's ownership ranges from 20 to 50 percent are accounted for under the equity method of accounting. Under the equity method of accounting, the Company's share of the investee's underlying net income or loss is recorded as equity in the earnings of affiliates and reflected as a component of (Losses)/ Gains and Other Investment Income in the consolidated statements of operations. The carrying value of equity method investments is measured based on the funds' net asset values. As of December 31, 2014, we held no investments under the equity method of accounting. | ||||||||||||
Fair Value Measurements: | ||||||||||||
The Fair Value Measurements and Disclosures Topic of the FASB ASC defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The Fair Value Measurements and Disclosures Topic of the FASB ASC also establishes a framework for measuring fair value and a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels: (i) valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets (Level 1); (ii) valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured (Level 2); and (iii) valuation inputs are unobservable and significant to the fair value measurement (Level 3). | ||||||||||||
The Company’s investments relate to its consolidated investments in equity securities and securities sold short, both of which are exchange-traded securities with quoted prices in active markets, its investments in third-party mutual funds, which have a readily available net asset value per share, and its investments in equity method investees. The fair value measurements of the equity securities, securities sold short, and investments in mutual funds have been classified as Level 1. | ||||||||||||
The following table presents these instruments’ fair value at December 31, 2014: | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Assets: | ||||||||||||
Equity Securities | $ | 23,036 | $ | — | $ | — | ||||||
Investments in Mutual Funds | 4,909 | — | — | |||||||||
Total Fair Value | $ | 27,945 | $ | — | $ | — | ||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Liabilities: | ||||||||||||
Securities Sold Short | 1,572 | — | — | |||||||||
Total Fair Value | $ | 1,572 | $ | — | $ | — | ||||||
The following table presents these instruments’ fair value at December 31, 2013: | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Assets: | ||||||||||||
Equity Securities | $ | 2,364 | $ | — | $ | — | ||||||
Investments in Mutual Funds | 5,257 | — | — | |||||||||
Total Fair Value | $ | 7,621 | $ | — | $ | — | ||||||
For the years ended December 31, 2014, and 2013, there were no transfers between levels. In addition, the Company did not hold any Level 2 or 3 securities during 2014 and 2013. | ||||||||||||
Securities Valuation: | ||||||||||||
Investments in equity securities and securities sold short for which market quotations are available are valued at the last reported price or closing price on the primary market or exchange on which they trade. If no reported equity sales occurred on the valuation date, equity investments are valued at the bid price. Investments in third-party mutual funds are valued at the closing net asset value per share of the fund on the day of valuation. Transactions are recorded on a trade date basis. | ||||||||||||
The net realized gain or loss on sales of securities, securities sold short, and investments in third-party mutual funds is determined on a specific identification basis and is included in (Losses)/ Gains and Other Investment Income in the consolidated statements of operations. | ||||||||||||
Concentrations of Credit Risk: | ||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, amounts due from brokers, and advisory fees receivable. The Company maintains its cash and cash equivalents in bank deposits and other accounts whose balances often exceed federally insured limits. | ||||||||||||
The concentration of credit risk with respect to advisory fees receivable is generally limited due to the short payment terms extended to clients by the Company. On a periodic basis, the Company evaluates its advisory fees receivable and establishes an allowance for doubtful accounts, if necessary, based on a history of past write-offs and collections and current credit conditions. At December 31, 2014 and 2013, no allowance for doubtful accounts has been deemed necessary. | ||||||||||||
Property and Equipment: | ||||||||||||
Property and equipment is carried at cost, less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the respective assets, which range from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvements or the remaining lease term. | ||||||||||||
Business Segments: | ||||||||||||
The Company views its operations as comprising one operating segment. | ||||||||||||
Income Taxes: | ||||||||||||
The Company is a “C” corporation under the Internal Revenue Code, and is thus liable for federal, state, and local taxes on the income derived from its economic interest in its operating company. The operating company is a limited liability company that has elected to be treated as a partnership for tax purposes. It has not made a provision for federal or state income taxes because it is the individual responsibility of each of the operating company’s members (including the Company) to separately report their proportionate share of the operating company’s taxable income or loss. Similarly, the income of the Company’s consolidated subsidiaries is not subject to income taxes, since it is allocated to each partnership’s individual partners. The operating company has made a provision for New York City Unincorporated Business Tax (“UBT”). | ||||||||||||
Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are in accordance with applicable tax laws. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation, or the change of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate. It is also the Company’s policy to recognize accrued interest, and penalties associated with uncertain tax positions in Income Tax Expense/(Benefit) on the consolidated statement of operations. For the years ended December 31, 2014, 2013, and 2012, no such expenses were recognized. As of December 31, 2014 and 2013, no such accruals were recorded. | ||||||||||||
The Company and its consolidated subsidiaries account for all federal, state, and local taxation pursuant to the asset and liability method, which requires deferred income tax assets and liabilities to be recorded for temporary differences between the carrying amount and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the temporary differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more likely than not to be realized. At December 31, 2014, the Company had a $44.2 million valuation allowance against deferred tax assets recorded as part of the Company’s initial public offering and the subsequent exchanges of Class B units of the operating company for shares of its Class A common stock. At December 31, 2013, the Company had a $54.0 million valuation allowance against these deferred tax assets. The income tax expense, or benefit, is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. The Company records its deferred tax liabilities as a component of other liabilities in the consolidated statements of financial condition. | ||||||||||||
Excess tax benefits related to stock- and unit-transactions are not recognized until they result in a reduction of cash taxes payable. The benefit of these excess tax benefits will be recorded in equity when they reduce cash taxes payable. The Company will only recognize a tax benefit from stock- and unit-based awards in Additional Paid-In Capital if an incremental tax benefit is realized after all other tax benefits currently available have been utilized. During the year ended December 31, 2014, the Company had approximately $0.2 million in tax benefits associated with stock- and unit-based awards that it was not able to recognize. This amount is reflected as an unrecognized tax benefit. During the year ended December 31, 2013, the Company had approximately $0.4 million in tax benefits associated with stock- and unit-based awards that it was not able to recognize. There were no unrecognized tax benefits for the years ended December 31, 2012. | ||||||||||||
Foreign Currency: | ||||||||||||
Investment securities and other assets and liabilities denominated in foreign currencies are remeasured into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities, and income and expense items denominated in foreign currencies, are remeasured into U.S. dollar amounts on the respective dates of such transactions. | ||||||||||||
The Company does not isolate the portion of the results of its operations resulting from the impact of fluctuations in foreign exchange rates on its non-U.S. investments. Such fluctuations are included in net realized and (losses)/gains and other investment income in the consolidated statements of operations. | ||||||||||||
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Company’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities resulting from changes in exchange rates. | ||||||||||||
The functional currency of the Company is the United States Dollar. The functional currency of the Company’s representative office in Australia is the Australian Dollar. Assets and liabilities of this office are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. For the years ended December 31, 2014, 2013, and 2012, the Company did not record any accumulated other comprehensive income. | ||||||||||||
Recently Issued Accounting Pronouncements Not Yet Adopted: | ||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." The core principle of the standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. This new guidance will be effective on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the potential impact on the consolidated statements and related disclosures, as well as the available transition methods. | ||||||||||||
In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis". This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2015, and requires either a retrospective approach to adoption or a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. Early adoption is permitted. The company is currently assessing the impact of this standard on its consolidated financial statements, as well as the available transition methods. |
Compensation_and_Benefits
Compensation and Benefits | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Compensation and Benefits | Compensation and Benefits | ||||||||||||||||||||
Compensation and benefits expense to employees and members is comprised of the following: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Cash Compensation and Other Benefits | $ | 32,396 | $ | 31,374 | $ | 28,690 | |||||||||||||||
Non-Cash Compensation | 8,877 | 5,448 | 3,065 | ||||||||||||||||||
Total Compensation and Benefits Expense | $ | 41,273 | $ | 36,822 | $ | 31,755 | |||||||||||||||
All non-cash compensation awards granted have varying vesting schedules and are issued at prices equal to the assessed fair market value at the time of issuance, as discussed below. Details of awards of Class B units of the operating company, Delayed Exchange Class B Units, options to purchase Class B units of the operating company, restricted shares of Class A common stock, and phantom Class B units of the operating company awarded for the three years ended December 31, 2014 are as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Amount | Fair Value(1) | Amount | Fair Value(1) | Amount | Fair Value(1) | ||||||||||||||||
Phantom Class B Units (2) | 102,110 | $ | 7.62 | 805,879 | $ | 8.5 | 4,103,896 | $ | 3.85 | ||||||||||||
Class B Units | 32,479 | $ | 11.76 | 82,491 | $ | 9.17 | 124,718 | $ | 4.85 | ||||||||||||
Delayed Exchange Class B Units(3) | 662,832 | $ | 5.27 | — | $ | — | — | $ | — | ||||||||||||
Deferred Compensation Phantom Class B Units | 22,959 | $ | 11.76 | 68,518 | $ | 5.4 | 80,831 | $ | 4.33 | ||||||||||||
Options to Purchase Class B Units | — | $ | — | 76,522 | $ | 3.27 | 51,625 | $ | 1.32 | ||||||||||||
Restricted Shares of Class A Common Stock | — | $ | — | 100,000 | $ | 4.41 | 44,484 | $ | 5.24 | ||||||||||||
-1 | Represents the weighted average grant date estimated fair value per share, unit, or option. | ||||||||||||||||||||
-2 | Represents phantom Class B units issued under the 2006 Equity Incentive Plan. These phantom units vest ratably over ten years and are not entitled to receive dividend or dividend equivalents until vested. | ||||||||||||||||||||
-3 | Represents Class B units issued under the 2006 Equity Incentive Plan. These units vest immediately upon grant, but may not be exchanged pursuant to the Amended and Restated Operating Agreement of the operating company until at least the seventh anniversary of the date of grant. These units are also not entitled to any benefits under the Tax Receivable Agreement between the Company and members of the operating company. | ||||||||||||||||||||
Pursuant to the Pzena Investment Management, LLC Amended and Restated 2006 Equity Incentive Plan (“the 2006 Equity Incentive Plan”), the operating company issues Class B units, Delayed Exchange Class B Units, phantom Class B units and options to purchase Class B units. Under the Pzena Investment Management, Inc. 2007 Equity Incentive Plan (“the 2007 Equity Incentive Plan”), the Company issues shares of restricted Class A common stock and options to acquire shares of Class A common stock. | |||||||||||||||||||||
Under the Pzena Investment Management, LLC Amended and Restated Bonus Plan (the “Bonus Plan”), eligible employees whose compensation is in excess of certain thresholds have a portion of that excess mandatorily deferred. These deferred amounts may be invested, at the employee’s discretion, in certain investment options as designated by the Compensation Committee of the Company's Board of Directors. Amounts deferred in any calendar year reduce that year’s compensation expense and are amortized and vest ratably over a four year period commencing the following year. As of December 31, 2014 and 2013, the liability associated with deferred compensation investment accounts was $2.2 million and $2.3 million, respectively. During the year ended December 31, 2014 approximately $1.0 million in deferred compensation investments were forfeited in connection with employee departures. | |||||||||||||||||||||
Pursuant to the Pzena Investment Management, Inc. Non-Employee Director Deferred Compensation Plan (the “Director Plan”), non-employee directors may elect to have all or part of the compensation otherwise payable to the director in cash, deferred in the form of phantom shares of Class A common stock of the Company. Elections to defer compensation under the Director Plan are made on an annual basis. Elections of deferred stock units result in the issuance of phantom shares of Class A common stock. Distributions under the Director Plan shall be made in a single distribution of shares of our Class A common stock at such time as elected by the participant when the deferral was made. Since inception of the Director Plan in 2009, the Company’s directors have elected to defer 100% of their compensation in the form of phantom shares of Class A common stock. Amounts deferred in any calendar year are amortized over the calendar year and reflected as General and Administrative Expense. During the years ended December 31, 2014, 2013 and 2012, the directors were awarded 31,507, 64,144, and 72,228 phantom shares of Class A common stock, respectively, reflecting the annual deferral of compensation and additional phantom shares issued as of each date, and in the amount of dividends and/or special dividends and distributions that are paid with respect to Class A common stock of the Company. As of December 31, 2014 and 2013, there were 190,389 and 158,882 phantom shares of Class A common stock outstanding, respectively. On September 3, 2013, pursuant to the Director Plan and in association with the resignation of a director, 6,944 phantom shares of Class A common stock were forfeited and the Company distributed 45,818 phantom shares of Class A common stock in the form of shares of Class A common stock. There were no distributions made under the Director Plan during the years ended December 31, 2014 and 2012. | |||||||||||||||||||||
The Company uses a fair value method in recording the expense associated with the granting of Class B units, Delayed Exchange Class B Units, restricted shares of Class A common stock, phantom Class B units, and options to purchase Class B units and shares of Class A common stock under the 2006 and 2007 Equity Incentive Plans, phantom Class B units under the Bonus Plan, and phantom shares of Class A common stock under the Director Plan. | |||||||||||||||||||||
The fair value of awarded restricted shares of Class A common stock under the 2007 Equity Incentive Plan and phantom shares of Class A common stock under the Director Plan is determined based on the closing market price of our Class A common stock on the date of grant. The fair value of awarded Class B units and phantom Class B units under the 2006 Equity Incentive Plan, and phantom Class B units under the Bonus Plan is determined by reference to the market price of our Class A common stock on the date of grant, since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis and adjusted for the impact of award terms on the value of the award. Certain of the phantom Class B units and restricted shares of Class A common stock are not entitled to dividends or dividend equivalents while unvested. The fair value of these awards is determined based on the closing market price of our Class A common stock on the date of grant, net of the present value of the dividends using the applicable risk-free interest rate. The Delayed Exchange Class B Units have a seven year exchange limitation and are not entitled to any benefits under the tax receivable agreement. The fair value of these awards is determined based on the closing market price of our Class A common stock on the date of grant, net of the effects of the liquidity limitation and tax receivable agreement benefit exclusion. | |||||||||||||||||||||
The fair value of options to purchase Class B units is determined by using an appropriate option pricing model on the grant date. No options were issued during the year ended December 31, 2014. For each of the three years ended December 31, the Company recognized compensation expense using the Black-Scholes option pricing model with the following weighted average assumptions: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Weighted Average Time Until Exercise | N/A | 7 years | 7 years | ||||||||||||||||||
Volatility | N/A | 42 | % | 43 | % | ||||||||||||||||
Risk-Free Rate | N/A | 2.33 | % | 1.24 | % | ||||||||||||||||
Dividend Yield | N/A | 3.31 | % | 4.96 | % | ||||||||||||||||
Weighted Average Time Until Exercise — The expected term is based on the Company’s historical experience and the particular terms of its option awards. | |||||||||||||||||||||
Expected Volatility — Due to the lack of sufficient historical data for the Company’s own shares, the Company based its expected volatility on a representative peer group. | |||||||||||||||||||||
Risk-Free Rate — The risk-free rate for periods within the expected term of the options is based on the interest rate of a traded zero-coupon U.S. Treasury bond with a term equal to the options’ expected term on the date of grant. | |||||||||||||||||||||
Dividend Yield — The dividend yield is based on the Company’s anticipated dividend payout over the expected term of the option awards. | |||||||||||||||||||||
The following is a summary of the option activity for the three years ended December 31, 2014: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | ||||||||||||||||
Beginning Balance | 3,793,884 | $ | 7.45 | 4,524,807 | $ | 6.88 | 5,071,227 | $ | 7.19 | ||||||||||||
Options Granted | — | — | 76,522 | 10.26 | 51,625 | 5.24 | |||||||||||||||
Options Cancelled | (270,000 | ) | 12.78 | — | — | (2,167 | ) | 8 | |||||||||||||
Options Exercised | (409,602 | ) | 6.53 | (752,445 | ) | 4.22 | (180,878 | ) | 4.22 | ||||||||||||
Options Repurchased by the Company | — | — | (55,000 | ) | 9.29 | (415,000 | ) | 11.61 | |||||||||||||
Other | — | — | — | — | — | — | |||||||||||||||
Ending Balance | 3,114,282 | $ | 7.1 | 3,793,884 | $ | 7.45 | 4,524,807 | $ | 6.88 | ||||||||||||
No options were issued in 2014. The weighted average grant-date fair values of the options issued in 2013, and 2012 were $3.27 and $1.32, respectively, per option. The 409,602 options exercised in 2014 resulted in 95,199 net Class B units issued, as a result of the redemption of 64,403 Class B units for the cashless exercise of the options and 68,346 shares of Class A common stock issued as a result of the redemption of 181,654 shares of Class A common stock for the cashless exercise of the options. The 270,000 options to purchase Class B units were cancelled during 2014 in connection with employee departures. No options were repurchased by the operating company in 2014. The 752,445 options to purchase Class B units that were exercised in 2013 resulted in 421,173 net Class B units issued, as a result of the redemption of 331,272 Class B units for the cashless exercise of the options. The 55,000 options repurchased by the operating company in 2013 were repurchased at fair value for an aggregate amount of $0.1 million. The 180,878 options to purchase Class B units that were exercised in 2012 resulted in 74,271 net Class B units issued, as a result of the redemption of 106,607 Class B units for the cashless exercise of the options. The 415,000 options repurchased by the operating company in 2012 were repurchased at fair value for an aggregate amount of $0.3 million. | |||||||||||||||||||||
Exercise prices for options outstanding and exercisable as of December 31, 2014 are as follows: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Number Outstanding as of December 31, 2014 | Weighted- | Weighted Average Exercise Price | Number Exercisable as of December 31, 2014 | Weighted- | Weighted Average Exercise Price | ||||||||||||||||
Average Remaining Contractual Life | Average Remaining Contractual Life | ||||||||||||||||||||
$4.22 – $5.00 | 1,349,081 | 5 | $ | 4.41 | 1,349,081 | 5 | $ | 4.41 | |||||||||||||
$5.00 – $10.00 | 1,189,369 | 5.1 | 7.87 | 1,189,369 | 5.1 | 7.87 | |||||||||||||||
$10.00 – $15.00 | 575,832 | 3.5 | 11.85 | 532,195 | 3.1 | 11.98 | |||||||||||||||
$4.22 – $15.00 | 3,114,282 | 4.8 | $ | 7.1 | 3,070,645 | 4.7 | $ | 7.06 | |||||||||||||
Based on the closing market price of the Company’s Class A common stock on December 31, 2014, the aggregate intrinsic value of the Company’s options was as follows: | |||||||||||||||||||||
Options | Options | ||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Aggregate Intrinsic Value | $ | 8,714 | $ | 8,714 | |||||||||||||||||
Phantom Class B units issued pursuant to the Bonus Plan, which generally vest ratably over four years, are summarized as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | ||||||||||||||||
Beginning Balance | 109,665 | $ | 5.32 | 106,340 | $ | 5.69 | 73,570 | $ | 7.53 | ||||||||||||
Phantom Class B Units Issued | 22,959 | 11.76 | 68,518 | 5.4 | 80,831 | 4.33 | |||||||||||||||
Vesting of Phantom Class B Units | (54,984 | ) | 6.09 | (65,193 | ) | 6 | (48,061 | ) | 6.22 | ||||||||||||
Phantom Class B Units Forfeited | (5,952 | ) | 7.35 | — | — | — | — | ||||||||||||||
Ending Balance | 71,688 | $ | 6.63 | 109,665 | $ | 5.32 | 106,340 | $ | 5.69 | ||||||||||||
Phantom Class B units issued pursuant to the 2006 Equity Incentive Plan, which generally vest ratably over 10 years and are not eligible to receive dividends or dividend equivalents until vested, are summarized as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | ||||||||||||||||
Beginning Balance | 4,499,386 | $ | 4.68 | 4,103,896 | $ | 3.85 | — | $ | — | ||||||||||||
Phantom Class B Units Issued | 102,110 | 7.62 | 805,879 | 8.5 | 4,103,896 | 3.85 | |||||||||||||||
Vesting of Phantom Class B Units | (423,263 | ) | 4.83 | (410,389 | ) | 3.85 | — | — | |||||||||||||
Phantom Class B Units Forfeited | (701,299 | ) | 3.85 | — | — | — | — | ||||||||||||||
Ending Balance | 3,476,934 | $ | 4.92 | 4,499,386 | $ | 4.68 | 4,103,896 | $ | 3.85 | ||||||||||||
For the year ended December 31, 2014, no delayed-vesting cash awards were issued. For the year ended December 31, 2013, the Company awarded $1.0 million in delayed-vesting cash awards issued to certain members. These delayed-vesting cash awards have varying vesting schedules with $0.6 million paid during 2014 and $0.4 million to be paid in 2015. For the year ended December 31, 2012, the Company awarded $1.1 million in delayed-vesting cash awards, with $0.6 million paid during 2013 and the remaining $0.5 million paid during 2014. | |||||||||||||||||||||
As of December 31, 2014 and 2013, the Company had approximately $26.8 million and $29.7 million, respectively, in unrecorded compensation expense related to unvested awards issued pursuant to its Bonus Plan; Class B units, option grants, and phantom Class B units issued under the 2006 Equity Incentive Plan; and restricted Class A common stock issued under the 2007 Equity Incentive Plan. The Company anticipates that this unrecorded cost will amortize over the respective vesting periods of the awards. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans |
The Profit Sharing and Savings Plan is a defined contribution profit sharing plan with a 401(k) deferral component. All full-time employees and certain part-time employees who have met the age and length of service requirements are eligible to participate in the plan. The plan allows participating employees to make elective deferrals of compensation up to the annual limits which are set by law. The plan provides for a discretionary annual contribution by the operating company which is determined by a formula based on the salaries of eligible employees as defined by the plan. During the year ended December 31, 2014, 2013, and 2012, the expense recognized in connection with this plan was $0.8 million, $0.7 million, and $0.6 million, respectively. |
Earnings_per_Share
Earnings per Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings per Share | Earnings per Share | |||||||||||
Basic earnings per share is computed by dividing the Company’s net income attributable to its common stockholders by the weighted average number of shares outstanding during the reporting period. For the years ended December 31, 2014, 2013, and 2012, the Company’s basic earnings per share was determined as follows: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands, except share and per share amounts) | ||||||||||||
Net Income for Basic Earnings per Share | $ | 8,100 | $ | 6,670 | $ | 3,840 | ||||||
Basic Weighted-Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||||||||
Basic Earnings per Share | $ | 0.64 | $ | 0.56 | $ | 0.36 | ||||||
Diluted earnings per share adjusts this calculation to reflect the impact of all outstanding membership units of the operating company, phantom Class B units, phantom Class A common stock, outstanding Class B unit options, options to purchase Class A common stock, and restricted Class A common stock, to the extent they would have a dilutive effect on earnings per share for the reporting period. Net income for diluted earnings per share generally assumes all outstanding operating company membership units are converted into Company stock at the beginning of the reporting period and the resulting change to the Company's net income associated with its increased interest in the operating company is taxed at the Company’s effective tax rate, exclusive of one-time charges and adjustments associated with both the valuation allowance and the liability to selling and converting shareholders. | ||||||||||||
For the years ended December 31, 2014, 2013, and 2012, the Company’s diluted net income was determined as follows: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Net Income Attributable to Non-Controlling Interests of Pzena Investment Management, LLC | $ | 47,026 | $ | 40,533 | $ | 29,711 | ||||||
Less: Assumed Corporate Income Taxes | 19,441 | 16,886 | 12,730 | |||||||||
Assumed After-Tax Income of Pzena Investment Management, LLC | 27,585 | 23,647 | 16,981 | |||||||||
Net Income of Pzena Investment Management, Inc | 8,100 | 6,670 | 3,840 | |||||||||
Diluted Net Income | $ | 35,685 | $ | 30,317 | $ | 20,821 | ||||||
Under the two-class method, earnings per share is calculated by dividing net income for diluted earnings per share by the weighted average number of common shares outstanding during the period, plus the dilutive effect of any potential common shares outstanding during the period using the more dilutive of the treasury method or two-class method. The two-class method includes an earnings allocation formula that determines earnings per share for each participating security according to dividends declared and undistributed earnings for the period. The Company’s net income for diluted earnings per share is reduced by the amount allocated to participating Class B units for purposes of calculating earnings per share. Dividends paid per share on the unvested Class B units are equal to the dividends paid per share of Class A common stock of the Company. | ||||||||||||
For the years ended December 31, 2014, 2013, and 2012, the Company’s diluted earnings per share were determined as follows: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In thousands, except share and per share amounts) | ||||||||||||
Diluted Net Income Allocated to: | ||||||||||||
Class A Common Stock | $ | 35,606 | $ | 30,244 | 20,742 | |||||||
Participating Class B Units | 79 | 73 | 79 | |||||||||
Total Diluted Net Income Attributable to Shareholders | $ | 35,685 | $ | 30,317 | $ | 20,821 | ||||||
Basic Weighted-Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||||||||
Dilutive Effect of Class B Units | 52,418,097 | 52,508,211 | 53,783,093 | |||||||||
Dilutive Effect of Options(1) | 915,893 | 690,563 | 535,629 | |||||||||
Dilutive Effect of Phantom Units | 1,648,210 | 1,383,794 | 140,397 | |||||||||
Dilutive Effect of Restricted Shares of Class A Common Stock(2) | 42,599 | 29,795 | 1,099 | |||||||||
Dilutive Weighted-Average Shares Outstanding | 67,653,475 | 66,603,120 | 65,247,758 | |||||||||
Add: Participating Class B Units(3) | 144,049 | 156,720 | 243,515 | |||||||||
Total Dilutive Weighted-Average Shares Outstanding | 67,797,524 | 66,759,840 | 65,491,273 | |||||||||
Diluted Earnings per Share | $ | 0.53 | $ | 0.45 | $ | 0.32 | ||||||
-1 | Represents the dilutive effect of options to purchase Class B units and Class A common stock. | |||||||||||
-2 | Certain restricted shares of Class A common stock granted to employees are not entitled to dividend or dividend equivalent payments until they are vested and are therefore non-participating securities and are not included in the computation of basic earnings per share. They are included in the computation of diluted earnings per share when the effect is dilutive using the treasury stock method. | |||||||||||
-3 | Unvested Class B Units granted to employees have nonforfeitable rights to dividends and therefore participate fully in the results of the operating company's operations from the date they are granted. They are included in the computation of diluted earnings per share using the two-class method for participating securities. | |||||||||||
Approximately 0.7 million options to purchase Class B units were excluded from the calculation of diluted earnings per share for the year ended December 31, 2014, as their inclusion would have had an antidilutive effect based on current market prices. Approximately 1.2 million options to purchase Class B units and 1.0 million options to purchase Class A common stock, and 1.6 million options to purchase Class B units and 1.0 million options to purchase Class A common stock were excluded from the calculations for the years end December 31, 2013 and 2012, respectively, as their inclusion would have had an antidilutive effect for the respective periods based on market prices. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Shareholders' Equity | Shareholders’ Equity | ||||||||||||
The Company functions as the sole managing member of the operating company. As a result, the Company: (i) consolidates the financial results of the operating company and reflects the membership interest in it that it does not own as a non-controlling interest in its consolidated financial statements; and (ii) recognizes income generated from its economic interest in the operating company’s net income. Class A and Class B units of the operating company have the same economic rights per unit. As of December 31, 2014, the holders of Class A common stock (through the Company) and the holders of Class B units of the operating company held approximately 19.8% and 80.2%, respectively, of the economic interests in the operations of the business. As of December 31, 2013, the holders of Class A common stock (through the Company) and the holders of Class B units of the operating company held approximately 18.7% and 81.3%, respectively, of the economic interests in the operations of the business. | |||||||||||||
Each Class B unit of the operating company has a corresponding share of the Company’s Class B common stock, par value $0.000001 per share. Each share of the Company’s Class B common stock entitles its holder to five votes, until the first time that the number of shares of Class B common stock outstanding constitutes less than 20% of the number of all shares of the Company’s common stock outstanding. From this time and thereafter, each share of the Company’s Class B common stock entitles its holder to one vote. When a Class B unit is exchanged for a share of the Company’s Class A common stock or forfeited, a corresponding share of the Company’s Class B common stock will automatically be redeemed and canceled. Conversely, to the extent that the Company causes the operating company to issue additional Class B units to employees pursuant to its equity incentive plan, these additional holders of Class B units would be entitled to receive a corresponding number of shares of the Company’s Class B common stock (including if the Class B units awarded are subject to vesting). | |||||||||||||
All holders of the Company’s Class B common stock have entered into a stockholders’ agreement, pursuant to which they agreed to vote all shares of Class B common stock then held by them, and acquired in the future, together on all matters submitted to a vote of the common stockholders. | |||||||||||||
The outstanding shares of the Company’s Class A common stock represent 100% of the rights of the holders of all classes of the Company’s capital stock to receive distributions, except that holders of Class B common stock will have the right to receive the class’s par value upon the Company’s liquidation, dissolution or winding up. | |||||||||||||
Pursuant to the operating agreement of the operating company, each vested Class B unit is exchangeable for a share of the Company’s Class A common stock, subject to certain exchange timing and volume limitations. | |||||||||||||
On July 31, 2014, March 20, 2013, and August 31, 2012, certain of the operating company’s members exchanged an aggregate of 1,150,060, 1,328,334, and 722,521, respectively, of their Class B units for an equivalent number of shares of Class A common stock of the Company. These acquisitions of additional operating company membership interests were treated as reorganizations of entities under common control as required by the Business Combinations Topic of the FASB ASC. | |||||||||||||
The incremental assets and liabilities assumed in the exchanges were recorded on July 31, 2014, March 20, 2013, and August 31, 2012 as follows: | |||||||||||||
July 31, | March 20, | August 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Pzena Investment Management, LLC Members' Capital | $ | 16,142 | $ | 18,781 | $ | 10,006 | |||||||
Pzena Investment Management, LLC Accumulated Deficit | (15,284 | ) | (18,100 | ) | (9,651 | ) | |||||||
Realizable Deferred Tax Asset | 1,272 | 795 | 278 | ||||||||||
Net Tax Receivable Liability to Converting Unitholders | (1,081 | ) | (677 | ) | (242 | ) | |||||||
Total | $ | 1,049 | $ | 799 | $ | 391 | |||||||
Common Stock, at Par | $ | 11 | $ | 13 | $ | 7 | |||||||
Additional Paid-in Capital | 1,038 | 786 | 384 | ||||||||||
Total | $ | 1,049 | $ | 799 | $ | 391 | |||||||
The Company announced a share repurchase program on April 24, 2012. The Board of Directors authorized the Company to repurchase an aggregate of $10 million of the Company’s outstanding Class A common stock and the operating company’s Class B units on the open market and in private transactions in accordance with applicable securities laws. On February 5, 2014, the Board of Directors authorized the Company to repurchase an additional $20 million of the Company's outstanding Class A common stock and Class B units of the operating company. The timing, number and value of common shares and units repurchased are subject to the Company’s discretion. The Company’s share repurchase program is not subject to an expiration date and may be suspended, discontinued, or modified at any time, for any reason. | |||||||||||||
During the year ended December 31, 2014, the Company purchased and retired 360,279 shares of Class A common stock and 89,503 Class B units at an average price per share of $9.70 and $10.07, respectively. The Company records the repurchase of shares and units at cost based on the trade date of the transaction. During the year ended December 31, 2013, the Company purchased and retired 383,450 shares of Class A common stock and 356,843 Class B units under the current repurchase authorization at an average price per share of $6.29 and $10.44, respectively. During the year ended December 31, 2012, the Company purchased and retired 147,669 shares of Class A common stock and 36,158 Class B units at an average price per share of $5.05 and $5.25, respectively. The Company records the repurchase of shares and units at cost based on the trade date of the transaction. |
NonControlling_Interests
Non-Controlling Interests | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||
Non-Controlling Interests | Non-Controlling Interests | |||||||||||
Non-Controlling Interests in the operations of the Company’s operating company and consolidated subsidiaries are comprised of the following: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Non-Controlling Interests of Pzena Investment Management, LLC | $ | 47,026 | $ | 40,533 | $ | 29,711 | ||||||
Non-Controlling Interests of Consolidated Subsidiaries | (92 | ) | 1,235 | 854 | ||||||||
Non-Controlling Interests | $ | 46,934 | $ | 41,768 | $ | 30,565 | ||||||
Distributions to non-controlling interests represent tax allocations and dividend equivalents paid to the members of the operating company, as well as redemptions by investors in the Company’s consolidated subsidiaries. |
Investments_at_Fair_Value
Investments, at Fair Value | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||
Investments, at Fair Value | Investments, at Fair Value | |||||||||||
Investments, at Fair Value consisted of the following at December 31, 2014: | ||||||||||||
Cost | Unrealized Gain/(Loss) | Fair Value | ||||||||||
(in thousands) | ||||||||||||
Equity Securities | $ | 23,789 | $ | (753 | ) | $ | 23,036 | |||||
Investments in Mutual Funds | 3,820 | 1,089 | 4,909 | |||||||||
Total | $ | 27,609 | $ | 336 | $ | 27,945 | ||||||
Securities Sold Short, at Fair Value consisted of the following at December 31, 2014: | ||||||||||||
Cost | Unrealized (Gain)/Loss | Fair Value | ||||||||||
(in thousands) | ||||||||||||
Securities Sold Short | 1,496 | 76 | 1,572 | |||||||||
Total | $ | 1,496 | $ | 76 | $ | 1,572 | ||||||
Investments, at Fair Value consisted of the following at December 31, 2013: | ||||||||||||
Cost | Unrealized Gain/(Loss) | Fair Value | ||||||||||
(in thousands) | ||||||||||||
Equity Securities | $ | 1,732 | $ | 632 | $ | 2,364 | ||||||
Investments in Mutual Funds | 4,043 | 1,214 | 5,257 | |||||||||
Total | $ | 5,775 | $ | 1,846 | $ | 7,621 | ||||||
The Company held no Securities Sold Short, at Fair Value at December 31, 2013. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and Equipment | Property and Equipment | |||||||
Property and equipment, net, is comprised of the following: | ||||||||
As of | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Leasehold Improvements | $ | 3,206 | $ | 1,219 | ||||
Computer Hardware | 1,228 | 1,141 | ||||||
Furniture and Fixtures | 786 | 786 | ||||||
Office Equipment | 279 | 256 | ||||||
Computer Software | 345 | 283 | ||||||
Total | 5,844 | 3,685 | ||||||
Less: Accumulated Depreciation and Amortization | (3,072 | ) | (2,850 | ) | ||||
Total | $ | 2,772 | $ | 835 | ||||
For the year ended December 31, 2014, the Company capitalized approximately $2.0 million for leasehold improvements related to its new corporate headquarters that it intends to depreciate when completed and put into service. | ||||||||
Depreciation is included in general and administrative expense and totaled $0.2 million for each of the years ended December 31, 2014, 2013, and 2012, respectively. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions |
For the years ended December 31, 2014, 2013, and 2012, the Company earned $2.8 million, $1.4 million, and $1.5 million, respectively, in investment advisory fees from unconsolidated VIEs which receive investment management services from the Company. The Company is not the primary beneficiary of these VIEs. | |
At December 31, 2014 and 2013, the Company had approximately $0.1 million remaining of advances to an international investment company for organization and start-up costs, which are included in Receivable from Related Parties on the consolidated statements of financial condition. The Company is the sponsor and investment manager of this entity. | |
At December 31, 2013 and 2012, other liabilities included approximately $0.1 million of payables to employee members. There were no such payables at December 31, 2014. | |
At December 31, 2013 and 2012, receivables from related parties included approximately $0.1 million of loans to employees. There were no such receivables at December 31, 2014. | |
The operating company, as the investment manager of the three mutual funds, Pzena Emerging Markets Focused Value Fund, Pzena Long/Short Value Fund, and Pzena Mid Cap Focused Value Fund, has contractually agreed to waive a portion or all of its management fees and pay fund expenses to ensure that the annual operating expenses of the funds stay below certain established total expense ratio thresholds. For the year ended December 31, 2014, the Company recognized $0.6 million of such expenses. No such expenses were recognized during the years ended December 31, 2013 and 2012 as the funds did not exist during these periods. | |
The operating company manages the personal funds of certain of the Company’s employees, including the CEO, its two Presidents, and its Executive Vice President. The operating company also manages accounts beneficially owned by a private fund in which certain of the Company’s executive officers invest. Investments by employees in individual accounts are permitted only at the discretion of the executive committee of the operating company, but are generally not subject to the same minimum investment levels that are required of outside investors. The operating company also manages the personal funds of some of its employees’ family members. Pursuant to the respective investment management agreements, the operating company waives or reduces its regular advisory fees for these accounts and personal funds. In addition, the operating company pays custody and administrative fees for certain of these accounts and personal funds in order to incubate products or preserve performance history. The aggregate value of the fees that the Company waived related to the Company’s executive officers, other employees, and family members, was approximately $0.7 million, $0.6 million, and $0.4 million in 2014, 2013, and 2012, respectively. The aggregate value of the custody and administrative fees paid related to the Company’s executive offers, other employees, and family members was less than $0.1 million in 2014, and approximately $0.1 million in 2013 and 2012, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | Commitments and Contingencies | ||||
In the normal course of business, the Company enters into agreements that include indemnities in favor of third parties, such as engagement letters with advisors and consultants. In certain cases, the Company may have recourse against third parties with respect to these indemnities. The Company maintains insurance policies that may provide coverage against certain claims under these indemnities. The Company has had no claims or payments pursuant to these agreements, and it believes the likelihood of a claim being made is remote. Utilizing the methodology in the Guarantees Topic of the FASB ASC, the Company’s estimate of the value of such guarantees is de minimis, and, therefore, no accrual has been made in the consolidated financial statements. | |||||
The Company leases office space under a non-cancelable operating lease agreement which expires on October 31, 2015. The Company reflects minimum lease expense for its headquarters on a straight-line basis over the lease term. During the year ended December 31, 2011, the Company entered into a noncancelable sublease agreement for certain excess office space associated with its operating lease agreement. The sublease agreement also expires on October 31, 2015. | |||||
During the year ended December 31, 2014, the Company entered into an operating lease agreement for its new corporate headquarters. The term of the lease commenced in October 2014. The Company plans to move to its new corporate headquarters during the first half of 2015. During the year ended December 31, 2014, the Company recognized $0.4 million in lease expenses associated with its new corporate headquarters. | |||||
Lease expenses for the years ended December 31, 2014, 2013, and 2012 were $2.0 million, $1.5 million, and $1.4 million, respectively, and are included in general and administrative expense. Sublease income for the years ended December 31, 2014, 2013, and 2012 was $0.4 million, $0.4 million, $0.2 million. Future minimum lease payments are as follows: | |||||
Year Ending December 31, | Minimum | ||||
Payments(1) | |||||
(in thousands) | |||||
2015 | 3,728 | ||||
2016 | 1,979 | ||||
2017 | 1,979 | ||||
2018 | 1,979 | ||||
2019 | 1,979 | ||||
2020 and thereafter | 11,876 | ||||
Total | $ | 23,520 | |||
(1) Amounts have not been reduced by future minimum sublease payments of $0.3 million due under noncancelable sublease agreements. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||
The operating company is a limited liability company that has elected to be treated as a partnership for tax purposes. Neither it nor the Company’s other consolidated subsidiaries have made a provision for federal or state income taxes because it is the individual responsibility of each of these entities’ members (including the Company) to separately report their proportionate share of the respective entity’s taxable income or loss. The operating company has made a provision for New York City UBT. The Company, as a “C” corporation under the Internal Revenue Code, is liable for federal, state and local taxes on the income derived from its economic interest in its operating company, which is net of UBT. Correspondingly, in its consolidated financial statements, the Company reports both the operating company’s provision for UBT, as well as its provision for federal, state and local corporate taxes. | |||||||||||||||||||||
The components of the income tax expense are as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Current Provision: | |||||||||||||||||||||
Unincorporated Business Taxes(1) | $ | 2,938 | $ | 2,438 | $ | 2,440 | |||||||||||||||
Local Corporate Tax | — | — | — | ||||||||||||||||||
State Corporate Tax | — | — | — | ||||||||||||||||||
Federal Corporate Tax | — | — | — | ||||||||||||||||||
Total Current Provision | $ | 2,938 | $ | 2,438 | $ | 2,440 | |||||||||||||||
Deferred Provision: | |||||||||||||||||||||
Unincorporated Business Taxes(1) | $ | 15 | $ | (4 | ) | $ | (21 | ) | |||||||||||||
Local Corporate Tax | 391 | 405 | 289 | ||||||||||||||||||
State Corporate Tax | 731 | 714 | 510 | ||||||||||||||||||
Federal Corporate Tax | 3,087 | 2,892 | 1,761 | ||||||||||||||||||
Total Deferred Provision | $ | 4,224 | $ | 4,007 | $ | 2,539 | |||||||||||||||
Change in Valuation Allowance | (6,174 | ) | (6,142 | ) | (3,068 | ) | |||||||||||||||
Net Adjustment to Deferred Tax Asset(2) | $ | 895 | $ | 286 | $ | — | |||||||||||||||
Total Income Tax Expense | $ | 1,883 | $ | 589 | $ | 1,911 | |||||||||||||||
(1) During the year ended December 31, 2013, the operating company recognized a $0.6 million tax benefit associated with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||||||||||||||||||
(2) During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
A reconciliation between the provision for income taxes reported for financial reporting purposes, and the application of the statutory U.S. Federal, state, and local tax rates to the reported income before income taxes for the years ended December 31, 2014, 2013, and 2012, were as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Amount | % of Pretax | Amount | % of Pretax | Amount | % of Pretax | ||||||||||||||||
Income | Income | Income | |||||||||||||||||||
(in thousands, except % amounts) | |||||||||||||||||||||
Federal Corporate Tax | $ | 19,352 | 34 | % | $ | 16,669 | 34 | % | $ | 12,347 | 34 | % | |||||||||
State and Local Corporate Tax, net of Federal Benefit | 4,178 | 7.3 | % | 3,775 | 7.7 | % | 3,214 | 8.9 | % | ||||||||||||
Unincorporated Business Tax(1) | 1,732 | 3.1 | % | 1,741 | 3.6 | % | 1,382 | 3.8 | % | ||||||||||||
Non-Controlling Interests | (19,403 | ) | (34.1 | )% | (17,417 | ) | (35.5 | )% | (13,097 | ) | (36.1 | )% | |||||||||
Increase/(Decrease) in Liability to Selling and Converting Shareholders | 1,417 | 2.5 | % | 1,519 | 3.1 | % | 900 | 2.5 | % | ||||||||||||
Deferred Income Tax Valuation Allowance | (6,174 | ) | (10.9 | )% | (6,142 | ) | (12.5 | )% | (3,068 | ) | (8.4 | )% | |||||||||
Operating Loss Carryforward | (625 | ) | (1.1 | )% | — | — | % | — | — | % | |||||||||||
Net Adjustment to Deferred Tax Asset (2) | 895 | 1.6 | % | 286 | 0.6 | % | — | — | % | ||||||||||||
Other | 511 | 0.9 | % | 158 | 0.2 | % | 233 | 0.6 | % | ||||||||||||
Income Tax Expense | $ | 1,883 | 3.3 | % | $ | 589 | 1.2 | % | $ | 1,911 | 5.3 | % | |||||||||
(1) During the year ended December 31, 2013, the operating company recognized a $0.6 million tax benefit associated with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||||||||||||||||||
(2) During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
The Income Taxes Topic of the FASB ASC establishes the minimum threshold for recognizing, and a system for measuring, the benefits of tax return positions in financial statements. | |||||||||||||||||||||
A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the years ended December 31, 2014 and 2013 is as follows. No unrecognized tax benefits were recognized during the year ended December 31, 2012. | |||||||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 409 | |||||||||||||||||||
Increases Related to Prior Year Tax Positions | — | ||||||||||||||||||||
Increases Related to Current Year Tax Positions | 691 | ||||||||||||||||||||
Balance at December 31, 2014 | $ | 1,100 | |||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||
Increases Related to Prior Year Tax Positions | 188 | ||||||||||||||||||||
Increases Related to Current Year Tax Positions | 221 | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 409 | |||||||||||||||||||
As of December 31, 2014 and 2013, the Company had available for U.S. federal income tax reporting purposes, a net operating loss carryforward of $9.5 million and $10.4 million, respectively, which expires in varying amounts during the tax years 2027 through 2033. | |||||||||||||||||||||
As of December 31, 2014, included in net operating losses are approximately $0.6 million of deductions for excess stock- and unit- based transactions. The $0.2 million of tax benefit associated with these deductions will be credited to Additional-Paid-In-Capital when such deductions reduce taxes payable. Although these net operating losses are included in the total carryforward amount, they are not reflected in the table of deferred tax assets as the excess tax benefits are not yet realized. | |||||||||||||||||||||
As of December 31, 2013, included in net operating losses are approximately $1.0 million of deductions for excess stock- and unit- based transactions. The $0.4 million of tax benefit associated with these deductions will be credited to Additional-Paid-In-Capital when such deductions reduce taxes payable. Although these net operating losses are included in the total carryforward amount, they are not reflected in the table of deferred tax assets as the excess tax benefits are not yet realized. | |||||||||||||||||||||
The Company and the operating company are generally no longer subject to U.S. Federal or state and local income tax examinations by tax authorities for any year prior to 2009. All tax years subsequent to, and including, 2009 are considered open and subject to examination by tax authorities. During 2013, the Company extended the examination statute of limitations for the 2009 tax year in association with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||||||||||||||||||
The acquisition of the Class B units of the operating company, noted below, has allowed the Company to make an election under Section 754 of the Internal Revenue Code (“Section 754”) to step up its tax basis in the net assets acquired. This step up is deductible for tax purposes over a 15-year period. Based on the net proceeds of the initial public offering and tax basis of the operating company, this election gave rise to an initial deferred tax asset of approximately $68.7 million. | |||||||||||||||||||||
Pursuant to a tax receivable agreement signed between the members of the operating company and the Company, 85% of the cash savings generated by this election will be distributed to the selling and converting shareholders upon the realization of this benefit. | |||||||||||||||||||||
If the Company exercises its right to terminate the tax receivable agreement early, the Company will be obligated to make an early termination payment to the selling and converting shareholders, based upon the net present value (based upon certain assumptions and deemed events set forth in the tax receivable agreement) of all payments that would be required to be paid by the Company under the tax receivable agreement. If certain change of control events were to occur, the Company would be obligated to make an early termination payment. | |||||||||||||||||||||
As discussed in Note 6, Shareholders’ Equity, on July 31, 2014, March 20, 2013, and August 31, 2012, certain of the operating company’s members exchanged an aggregate of 1,150,060, 1,328,334, and 722,521, respectively, of their Class B units for an equivalent number of shares of Class A common stock of the Company. The Company elected to step up its tax basis in the incremental assets acquired in accordance with Section 754. Based on the exchange-date fair values of the Company’s common stock and the tax basis of the operating company, this election gave rise to a $6.0 million deferred tax asset and corresponding $5.1 million liability on July 31, 2014, a $5.9 million deferred tax asset and a corresponding $5.0 million liability on March 20, 2013, a $2.2 million deferred tax asset and a corresponding $1.9 million liability to converting shareholders on August 31, 2012. The Company assessed the realizability of the deferred tax asset associated with each of these exchanges and determined that a portion of each of their benefits would go unutilized. Consequently, the Company established a $4.7 million, a $5.1 million, and a $1.9 million valuation allowance on July 31, 2014, March 20, 2013, and August 31, 2012, respectively, to reduce the deferred tax asset to an amount more likely than not to be realized. These deferred tax assets remain available to the Company and can be used to reduce taxable income in future years. The Company similarly reduced the associated liability to selling and converting shareholders by $4.0 million, $4.4 million, and $1.6 million, at July 31, 2014, March 20, 2013, and August 31, 2012, respectively, to reflect this change in the estimated realization of these assets. As required by the Income Taxes Topic of the FASB ASC, the Company recorded the effects of these transactions in equity. | |||||||||||||||||||||
During the years ended December 31, 2014 and 2013, after giving effect to the exchanges discussed earlier, the Company’s valuation allowance was reduced by approximately $6.2 million and $6.1 million, respectively, due to revised estimates of future taxable income. To reflect this change in the estimated realization of the asset and its liability for future payments, the Company increased its liability to selling and converting shareholders by $4.2 million and $4.5 million, respectively, for the years ended December 31, 2014 and 2013. The effects of these changes to the deferred tax asset and liability to selling and converting shareholders were recorded as a component of the income tax expense and other expense, respectively, on the consolidated statements of operations. As of December 31, 2014 and 2013, the net values of all deferred tax assets were approximately $14.6 million and $12.3 million, respectively. | |||||||||||||||||||||
The change in the Company’s deferred tax assets, net of valuation allowance, for the year ended December 31, 2014 is summarized as follows: | |||||||||||||||||||||
Section 754 | Other | Valuation Allowance | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 61,628 | $ | 4,657 | $ | (53,973 | ) | $ | 12,312 | ||||||||||||
Deferred Tax (Expense)/Benefit | (4,067 | ) | 447 | — | (3,620 | ) | |||||||||||||||
Unit Exchange | 6,013 | — | (4,741 | ) | 1,272 | ||||||||||||||||
Change in Valuation Allowance | — | — | 6,174 | 6,174 | |||||||||||||||||
Operating Loss Carryforward | — | (625 | ) | — | (625 | ) | |||||||||||||||
Net Adjustment to Deferred Tax Asset(1) | (8,791 | ) | (405 | ) | 8,301 | (895 | ) | ||||||||||||||
Balance at December 31, 2014 | $ | 54,783 | $ | 4,074 | $ | (44,239 | ) | $ | 14,618 | ||||||||||||
(1) During 2014, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
The change in the Company’s deferred tax liabilities, which is included in other liabilities on the Company’s consolidated statements of financial condition, for the year ended December 31, 2014, is summarized as follows: | |||||||||||||||||||||
Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2013 | $ | (39 | ) | ||||||||||||||||||
Deferred Tax Expense | 21 | ||||||||||||||||||||
Balance at December 31, 2014 | $ | (18 | ) | ||||||||||||||||||
The change in the Company’s deferred tax assets, net of valuation allowance, for the year ended December 31, 2013 is summarized as follows: | |||||||||||||||||||||
Section 754 | Other | Valuation Allowance | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2012 | $ | 65,069 | $ | 4,536 | $ | (59,917 | ) | $ | 9,688 | ||||||||||||
Deferred Tax (Expense)/Benefit | (3,788 | ) | (239 | ) | — | (4,027 | ) | ||||||||||||||
Unit Exchange | 5,935 | — | (5,140 | ) | 795 | ||||||||||||||||
Change in Valuation Allowance | — | — | 6,142 | 6,142 | |||||||||||||||||
Net Adjustment to Deferred Tax Asset(1) | $ | (5,588 | ) | $ | 360 | $ | 4,942 | $ | (286 | ) | |||||||||||
Balance at December 31, 2013 | $ | 61,628 | $ | 4,657 | $ | (53,973 | ) | $ | 12,312 | ||||||||||||
(1) During 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
The change in the Company’s deferred tax liabilities for the year ended December 31, 2013 is summarized as follows: | |||||||||||||||||||||
Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2012 | $ | (59 | ) | ||||||||||||||||||
Deferred Tax Expense | 20 | ||||||||||||||||||||
Balance at December 31, 2013 | $ | (39 | ) | ||||||||||||||||||
As of December 31, 2014 and 2013, the net values of the liability to selling and converting shareholders were approximately $15.4 million and $12.8 million, respectively. The change in the Company’s liability to selling and converting shareholders for the years ended December 31, 2014 and 2013, is summarized as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning Balance | $ | 12,777 | $ | 9,656 | |||||||||||||||||
Change in Liability | 4,168 | 4,468 | |||||||||||||||||||
Unit Conversion | 1,081 | 677 | |||||||||||||||||||
Tax Receivable Agreement Payments | (2,668 | ) | (2,024 | ) | |||||||||||||||||
Ending Balance | $ | 15,358 | $ | 12,777 | |||||||||||||||||
Quarterly_Results_of_Operation
Quarterly Results of Operations (unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) | |||||||||||||||
Unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 are summarized below: | ||||||||||||||||
For the Quarter Ended 2014 | ||||||||||||||||
Dec. 31 | Sept. 30 | 30-Jun | 31-Mar | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Total Revenue | $ | 28,560 | $ | 29,605 | $ | 27,945 | $ | 26,401 | ||||||||
Operating Income | 14,749 | 16,632 | 15,541 | 14,031 | ||||||||||||
Net Income | $ | 2,469 | $ | 2,059 | $ | 2,124 | $ | 1,448 | ||||||||
Basic Earnings Per Share | $ | 0.19 | $ | 0.16 | $ | 0.17 | $ | 0.12 | ||||||||
Diluted Earnings Per Share | $ | 0.14 | $ | 0.14 | $ | 0.13 | $ | 0.11 | ||||||||
For the Quarter Ended 2013 | ||||||||||||||||
Dec. 31 | Sept. 30 | 30-Jun | 31-Mar | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Total Revenue | $ | 28,749 | $ | 24,046 | $ | 22,132 | $ | 20,842 | ||||||||
Operating Income | 17,197 | 12,951 | 11,275 | 9,425 | ||||||||||||
Net Income | $ | 2,279 | $ | 1,956 | $ | 1,266 | $ | 1,169 | ||||||||
Basic Earnings Per Share | $ | 0.19 | $ | 0.16 | $ | 0.1 | $ | 0.1 | ||||||||
Diluted Earnings Per Share | $ | 0.15 | $ | 0.12 | $ | 0.1 | $ | 0.09 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
The Company evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. | |
On February 10, 2015, the Company declared a year-end dividend of $0.32 per share of its Class A common stock which was paid on March 5, 2015 to holders of record on February 20, 2015. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation: | Basis of Presentation: |
The consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and related Securities and Exchange Commission (“SEC”) rules and regulations. The Company’s policy is to consolidate all majority-owned subsidiaries in which it has a controlling financial interest. Certain investment vehicles the operating company sponsors for which it is the investment advisor, are considered to be variable-interest entities (“VIEs”). The Company consolidates VIEs where the Company is deemed to be the primary beneficiary. The majority-owned subsidiaries in which the Company has a controlling financial interest and the VIEs for which the Company is deemed to be the primary beneficiary are collectively referred to as “consolidated subsidiaries.” Non-controlling interests recorded on the consolidated financial statements of the Company include the non-controlling interests of the outside investors in each of these entities, as well as those of the operating company. All significant inter-company transactions and balances have been eliminated in consolidation. | |
On March 31, 2014, the operating company launched the Pzena Mid Cap Focused Value Fund, Pzena Long/Short Value Fund, and Pzena Emerging Markets Focused Value Fund, for each of which it acts as the investment advisor. These funds meet the definition of VIE due to the fund's series trust structure. The shareholders of individual funds lack the ability to make decisions regarding the trustees and the key activities of the fund, because those abilities reside at the trust level. For purposes of consolidation, the Company believes it is the primary beneficiary when it, along with it's related parties and de-facto agents, owns a majority of the fund shares because the majority of the variability of the funds accrues to the Company. On March 31, 2014, the Company provided the initial cash investment for each fund in an effort to generate an investment performance track record to attract third-party investors and had an initial investment representing 100% of the ownership in each entity. As a result, the entities were consolidated with the Company as of March 31, 2014. On August 5, 2014, due to additional subscriptions into the Pzena Emerging Markets Focused Value Fund, the Company's ownership decreased to 42.9% and the entity was deconsolidated. However, as of December 19, 2014, as a result of a shift in equity ownership on that date, the Company was considered the primary beneficiary of the fund and the entity was reconsolidated. During the period when the Company was not considered the primary beneficiary of the Pzena Emerging Markets Focused Value Fund, it removed the related assets, liabilities and non-controlling interest from it's consolidated statement of financial condition, the related net investment income from its consolidated statement of operations, and classified the remaining investment as an equity method investment. The Pzena Emerging Markets Focused Value Fund, Pzena Mid Cap Focused Value Fund and Pzena Long/Short Value Fund will continue to be consolidated to the extent the Company has a majority ownership interest in them. At December 31, 2014, the aggregate of these funds' $19.3 million in net assets were included in the Company's consolidated statement of financial condition. | |
Pzena Large Cap Value Fund is a Massachusetts Trust in which a majority of the trustees are members of the executive committee of the operating company. A majority of the trustees do not hold equity investments in this trust. Since the holders of the equity investments in this partnership lack a controlling financial interest in it, this entity is deemed to be a VIE. The Company is considered the primary beneficiary of this VIE. At December 31, 2014, the Pzena Large Cap Value Fund’s $1.2 million in net assets were included in the Company’s consolidated statements of financial condition. | |
The operating company is the managing member of Pzena International Value Service. The operating company is considered the primary beneficiary of this entity. As a result, the entity was consolidated as of February 1, 2011. At December 31, 2014, Pzena International Value Service’s $2.1 million in net assets were included in the Company’s consolidated statements of financial condition. | |
All of the consolidated subsidiaries are investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide for Investment Companies. The Company has retained the specialized accounting for these partnerships pursuant to the Consolidation of Partnerships and Similar Entities Subtopic of the FASB ASC. Thus, the Company reports these investment partnerships’ investments in Investments, with net realized and unrealized gains and losses reported in (losses)/gains and other investment income in the consolidated statements of operations. | |
VIEs that are not consolidated continue to receive investment management services from the Company, and are vehicles through which the Company offers its Global Value and/or International (ex-U.S.) Value strategies. The total net assets of these VIEs was approximately $408.9 million and $244.2 million at December 31, 2014 and December 31, 2013, respectively. Neither the Company nor the operating company were exposed to losses as a result of its involvement with these entities because neither had a direct investment in them. | |
The Company records in its own equity its pro-rata share of transactions that impact the operating company’s net equity, including unit and option issuances, repurchases, and retirements. The operating company’s pro-rata share of such transactions are recorded as adjustments to additional paid-in capital or non-controlling interests, as applicable, on the consolidated statements of financial position. | |
Management's Use of Estimates: | Management’s Use of Estimates: |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the period. Actual results could differ from those estimates. | |
Fair Values of Financial Instruments: | Fair Values of Financial Instruments: |
The carrying amounts of all financial instruments in the consolidated statements of financial condition are presented at their fair value. | |
Revenue Recognition: | Revenue Recognition: |
Revenue, comprised of advisory fee income, is recognized over the period in which advisory services are provided. Advisory fee income includes management fees that are calculated based on percentages of assets under management (“AUM”), generally billed quarterly, either in arrears or advance, depending on their contractual terms. Advisory fee income also includes performance fees that may be earned by the Company depending on the investment return of the assets under management. Performance fee arrangements generally entitle the Company to participate, on a fixed-percentage basis, in any returns generated in excess of an agreed-upon benchmark. The Company’s participation percentage in such return differentials is then multiplied by AUM to determine the performance fees earned. In general, returns are calculated on an annualized basis over the contract’s measurement period, which usually extends to three years. Performance fees are generally payable annually. Following the preferred method identified in the Revenue Recognition Topic of the FASB ASC, such performance fee income is recorded at the conclusion of the contractual performance period, when all contingencies are resolved. For the years ended December 31, 2014, 2013, and 2012, the Company recognized approximately $3.8 million, $3.9 million and $0.3 million, respectively, in performance fee income. | |
Cash and Cash Equivalents: | Cash and Cash Equivalents: |
At December 31, 2014 and 2013, cash and cash equivalents was $39.1 million and $33.9 million, respectively. The Company considers all money market funds and highly-liquid debt instruments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company maintains its cash in bank deposit and other accounts whose balances often exceed federally insured limits. | |
Interest on cash and cash equivalents is recorded as interest income on an accrual basis in the consolidated statements of operations. | |
Restricted Cash: | Restricted Cash: |
The Company maintained compensating balances of $2.8 million and $0.3 million at December 31, 2014, and 2013, respectively. The Company holds letters of credit issued by a third party in lieu of cash security deposits, as required by the Company's leases for its current and future New York corporate headquarters. Such amounts are recorded in Restricted Cash in the consolidated statements of financial condition. | |
The Pzena Long/Short Value Fund is required to maintain cash collateral for margin accounts established to support securities sold short, not yet purchased. To satisfy this requirement, as of December 31, 2014, $1.5 million was set aside and recorded in Restricted Cash in the consolidated statements of financial condition. | |
Due to/from Broker: | Due to/from Broker: |
Due to/from Broker consists primarily of amounts payable/receivable for unsettled securities transactions held/initiated at the clearing brokers of the Company’s consolidated subsidiaries. | |
Fair Value Measurements: | Investments: |
Investment Securities, trading | |
Investment securities classified as trading securities consist of investments held by the Company and its consolidated subsidiaries, as well as investments in third-party mutual funds. The Company’s investments in third-party mutual funds are held to satisfy the Company’s obligations under its deferred compensation program. Dividends associated with the investments of the Company’s consolidated subsidiaries are recorded as dividend income on an ex-dividend basis in the consolidated statement of operations. | |
Securities Sold Short represents securities sold short, not yet purchased by the Pzena Long/Short Value Fund, which is consolidated with the Company's financial statements. Dividend expense associated with these investments is reflected in Other Expense on an ex-dividend basis in the consolidated statement of operations. | |
All such investments are recorded at fair value, with net realized and unrealized gains and losses reported in earnings. Net realized and unrealized gains and losses are a component of (Losses)/ Gains and Other Investment Income in the consolidated statements of operations. | |
Investments in equity method investees | |
Investments in non-controlled affiliates in which the Company's ownership ranges from 20 to 50 percent are accounted for under the equity method of accounting. Under the equity method of accounting, the Company's share of the investee's underlying net income or loss is recorded as equity in the earnings of affiliates and reflected as a component of (Losses)/ Gains and Other Investment Income in the consolidated statements of operations. The carrying value of equity method investments is measured based on the funds' net asset values. As of December 31, 2014, we held no investments under the equity method of accounting. | |
Fair Value Measurements: | |
The Fair Value Measurements and Disclosures Topic of the FASB ASC defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The Fair Value Measurements and Disclosures Topic of the FASB ASC also establishes a framework for measuring fair value and a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels: (i) valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets (Level 1); (ii) valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured (Level 2); and (iii) valuation inputs are unobservable and significant to the fair value measurement (Level 3). | |
The Company’s investments relate to its consolidated investments in equity securities and securities sold short, both of which are exchange-traded securities with quoted prices in active markets, its investments in third-party mutual funds, which have a readily available net asset value per share, and its investments in equity method investees. The fair value measurements of the equity securities, securities sold short, and investments in mutual funds have been classified as Level 1. | |
Securities Valuation: | Securities Valuation: |
Investments in equity securities and securities sold short for which market quotations are available are valued at the last reported price or closing price on the primary market or exchange on which they trade. If no reported equity sales occurred on the valuation date, equity investments are valued at the bid price. Investments in third-party mutual funds are valued at the closing net asset value per share of the fund on the day of valuation. Transactions are recorded on a trade date basis. | |
The net realized gain or loss on sales of securities, securities sold short, and investments in third-party mutual funds is determined on a specific identification basis and is included in (Losses)/ Gains and Other Investment Income in the consolidated statements of operations. | |
Concentrations of Credit Risk: | Concentrations of Credit Risk: |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, amounts due from brokers, and advisory fees receivable. The Company maintains its cash and cash equivalents in bank deposits and other accounts whose balances often exceed federally insured limits. | |
The concentration of credit risk with respect to advisory fees receivable is generally limited due to the short payment terms extended to clients by the Company. On a periodic basis, the Company evaluates its advisory fees receivable and establishes an allowance for doubtful accounts, if necessary, based on a history of past write-offs and collections and current credit conditions. At December 31, 2014 and 2013, no allowance for doubtful accounts has been deemed necessary. | |
Property and Equipment: | Property and Equipment: |
Property and equipment is carried at cost, less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the respective assets, which range from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvements or the remaining lease term. | |
Business Segments: | Business Segments: |
The Company views its operations as comprising one operating segment. | |
Income Taxes: | Income Taxes: |
The Company is a “C” corporation under the Internal Revenue Code, and is thus liable for federal, state, and local taxes on the income derived from its economic interest in its operating company. The operating company is a limited liability company that has elected to be treated as a partnership for tax purposes. It has not made a provision for federal or state income taxes because it is the individual responsibility of each of the operating company’s members (including the Company) to separately report their proportionate share of the operating company’s taxable income or loss. Similarly, the income of the Company’s consolidated subsidiaries is not subject to income taxes, since it is allocated to each partnership’s individual partners. The operating company has made a provision for New York City Unincorporated Business Tax (“UBT”). | |
Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are in accordance with applicable tax laws. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation, or the change of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate. It is also the Company’s policy to recognize accrued interest, and penalties associated with uncertain tax positions in Income Tax Expense/(Benefit) on the consolidated statement of operations. For the years ended December 31, 2014, 2013, and 2012, no such expenses were recognized. As of December 31, 2014 and 2013, no such accruals were recorded. | |
The Company and its consolidated subsidiaries account for all federal, state, and local taxation pursuant to the asset and liability method, which requires deferred income tax assets and liabilities to be recorded for temporary differences between the carrying amount and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the temporary differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more likely than not to be realized. At December 31, 2014, the Company had a $44.2 million valuation allowance against deferred tax assets recorded as part of the Company’s initial public offering and the subsequent exchanges of Class B units of the operating company for shares of its Class A common stock. At December 31, 2013, the Company had a $54.0 million valuation allowance against these deferred tax assets. The income tax expense, or benefit, is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. The Company records its deferred tax liabilities as a component of other liabilities in the consolidated statements of financial condition. | |
Excess tax benefits related to stock- and unit-transactions are not recognized until they result in a reduction of cash taxes payable. The benefit of these excess tax benefits will be recorded in equity when they reduce cash taxes payable. The Company will only recognize a tax benefit from stock- and unit-based awards in Additional Paid-In Capital if an incremental tax benefit is realized after all other tax benefits currently available have been utilized. During the year ended December 31, 2014, the Company had approximately $0.2 million in tax benefits associated with stock- and unit-based awards that it was not able to recognize. This amount is reflected as an unrecognized tax benefit. During the year ended December 31, 2013, the Company had approximately $0.4 million in tax benefits associated with stock- and unit-based awards that it was not able to recognize. There were no unrecognized tax benefits for the years ended December 31, 2012. | |
Foreign Currency: | Foreign Currency: |
Investment securities and other assets and liabilities denominated in foreign currencies are remeasured into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities, and income and expense items denominated in foreign currencies, are remeasured into U.S. dollar amounts on the respective dates of such transactions. | |
The Company does not isolate the portion of the results of its operations resulting from the impact of fluctuations in foreign exchange rates on its non-U.S. investments. Such fluctuations are included in net realized and (losses)/gains and other investment income in the consolidated statements of operations. | |
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Company’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities resulting from changes in exchange rates. | |
The functional currency of the Company is the United States Dollar. The functional currency of the Company’s representative office in Australia is the Australian Dollar. Assets and liabilities of this office are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. For the years ended December 31, 2014, 2013, and 2012, the Company did not record any accumulated other comprehensive income. | |
New Accounting Pronouncements: | ecently Issued Accounting Pronouncements Not Yet Adopted: |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." The core principle of the standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. This new guidance will be effective on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the potential impact on the consolidated statements and related disclosures, as well as the available transition methods. | |
In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis". This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2015, and requires either a retrospective approach to adoption or a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. Early adoption is permitted. The company is currently assessing the impact of this standard on its consolidated financial statements, as well as the available transition methods. |
Organization_Tables
Organization (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Summary of entities | The Company has consolidated the results of operations and financial condition of the following entities as of December 31, 2014: | |||
Legal Entity | Type of Entity (Date of Formation) | Ownership at | ||
December 31, | ||||
2014 | ||||
Pzena Investment Management, Pty | Australian Proprietary Limited Company (12/16/2009) | 100 | % | |
Pzena Financial Services, LLC | Delaware Limited Liability Company (10/15/2013) | 100 | % | |
Pzena Investment Management Special Situations, LLC | Delaware Limited Liability Company (12/01/2010) | 99.9 | % | |
Pzena Mid Cap Focused Value Fund, a series of Advisors Series Trust | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | 93.2 | % | |
Pzena Long/Short Value Fund, a series of Advisors Series Trust | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | 77.3 | % | |
Pzena Emerging Markets Focused Value Fund, a series of Advisors Series Trust | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | 12.3 | % | |
Pzena Investment Funds Trust, Pzena Large Cap Value Fund | Massachusetts Trust (11/01/2002) | 0 | % | |
Pzena International Value Service, a series of the Pzena Investment Management International, LLC | Delaware Limited Liability Company (12/22/2003) | 0 | % |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Summary of fair value assets | The following table presents these instruments’ fair value at December 31, 2014: | |||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Assets: | ||||||||||||
Equity Securities | $ | 23,036 | $ | — | $ | — | ||||||
Investments in Mutual Funds | 4,909 | — | — | |||||||||
Total Fair Value | $ | 27,945 | $ | — | $ | — | ||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Liabilities: | ||||||||||||
Securities Sold Short | 1,572 | — | — | |||||||||
Total Fair Value | $ | 1,572 | $ | — | $ | — | ||||||
The following table presents these instruments’ fair value at December 31, 2013: | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Assets: | ||||||||||||
Equity Securities | $ | 2,364 | $ | — | $ | — | ||||||
Investments in Mutual Funds | 5,257 | — | — | |||||||||
Total Fair Value | $ | 7,621 | $ | — | $ | — | ||||||
Compensation_and_Benefits_Tabl
Compensation and Benefits (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Summary of compensation and benefits expense to employees and members | Compensation and benefits expense to employees and members is comprised of the following: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Cash Compensation and Other Benefits | $ | 32,396 | $ | 31,374 | $ | 28,690 | |||||||||||||||
Non-Cash Compensation | 8,877 | 5,448 | 3,065 | ||||||||||||||||||
Total Compensation and Benefits Expense | $ | 41,273 | $ | 36,822 | $ | 31,755 | |||||||||||||||
Schedule of share based compensation activity | All non-cash compensation awards granted have varying vesting schedules and are issued at prices equal to the assessed fair market value at the time of issuance, as discussed below. Details of awards of Class B units of the operating company, Delayed Exchange Class B Units, options to purchase Class B units of the operating company, restricted shares of Class A common stock, and phantom Class B units of the operating company awarded for the three years ended December 31, 2014 are as follows: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Amount | Fair Value(1) | Amount | Fair Value(1) | Amount | Fair Value(1) | ||||||||||||||||
Phantom Class B Units (2) | 102,110 | $ | 7.62 | 805,879 | $ | 8.5 | 4,103,896 | $ | 3.85 | ||||||||||||
Class B Units | 32,479 | $ | 11.76 | 82,491 | $ | 9.17 | 124,718 | $ | 4.85 | ||||||||||||
Delayed Exchange Class B Units(3) | 662,832 | $ | 5.27 | — | $ | — | — | $ | — | ||||||||||||
Deferred Compensation Phantom Class B Units | 22,959 | $ | 11.76 | 68,518 | $ | 5.4 | 80,831 | $ | 4.33 | ||||||||||||
Options to Purchase Class B Units | — | $ | — | 76,522 | $ | 3.27 | 51,625 | $ | 1.32 | ||||||||||||
Restricted Shares of Class A Common Stock | — | $ | — | 100,000 | $ | 4.41 | 44,484 | $ | 5.24 | ||||||||||||
-1 | Represents the weighted average grant date estimated fair value per share, unit, or option. | ||||||||||||||||||||
-2 | Represents phantom Class B units issued under the 2006 Equity Incentive Plan. These phantom units vest ratably over ten years and are not entitled to receive dividend or dividend equivalents until vested. | ||||||||||||||||||||
-3 | Represents Class B units issued under the 2006 Equity Incentive Plan. These units vest immediately upon grant, but may not be exchanged pursuant to the Amended and Restated Operating Agreement of the operating company until at least the seventh anniversary of the date of grant. These units are also not entitled to any benefits under the Tax Receivable Agreement between the Company and members of the operating company. | ||||||||||||||||||||
Schedule of weighted average assumptions | The fair value of options to purchase Class B units is determined by using an appropriate option pricing model on the grant date. No options were issued during the year ended December 31, 2014. For each of the three years ended December 31, the Company recognized compensation expense using the Black-Scholes option pricing model with the following weighted average assumptions: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Weighted Average Time Until Exercise | N/A | 7 years | 7 years | ||||||||||||||||||
Volatility | N/A | 42 | % | 43 | % | ||||||||||||||||
Risk-Free Rate | N/A | 2.33 | % | 1.24 | % | ||||||||||||||||
Dividend Yield | N/A | 3.31 | % | 4.96 | % | ||||||||||||||||
Summary of the option activity | The following is a summary of the option activity for the three years ended December 31, 2014: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | ||||||||||||||||
Beginning Balance | 3,793,884 | $ | 7.45 | 4,524,807 | $ | 6.88 | 5,071,227 | $ | 7.19 | ||||||||||||
Options Granted | — | — | 76,522 | 10.26 | 51,625 | 5.24 | |||||||||||||||
Options Cancelled | (270,000 | ) | 12.78 | — | — | (2,167 | ) | 8 | |||||||||||||
Options Exercised | (409,602 | ) | 6.53 | (752,445 | ) | 4.22 | (180,878 | ) | 4.22 | ||||||||||||
Options Repurchased by the Company | — | — | (55,000 | ) | 9.29 | (415,000 | ) | 11.61 | |||||||||||||
Other | — | — | — | — | — | — | |||||||||||||||
Ending Balance | 3,114,282 | $ | 7.1 | 3,793,884 | $ | 7.45 | 4,524,807 | $ | 6.88 | ||||||||||||
Schedule of exercise prices for stock options outstanding and exercisable | Exercise prices for options outstanding and exercisable as of December 31, 2014 are as follows: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Number Outstanding as of December 31, 2014 | Weighted- | Weighted Average Exercise Price | Number Exercisable as of December 31, 2014 | Weighted- | Weighted Average Exercise Price | ||||||||||||||||
Average Remaining Contractual Life | Average Remaining Contractual Life | ||||||||||||||||||||
$4.22 – $5.00 | 1,349,081 | 5 | $ | 4.41 | 1,349,081 | 5 | $ | 4.41 | |||||||||||||
$5.00 – $10.00 | 1,189,369 | 5.1 | 7.87 | 1,189,369 | 5.1 | 7.87 | |||||||||||||||
$10.00 – $15.00 | 575,832 | 3.5 | 11.85 | 532,195 | 3.1 | 11.98 | |||||||||||||||
$4.22 – $15.00 | 3,114,282 | 4.8 | $ | 7.1 | 3,070,645 | 4.7 | $ | 7.06 | |||||||||||||
Schedule of aggregate intrinsic value | Based on the closing market price of the Company’s Class A common stock on December 31, 2014, the aggregate intrinsic value of the Company’s options was as follows: | ||||||||||||||||||||
Options | Options | ||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Aggregate Intrinsic Value | $ | 8,714 | $ | 8,714 | |||||||||||||||||
Summary of Phantom Class B Units that vest ratably | Phantom Class B units issued pursuant to the Bonus Plan, which generally vest ratably over four years, are summarized as follows: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | ||||||||||||||||
Beginning Balance | 109,665 | $ | 5.32 | 106,340 | $ | 5.69 | 73,570 | $ | 7.53 | ||||||||||||
Phantom Class B Units Issued | 22,959 | 11.76 | 68,518 | 5.4 | 80,831 | 4.33 | |||||||||||||||
Vesting of Phantom Class B Units | (54,984 | ) | 6.09 | (65,193 | ) | 6 | (48,061 | ) | 6.22 | ||||||||||||
Phantom Class B Units Forfeited | (5,952 | ) | 7.35 | — | — | — | — | ||||||||||||||
Ending Balance | 71,688 | $ | 6.63 | 109,665 | $ | 5.32 | 106,340 | $ | 5.69 | ||||||||||||
Phantom Class B units issued pursuant to the 2006 Equity Incentive Plan, which generally vest ratably over 10 years and are not eligible to receive dividends or dividend equivalents until vested, are summarized as follows: | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | Phantom Units Outstanding | Weighted Average Price | ||||||||||||||||
Beginning Balance | 4,499,386 | $ | 4.68 | 4,103,896 | $ | 3.85 | — | $ | — | ||||||||||||
Phantom Class B Units Issued | 102,110 | 7.62 | 805,879 | 8.5 | 4,103,896 | 3.85 | |||||||||||||||
Vesting of Phantom Class B Units | (423,263 | ) | 4.83 | (410,389 | ) | 3.85 | — | — | |||||||||||||
Phantom Class B Units Forfeited | (701,299 | ) | 3.85 | — | — | — | — | ||||||||||||||
Ending Balance | 3,476,934 | $ | 4.92 | 4,499,386 | $ | 4.68 | 4,103,896 | $ | 3.85 | ||||||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Summary of basic earnings per share | For the years ended December 31, 2014, 2013, and 2012, the Company’s basic earnings per share was determined as follows: | |||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands, except share and per share amounts) | ||||||||||||
Net Income for Basic Earnings per Share | $ | 8,100 | $ | 6,670 | $ | 3,840 | ||||||
Basic Weighted-Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||||||||
Basic Earnings per Share | $ | 0.64 | $ | 0.56 | $ | 0.36 | ||||||
Summary of diluted net income | For the years ended December 31, 2014, 2013, and 2012, the Company’s diluted net income was determined as follows: | |||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Net Income Attributable to Non-Controlling Interests of Pzena Investment Management, LLC | $ | 47,026 | $ | 40,533 | $ | 29,711 | ||||||
Less: Assumed Corporate Income Taxes | 19,441 | 16,886 | 12,730 | |||||||||
Assumed After-Tax Income of Pzena Investment Management, LLC | 27,585 | 23,647 | 16,981 | |||||||||
Net Income of Pzena Investment Management, Inc | 8,100 | 6,670 | 3,840 | |||||||||
Diluted Net Income | $ | 35,685 | $ | 30,317 | $ | 20,821 | ||||||
Summary of diluted earnings per share | For the years ended December 31, 2014, 2013, and 2012, the Company’s diluted earnings per share were determined as follows: | |||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In thousands, except share and per share amounts) | ||||||||||||
Diluted Net Income Allocated to: | ||||||||||||
Class A Common Stock | $ | 35,606 | $ | 30,244 | 20,742 | |||||||
Participating Class B Units | 79 | 73 | 79 | |||||||||
Total Diluted Net Income Attributable to Shareholders | $ | 35,685 | $ | 30,317 | $ | 20,821 | ||||||
Basic Weighted-Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||||||||
Dilutive Effect of Class B Units | 52,418,097 | 52,508,211 | 53,783,093 | |||||||||
Dilutive Effect of Options(1) | 915,893 | 690,563 | 535,629 | |||||||||
Dilutive Effect of Phantom Units | 1,648,210 | 1,383,794 | 140,397 | |||||||||
Dilutive Effect of Restricted Shares of Class A Common Stock(2) | 42,599 | 29,795 | 1,099 | |||||||||
Dilutive Weighted-Average Shares Outstanding | 67,653,475 | 66,603,120 | 65,247,758 | |||||||||
Add: Participating Class B Units(3) | 144,049 | 156,720 | 243,515 | |||||||||
Total Dilutive Weighted-Average Shares Outstanding | 67,797,524 | 66,759,840 | 65,491,273 | |||||||||
Diluted Earnings per Share | $ | 0.53 | $ | 0.45 | $ | 0.32 | ||||||
-1 | Represents the dilutive effect of options to purchase Class B units and Class A common stock. | |||||||||||
-2 | Certain restricted shares of Class A common stock granted to employees are not entitled to dividend or dividend equivalent payments until they are vested and are therefore non-participating securities and are not included in the computation of basic earnings per share. They are included in the computation of diluted earnings per share when the effect is dilutive using the treasury stock method. | |||||||||||
-3 | Unvested Class B Units granted to employees have nonforfeitable rights to dividends and therefore participate fully in the results of the operating company's operations from the date they are granted. They are included in the computation of diluted earnings per share using the two-class method for participating securities. |
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Incremental assets and liabilities assumed in exchanges | The incremental assets and liabilities assumed in the exchanges were recorded on July 31, 2014, March 20, 2013, and August 31, 2012 as follows: | ||||||||||||
July 31, | March 20, | August 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Pzena Investment Management, LLC Members' Capital | $ | 16,142 | $ | 18,781 | $ | 10,006 | |||||||
Pzena Investment Management, LLC Accumulated Deficit | (15,284 | ) | (18,100 | ) | (9,651 | ) | |||||||
Realizable Deferred Tax Asset | 1,272 | 795 | 278 | ||||||||||
Net Tax Receivable Liability to Converting Unitholders | (1,081 | ) | (677 | ) | (242 | ) | |||||||
Total | $ | 1,049 | $ | 799 | $ | 391 | |||||||
Common Stock, at Par | $ | 11 | $ | 13 | $ | 7 | |||||||
Additional Paid-in Capital | 1,038 | 786 | 384 | ||||||||||
Total | $ | 1,049 | $ | 799 | $ | 391 | |||||||
NonControlling_Interests_Table
Non-Controlling Interests (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||
Non-controlling interest income | Non-Controlling Interests in the operations of the Company’s operating company and consolidated subsidiaries are comprised of the following: | |||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Non-Controlling Interests of Pzena Investment Management, LLC | $ | 47,026 | $ | 40,533 | $ | 29,711 | ||||||
Non-Controlling Interests of Consolidated Subsidiaries | (92 | ) | 1,235 | 854 | ||||||||
Non-Controlling Interests | $ | 46,934 | $ | 41,768 | $ | 30,565 | ||||||
Investments_at_Fair_Value_Tabl
Investments, at Fair Value (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||
Investment in equity securities | Investments, at Fair Value consisted of the following at December 31, 2014: | |||||||||||
Cost | Unrealized Gain/(Loss) | Fair Value | ||||||||||
(in thousands) | ||||||||||||
Equity Securities | $ | 23,789 | $ | (753 | ) | $ | 23,036 | |||||
Investments in Mutual Funds | 3,820 | 1,089 | 4,909 | |||||||||
Total | $ | 27,609 | $ | 336 | $ | 27,945 | ||||||
Securities Sold Short, at Fair Value consisted of the following at December 31, 2014: | ||||||||||||
Cost | Unrealized (Gain)/Loss | Fair Value | ||||||||||
(in thousands) | ||||||||||||
Securities Sold Short | 1,496 | 76 | 1,572 | |||||||||
Total | $ | 1,496 | $ | 76 | $ | 1,572 | ||||||
Investments, at Fair Value consisted of the following at December 31, 2013: | ||||||||||||
Cost | Unrealized Gain/(Loss) | Fair Value | ||||||||||
(in thousands) | ||||||||||||
Equity Securities | $ | 1,732 | $ | 632 | $ | 2,364 | ||||||
Investments in Mutual Funds | 4,043 | 1,214 | 5,257 | |||||||||
Total | $ | 5,775 | $ | 1,846 | $ | 7,621 | ||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and equipment | Property and equipment, net, is comprised of the following: | |||||||
As of | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Leasehold Improvements | $ | 3,206 | $ | 1,219 | ||||
Computer Hardware | 1,228 | 1,141 | ||||||
Furniture and Fixtures | 786 | 786 | ||||||
Office Equipment | 279 | 256 | ||||||
Computer Software | 345 | 283 | ||||||
Total | 5,844 | 3,685 | ||||||
Less: Accumulated Depreciation and Amortization | (3,072 | ) | (2,850 | ) | ||||
Total | $ | 2,772 | $ | 835 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Future minimum lease payments | Future minimum lease payments are as follows: | ||||
Year Ending December 31, | Minimum | ||||
Payments(1) | |||||
(in thousands) | |||||
2015 | 3,728 | ||||
2016 | 1,979 | ||||
2017 | 1,979 | ||||
2018 | 1,979 | ||||
2019 | 1,979 | ||||
2020 and thereafter | 11,876 | ||||
Total | $ | 23,520 | |||
(1) Amounts have not been reduced by future minimum sublease payments of $0.3 million due under noncancelable sublease agreements. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Components of income tax expense/(benefit) | The components of the income tax expense are as follows: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Current Provision: | |||||||||||||||||||||
Unincorporated Business Taxes(1) | $ | 2,938 | $ | 2,438 | $ | 2,440 | |||||||||||||||
Local Corporate Tax | — | — | — | ||||||||||||||||||
State Corporate Tax | — | — | — | ||||||||||||||||||
Federal Corporate Tax | — | — | — | ||||||||||||||||||
Total Current Provision | $ | 2,938 | $ | 2,438 | $ | 2,440 | |||||||||||||||
Deferred Provision: | |||||||||||||||||||||
Unincorporated Business Taxes(1) | $ | 15 | $ | (4 | ) | $ | (21 | ) | |||||||||||||
Local Corporate Tax | 391 | 405 | 289 | ||||||||||||||||||
State Corporate Tax | 731 | 714 | 510 | ||||||||||||||||||
Federal Corporate Tax | 3,087 | 2,892 | 1,761 | ||||||||||||||||||
Total Deferred Provision | $ | 4,224 | $ | 4,007 | $ | 2,539 | |||||||||||||||
Change in Valuation Allowance | (6,174 | ) | (6,142 | ) | (3,068 | ) | |||||||||||||||
Net Adjustment to Deferred Tax Asset(2) | $ | 895 | $ | 286 | $ | — | |||||||||||||||
Total Income Tax Expense | $ | 1,883 | $ | 589 | $ | 1,911 | |||||||||||||||
(1) During the year ended December 31, 2013, the operating company recognized a $0.6 million tax benefit associated with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||||||||||||||||||
(2) During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
Differences between provisions for income taxes reported for financial reporting purposes and applicable statutory rates | A reconciliation between the provision for income taxes reported for financial reporting purposes, and the application of the statutory U.S. Federal, state, and local tax rates to the reported income before income taxes for the years ended December 31, 2014, 2013, and 2012, were as follows: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Amount | % of Pretax | Amount | % of Pretax | Amount | % of Pretax | ||||||||||||||||
Income | Income | Income | |||||||||||||||||||
(in thousands, except % amounts) | |||||||||||||||||||||
Federal Corporate Tax | $ | 19,352 | 34 | % | $ | 16,669 | 34 | % | $ | 12,347 | 34 | % | |||||||||
State and Local Corporate Tax, net of Federal Benefit | 4,178 | 7.3 | % | 3,775 | 7.7 | % | 3,214 | 8.9 | % | ||||||||||||
Unincorporated Business Tax(1) | 1,732 | 3.1 | % | 1,741 | 3.6 | % | 1,382 | 3.8 | % | ||||||||||||
Non-Controlling Interests | (19,403 | ) | (34.1 | )% | (17,417 | ) | (35.5 | )% | (13,097 | ) | (36.1 | )% | |||||||||
Increase/(Decrease) in Liability to Selling and Converting Shareholders | 1,417 | 2.5 | % | 1,519 | 3.1 | % | 900 | 2.5 | % | ||||||||||||
Deferred Income Tax Valuation Allowance | (6,174 | ) | (10.9 | )% | (6,142 | ) | (12.5 | )% | (3,068 | ) | (8.4 | )% | |||||||||
Operating Loss Carryforward | (625 | ) | (1.1 | )% | — | — | % | — | — | % | |||||||||||
Net Adjustment to Deferred Tax Asset (2) | 895 | 1.6 | % | 286 | 0.6 | % | — | — | % | ||||||||||||
Other | 511 | 0.9 | % | 158 | 0.2 | % | 233 | 0.6 | % | ||||||||||||
Income Tax Expense | $ | 1,883 | 3.3 | % | $ | 589 | 1.2 | % | $ | 1,911 | 5.3 | % | |||||||||
(1) During the year ended December 31, 2013, the operating company recognized a $0.6 million tax benefit associated with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||||||||||||||||||
(2) During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
Schedule of unrecognized tax benefits roll forward | A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the years ended December 31, 2014 and 2013 is as follows. No unrecognized tax benefits were recognized during the year ended December 31, 2012. | ||||||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 409 | |||||||||||||||||||
Increases Related to Prior Year Tax Positions | — | ||||||||||||||||||||
Increases Related to Current Year Tax Positions | 691 | ||||||||||||||||||||
Balance at December 31, 2014 | $ | 1,100 | |||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||
Increases Related to Prior Year Tax Positions | 188 | ||||||||||||||||||||
Increases Related to Current Year Tax Positions | 221 | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 409 | |||||||||||||||||||
Deferred tax assets and liabilities | The change in the Company’s deferred tax assets, net of valuation allowance, for the year ended December 31, 2014 is summarized as follows: | ||||||||||||||||||||
Section 754 | Other | Valuation Allowance | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 61,628 | $ | 4,657 | $ | (53,973 | ) | $ | 12,312 | ||||||||||||
Deferred Tax (Expense)/Benefit | (4,067 | ) | 447 | — | (3,620 | ) | |||||||||||||||
Unit Exchange | 6,013 | — | (4,741 | ) | 1,272 | ||||||||||||||||
Change in Valuation Allowance | — | — | 6,174 | 6,174 | |||||||||||||||||
Operating Loss Carryforward | — | (625 | ) | — | (625 | ) | |||||||||||||||
Net Adjustment to Deferred Tax Asset(1) | (8,791 | ) | (405 | ) | 8,301 | (895 | ) | ||||||||||||||
Balance at December 31, 2014 | $ | 54,783 | $ | 4,074 | $ | (44,239 | ) | $ | 14,618 | ||||||||||||
(1) During 2014, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
The change in the Company’s deferred tax liabilities, which is included in other liabilities on the Company’s consolidated statements of financial condition, for the year ended December 31, 2014, is summarized as follows: | |||||||||||||||||||||
Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2013 | $ | (39 | ) | ||||||||||||||||||
Deferred Tax Expense | 21 | ||||||||||||||||||||
Balance at December 31, 2014 | $ | (18 | ) | ||||||||||||||||||
The change in the Company’s deferred tax assets, net of valuation allowance, for the year ended December 31, 2013 is summarized as follows: | |||||||||||||||||||||
Section 754 | Other | Valuation Allowance | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2012 | $ | 65,069 | $ | 4,536 | $ | (59,917 | ) | $ | 9,688 | ||||||||||||
Deferred Tax (Expense)/Benefit | (3,788 | ) | (239 | ) | — | (4,027 | ) | ||||||||||||||
Unit Exchange | 5,935 | — | (5,140 | ) | 795 | ||||||||||||||||
Change in Valuation Allowance | — | — | 6,142 | 6,142 | |||||||||||||||||
Net Adjustment to Deferred Tax Asset(1) | $ | (5,588 | ) | $ | 360 | $ | 4,942 | $ | (286 | ) | |||||||||||
Balance at December 31, 2013 | $ | 61,628 | $ | 4,657 | $ | (53,973 | ) | $ | 12,312 | ||||||||||||
(1) During 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||||||||||||||||||
The change in the Company’s deferred tax liabilities for the year ended December 31, 2013 is summarized as follows: | |||||||||||||||||||||
Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at December 31, 2012 | $ | (59 | ) | ||||||||||||||||||
Deferred Tax Expense | 20 | ||||||||||||||||||||
Balance at December 31, 2013 | $ | (39 | ) | ||||||||||||||||||
Net value of the liability to selling and converting shareholders | The change in the Company’s liability to selling and converting shareholders for the years ended December 31, 2014 and 2013, is summarized as follows: | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning Balance | $ | 12,777 | $ | 9,656 | |||||||||||||||||
Change in Liability | 4,168 | 4,468 | |||||||||||||||||||
Unit Conversion | 1,081 | 677 | |||||||||||||||||||
Tax Receivable Agreement Payments | (2,668 | ) | (2,024 | ) | |||||||||||||||||
Ending Balance | $ | 15,358 | $ | 12,777 | |||||||||||||||||
Quarterly_Results_of_Operation1
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Quarterly financial information | Unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 are summarized below: | |||||||||||||||
For the Quarter Ended 2014 | ||||||||||||||||
Dec. 31 | Sept. 30 | 30-Jun | 31-Mar | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Total Revenue | $ | 28,560 | $ | 29,605 | $ | 27,945 | $ | 26,401 | ||||||||
Operating Income | 14,749 | 16,632 | 15,541 | 14,031 | ||||||||||||
Net Income | $ | 2,469 | $ | 2,059 | $ | 2,124 | $ | 1,448 | ||||||||
Basic Earnings Per Share | $ | 0.19 | $ | 0.16 | $ | 0.17 | $ | 0.12 | ||||||||
Diluted Earnings Per Share | $ | 0.14 | $ | 0.14 | $ | 0.13 | $ | 0.11 | ||||||||
For the Quarter Ended 2013 | ||||||||||||||||
Dec. 31 | Sept. 30 | 30-Jun | 31-Mar | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Total Revenue | $ | 28,749 | $ | 24,046 | $ | 22,132 | $ | 20,842 | ||||||||
Operating Income | 17,197 | 12,951 | 11,275 | 9,425 | ||||||||||||
Net Income | $ | 2,279 | $ | 1,956 | $ | 1,266 | $ | 1,169 | ||||||||
Basic Earnings Per Share | $ | 0.19 | $ | 0.16 | $ | 0.1 | $ | 0.1 | ||||||||
Diluted Earnings Per Share | $ | 0.15 | $ | 0.12 | $ | 0.1 | $ | 0.09 | ||||||||
Organization_Details
Organization (Details) | 12 Months Ended | |
Dec. 31, 2014 | Aug. 05, 2014 | |
Pzena Investment Management, Pty [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Australian Proprietary Limited Company (12/16/2009) | |
Operating company's ownership at end of period (in hundredths) | 100.00% | |
Pzena Financial Services, LLC [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Delaware Limited Liability Company (10/15/2013) | |
Operating company's ownership at end of period (in hundredths) | 100.00% | |
Pzena Investment Management Special Situations, LLC [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Delaware Limited Liability Company (12/01/2010) | |
Operating company's ownership at end of period (in hundredths) | 99.90% | |
Pzena Mid Cap Focused Value Fund, a series of Advisors Series Trust [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | |
Operating company's ownership at end of period (in hundredths) | 93.20% | |
Pzena Long/Short Value Fund, a series of Advisors Series Trust [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | |
Operating company's ownership at end of period (in hundredths) | 77.30% | |
Pzena Emerging Markets Focused Value Fund, a series of Advisors Series Trust [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Open-end Management Investment Company, series of Delaware Statutory Trust (3/31/2014) | |
Operating company's ownership at end of period (in hundredths) | 12.30% | 42.90% |
Pzena Investment Funds Trust, Pzena Large Cap Value Fund [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Massachusetts Trust (11/01/2002) | |
Operating company's ownership at end of period (in hundredths) | 0.00% | |
Pzena International Value Service, a series of the Pzena Investment Management International, LLC [Member] | ||
Entity Information [Line Items] | ||
Type of entity (date of formation) | Delaware Limited Liability Company (12/22/2003) | |
Operating company's ownership at end of period (in hundredths) | 0.00% |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 05, 2014 | |
segment | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Restricted Cash | $2,810,000 | $316,000 | |||
Revenue Recognition [Abstract] | |||||
Contract measurement period | 3 years | ||||
Performance fee income | 3,800,000 | 3,900,000 | 300,000 | ||
Cash and Cash Equivalents [Abstract] | |||||
Cash and cash equivalents | 39,109,000 | 33,878,000 | 32,645,000 | 35,083,000 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Securities Sold Short, at Fair Value | 1,572,000 | 0 | |||
Fair value of instruments [Abstract] | |||||
Marketable Securities | 27,945,000 | 7,621,000 | |||
Transfers, amount | 0 | 0 | |||
Business Segments [Abstract] | |||||
Number of operating segments | 1 | ||||
Income Taxes [Abstract] | |||||
Valuation allowance on deferred tax assets | -44,239,000 | -53,973,000 | -59,917,000 | ||
Deferred Tax Assets, Operating Loss Carryforwards | 200,000 | 400,000 | 0 | ||
Reported Value Measurement [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity Securities | 23,789,000 | 1,732,000 | |||
Investments in Mutual Funds | 3,820,000 | 4,043,000 | |||
Total | 27,609,000 | 5,775,000 | |||
Fair value of instruments [Abstract] | |||||
Trading Liabilities, Fair Value Disclosure | 1,496,000 | ||||
Reported Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Fair value of instruments [Abstract] | |||||
Marketable Securities | 0 | 0 | |||
Reported Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | |||||
Fair value of instruments [Abstract] | |||||
Marketable Securities | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity Securities | 23,036,000 | 2,364,000 | |||
Investments in Mutual Funds | 4,909,000 | 5,257,000 | |||
Securities Sold Short, at Fair Value | 1,572,000 | ||||
Total | 27,945,000 | 7,621,000 | |||
Fair value of instruments [Abstract] | |||||
Trading Liabilities, Fair Value Disclosure | 1,572,000 | ||||
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity Securities | 0 | 0 | |||
Investments in Mutual Funds | 0 | 0 | |||
Securities Sold Short, at Fair Value | 0 | ||||
Total | 0 | 0 | |||
Fair value of instruments [Abstract] | |||||
Trading Liabilities, Fair Value Disclosure | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity Securities | 0 | 0 | |||
Investments in Mutual Funds | 0 | 0 | |||
Securities Sold Short, at Fair Value | 0 | ||||
Total | 0 | 0 | |||
Fair value of instruments [Abstract] | |||||
Trading Liabilities, Fair Value Disclosure | 0 | ||||
Minimum [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating company's ownership at end of period (in hundredths) | 20.00% | ||||
Minimum [Member] | Property and Equipment [Member] | |||||
Property and Equipment [Line Items] | |||||
Useful life of property and equipment | 3 years | ||||
Maximum [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating company's ownership at end of period (in hundredths) | 50.00% | ||||
Maximum [Member] | Property and Equipment [Member] | |||||
Property and Equipment [Line Items] | |||||
Useful life of property and equipment | 7 years | ||||
Subsidiaries [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net Assets | 19,300,000 | ||||
Pzena Large Cap Value Fund [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net Assets | 1,200,000 | ||||
Pzena International Value Service [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net Assets | 2,100,000 | ||||
VIEs That are Not Consolidated [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net Assets | 408,900,000 | 244,200,000 | |||
Pzena Long/Short Value Fund, a series of Advisors Series Trust [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Restricted Cash | $1,500,000 | ||||
Pzena Emerging Markets Focused Value Fund, a series of Advisors Series Trust [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating company's ownership at end of period (in hundredths) | 12.30% | 42.90% |
Compensation_and_Benefits_Deta
Compensation and Benefits (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||||||
Sep. 03, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Compensation and benefits expense [Abstract] | ||||||||
Cash Compensation and Other Benefits | 32,396,000 | $31,374,000 | $28,690,000 | |||||
Non-Cash Compensation | 8,877,000 | 5,448,000 | 3,065,000 | |||||
Total Compensation and Benefits Expense | 41,273,000 | 36,822,000 | 31,755,000 | |||||
Non-cash compensation awards granted [Abstract] | ||||||||
Liability associated with deferred compensation investment | 2,211,000 | 2,339,000 | ||||||
Shares issued (in shares) | 0 | |||||||
Unit options retired And repurchased during period value | 71,000 | 313,000 | ||||||
Weighted average assumptions [Abstract] | ||||||||
Weighted Average Time Until Exercise | 7 years | 7 years | ||||||
Volatility (in hundredths) | 42.00% | 43.00% | ||||||
Risk-Free Rate (in hundredths) | 2.33% | 1.24% | ||||||
Dividend Yield (in hundredths) | 3.31% | 4.96% | ||||||
Aggregate Intrinsic Value [Abstract] | ||||||||
Outstanding options, intrinsic value | 8,714,000 | |||||||
Exercisable options, intrinsic value | 8,714,000 | |||||||
Awards made in 2013 [Member] | ||||||||
Delayed-vesting cash awards [Line Items] | ||||||||
Delayed-vesting cash awards issued | 0 | 1,000,000 | ||||||
Awards vesting in 2014 | 600,000 | |||||||
Awards vesting in 2015 | 400,000 | |||||||
Awards made in 2012 [Member] | ||||||||
Delayed-vesting cash awards [Line Items] | ||||||||
Delayed-vesting cash awards issued | 1,100,000 | |||||||
Awards vesting in 2015 | 500,000 | |||||||
Delayed-vesting awards paid | 600,000 | |||||||
$4.22 - $5.00 [Member] | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (in dollars per share) | 4.22 | |||||||
Exercise price range, upper range limit (in dollars per share) | 5 | |||||||
Options outstanding, number outstanding as of the end of the period (in shares) | 1,349,081 | |||||||
Options outstanding, weighted-average remaining contractual life | 5 years | |||||||
Options outstanding, weighted average exercise price (in dollars per share) | 4.41 | |||||||
Options exercisable, number exercisable as of the end of period (in shares) | 1,349,081 | |||||||
Options exercisable, weighted-average remaining contractual life | 5 years | |||||||
Options exercisable, weighted average exercise price (in dollars per share) | 4.41 | |||||||
$5.00 - $10.00 [Member] | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (in dollars per share) | 5 | |||||||
Exercise price range, upper range limit (in dollars per share) | 10 | |||||||
Options outstanding, number outstanding as of the end of the period (in shares) | 1,189,369 | |||||||
Options outstanding, weighted-average remaining contractual life | 5 years 1 month 6 days | |||||||
Options outstanding, weighted average exercise price (in dollars per share) | 7.87 | |||||||
Options exercisable, number exercisable as of the end of period (in shares) | 1,189,369 | |||||||
Options exercisable, weighted-average remaining contractual life | 5 years 1 month 6 days | |||||||
Options exercisable, weighted average exercise price (in dollars per share) | 7.87 | |||||||
$10.00 - $15.00 [Member] | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (in dollars per share) | 10 | |||||||
Exercise price range, upper range limit (in dollars per share) | 15 | |||||||
Options outstanding, number outstanding as of the end of the period (in shares) | 575,832 | |||||||
Options outstanding, weighted-average remaining contractual life | 3 years 6 months | |||||||
Options outstanding, weighted average exercise price (in dollars per share) | 11.85 | |||||||
Options exercisable, number exercisable as of the end of period (in shares) | 532,195 | |||||||
Options exercisable, weighted-average remaining contractual life | 3 years 1 month 6 days | |||||||
Options exercisable, weighted average exercise price (in dollars per share) | 11.98 | |||||||
$4.22 - $15.00 [Member] | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (in dollars per share) | 4.22 | |||||||
Exercise price range, upper range limit (in dollars per share) | 15 | |||||||
Options outstanding, number outstanding as of the end of the period (in shares) | 3,114,282 | |||||||
Options outstanding, weighted-average remaining contractual life | 4 years 9 months 18 days | |||||||
Options outstanding, weighted average exercise price (in dollars per share) | 7.1 | |||||||
Options exercisable, number exercisable as of the end of period (in shares) | 3,070,645 | |||||||
Options exercisable, weighted-average remaining contractual life | 4 years 8 months 12 days | |||||||
Options exercisable, weighted average exercise price (in dollars per share) | 7.06 | |||||||
Options to Purchase Operating Company Units [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded (in shares) | 0 | 76,522 | 51,625 | |||||
Awarded amount (in dollars per share) | 0 | [1] | $3.27 | [1] | $1.32 | [1] | ||
Weighted Average Exercise Price [Roll Forward] | ||||||||
Net units issued as a result of options exercised (in shares) | 95,199 | 421,173 | 74,271 | |||||
Redemption of Class B units for cashless exercise of options (in shares) | 64,403 | 331,272 | 106,607 | |||||
Net Class A Shares issued from exercise of options | 68,346 | |||||||
Redemption of Class A shares for cashless exercise of options (in shares) | 181,654 | |||||||
Phantom Class B units [Roll Forward] | ||||||||
Phantom Class B Units Issued, Weighted Average Fair Value | 0 | [1] | $3.27 | [1] | $1.32 | [1] | ||
Options [Member] | ||||||||
Options Outstanding [Roll Forward] | ||||||||
Beginning Balance (in shares) | 3,793,884 | 4,524,807 | 5,071,227 | |||||
Options Granted (in shares) | 0 | 76,522 | 51,625 | |||||
Options Cancelled (in shares) | -270,000 | 0 | -2,167 | |||||
Options Exercised (in shares) | -409,602 | -752,445 | -180,878 | |||||
Options Repurchased by the Company (in shares) | 0 | -55,000 | -415,000 | |||||
Other (in shares) | 0 | 0 | 0 | |||||
Ending Balance (in shares) | 3,114,282 | 3,793,884 | 4,524,807 | |||||
Weighted Average Exercise Price [Roll Forward] | ||||||||
Beginning Balance (in dollars per share) | 7.45 | $6.88 | $7.19 | |||||
Options Granted (in dollars per share) | 0 | $10.26 | $5.24 | |||||
Options Cancelled (in dollars per share) | 12.78 | $0 | $8 | |||||
Options Exercised (in dollars per share) | 6.53 | $4.22 | $4.22 | |||||
Options Repurchased by the Company (in dollars per share) | 0 | $9.29 | $11.61 | |||||
Other (in dollars per share) | 0 | $0 | $0 | |||||
Ending Balance (in dollars per share) | 7.1 | $7.45 | $6.88 | |||||
Weighted average grant-date fair value of options issued (in dollars per share) | $3.27 | $1.32 | ||||||
Director [Member] | Phantom Shares of Class A common stock [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Defer compensation percentage of compensation directors elected (in hundredths) | 100.00% | |||||||
Shares issued (in shares) | 31,507 | 64,144 | 72,228 | |||||
Shares outstanding (in shares) | 190,389 | 158,882 | ||||||
Stock forfeited during period, shares | 6,944 | |||||||
Equity Incentive Plan 2006 [Member] | Phantom Operating Company Class B Units [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded (in shares) | 102,110 | [2] | 805,879 | [2] | 4,103,896 | [2] | ||
Awarded amount (in dollars per share) | 7.62 | [1],[2] | $8.50 | [1],[2] | $3.85 | [1],[2] | ||
Vesting period for units | 10 years | |||||||
Phantom Class B units [Roll Forward] | ||||||||
Phantom Class B Units Issued, Weighted Average Fair Value | 7.62 | [1],[2] | $8.50 | [1],[2] | $3.85 | [1],[2] | ||
Equity Incentive Plan 2006 [Member] | Restricted Class B Units [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded (in shares) | 32,479 | 82,491 | 124,718 | |||||
Awarded amount (in dollars per share) | 11.76 | [1] | $9.17 | [1] | $4.85 | [1] | ||
Exchangeable ratio | one-for-one basis | |||||||
Phantom Class B units [Roll Forward] | ||||||||
Phantom Class B Units Issued, Weighted Average Fair Value | 11.76 | [1] | $9.17 | [1] | $4.85 | [1] | ||
Equity Incentive Plan 2006 [Member] | Delayed Exchange Unit [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded (in shares) | 662,832 | 0 | 0 | |||||
Awarded amount (in dollars per share) | 5.27 | [1] | ||||||
Phantom Class B units [Roll Forward] | ||||||||
Phantom Class B Units Issued, Weighted Average Fair Value | 5.27 | [1] | ||||||
Equity Incentive Plan 2006 [Member] | Deferred Compensation Phantom Operating Company Class B Units [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded amount (in dollars per share) | 7.62 | $8.50 | $3.85 | |||||
Phantom Class B units [Roll Forward] | ||||||||
Beginning Balance (in shares) | 4,499,386 | 4,103,896 | 0 | |||||
Beginning Balance, Weighted Average Price | 4.68 | $3.85 | $0 | |||||
Phantom Class B Units Issued (in shares) | 102,110 | 805,879 | 4,103,896 | |||||
Phantom Class B Units Issued, Weighted Average Fair Value | 7.62 | $8.50 | $3.85 | |||||
Vesting of Phantom Class B Units (in shares) | -423,263 | -410,389 | 0 | |||||
Vesting of Phantom Class B Units, Weighted Average Price | 4.83 | $3.85 | $0 | |||||
Forfeitures of Phantom Class B Units (in shares) | -701,299 | 0 | 0 | |||||
Forfeitures of Phantom Class B Units, Weighted Average Price | 3.85 | $0 | $0 | |||||
Ending Balance (in shares) | 3,476,934 | 4,499,386 | 4,103,896 | |||||
Ending Balance, Weighted Average Price | 4.92 | $4.68 | $3.85 | |||||
Bonus plan [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Liability associated with deferred compensation investment | 2,200,000 | 2,300,000 | ||||||
Stock issued during period, value | 1,000,000 | |||||||
Bonus plan [Member] | Delayed Exchange Unit [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded amount (in dollars per share) | $0 | [1] | $0 | [1] | ||||
Phantom Class B units [Roll Forward] | ||||||||
Phantom Class B Units Issued, Weighted Average Fair Value | $0 | [1] | $0 | [1] | ||||
Bonus plan [Member] | Deferred Compensation Phantom Operating Company Class B Units [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded (in shares) | 22,959 | 68,518 | 80,831 | |||||
Awarded amount (in dollars per share) | 11.76 | [1] | $5.40 | [1] | $4.33 | [1] | ||
Vesting period for units | 4 years 0 months 0 days | |||||||
Phantom Class B units [Roll Forward] | ||||||||
Beginning Balance (in shares) | 109,665 | 106,340 | 73,570 | |||||
Beginning Balance, Weighted Average Price | 5.32 | $5.69 | $7.53 | |||||
Phantom Class B Units Issued (in shares) | 22,959 | 68,518 | 80,831 | |||||
Phantom Class B Units Issued, Weighted Average Fair Value | 11.76 | [1] | $5.40 | [1] | $4.33 | [1] | ||
Vesting of Phantom Class B Units (in shares) | -54,984 | -65,193 | -48,061 | |||||
Vesting of Phantom Class B Units, Weighted Average Price | 6.09 | $6 | $6.22 | |||||
Forfeitures of Phantom Class B Units (in shares) | -5,952 | 0 | 0 | |||||
Forfeitures of Phantom Class B Units, Weighted Average Price | 7.35 | $0 | $0 | |||||
Ending Balance (in shares) | 71,688 | 109,665 | 106,340 | |||||
Ending Balance, Weighted Average Price | 6.63 | $5.32 | $5.69 | |||||
Equity Incentive Plan 2007 [Member] | Restricted Shares of Class A Common Stock [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Awarded (in shares) | 0 | 100,000 | 44,484 | |||||
Awarded amount (in dollars per share) | 0 | [1] | $4.41 | [1] | $5.24 | [1] | ||
Phantom Class B units [Roll Forward] | ||||||||
Phantom Class B Units Issued, Weighted Average Fair Value | 0 | [1] | $4.41 | [1] | $5.24 | [1] | ||
Bonus Plan, 2006 Plan and 2007 Plan [Member] | ||||||||
Delayed-vesting cash awards [Line Items] | ||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | 26,800,000 | 29,700,000 | ||||||
Common Class A [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Shares outstanding (in shares) | 13,044,719 | 12,158,057 | ||||||
Common Class A [Member] | Common Stock [Member] | ||||||||
Non-cash compensation awards granted [Abstract] | ||||||||
Shares outstanding (in shares) | 13,044,719 | 12,158,057 | 11,149,941 | 10,575,089 | ||||
Directors' Shares | 45,818 | 0 | 45,818 | 0 | ||||
Unit options retired And repurchased during period value | $0 | $0 | ||||||
Options Outstanding [Roll Forward] | ||||||||
Options Exercised (in shares) | -68,346 | 0 | 0 | |||||
[1] | Represents the weighted average grant date estimated fair value per share, unit, or option. | |||||||
[2] | Represents phantom Class B units issued under the 2006 Equity Incentive Plan. These phantom units vest ratably over ten years and are not entitled to receive dividend or dividend equivalents until vested. |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Compensation and Retirement Disclosure [Abstract] | |||
Profit sharing and savings plan expenses recognized | $800,000 | $700,000 | $600,000 |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Computation of basic earnings per share [Abstract] | ||||||||||||||
Net Income for Basic Earnings per Share | $8,100 | $6,670 | $3,840 | |||||||||||
Basic Weighted Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||||||||||
Basic Earnings per Share | $0.19 | $0.16 | $0.17 | $0.12 | $0.19 | $0.16 | $0.10 | $0.10 | $0.64 | $0.56 | $0.36 | |||
Diluted net income [Abstract] | ||||||||||||||
Net Income Attributable to Non-Controlling Interests of Pzena Investment Management, LLC | 46,934 | 41,768 | 30,565 | |||||||||||
Net Income of Pzena Investment Management, Inc | 2,469 | 2,059 | 2,124 | 1,448 | 2,279 | 1,956 | 1,266 | 1,169 | 8,100 | 6,670 | 3,840 | |||
Diluted Net Income | 35,685 | 30,317 | 20,821 | |||||||||||
Diluted Net Income Allocated to: | ||||||||||||||
Total Diluted Net Income Attributable to Shareholders | 35,685 | 30,317 | 20,821 | |||||||||||
Basic Weighted Average Shares Outstanding | 12,628,676 | 11,990,757 | 10,787,540 | |||||||||||
Dilutive Effect of Operating Company B Units (in shares) | 52,418,097 | 52,508,211 | 53,783,093 | |||||||||||
Dilutive Effect of Options (in shares) | 915,893 | 690,563 | 535,629 | |||||||||||
Dilutive Effect of Phantom Units (in shares) | 1,648,210 | 1,383,794 | 140,397 | |||||||||||
Dilutive Effect of Restricted Shares of Class A Common Stock | 42,599 | 29,795 | 1,099 | |||||||||||
Dilutive Weighted-Average Shares Outstanding (in shares) | 67,653,475 | 66,603,120 | 65,247,758 | |||||||||||
Add: Participating Restricted Operating Company Class B Units (in shares) | 144,049 | 156,720 | 243,515 | |||||||||||
Total Dilutive Weighted-Average Shares Outstanding (in shares) | 67,797,524 | [1] | 66,759,840 | [1] | 65,491,273 | [1] | ||||||||
Diluted Earnings per Share | $0.14 | $0.14 | $0.13 | $0.11 | $0.15 | $0.12 | $0.10 | $0.09 | $0.53 | $0.45 | $0.32 | |||
Options to Purchase Operating Company Class B Units [Member] | ||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||
Securities excluded from the calculation of diluted net income per share (in shares) | 700,000 | 1,200,000 | 1,600,000 | |||||||||||
Options to Purchase Shares of Class A Common Stock [Member] | ||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||
Securities excluded from the calculation of diluted net income per share (in shares) | 1,000,000 | 1,000,000 | ||||||||||||
Common Class A [Member] | ||||||||||||||
Diluted Net Income Allocated to: | ||||||||||||||
Total Diluted Net Income Attributable to Shareholders | 35,606 | 30,244 | 20,742 | |||||||||||
Participating Class B Restricted Units [Member] | ||||||||||||||
Diluted Net Income Allocated to: | ||||||||||||||
Total Diluted Net Income Attributable to Shareholders | 79 | 73 | 79 | |||||||||||
Pzena Investment Management, LLC [Member] | ||||||||||||||
Diluted net income [Abstract] | ||||||||||||||
Net Income Attributable to Non-Controlling Interests of Pzena Investment Management, LLC | 47,026 | 40,533 | 29,711 | |||||||||||
Less: Assumed Corporate Income Taxes | 19,441 | 16,886 | 12,730 | |||||||||||
Assumed After-Tax Income of Pzena Investment Management, LLC | 27,585 | 23,647 | 16,981 | |||||||||||
Net Income of Pzena Investment Management, Inc | 8,100 | 6,670 | 3,840 | |||||||||||
Diluted Net Income | $35,685 | $30,317 | $20,821 | |||||||||||
[1] | The Company issues restricted Class B units that have non-forfeitable dividend rights. Under the btwo-class method,b these units are considered participating securities and are required to be included in the computation of diluted earnings per share. |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2014 | Mar. 20, 2013 | Aug. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2014 | Feb. 05, 2014 | Apr. 24, 2012 | |
vote | |||||||||
Class of Stock [Line Items] | |||||||||
Vote per share | 5 | ||||||||
Amount authorized under stock repurchase program | $20,000,000 | $10,000,000 | |||||||
Incremental assets and liabilities assumed [Abstract] | |||||||||
Pzena Investment Management, LLC Members' Capital | 16,142,000 | 18,781,000 | 10,006,000 | 16,142,000 | |||||
Pzena Investment Management, LLC Accumulated Deficit | -15,284,000 | -18,100,000 | -9,651,000 | -15,284,000 | |||||
Realizable Deferred Tax Asset | 1,272,000 | 795,000 | 278,000 | 1,272,000 | |||||
Net Tax Receivable Liability to Converting Unitholders | -1,081,000 | -677,000 | -242,000 | -1,081,000 | |||||
Total | 1,049,000 | 799,000 | 391,000 | 1,049,000 | |||||
Unit Conversion | 191,000 | 119,000 | 36,000 | ||||||
Total | 1,049,000 | 799,000 | 391,000 | ||||||
Common Class A [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Economic interest held in company by class of stock (in hundredths) | 19.80% | 18.70% | |||||||
Par value (in dollars per share) | $0.01 | $0.01 | |||||||
Percentage of outstanding shares that represents rights of holders to receive distribution (in hundredths) | 100.00% | ||||||||
Purchased under repurchase authorization at an average price per share (in dollars per share) | $9.70 | $6.29 | $5.05 | ||||||
Common Class B [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Economic interest held in company by class of stock (in hundredths) | 80.20% | 81.30% | |||||||
Par value (in dollars per share) | $0.00 | $0.00 | |||||||
Voting rights | five votes | ||||||||
Percentage of stock holding that will entitle holders to one vote (in hundredths) | 20.00% | ||||||||
Voting rights when class of stock constitutes less than 20% of all shares outstanding | 1 | ||||||||
Purchased under repurchase authorization at an average price per share (in dollars per share) | $10.07 | $10.44 | $5.25 | ||||||
Common Stock [Member] | Common Class A [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock and Units purchased and retired (in shares) | 360,279 | 383,450 | 147,669 | ||||||
Incremental assets and liabilities assumed [Abstract] | |||||||||
Unit Conversion | 11,000 | 13,000 | 7,000 | 11,000 | 13,000 | 7,000 | |||
Common Stock [Member] | Common Class B [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock and Units purchased and retired (in shares) | 89,503 | 356,843 | 36,158 | ||||||
Additional Paid-In Capital [Member] | |||||||||
Incremental assets and liabilities assumed [Abstract] | |||||||||
Unit Conversion | $1,038,000 | $786,000 | $384,000 | $1,038,000 | $786,000 | $384,000 | |||
Class B unit exchange for Company Class A common stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of class B units exchanged for equivalent class A common shares (in shares) | 1,150,060 | 1,328,334 | 722,521 |
NonControlling_Interests_Detai
Non-Controlling Interests (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Noncontrolling Interest [Line Items] | |||
Non-Controlling Interests | $46,934 | $41,768 | $30,565 |
Pzena Investment Management, LLC [Member] | |||
Noncontrolling Interest [Line Items] | |||
Non-Controlling Interests | 47,026 | 40,533 | 29,711 |
Consolidated subsidiaries [Member] | |||
Noncontrolling Interest [Line Items] | |||
Non-Controlling Interests | ($92) | $1,235 | $854 |
Investments_at_Fair_Value_Deta
Investments, at Fair Value (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Cost [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity Securities | $23,789 | $1,732 |
Investments in Mutual Funds | 3,820 | 4,043 |
Securities Sold Short | 1,496 | |
Total | 27,609 | 5,775 |
Trading Liabilities, Fair Value Disclosure | 1,496 | |
Unrealized Gain/(Loss) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity Securities | -753 | 632 |
Investments in Mutual Funds | 1,089 | 1,214 |
Securities Sold Short | 76 | |
Total | 336 | 1,846 |
Trading Liabilities, Fair Value Disclosure | 76 | |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity Securities | 23,036 | 2,364 |
Investments in Mutual Funds | 4,909 | 5,257 |
Securities Sold Short | 1,572 | 0 |
Total | 27,945 | 7,621 |
Trading Liabilities, Fair Value Disclosure | $1,572 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, plant and equipment, including leasehold improvements, net [Abstract] | |||
Property and equipment, gross | $5,844,000 | $3,685,000 | |
Less: Accumulated Depreciation and Amortization | -3,072,000 | -2,850,000 | |
Property and equipment, net | 2,772,000 | 835,000 | |
Leasehold Improvements, Gross | 2,000,000 | ||
Depreciation expense | 224,000 | 178,000 | 179,000 |
Leasehold Improvements [Member] | |||
Property, plant and equipment, including leasehold improvements, net [Abstract] | |||
Property and equipment, gross | 3,206,000 | 1,219,000 | |
Computer Hardware [Member] | |||
Property, plant and equipment, including leasehold improvements, net [Abstract] | |||
Property and equipment, gross | 1,228,000 | 1,141,000 | |
Furniture and Fixtures [Member] | |||
Property, plant and equipment, including leasehold improvements, net [Abstract] | |||
Property and equipment, gross | 786,000 | 786,000 | |
Office Equipment [Member] | |||
Property, plant and equipment, including leasehold improvements, net [Abstract] | |||
Property and equipment, gross | 279,000 | 256,000 | |
Computer Software [Member] | |||
Property, plant and equipment, including leasehold improvements, net [Abstract] | |||
Property and equipment, gross | $345,000 | $283,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
VIEs That are Not Consolidated [Member] | |||
Related Party Transaction [Line Items] | |||
Investment advisory fees | $2.80 | $1.40 | $1.50 |
International investment entity [Member] | |||
Related Party Transaction [Line Items] | |||
Receivables from related party | 0.1 | 0.1 | |
Employees [Member] | |||
Related Party Transaction [Line Items] | |||
Other liabilities payable to employee members | 0 | 0.1 | 0.1 |
Loans to employees | 0.1 | 0.1 | |
Pzena Mutual Funds [Member] | |||
Related Party Transaction [Line Items] | |||
Investment advisory fees waived | 0.6 | ||
Company's executive officers and other employees [Member] | |||
Related Party Transaction [Line Items] | |||
Investment advisory fees waived | 0.7 | 0.6 | 0.4 |
Administrative fees paid, less than | $0.10 | $0.10 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | ||||
Leases expenses | $0.40 | $2 | $1.50 | $1.40 |
Sub-lease income | 0.4 | 0.4 | 0.2 | |
Future minimum sublease payments | $0.30 | $0.30 |
Commitments_and_Contingencies_2
Commitments and Contingencies Future Payments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Future minimum lease payments | |
2015 | $3,728 |
2016 | 1,979 |
2017 | 1,979 |
2018 | 1,979 |
2019 | 1,979 |
2020 and thereafter | 11,876 |
Total | $23,520 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2014 | Mar. 20, 2013 | Aug. 31, 2012 | Dec. 31, 2012 | |
Income Tax Additional Disclosure [Abstract] | ||||||
Tax benefit associated with the amendment of prior year tax returns | $600,000 | |||||
Operating loss carryforwards | 9,500,000 | 10,400,000 | ||||
Operating loss carryforward, deductions for excess stock transactions | 600,000 | 1,000,000 | ||||
Deferred Tax Assets, Operating Loss Carryforwards | 200,000 | 400,000 | ||||
Section 754 election tax deduction period | 15 years | |||||
Initial Deferred Tax Asset | 68,700,000 | |||||
Percentage of cash savings generated by section 754 to be distributed (in hundredths) | 85.00% | |||||
Deferred Tax Section 754 Unit Exchange | 6,013,000 | 5,935,000 | ||||
Deferred Tax Asset, Valuation Allowance | -44,239,000 | -53,973,000 | -59,917,000 | |||
Reduction in liability to selling and converting shareholders due to stock exchange | 4,200,000 | |||||
Class B Unit Exchanged for Class A Common Stock [Member] | ||||||
Income Tax Additional Disclosure [Abstract] | ||||||
Initial Deferred Tax Asset | 5,900,000 | 2,200,000 | ||||
Number of class B units exchanged for equivalent class A common shares (in shares) | 1,150,060 | 1,328,334 | 722,521 | |||
Liability to selling and converting shareholders | 5,100,000 | 5,000,000 | 1,900,000 | |||
Deferred Tax Asset, Valuation Allowance | -4,741,000 | -5,140,000 | -1,900,000 | |||
Reduction in liability to selling and converting shareholders due to stock exchange | $4,500,000 | $4,000,000 | $4,400,000 | $1,600,000 |
Income_Taxes_Components_of_Inc
Income Taxes (Components of Income Tax Expense) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Current Provision: | ||||||
Unincorporated Business Taxes | $2,938 | [1] | $2,438 | [1] | $2,440 | [1] |
Local Corporate Tax | 0 | 0 | 0 | |||
State Corporate Tax | 0 | 0 | 0 | |||
Federal Corporate Tax | 0 | 0 | 0 | |||
Total Current Provision | 2,938 | 2,438 | 2,440 | |||
Deferred Provision: | ||||||
Unincorporated Business Taxes | 15 | [1] | -4 | [1] | -21 | [1] |
Local Corporate Tax | 391 | 405 | 289 | |||
State Corporate Tax | 731 | 714 | 510 | |||
Federal Corporate Tax | 3,087 | 2,892 | 1,761 | |||
Total Deferred Provision | 4,224 | 4,007 | 2,539 | |||
Change in Valuation Allowance | -6,174 | -6,142 | -3,068 | |||
Net Adjustment to Deferred Tax Asset | 895 | [2],[3] | 286 | [2] | 0 | [2] |
Total Income Tax Expense | $1,883 | $589 | $1,911 | |||
[1] | During the year ended December 31, 2013, the operating company recognized a $0.6 million tax benefit associated with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||
[2] | During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||
[3] | During 2014, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. |
Income_Taxes_Provision_for_Inc
Income Taxes (Provision for Income Taxes) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||||||
Federal Corporate Tax | $19,352 | $16,669 | $12,347 | |||
State and Local Corporate Tax, net of Federal Benefit | 4,178 | 3,775 | 3,214 | |||
Unincorporated Business Tax | 1,732 | [1] | 1,741 | [1] | 1,382 | [1] |
Non-Controlling Interests | -19,403 | -17,417 | -13,097 | |||
Increase/(Decrease) in Liability to Selling and Converting Shareholders | 1,417 | 1,519 | 900 | |||
Deferred Income Tax Valuation Allowance | -6,174 | -6,142 | -3,068 | |||
Operating Loss Carryforward | -625 | 0 | 0 | |||
Net Adjustment to Deferred Tax Asset | 895 | [2] | 286 | [2] | 0 | [2] |
Other | 511 | 158 | 233 | |||
Total Income Tax Expense | $1,883 | $589 | $1,911 | |||
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||||||
Federal Corporate Tax (in hundredths) | 34.00% | 34.00% | 34.00% | |||
State and Local Corporate Tax, net of Federal Benefit (in hundredths) | 7.30% | 7.70% | 8.90% | |||
Unincorporated Business Tax (in hundredths) | 3.10% | [1] | 3.60% | [1] | 3.80% | [1] |
Non-Controlling Interests (in hundredths) | -34.10% | -35.50% | -36.10% | |||
Increase/(Decrease) in Liability to Selling and Converting Shareholders (in hundredths) | 2.50% | 3.10% | 2.50% | |||
Deferred Income Tax Valuation Allowance (in hundredths) | -10.90% | -12.50% | -8.40% | |||
Effective Income Tax Rate Reconciliation, Use of Operating Loss Carryforward (Percent) | -1.10% | 0.00% | 0.00% | |||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 1.60% | 0.60% | 0.00% | [2] | ||
Other (in hundredths) | 0.90% | 0.20% | 0.60% | |||
Income Tax Expense/(Benefit) (in hundredths) | 3.30% | 1.20% | 5.30% | |||
[1] | During the year ended December 31, 2013, the operating company recognized a $0.6 million tax benefit associated with the amendment of prior year tax returns to change the methodology for state and local receipts. | |||||
[2] | During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. |
Income_Taxes_Unrecognized_Tax_
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits, Period Increase (Decrease) | $0 | $0 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | 409,000 | 0 | |
Increases Related to Prior Year Tax Positions | 0 | 188,000 | |
Increases Related to Current Year Tax Positions | 691,000 | 221,000 | |
Ending Balance | $1,100,000 | $409,000 | $0 |
Income_Taxes_Deferred_Tax_Asse
Income Taxes (Deferred Tax Assets, Net of Valudation Allowance/ Deferred Tax Liabilities) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Deferred tax liabilities roll forward [Abstract] | ||||||
Beginning Balance | ($39) | ($59) | ||||
Deferred Tax Expense | 21 | 20 | ||||
Ending Balance | -18 | -39 | -59 | |||
Section 754 [Roll Forward] | ||||||
Beginning Balance | 61,628 | 65,069 | ||||
Deferred Tax (Expense)/Benefit | -4,067 | -3,788 | ||||
Unit Exchange | 6,013 | 5,935 | ||||
Change in Valuation Allowance | 0 | 0 | ||||
754 Deferred Tax Asset, operating loss carryforward | 0 | |||||
Deferred tax section 754, net adjustment to deferred tax asset | -8,791 | [1] | -5,588 | |||
Ending Balance | 54,783 | 61,628 | 65,069 | |||
Deferred Tax Assets Other [Roll Forward] | ||||||
Beginning Balance | 4,657 | 4,536 | ||||
Deferred Other Tax Expense (Benefit) | 447 | -239 | ||||
Unit Exchange | 0 | 0 | ||||
Change in Valuation Allowance | 0 | 0 | ||||
Deferred tax assets other , operating loss carryforward | -625 | |||||
Deferred tax assets other , net adjustment to deferred tax asset | -405 | [1] | 360 | |||
Ending Balance | 4,074 | 4,657 | 4,536 | |||
Deferred Tax Assets Valuation Allowance [Roll Forward] | ||||||
Deferred Tax Expense | 0 | 0 | ||||
Unit Exchange | -4,741 | -5,140 | ||||
Change in Valuation Allowance | 6,174 | 6,142 | 3,068 | |||
Valuation Allowance, operating loss carryforward | 0 | |||||
Deferred tax assets other, net adjustment to deferred tax asset | 8,301 | [1] | 4,942 | |||
Ending Balance | -44,239 | -53,973 | -59,917 | |||
Deferred tax assets [Roll Forward] | ||||||
Beginning Balance | 12,312 | 9,688 | ||||
Deferred Tax Expense | -3,620 | -4,027 | ||||
Unit Exchange | 1,272 | 795 | ||||
Change in Valuation Allowance | 6,174 | 6,142 | ||||
operating loss carryforward | -625 | |||||
Net Adjustment to Deferred Tax Asset | -895 | [1],[2] | -286 | [2] | 0 | [2] |
Beginning Balance | -53,973 | -59,917 | ||||
Ending Balance | $14,618 | $12,312 | $9,688 | |||
[1] | During 2014, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. | |||||
[2] | During 2014 and 2013, the Company recognized adjustments to the deferred tax asset and valuation allowance assessed against the deferred tax asset associated with a change in the effective tax rate. |
Income_Taxes_Change_in_Liabili
Income Taxes (Change in Liability to Selling and Converting Shareholders) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Change in liability to selling and converting shareholders [Roll forward] | |||
Beginning Balance | $12,777 | $9,656 | |
Change in Liability | 4,168 | 4,468 | 2,647 |
Unit Conversion | 1,081 | 677 | |
Tax Receivable Agreement Payments | -2,668 | -2,024 | |
Ending Balance | $15,358 | $12,777 | $9,656 |
Quarterly_Results_of_Operation2
Quarterly Results of Operations (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total Revenue | $28,560 | $29,605 | $27,945 | $26,401 | $28,749 | $24,046 | $22,132 | $20,842 | $112,511 | $95,769 | $76,280 |
Operating Income | 14,749 | 16,632 | 15,541 | 14,031 | 17,197 | 12,951 | 11,275 | 9,425 | 60,953 | 50,848 | 37,179 |
Net Income | $2,469 | $2,059 | $2,124 | $1,448 | $2,279 | $1,956 | $1,266 | $1,169 | $8,100 | $6,670 | $3,840 |
Basic Earnings per Share (in dollars per share) | $0.19 | $0.16 | $0.17 | $0.12 | $0.19 | $0.16 | $0.10 | $0.10 | $0.64 | $0.56 | $0.36 |
Diluted Earnings Per Share (in dollars per share) | $0.14 | $0.14 | $0.13 | $0.11 | $0.15 | $0.12 | $0.10 | $0.09 | $0.53 | $0.45 | $0.32 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 05, 2015 | Feb. 10, 2015 | |
Subsequent Event [Line Items] | |||||
Cash Dividends Paid per Share of Class A Common Stock | $0.35 | $0.25 | $0.28 | ||
Cash Dividends Declared per Share of Class A Common Stock | $0.35 | $0.25 | $0.28 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash Dividends Paid per Share of Class A Common Stock | $0.32 | ||||
Cash Dividends Declared per Share of Class A Common Stock | $0.32 |