Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 11, 2019 | Jun. 30, 2018 | |
Document Information [Line Items] | |||
Entity Registrant Name | Och-Ziff Capital Management Group LLC | ||
Entity Central Index Key | 0001403256 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 365.2 | ||
Class A Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 20,447,449 | ||
Class B Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 29,458,952 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 315,809 | $ 469,513 |
Restricted cash | 8,075 | 0 |
Investments (includes assets measured at fair value of $361,378 and $224,722, of which $62,186 and $0 related to assets sold under agreements to repurchase as of December 31, 2018 and 2017, respectively) | 389,897 | 238,974 |
Income and fees receivable | 82,843 | 354,456 |
Due from related parties | 20,754 | 28,202 |
Deferred income tax assets | 355,025 | 375,230 |
Other assets, net | 82,403 | 116,361 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 171,495 | 43,366 |
Other assets of consolidated funds | 21,090 | 13,331 |
Total Assets | 1,447,391 | 1,639,433 |
Liabilities | ||
Compensation payable | 105,036 | 208,639 |
Unearned incentive | 61,397 | 143,710 |
Due to related parties | 281,821 | 281,555 |
Debt obligations | 289,987 | 569,379 |
Securities sold under agreements to repurchase | 62,801 | 0 |
Other liabilities | 63,603 | 75,122 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 14,541 | 11,340 |
Total Liabilities | 879,186 | 1,289,745 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interests | 577,660 | 445,617 |
Shareholders’ (Deficit) Equity | ||
Paid-in capital | 3,135,841 | 3,102,074 |
Accumulated deficit | (3,564,727) | (3,555,905) |
Shareholders’ deficit attributable to Class A Shareholders | (428,886) | (453,831) |
Shareholders’ equity attributable to noncontrolling interests | 419,431 | 357,902 |
Total Shareholders’ Deficit | (9,455) | (95,929) |
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Deficit | 1,447,391 | 1,639,433 |
Class A Shares | ||
Shareholders’ (Deficit) Equity | ||
Par value of stock | 0 | 0 |
Class B Shares | ||
Shareholders’ (Deficit) Equity | ||
Par value of stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments measured at fair value | $ 361,378 | $ 224,722 |
Assets sold under agreements to repurchase at fair value | $ 62,186 | $ 0 |
Class A Shares | ||
Common stock, no par value | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,905,126 | 18,957,321 |
Common stock, shares outstanding | 19,905,126 | 18,957,321 |
Class B Shares | ||
Common stock, no par value | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 29,458,948 | 33,933,948 |
Common stock, shares outstanding | 29,458,948 | 33,933,948 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Other revenues | $ 15,976 | $ 6,777 | $ 2,006 |
Income of consolidated funds | 6,489 | 4,102 | 1,762 |
Total Revenues | 507,223 | 858,337 | 770,364 |
Expenses | |||
Compensation and benefits | 312,723 | 436,549 | 409,883 |
Interest expense | 24,179 | 23,191 | 23,776 |
General, administrative and other | 181,977 | 152,071 | 646,468 |
Expenses of consolidated funds | 406 | 9,391 | 350 |
Total Expenses | 519,285 | 621,202 | 1,080,477 |
Other (Loss) Income | |||
Changes in tax receivable agreement liability | 2,218 | 222,859 | (1,663) |
Net losses on early retirement of debt | (14,303) | 0 | 0 |
Net (losses) gains on investments | (7,055) | 3,465 | 3,760 |
Net (losses) gains of consolidated funds | (5,200) | 8,472 | 2,915 |
Total Other (Loss) Income | (24,340) | 234,796 | 5,012 |
(Loss) Income Before Income Taxes | (36,402) | 471,931 | (305,101) |
Income taxes | 12,500 | 317,559 | 10,886 |
Consolidated and Comprehensive Net (Loss) Income | (48,902) | 154,372 | (315,987) |
Less: Net loss (income) attributable to noncontrolling interests | 24,909 | (131,630) | 193,757 |
Less: Net income attributable to redeemable noncontrolling interests | (291) | (1,667) | (2,450) |
Net (Loss) Income Attributable to Och-Ziff Capital Management Group LLC | (24,284) | 21,075 | (124,680) |
Less: Change in redemption value of Preferred Units | 0 | (2,853) | (6,082) |
Net (Loss) Income Attributable to Class A Shareholders | $ (24,284) | $ 18,222 | $ (130,762) |
(Loss) Earnings per Class A Share | |||
(Loss) Income Per Class A Share, Basic (in dollars per share) | $ (1.26) | $ 0.98 | $ (7.16) |
(Loss) Income Per Class A Share, Diluted (in dollars per share) | $ (1.26) | $ 0.97 | $ (7.29) |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 19,270,929 | 18,642,379 | 18,267,017 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 19,270,929 | 18,718,176 | 47,998,727 |
Management fees | |||
Revenues | |||
Investment management revenues | $ 281,862 | $ 319,458 | $ 533,156 |
Incentive income | |||
Revenues | |||
Investment management revenues | $ 202,896 | $ 528,000 | $ 233,440 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Class A Shares | Class B Shares | Paid-in Capital | Appropriated Retained Earnings (Deficit) | Accumulated Deficit | Shareholders' Deficit Attributable to Class A Shareholders | Shareholders' Equity Attributable to Noncontrolling Interests |
Balance at Beginning of Period (values) at Dec. 31, 2015 | $ 1,240,568 | $ 3,040,655 | $ (59,663) | $ (3,396,822) | $ (415,830) | $ 1,656,398 | ||
Balance at Beginning of Period (shares) at Dec. 31, 2015 | 18,102,646 | 29,731,740 | ||||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | ||||||||
Deconsolidation of funds on adoption of ASU 2015-02 | (1,304,091) | 59,663 | (42,626) | 17,037 | (1,321,128) | |||
Capital contributions | 3,015 | 3,015 | ||||||
Capital distributions | (477) | (477) | ||||||
Dividend equivalents on Class A restricted share units | (676) | 676 | ||||||
Equity-based compensation, net of taxes (values) | 62,140 | 20,848 | 20,848 | 41,292 | ||||
Equity-based compensation (shares) | 381,680 | (38) | ||||||
Impact of changes in Oz Operating Group ownership | (2,137) | (2,137) | 2,137 | |||||
Increase In Paid In Capital As A Result Of Waiver Of Certain Payments Due Under The Tax Receivable Agreement | 39,233 | 44,823 | 44,823 | (5,590) | ||||
Change in redemption value of Preferred Units | (16,043) | (6,082) | (6,082) | (9,961) | ||||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | (318,437) | (124,680) | (124,680) | (193,757) | ||||
Balance at End of Period (values) at Dec. 31, 2016 | (294,092) | 3,097,431 | $ 0 | (3,563,452) | (466,021) | 171,929 | ||
Balance at End of Period (shares) at Dec. 31, 2016 | 18,484,326 | 29,731,702 | ||||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | ||||||||
Impact of Adoption - ASC 606 | (813,116) | |||||||
Capital contributions | 1,297 | 1,297 | ||||||
Capital distributions | (22,526) | (22,526) | ||||||
Cash dividends declared on Class A Shares | (12,972) | (12,972) | (12,972) | |||||
Dividend equivalents on Class A restricted share units | 556 | (556) | ||||||
Equity-based compensation, net of taxes (values) | 76,585 | 31,411 | 31,411 | 45,174 | ||||
Relinquishment of Group A Units (shares) | (3,000,000) | |||||||
Class B Shares granted to holders of P Units (shares) | 7,185,000 | |||||||
Equity-based compensation (shares) | 472,995 | 17,246 | ||||||
Impact of changes in Oz Operating Group ownership | (14,092) | (14,092) | 14,092 | |||||
Increase In Paid In Capital As A Result Of Waiver Of Certain Payments Due Under The Tax Receivable Agreement | 10,520 | 10,840 | 10,840 | (320) | ||||
Dilution of Proceeds From Tax Receivable Agreement Waiver | (21,219) | (21,219) | 21,219 | |||||
Change in redemption value of Preferred Units | (7,446) | (2,853) | (2,853) | (4,593) | ||||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | 152,705 | 21,075 | 21,075 | 131,630 | ||||
Balance at End of Period (values) at Dec. 31, 2017 | (95,929) | 3,102,074 | (3,555,905) | (453,831) | 357,902 | |||
Balance at End of Period (shares) at Dec. 31, 2017 | 18,957,321 | 33,933,948 | ||||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | ||||||||
Impact of Adoption - ASC 606 | 116,984 | 41,922 | 41,922 | 75,062 | ||||
Capital contributions | 1,733 | 1,733 | ||||||
Capital distributions | (37,043) | (37,043) | ||||||
Cash dividends declared on Class A Shares | (24,842) | (24,842) | (24,842) | |||||
Dividend equivalents on Class A restricted share units | 1,618 | (1,618) | ||||||
Equity-based compensation, net of taxes (values) | 78,835 | 33,575 | 33,575 | 45,260 | ||||
Relinquishment of Group A Units (shares) | (350,000) | |||||||
Equity-based compensation (shares) | 947,805 | (4,125,000) | ||||||
Impact of changes in Oz Operating Group ownership | (1,426) | (1,426) | 1,426 | |||||
Increase In Paid In Capital As A Result Of Waiver Of Certain Payments Due Under The Tax Receivable Agreement | 0 | |||||||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | (49,193) | (24,284) | (24,284) | (24,909) | ||||
Balance at End of Period (values) at Dec. 31, 2018 | $ (9,455) | $ 3,135,841 | $ (3,564,727) | $ (428,886) | $ 419,431 | |||
Balance at End of Period (shares) at Dec. 31, 2018 | 19,905,126 | 29,458,948 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' (Deficit) Equity Consolidated Statement of Changes in Shareholders' (Deficit) Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends Paid per Class A Share (in dollars per share) | $ 1.3 | $ 0.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | |||
Consolidated net (loss) income | $ (48,902) | $ 154,372 | $ (315,987) |
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | |||
Amortization of equity-based compensation | 87,130 | 84,169 | 75,217 |
Depreciation, amortization and net gains and losses on fixed assets | 10,308 | 10,334 | 19,882 |
Net losses on early retirement of debt | 14,303 | 0 | 0 |
Deferred income taxes | 8,599 | 312,764 | 2,236 |
Net losses (gains) on investments, net of dividends | 11,350 | (3,465) | (3,760) |
Operating cash flows due to changes in: | |||
Income and fees receivable | 300,450 | (177,819) | (74,077) |
Due from related parties | 7,448 | (7,708) | (10,502) |
Other assets, net | 30,607 | (6,388) | (8,376) |
Compensation payable | (106,645) | 2,658 | 29,479 |
Unearned incentive income | 17,109 | 47,631 | 96,079 |
Due to related parties | 266 | (222,563) | 1,320 |
Other liabilities | (11,144) | (3,869) | (88,419) |
Consolidated funds related items: | |||
Net losses (gains) of consolidated funds | 5,200 | (8,472) | (2,915) |
Purchases of investments | (378,626) | (423,147) | (242,474) |
Proceeds from sale of investments | 245,309 | 184,783 | 231,591 |
Other assets of consolidated funds | (7,769) | (307,379) | 3,925 |
Other liabilities of consolidated funds | 3,203 | 80,421 | 5,319 |
Net Cash Provided by (Used in) Operating Activities | 188,196 | (283,678) | (281,462) |
Cash Flows from Investing Activities | |||
Purchases of fixed assets | (5,830) | (4,990) | (8,808) |
Proceeds from sale of fixed assets | 0 | 57,599 | 0 |
Purchases of United States government obligations | (293,183) | (112,400) | (59,909) |
Maturities of United States government obligations | 129,781 | 100,000 | 78,500 |
Investments in funds | (179,930) | (165,519) | (40,920) |
Proceeds from sales and maturities in investments in funds | 180,415 | 6,959 | 14,696 |
Other, net | 0 | 0 | (17) |
Net Cash Used in Investing Activities | (168,747) | (118,351) | (16,458) |
Cash Flows from Financing Activities | |||
Issuance and sale of Preferred Units, net of issuance costs | 0 | 150,054 | 246,457 |
Contributions from noncontrolling and redeemable noncontrolling interests | 148,950 | 3,629 | 3,019 |
Distributions to noncontrolling and redeemable noncontrolling interests | (52,506) | (22,526) | (477) |
Dividends on Class A Shares | (24,842) | (12,972) | 0 |
Proceeds from debt obligations, net of issuance costs | 301,558 | 154,490 | 135,951 |
Repayment of debt obligations, including prepayment costs | (595,463) | (167,516) | (3,667) |
Proceeds from securities sold under agreements to repurchase, net of issuance costs | 63,099 | 0 | 0 |
Proceeds from debt obligations of consolidated CLO | 0 | 666,711 | 0 |
Repayment of debt obligation of consolidated CLO | 0 | (222,434) | 0 |
Other, net | (5,874) | (7,707) | (7,620) |
Net Cash (Used in) Provided by Financing Activities | (165,078) | 541,729 | 373,663 |
Net Change in Cash and Cash Equivalents and Restricted Cash | (145,629) | 139,700 | 75,743 |
Cash and Cash Equivalents and Restricted Cash, Beginning of Period | 469,513 | 329,813 | 254,070 |
Cash and Cash Equivalents and Restricted Cash, End of Period | 323,884 | 469,513 | 329,813 |
Cash paid during the period: | |||
Interest | 28,472 | 20,904 | 19,514 |
Income taxes | 2,930 | 4,156 | 9,504 |
Non-cash transactions: | |||
Assets related to the initial consolidation of CLO | 0 | 100,156 | 0 |
Liabilities related to the initial consolidation of CLO | 0 | 99,878 | 0 |
Assets related to the deconsolidation of funds | 0 | 653,629 | 9,351,057 |
Liabilities related to the deconsolidation of funds | 0 | 629,282 | 7,233,850 |
Increase In Paid In Capital As A Result Of Waiver Of Certain Payments Due Under The Tax Receivable Agreement | $ 0 | $ 10,520 | $ 39,233 |
Overview
Overview | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | OVERVIEW Och-Ziff Capital Management Group LLC (the “Registrant”), a Delaware limited liability company, together with its consolidated subsidiaries (collectively, the “Company” or “Oz Management”), is a global alternative asset management firm with offices in New York, London, Hong Kong, Mumbai and Shanghai. The Company provides asset management services to its investment funds (the “funds”), which pursue a broad range of global investment opportunities. The Company currently manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”) and other customized solutions for clients. The Company’s primary sources of revenues are management fees, which are based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of its funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the funds. The Company currently has two operating segments: Oz Funds and Real Estate. T he Oz Funds segment provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles. The Real Estate segment provides asset management services to the Company’s real estate funds. In the fourth quarter of 2018, the Real Estate segment met the threshold for a reportable segment. As a result, the Company began reporting operating segment results for both segments and has adjusted prior-period disclosures to present comparable information. The Company generates substantially all of its revenues in the United States. The liability of the Company’s Class A Shareholders is limited to the extent of their capital contributions. The Company conducts its operations through OZ Management LP, OZ Advisors LP and OZ Advisors II LP (collectively, the “Oz Operating Partnerships” and collectively with their consolidated subsidiaries, the “Oz Operating Group”). References to the Company’s “executive managing directors” refer to the current limited partners of OZ Management LP, OZ Advisors LP and OZ Advisors II LP other than the Company’s intermediate holding companies, and include the Company’s founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business. References to the “Ziffs” refer collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons. References to the Company’s “intermediate holding companies” refer, collectively, to Och-Ziff Holding Corporation (“Oz Corp”) and Och-Ziff Holding LLC (“Oz Holding”), each of which are wholly owned subsidiaries of the Registrant. As previously disclosed, the Registrant, certain of its subsidiaries and Mr. Och entered into a letter agreement dated December 5, 2018 providing for the implementation of certain transactions (the letter agreement together with the term sheet attached thereto, as amended, collectively, the “Letter Agreement”). The Letter Agreement provided for, among other things, the preparation and execution of further agreements (the “Implementing Agreements”) and other actions to implement the transactions contemplated by the Letter Agreement (collectively, the “Recapitalization”). In February 2019, the Company completed the Recapitalization. See Note 19 for additional details. Company Structure As of December 31, 2018 , the Registrant is a holding company that, through its intermediate holding companies, holds equity ownership interests in the Oz Operating Group. The Registrant had issued and outstanding the following share classes: • Class A Shares —Class A Shares are publicly traded and entitle the holders thereof to one vote per share on matters submitted to a vote of shareholders. The holders of Class A Shares are entitled to any distributions declared by the Registrant’s Board of Directors (the “Board”). • Class B Shares —Class B Shares are held by the Company’s executive managing directors. These shares are not publicly traded but rather entitle the executive managing directors to one vote per share on matters submitted to a vote of shareholders. These shares do not participate in the earnings of the Registrant, as the executive managing directors participate in the related economics of the Oz Operating Group through their direct ownership of Group A Units, Group D Units and the Preferred Units, as discussed below. Class B Shares represent a majority of the outstanding voting shares of the Company. Holders of the Class B Shares have granted an irrevocable proxy to vote all of their Class B Shares to the Class B Shareholder Committee, the sole member of which is currently Mr. Och, as it may determine in its sole discretion. As a result, Mr. Och is currently able to control all matters requiring the approval of the Company’s shareholders. In connection with the Recapitalization described in Note 19 , this proxy will terminate on the “Transition Date,” which will be the 30th day following the completion of the Liquidity Redemption (as defined below), subject to extension in certain cases whereby Mr. Och or his related parties are not permitted to effect redemptions of their capital in funds managed by the Company. The Company conducts its operations through the Oz Operating Group. The following is a list of the outstanding units of the Oz Operating Partnerships as of December 31, 2018 : • Group A Units —The Group A Units are equity interests held by the Company’s executive managing directors. Once vested, these units may be exchanged on a one-to-one basis for Class A Shares, subject to transfer restrictions. • Group B Units —The Group B Units are equity interests held by the Company’s intermediate holding companies. These units represent the Company’s economic interest in the Oz Operating Group. • Group D Units —The Group D Units are profits interests held by executive managing directors. These units receive distributions on a pro rata basis with the Group A Units and the Group B Units. A Group D Unit converts into a Group A Unit when the Company determines that it has become economically equivalent to a Group B Unit (a “book-up”), at which point it is considered a grant of equity-based compensation. As of December 31, 2018 , the Group D Units represented a 7.8% non-equity profits interest in the Oz Operating Group. Group D Units are not considered equity for GAAP purposes, and therefore distributions made to holders of these units are recognized within compensation and benefits in the consolidated statements of comprehensive income (loss). • Group P Units —The Group P Units are equity interests held by the certain executive managing directors. Group P Units entitle holders to receive distributions of future profits of the Oz Operating Group, and each Group P Unit becomes exchangeable for one Class A Share (or the cash equivalent thereof), in each case upon satisfaction of certain service and market conditions and at such time the Company determines that a Group P Unit has become economically equivalent to a Group A Unit. The terms of the Group P Units may be varied for certain executive managing directors. Group P Unit grants are accounted for as equity-based compensation. See Note 12 for additional information. • Preferred Units —The Preferred Units are non-voting preferred equity interests in the Oz Operating Group entities and have an aggregate liquidation preference of $1,000 , plus accrued and unpaid distributions. See Note 10 for additional information regarding the terms of the Preferred Units. As of December 31, 2018 , the Company issued its executive managing directors a number of Class B Shares of the Registrant equal to the number of Group A Units and Group P Units held. Upon the exchange of a Group A Unit or a Group P Unit for a Class A Share, the corresponding Class B Share is canceled and a Group B Unit is issued to the intermediate holding companies of the Company. In addition, the Company issues Class A restricted share units (“RSUs”) and, beginning in 2018, performance-based RSUs (“PSUs”) to its employees and executive managing directors as a form of compensation. RSU and PSU grants are accounted for as equity-based compensation. See Note 12 for additional information regard RSUs and PSUs. Reverse Share Split At the close of trading on January 3, 2019, the Company effectuated a 1-for-10 reverse share split (the “Reverse Share Split”) of the Class A Shares. As a result of the Reverse Share Split, every ten issued and outstanding Class A Shares were combined into one Class A Share. In addition, corresponding adjustments were made to the Class B Shares, Group A Units, Group B Units, Group D Units, Group P Units, RSUs and PSUs. All prior period share, unit, per share and per unit amounts have been restated to give retroactive effect to the Reverse Share Split. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements of the Company. The most critical of these estimates are related to (i) fair value measurements of the assets and liabilities of the funds, which impacts the Company’s management fees and incentive income; (ii) the determination of whether to recognize incentive income; (iii) the determination of whether or not to consolidate a variable interest entity; and (iv) the estimate of future taxable income, which impacts the carrying amount of the Company’s deferred income tax assets. While management believes that the estimates utilized in preparing the consolidated financial statements are reasonable and prudent, actual results could differ materially from those estimates. Foreign Currency The functional currency of substantially all of the Company’s consolidated subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars at the closing rates of exchange on the balance sheet date. Gains and losses on transactions denominated in foreign currencies due to changes in exchange rates are recorded as other expenses within general, administrative and other in the consolidated statements of comprehensive income (loss). Consolidation Policies The Company adopted Accounting Standards Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis as of January 1, 2016 using the modified retrospective method of transition, which resulted in a cumulative effect adjustment to opening equity on the date of adoption. The impact to the Company’s opening retained earnings in 2016 was driven by the cumulative effect of a change in the incentive income recognition methodology for the funds no longer consolidated by the Company, net of deferred income tax effects. The Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds are generally organized using a “master-feeder” structure. Fund investors, including the Company’s executive managing directors, employees and other related parties, to the extent they invest in a given fund, generally invest directly into the feeder funds. These feeder funds are typically limited partnerships or limited companies that hold direct or indirect interests in a master fund. The master fund, together with its subsidiaries, is the primary investment vehicle for its feeder funds. The Company generally collects its management fees and incentive income from the feeder funds or subsidiaries of the feeder funds (“intermediate funds”), and generally does not collect any management fees or incentive income directly from the master funds. The Company also organizes certain funds (e.g., its real estate funds and closed-end opportunistic credit funds) without the use of a master-feeder structure. These are typically organized as limited partnerships, in which the Company is the general partner and collects management fees and incentive income directly from these entities; however, in the case of the real estate funds, the Company collects management fees directly from those funds’ investors. Finally, CLOs are collateralized financing vehicles that issue notes to investors and use those proceeds to acquire various types of credit-related investments that serve as collateral for the notes. Senior notes issued by these vehicles make periodic payments based on a stated interest rate, while the most subordinated notes have no stated interest rate but receive periodic payments from excess cash flows remaining after periodic payments have been made to the other notes and for fees and expenses due. The Company generally directs the activities of its funds through its role as general partner or as the investment manager or CLO collateral manager with decision-making rights. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Fee arrangements are not considered variable interests when they are commensurate with the level of effort required to provide services and include only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length, and where the Company does not hold other interests in the entity that would absorb more than an insignificant amount of the variability of the entity. Where the Company does not have a variable interest in the entity, it will not consolidate the entity. Where the Company has a variable interest, it is required to determine whether the entity will be considered as a Variable Interest Entity (“VIE”) or Voting Interest Entity (“VOE”), the classification of which will determine the analysis that the Company is required to perform when determining whether it should consolidate the entity. The consolidated financial statements include the accounts of the Registrant and entities in which it, directly or indirectly, is determined to have a controlling financial interest under the following set of guidelines: • VIEs— The Company determines whether, if by design, an entity has any of the following characteristics: (i) equity investors who lack the characteristics of a controlling financial interest; (ii) the entity does not have sufficient equity at risk to finance its expected activities without additional subordinated financial support from other parties; or (iii) substantially all of the activities of the entity are performed on behalf of a party with disproportionately few voting rights. An entity with any one of these characteristics is a VIE. Partnerships, and similarly structured entities, will be considered as VIEs where a simple majority of third party investors with equity at risk are not able to exercise substantive kick-out or participating rights over the general partner. • VOEs— Where an entity does not have the characteristics of a VIE, it is a VOE. The determination of whether a fund is a VIE or a VOE is based on the facts and circumstances for each individual fund in accordance with the guidelines described below. Classification of such entities is reassessed where there is a substantive change in the governing documents or contractual arrangements of the entity, to the capital structure of the entity or in the activities of the entity. The Company continuously reassesses whether it should consolidate a VIE or VOE. Funds that are VIEs Funds that are VIEs are generally VIEs because fund investors are deemed to lack the characteristics of a controlling financial interest or the entity does not have sufficient equity at risk. The party identified as the primary beneficiary of a VIE is required to consolidate the entity. A party is the primary beneficiary of a VIE where it has a controlling financial interest in the entity, which is defined as (i) the power to direct the activities of the entity that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Where the Company does not have a controlling financial interest, but is part of a related party group under common control that collectively has characteristics of a controlling financial interest, the Company may be required to determine which party within the related party group is more closely associated with the VIE and would therefore consolidate a VIE. This assessment would also be performed where power is shared within a related party group that collectively has characteristics of a controlling financial interest. For the purposes of determining whether it is the primary beneficiary of a fund that is a VIE, the Company considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. The types of funds that are VIEs and not consolidated are generally (i) master funds and intermediate fund vehicles for the Company’s multi-strategy funds, as well as opportunistic credit, real estate and certain other fund vehicles, as third party investors in these entities have not been granted substantive removal rights; and (ii) CLOs, as they lack sufficient equity at risk to finance their expected activities without additional subordinated financial support from other parties. The Company does not consolidate VIEs where it does not have a controlling financial interest. The types of funds that are VIEs consolidated by the Company are certain new funds that the Company has seeded and generally expects to deconsolidate when the fund has a certain level of additional third party capital. Funds that are VOEs Funds that are corporations, or similarly structured entities, that are not VIEs would be consolidated by the Company where the Company has a majority equity investment and has control over significant operating, financial and investing decisions of the entity. The Company will generally not consolidate partnerships, or similarly structured entities, that are not VIEs where a single investor or simple majority of third party investors with equity have the ability to exercise substantive kick-out or participating rights. The types of funds that are VOEs and not consolidated by the Company are generally feeder funds of the Company’s multi-strategy funds, as third party fund investors in these entities have been granted substantive removal rights. The Company does not currently consolidate any funds that are VOEs. Allocations of Oz Operating Group Earnings and Capital The Company consolidates the Oz Operating Group. Earnings of the Oz Operating Group are allocated on a pro rata basis between the Group A Units, which interests are reflected within net income (loss) attributable to noncontrolling interests, and Group B Units, which interests are reflected within net income (loss) attributable to Och-Ziff Capital Management Group LLC, in the consolidated statements of comprehensive income (loss). Paid-in capital of the Oz Operating Group is also allocated pro rata between the Group A Units, which interests are reflected within noncontrolling interests, and Group B Units, which interests are reflected within the Company’s paid-in capital, in the consolidated balance sheets. As of December 31, 2018 , Group P Units are not participating in the earnings of the Oz Operating Group, as certain service and performance conditions, as described in Note 12 , have not been met as of the reporting period end. See Note 3 for additional information regarding the Company’s interest in the Oz Operating Group. Noncontrolling Interests and Appropriated Retained Deficit The Group A Units represent interests in the Oz Operating Group not held by the Company, and amounts attributable to these units are presented as noncontrolling interests in the consolidated balance sheets. Additionally, the Company consolidates certain credit funds that it manages, wherein investors are able to redeem their interests on a monthly basis. Amounts relating to these fund investors’ interests in these funds are presented as redeemable noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests are presented as net income (loss) attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss). The Company also consolidated the CLOs it managed prior to adoption of ASU 2015-02 on January 1, 2016. The Company elected the fair value option for the notes and loans payable of the consolidated CLOs upon the initial consolidation of each CLO. The recognition of the difference between the fair value of assets and liabilities of consolidated CLOs was presented as appropriated retained deficit. See Note 3 for additional information regarding noncontrolling interests. Preferred Units The Company presents Preferred Units as redeemable noncontrolling interests, outside of permanent equity on the Company’s consolidated balance sheet, as the redemption of the Preferred Units may be effected in a manner not solely in control of the Company. The Company recorded the proceeds from the issuance and sale net of transactions costs. As the redemption of the Preferred Units is outside of the control of the Company, the carrying value of the Preferred Units is their current full redemption value. The change in redemption value was treated as a reduction of the common equity holders’ interests in the Oz Operating Group. The pro rata share of the change in redemption value that was allocable to the Registrant was treated as a reduction of net income (loss) attributable to Class A Shareholder when calculating earnings (loss) per Class A Share. See Note 10 for additional information on the Preferred Units. Revenue Recognition Policies The Company provides asset management services to its customers, including certain administrative services related to the funds’ operations, in exchange for management and incentive fees, which are included in the Company’s agreements with its customers. The services provided in connection with the identified performance obligations are satisfied over time. The agreements are generally automatically renewed on an annual basis unless the agreements are terminated by the general partner or directors of the respective funds. Management Fees Management fees for the Company’s multi-strategy funds typically range from 0.96% to 2.25% annually of assets under management based on the net asset value of these funds. For the Company’s opportunistic credit funds, management fees typically range from 0.50% to 1.75% annually based on the net asset value of these funds. Management fees for Institutional Credit Strategies, which primarily relate to CLOs, generally range from 0.35% to 0.50% annually based on the par value of the collateral and cash held in the CLOs. Management fees for the Company’s real estate funds typically range from 0.75% to 1.50% annually based on the amount of capital committed or invested during the investment period, and on the amount of invested capital after the investment period. Management fees are recognized over the period during which the related services are performed. Management fees are generally calculated and paid to the Company on a quarterly basis in advance, based on the amount of assets under management at the beginning of the quarter. Management fees are prorated for capital inflows and redemptions during the quarter. Accordingly, changes in the Company’s management fee revenues from quarter to quarter are driven by changes in the quarterly opening balances of assets under management, the relative magnitude and timing of inflows and redemptions during the respective quarter, as well as the impact of differing management fee rates charged on those inflows and redemptions. The Company considers management fees to be a form of variable consideration, as the amount earned each quarter may depend on various contingencies, such as the value of assets under management, capital inflows and outflows during the period, or changes in committed or invested capital. Management fees, however, are generally recognized at the end of each reporting period and are not subject to clawback and, therefore, the value of the management fees the Company is entitled to receive at the end of each quarter is generally no longer subject to the constraint. Incentive Income The Company earns incentive income based on the cumulative performance of the funds over a commitment period. Prior to the adoption of new revenue recognition accounting guidance in 2018, incentive income was recognized at the end of the applicable commitment period when the amounts were contractually payable, or “crystallized,” and when no longer subject to clawback. Beginning in 2018, as a result of the adoption of the new revenue recognition accounting guidance, the Company recognizes incentive income when such amounts are probable of not significantly reversing. Incentive income is typically equal to 20% of the realized and unrealized profits, net of management fees, attributable to each fund investor in the Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds. Incentive income excludes unrealized gains and losses attributable to investments that the Company, as investment manager, believes lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance (“Special Investments”). For the Company’s closed-end opportunistic credit funds, real estate funds and certain other funds, incentive income is typically equal to 20% of the realized profits, net of management fees, attributable to each fund investor. For CLOs, incentive income is typically 20% of the excess cash flows available to the holders of the subordinated notes. The Company’s ability to earn incentive income from some of its funds may be impacted by hurdle rates, whereby the Company is not entitled to incentive income until the investment returns exceed an agreed upon benchmark. For a portion of these assets subject to hurdle rates, once the investment performance has exceeded the hurdle rate, the Company may receive a preferential “catch-up” allocation, equal to a full 20% of the net profits attributable to investors in these assets. All of the Company’s multi-strategy funds and open-end opportunistic credit funds are subject to a perpetual loss carry forward, or perpetual “high-water mark,” meaning the Company will not be able to earn incentive income with respect to positive investment performance it generates for a fund investor in any year following negative investment performance until that loss is recouped, at which point a fund investor’s investment surpasses the high-water mark. The Company earns incentive income on any profits, net of management fees, in excess of the high-water mark. The commitment period for most of the Company’s multi-strategy assets under management is for a period of one year on a calendar-year basis with incentive income recognized annually on December 31. The Company may also recognize incentive income related to fund investor redemptions at other times during the year, and on assets under management subject to commitment periods that are longer than one year. The Company may also recognize incentive income for tax distributions that the Company is entitled to that cover estimated tax obligations of the Company related to the management of certain funds. These distributions are not subject to clawback once distributed to the Company. Incentive income is considered variable consideration, the recognition of which is subject to constraint. Incentive income is no longer constrained when it is probable that a significant reversal will not occur. Determining the amount of incentive income to record is subject to qualitative and quantitative factors including, where a fund is in its life-cycle, whether the Company has received or is entitled to receive incentive income distributions and potential sales of fund investments. The Company continuously evaluates whether there are additional considerations that could potentially impact the recognition of incentive income. To the extent that distributions have been received, but for which the recognition of incentive income is not appropriate, the Company will recognize a liability for unearned incentive income. See Note 11 for additional information regarding the Company’s revenues. Other Revenues Other revenues consist primarily of interest income on investments in CLOs and cash and cash equivalents. Interest income is recognized on an effective yield basis. Additionally, prior to the sale of the Company’s aircraft in the first half of 2017, revenue related to non-business use of the corporate aircraft by certain executive managing directors was also included within other revenues and was recognized on an accrual basis based on actual flight hours. Compensation and Benefits Compensation and benefits is comprised of salaries, benefits, payroll taxes, and discretionary and guaranteed cash bonus expense. The Company generally recognizes compensation and benefits expenses over the related service period. Bonus Compensation On an annual basis, compensation and benefits comprise a significant portion of total expenses, with discretionary cash bonuses generally comprising a significant portion of total compensation and benefits. The Company accrues minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued during the first three quarters of each year, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year. Equity-Based Compensation Compensation expense related to equity-classified share-based payments with a service condition is based on the grant-date fair value and recognized on a straight-line basis over the requisite service period for awards with both cliff vesting and graded vesting. The Company accounts for forfeitures on share-based compensation arrangements as they occur. The Company recognizes all income tax effects of awards within consolidated net income (loss) when the awards vest or are settled. For liability-classified share-based payments, the Company recognizes compensation expense over the requisite service period adjusted to the fair value as of the end of the reporting period. Compensation expense related to equity-classified share-based payments related to Group P Units, which include both a service and a market condition, is based on the estimated fair value of the awards at the date of grant, using graded vesting, which separately considers and recognizes compensation expense over the requisite service period for each tranche. See Note 12 for additional information on the Company’s equity-based compensation plans. Group D Units The Group D Units are not considered equity under GAAP, and therefore no equity-based compensation expense is recognized related to these units when they are granted. Distributions to holders of Group D Units are included within compensation and benefits in the consolidated statements of comprehensive income (loss). These distributions are accrued in the quarter in which the related income was earned and are paid out the following quarter at the same time distributions on the Group A Units and dividends on the Company’s Class A Shares are paid. A Group D Unit converts into a Group A Unit to the extent the Company determines that it has become economically equivalent to a Group A Unit. Upon the conversion of Group D Units into Group A Units, we recognize a one-time charge for the grant-date fair value of the vested units and begin to amortize the grant-date fair value of the unvested units over the vesting period. Profit Sharing Arrangements The Company also has profit-sharing arrangements whereby certain employees and executive managing directors are entitled to a share of incentive income distributed to the Company by certain funds. To the extent that the payments made by the Company to the employees and executive managing directors are probable and reasonably estimable, the Company accrues these payments as compensation expense, which may occur prior to the recognition of the related incentive income. Deferred Cash Interests (DCIs) DCIs are granted to certain employees and executive managing directors as a form of compensation. DCIs generally vest over a three year period, subject to an employee’s or executive managing director’s continued service. Upon vesting, the Company pays the employee or executive managing director an amount in cash equal to the notional investment in specified funds represented by the DCIs, as adjusted for fund performance over the service period. Except as otherwise provided in the relevant deferred cash interest plan or in an award agreement, in the event of a termination of the employee’s or executive managing director’s service, any portion of the DCIs that are unvested as of the date of termination will be forfeited. The Company recognizes the total notional investment as compensation expense, as adjusted for notional fund performance, over the related service period. Income Taxes Deferred income tax assets and liabilities resulting from temporary differences between the GAAP and tax bases of assets and liabilities are measured at the balance sheet date using enacted income tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The Company offsets deferred income tax assets and liabilities for presentation in its consolidated balance sheets when such assets and liabilities are within the same legal entity and related to the same taxing jurisdiction. The realization of deferred income tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the enacted tax law in the applicable tax jurisdiction. A valuation allowance is established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether a valuation allowance should be established, as well as the amount of such allowance. The Company recognizes the income tax accounting effects of changes in tax law or rates (including retroactive changes) in the period of enactment . Future events such as changes in tax legislation could have an impact on the provision for income taxes and the effective income tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The Company records interest and penalties related to income taxes within income taxes in the consolidated statements of comprehensive income (loss). Cash and Cash Equivalents and Restricted Cash The Company considers highly-rated liquid investments that have an original maturity of three months or less from the date of purchase to be cash equivalents. Cash equivalents are recorded at amortized cost plus accrued interest. As of December 31, 2018 , the majority of the Company’s cash and cash equivalents were held with one major financial institution, which exposes the Company to a certain degree of credit risk concentration. Restricted cash represents amounts that are restricted as to usage due to regulatory reasons. The following table summarizes the Company’s cash and cash equivalents and restricted cash balances as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 (dollars in thousands) Cash and cash equivalents $ 315,809 $ 469,513 Restricted cash 8,075 — Total Cash and Cash Equivalents and Restricted Cash $ 323,884 $ 469,513 Investments Investments in CLOs The Company elected to measure its investments in notes issued by CLOs managed by the Company at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net (losses) gains on investments in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method, and includes this income within other revenues in the consolidated statements of comprehensive income (loss). Investments in Other Funds The Company’s equity investments in funds are accounted for under the equity method of accounting. The Company recognizes its share of earnings within net (losses) gains on investments in the consolidated statements of comprehensive income (loss). Investments in United States Government Obligations The Company invests in United States government obligations to manage excess liquidity. These investments are carried at fair value, as the Company has elected the fair value option in order to include any gains or losses within consolidated net income (loss). These investments are recorded in the consolidated balance sheet within cash and cash equivalents for investments with an original maturity from the date of purchase of three months or less, and within investments for those longer than three months. Changes in fair value of these investments were immaterial for the years ended December 31, 2018 , 2017 and 2016 . Transfers of Financial Assets From time to time, the Company purchases loans in the open market and sells the loans at cost to CLOs it manages. The Company accounts for the transfer of these loans as a sale upon meeting the following requirements: (i) the transferred assets are legally isolated from the Company; (ii) holder of the notes issued by the CLO (other than the Company) must have the right to sell or pledge their notes; and (iii) the Company may not maintain effective control over the transferred loans. The Company continues to recognize acquired loans until the requirements are met. Any loans for which the requirements above have not been met are classified as held for sale and measured at the lower of cost or fair value. See Note 4 for additional information. Fixed Assets Fixed assets are recorded at cost less accumulated depreciation and amortization within other assets, net in the consolidated balance sheets. The Company evaluates fixed assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be fully recovered. Depreciation and amortization of fixed assets are calculated using the straight-line method over the following depreciable lives: the shorter of the related lease term or expected useful life for leasehold improvements and 3.0 years to 7.0 years for all other fixed assets. If a fixed asset is reclassified as held for sale, it is carried at the lower of existing carrying value or its estimated net selling price, and the asset is no longer depreciated. Goodwill Goodwill is included within other assets, net in the Company’s consolidated balance sheets and relates to the Company’s 2007 acquisition of an additional 25% interest in its domestic real estate operations from one of its former joint venture partners. The Company tests goodwill for impairment on an annual basis or more frequently if events or circumstances justify conducting an interim test. Securities Sold Under Agreements to Repurchase Securities sold under agreements to repurchase (“repurchase agreements”) are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. Securities transferred to counterparties under repurchase agreements are included within investments in the consolidated balance sheets. Cash received under a repurchase agreement is recognized a liability within securities sold under agreements to repurchase in the consolidated balance sheets. Interest expense is recognized on an effective yield basis and is included within interest expenses in the consolidated statements of comprehensive income (loss). See Note 9 for additional information. Policies of Consolidated Funds The funds are considered investment companies for GAAP purposes. Pursuant to specialized accounting guidance for investment companies and the retention of that guidance in the Company’s consolidated financial statements, the investments held by the consolidated funds’ are reflected in the consolidated financial statements at their estimated fair values. Income of Consolidated Funds Income of consolidated funds consists of interest income, dividend income and other miscellaneous items. Interest income is recorded on an accrual basis. The consolidated funds ma |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | NONCONTROLLING INTERESTS AND OZ OPERATING GROUP OWNERSHIP Noncontrolling interests represent ownership interests in the Company’s subsidiaries held by parties other than the Company, and primarily relate to the Group A Units held by the Company’s executive managing directors. Net (loss) income attributable to the Group A Units is driven by the earnings of the Oz Operating Group. The following table presents the components of the net (loss) income attributable to noncontrolling interests: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Group A Units $ (25,716 ) $ 130,730 $ (195,087 ) Consolidated funds — — 262 Other 807 900 1,068 $ (24,909 ) $ 131,630 $ (193,757 ) The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: December 31, 2018 December 31, 2017 (dollars in thousands) Group A Units $ 415,928 $ 353,791 Other 3,503 4,111 $ 419,431 $ 357,902 The Preferred Units and fund investors’ interests in certain consolidated funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests: Year Ended December 31, 2018 2017 2016 Funds Preferred Units Total Funds Preferred Units Total Funds Preferred Units Total (dollars in thousands) Beginning balance $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 $ 832,284 $ — $ 832,284 Deconsolidation of funds on adoption of ASU 2015-02 — — — — — — (813,116 ) — (813,116 ) Change in redemption value of Preferred Units — — — — 7,446 7,446 — 16,043 16,043 Preferred Units issuance, net of issuance costs — — — — 150,054 150,054 — 246,457 246,457 Capital contributions 147,217 — 147,217 2,329 — 2,329 3 — 3 Capital distributions (15,465 ) — (15,465 ) — — — — — — Comprehensive income 291 — 291 1,667 — 1,667 2,450 — 2,450 Ending Balance $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 Oz Operating Group Ownership The Company’s equity interest in the Oz Operating Group increased to 43.6% as of December 31, 2018 , from 41.5% as of December 31, 2017 , (excluding Group P Units, as they are not yet participating in the economics of the Oz Operating Group). Changes in the Company’s interest in the Oz Operating Group have historically been, and in the future may be, driven by the following: (i) the exchange of Group A Units and Group P Units for an equal number of Class A Shares, at which time the related Class B Shares are also canceled; (ii) the issuance of Class A Shares under the Company’s Amended and Restated 2007 Equity Incentive Plan and 2013 Incentive Plan related to the settlement of the RSUs or the PSUs; (iii) the forfeiture of Group A Units and participating Group P Units by a departing executive managing director; and (iv) the repurchase of Class A Shares and Group A Units. The Company’s interest in the Oz Operating Group is expected to continue to increase over time as additional Class A Shares are issued upon the exchange of Group A Units and Group P Units, as well as the settlement of vested RSUs or PSUs. These increases will be offset upon any conversion by an executive managing director of Group D Units, which are not considered equity for GAAP purposes, into Group A Units, at which time an equal number of Class B Shares is also issued to the executive managing director. Additionally, the Company’s economic interest in the Oz Operating Group will decline when Group P Units begin to participate, as described in Note 12 . Relinquishment of Group A Units Oz Corp and Oz Holding, as the general partners of the Oz Operating Partnerships (collectively, the “General Partners”), entered into a Relinquishment Agreement with Daniel S. Och and certain family trusts over which Mr. Och has investment control (the “Och Trusts”) effective as of March 1, 2017 (the “Relinquishment Agreement”). Pursuant to the Relinquishment Agreement, Mr. Och and the Och Trusts agreed to cancel, in the aggregate, 3.0 million of their vested Group A Units. The Company accounted for the transaction as a repurchase of Group A Units for no consideration. A corresponding number of Class B Shares were also canceled. The Relinquishment Agreement provides that if any of the Group D Units granted to James S. Levin on March 1, 2017 are forfeited, such forfeited units (up to an aggregate amount of 3.0 million ) shall be reallocated to Mr. Och and the Och Trusts pursuant to the terms of the Oz Operating Partnerships’ limited partnership agreements; however, in February 2018, Mr. Och announced that he is disclaiming his right to receive any forfeited units and instead the Group D Units forfeited by James S. Levin have been canceled. In the third quarter of 2018, a former executive managing director of the Company relinquished 350,000 Group A Units and an equal number of Class B Shares. Dilution of Proceeds from Tax Receivable Agreement Amendment In September 2016, the Company amended the tax receivable agreement to provide that no amounts will be due or payable under the tax receivable agreement by Oz Corp, one of the Company’s wholly owned intermediate holding companies, with respect to the 2015 and 2016 taxable years. During the first quarter of 2017, Oz Corp contributed to the Oz Operating Group the cash previously set aside for such payments, which resulted in a reallocation of such contribution between the Company’s paid-in capital and the paid-in capital of the Group A Units (including within noncontrolling interests). |
Investments and Fair Value Disc
Investments and Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | INVESTMENTS AND FAIR VALUE DISCLOSURES The following table presents the components of the Company’s investments as reported in the consolidated balance sheets: December 31, 2018 December 31, 2017 (dollars in thousands) United States government obligations, at fair value $ 179,510 $ 12,973 CLOs, at fair value 181,868 211,749 Other investments, equity method 28,519 14,252 Total Investments $ 389,897 $ 238,974 In the second quarter of 2018, as a result of a recent court decision that vacates application of U.S. risk retention rules in certain CLO transactions, the Company sold certain of its investments in CLOs and recognized an immaterial net loss on the sale. The Company is still subject to EU risk retention rules for certain CLOs it manages, and therefore continues to hold investments in these CLOs. Fair Value Disclosures Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Assets and liabilities measured at fair value are classified into one of the following categories: • Level I – Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives. • Level II – Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives. • Level III – Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include CLOs, real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations and investments in affiliated credit funds. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair Value Measurements Categorized within the Fair Value Hierarchy The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2018 : As of December 31, 2018 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 58,054 $ — $ — $ 58,054 Included within investments: United States government obligations $ 179,510 $ — $ — $ 179,510 CLOs (1) $ — $ — $ 181,868 $ 181,868 Investments of consolidated funds: Bank debt $ — $ 91,345 $ 75,613 $ 166,958 Corporate bonds — 4,537 — 4,537 Total Investments of Consolidated Funds $ — $ 95,882 $ 75,613 $ 171,495 _______________ (1) As of December 31, 2018 , investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2017 : As of December 31, 2017 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 99,704 $ — $ — $ 99,704 Included within investments: United States government obligations $ 12,973 $ — $ — $ 12,973 CLOs (1) $ — $ — $ 211,749 $ 211,749 Investments of consolidated funds: Bank debt $ — $ 24,559 $ 18,807 $ 43,366 _______________ (1) As of December 31, 2017 , investments in CLOs had contractual principal amounts of $189.2 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. Reconciliation of Fair Value Measurements Categorized within Level III Gains and losses, excluding those of the consolidated funds are recorded within net (losses) gains on investments in the consolidated statements of comprehensive income (loss), and gains and losses of the consolidated funds are recorded within net gains of consolidated funds. Amortization of premium, accretion of discount and foreign exchange gains and losses on non-U.S. Dollar investments are also included within gains and losses in the tables below. The following tables summarize the changes in the Company’s Level III assets and liabilities for the years ended December 31, 2018 : December 31, 2017 Transfers Transfers Investment Investment Gains / Losses December 31, 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 211,749 $ — $ — $ 157,099 $ (175,272 ) $ (11,708 ) $ 181,868 Investments of consolidated funds: Bank debt $ 18,807 $ 1,671 $ (1,244 ) $ 146,658 $ (88,600 ) $ (1,679 ) $ 75,613 The following tables summarize the changes in the Company’s Level III assets and liabilities for the years ended December 31, 2017 : December 31, 2016 Transfers In Transfers Out Investment Purchases / Issuances Investment Sales Gains/Losses December 31, 2017 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 21,341 $ — $ — $ 185,404 $ (647 ) $ 5,651 $ 211,749 Investments of consolidated funds: Bank debt $ 18,127 $ 587 $ (17,311 ) $ 89,225 $ (73,069 ) $ 1,248 $ 18,807 In the second quarter of 2017, the Company consolidated a CLO, for which the amounts related to the initial consolidation of the CLO are reflected in the investment purchases in the table above. The Company deconsolidated the CLO in the third quarter of 2017, and such amounts related to the deconsolidation of the CLO are included within investment sales. Transfers out of Level III presented in the tables above resulted from the fair values of certain securities becoming market observable, with fair value determined using independent pricing services. Transfers into Level III presented in the table above resulted from the valuation of certain investments with decreased market observability, with fair values determined using independent pricing services. The table below summarizes the net change in unrealized gains and losses on the Company’s Level III investments held as of the reporting date: Year Ended December 31, 2018 2017 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ (9,998 ) $ 5,651 Investments of consolidated funds: Bank debt $ (2,160 ) $ 97 Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III Investments in CLOs, bank debt and corporate bonds are valued using independent pricing services, and therefore the Company does not have transparency into the significant inputs used by such services. The Company elected to measure its investments in CLOs at fair value through consolidated net (loss) income in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net gains on investments in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method. As further discussed in Note 5, the Company consolidated a CLO warehouse vehicle beginning in the second quarter of 2017, which was then deconsolidated during the third quarter of 2017. The Company elected to measure the debt obligations of the consolidated CLO at fair value through consolidated net income (loss) in order to mitigate the accounting mismatch between the carrying values of the assets and liabilities of the consolidated CLO. For the period the CLO was consolidated, changes in fair value of these assets and liabilities were included within net gains (losses) of consolidated funds in the consolidated statements of comprehensive income (loss). The Company accrued interest income and interest expense of the consolidated CLO using the effective interest method. Fair Value of Other Financial Instruments Management estimates that the carrying value of the Company’s other financial instruments, including its debt obligations and repurchase agreements, approximated their fair values as of December 31, 2018 . The fair value measurements for the Company's debt obligations and repurchase agreements are categorized as Level III within the fair value hierarchy and were determined using independent pricing services. Assets Measured at Fair Value on a Non-Recurring Basis The Company recognizes loans held for sale at the lower of cost or fair value. The Company had $29.1 million of loans held for sale as of December 31, 2017. As of December 31, 2017, $26.7 million and $2.4 million of the loans held for sale were categorized as Level II and Level III within the fair value hierarchy, respectively. The fair value for the loans was determined using independent pricing services. The Company had no loans held for sale as of December 31, 2018. Loans Sold to CLOs Managed by the Company In the years ended December 31, 2018 and 2017 , the Company sold $29.8 million and $71.3 million of loans to CLOs managed by the Company, respectively. These loans were previously purchased by the Company in the open market, and were sold for cash at cost to the CLOs. The loans were accounted for as transfers of financial assets and met the criteria for derecognition under GAAP. The Company invests in senior secured and subordinated notes issued by certain CLOs to which it sold the loans discussed above. These investments represent retained interests to the Company and are in the form of a 5% vertical strip (i.e., 5% of each of the senior and subordinated tranches of notes issues by each CLO). The retained interests are reported within investments on the Company’s consolidated balance sheet. In the years ended December 31, 2018 and 2017 , the Company made investments of $24.9 million and $45.4 million , respectively, related to these retained interests. As of December 31, 2018 and 2017 , the Company’s investments in these retained interests had a fair value of $89.4 million and $70.4 million , respectively. The Company is subject to risks associated with the performance of the underlying collateral and the market yield of the assets. The Company’s risk of loss from retained interest is limited to its investments in these interests. The Company receives quarterly payments of interest and principal, as applicable, on these retained interests. In the years ended December 31, 2018 and 2017 , the Company received $6.4 million and $647 thousand , respectively, of interest and principal payments related to the retained interests. The Company uses independent pricing services to value its investments in the CLOs, including the retained interests, and therefore the only key assumption is the price provided by such service. A corresponding adverse change of 10% or 20% on price would have a corresponding impact on the fair value of the Company’s investments in CLOs. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES In the ordinary course of business, the Company sponsors the formation of funds that are considered VIEs. See Note 2 for a discussion of entities that are VIEs and the evaluation of those entities for consolidation by the Company. In the second quarter of 2017, the Company consolidated one of the CLOs it manages as a result of increasing its investment in the vehicle, which provided the Company with a controlling financial interest in the VIE. In the third quarter of 2017, the CLO emerged from warehouse and the Company’s interest in the CLO was limited to an investment in each tranche issued by the CLO. Due to the reconsideration event, the Company deconsolidated the CLO in the third quarter of 2017. No gains or losses were recognized as a result of the deconsolidation. The table below presents the assets and liabilities of VIEs consolidated by the Company: December 31, 2018 December 31, 2017 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ 171,495 $ 43,366 Other assets of consolidated funds 21,090 13,331 Total Assets $ 192,585 $ 56,697 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 14,541 11,340 Total Liabilities $ 14,541 $ 11,340 The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability. The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, insignificant direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 17 . The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated. The table below presents the net assets of VIEs in which the Company has variable interests along with the maximum risk of loss as a result of the Company’s involvement with VIEs: December 31, 2018 December 31, 2017 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 10,236,438 $ 8,300,163 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 62,038 144,124 Income and fees receivable 31,658 24,953 Investments in funds 190,674 222,192 Maximum Exposure to Loss $ 284,370 $ 391,269 |
Other Assets, Net
Other Assets, Net | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets, Net | OTHER ASSETS, NET The following table presents the components of other assets, net as reported in the consolidated balance sheets: December 31, 2018 December 31, 2017 (dollars in thousands) Fixed Assets: Leasehold improvements $ 54,257 $ 53,419 Computer hardware and software 48,178 44,190 Furniture, fixtures and equipment 8,373 8,571 Accumulated depreciation and amortization (67,558 ) (58,671 ) Fixed assets, net 43,250 47,509 Goodwill 22,691 22,691 Prepaid expenses 11,629 12,862 Loans held for sale — 29,110 Other 4,833 4,189 Total Other Assets, Net $ 82,403 $ 116,361 |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES The following table presents the components of other liabilities as reported in the consolidated balance sheets: December 31, 2018 December 31, 2017 (dollars in thousands) Accrued expenses $ 27,683 $ 21,955 Unused trade commissions 8,615 — Uncertain tax positions 7,000 7,000 Deferred rent credit 6,231 8,283 Loan trades payable 4,978 29,110 Other 9,096 8,774 Total Other Liabilities $ 63,603 $ 75,122 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instruments [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS As of December 31, 2018 , the Company’s indebtedness outstanding was primarily comprised of the 2018 Term Loan and the CLO Investments Loans (each as defined below). In 2018, the Company repaid the indebtedness outstanding under its senior notes and certain CLO Investments Loans and recognized net losses on early retirement of debt reported in the consolidated statements of comprehensive income (loss). The table below presents scheduled principal payments as of December 31, 2018 on the Company’s debt obligations for each of the next five years. As further discussed in Note 19 , in connection with the Recapitalization, the Company amended the 2018 Term Loan in February 2019, and prepaid $100.0 million of amounts outstanding under the 2018 Term Loan. Such prepayments have been applied to reduce scheduled installments of principal of the 2018 Term Loan in forward order of maturity. Additionally, any additional prepayments may also be applied in a similar manner. 2018 Term Loan CLO Investments Loans Total (dollars in thousands) 2019 $ 15,625 $ 21,068 $ 36,693 2020 $ 37,500 $ — $ 37,500 2021 $ 37,500 $ — $ 37,500 2022 $ 37,500 $ — $ 37,500 2023 $ 71,875 $ 17,362 $ 89,237 Senior Credit Facility On April 10, 2018 (the “Closing Date”), OZ Management LP, as borrower, (the “Senior Credit Agreement Borrower”), and certain other subsidiaries of the Company, as guarantors, entered into a senior secured credit and guaranty agreement (the “Senior Credit Agreement”) consisting of (i) a $250.0 million term loan facility (the “2018 Term Loan”) and (ii) a $100.0 million revolving credit facility (the “2018 Revolving Credit Facility”). As of December 31, 2018 , $200.0 million remained outstanding under the 2018 Term Loan. As of December 31, 2018 , the Company had not made any draw-downs under the 2018 Revolving Credit Facility. As a part of the Recapitalization, the Company amended the Senior Credit Agreement, repaid $100.0 million of amounts outstanding under the 2018 Term Loan and terminated the 2018 Revolving Credit Facility. The Company paid down an additional $20.0 million of the 2018 Term Loan on March 7, 2019. As a result of Recapitalization, indebtedness outstanding under the 2018 Term Loan will be payable in accordance with the provisions of the “Cash Sweep” described in Note 19 . The 2018 Term Loan matures April 10, 2023 . The maturity date of the 2018 Term Loan may be extended pursuant to the terms of the Senior Credit Agreement. The proceeds from the 2018 Term Loan together with cash on hand were used to redeem the $400.0 million senior notes that were issued in November 2014. In connection with entry into the 2018 Senior Credit Agreement, the Company also terminated all commitments under the Company’s 2014 revolving credit facility. The 2018 Term Loan bears interest at a per annum rate equal to, at the Company’s option, one, three or six months (or twelve months with the consent of each lender) LIBOR plus 4.75% , or a base rate plus 3.75% . Prior to the termination of the 2018 Revolving Credit Facility in February 2019, the Company was required to pay an undrawn commitment fee at a rate per annum equal to 0.20% to 0.75% of the undrawn portion of the commitments under the 2018 Revolving Credit Facility, computed on a daily basis. The obligations under the Senior Credit Agreement are guaranteed by the Oz Operating Partnerships and are secured by a lien on substantially all of the Oz Operating Partnerships’ assets, subject to certain exclusions. The Senior Credit Agreement contains two financial maintenance covenants. The first financial maintenance covenant states that the Company’s total fee-paying assets under management as of the last day of any fiscal quarter must be greater than $20.0 billion , and the second states that the total net leverage ratio (as defined in the agreement) as of the last day of any fiscal quarter must be less than (i) 3.00 to 1.00, or (ii) following the third anniversary of the Closing Date, 2.50 to 1.00. As of December 31, 2018 , the Company was in compliance with the financial maintenance covenants. As part of the Recapitalization, the Senior Credit Agreement was amended, and as part of such amendment, the definition of total net leverage ratio will exclude the Restructured Securities (as defined in Note 19 ). The Senior Credit Agreement contains customary events of default. If an event of default under the Senior Credit Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding a majority of the commitments and loans, upon notice by the administrative agent to the Senior Credit Agreement Borrower, the obligations under the Senior Credit Agreement shall become immediately due and payable. In addition, if the Senior Credit Agreement Borrower or any of its material subsidiaries becomes the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Senior Credit Agreement will automatically become immediately due and payable. In connection with the Recapitalization, the Senior Credit Agreement Borrower entered into Amendment No. 1 (the “Senior Credit Agreement Amendment”) to the Senior Credit Agreement (the Senior Credit Agreement as amended by the Senior Credit Agreement Amendment, the “Amended Senior Credit Agreement”). See Note 19 for additional information. CLO Investments Loans The Company entered into loans to finance portions of investments in certain CLOs (collectively, the “CLO Investments Loans”). In general, the Company will make interest and principal payments on the loans at such time interest payments are received on its investments in the CLOs, and will make principal payments on the loans to the extent principal payments are received on its investments in the CLOs, with any remaining balance due upon maturity. The loans are subject to customary events of default and covenants and also include terms that require the Company’s continued involvement with the CLOs. The CLO Investments Loans do not have any financial maintenance covenants and are secured by the related investments in CLOs, which investments had fair values of $112.8 million and $206.6 million as of December 31, 2018 and 2017 , respectively. The table below presents information related to CLO Investments Loans as of December 31, 2018 and 2017 . Carrying values presented below are net of discounts, if any, and unamortized deferred financing costs. The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or the date at which the Company no longer holds a risk retention investment in the respective CLO. As a result of a recent court decision that vacates application of U.S. risk retention rules in certain CLO transactions, the Company sold certain investments in CLOs and paid off the associated CLO Investments Loans. In the third quarter of 2018, the Company repaid one of its CLO Investments Loans and refinanced the related investment under the CLO Financing Facility described in Note 9 . The Company continues to hold investments in its European CLOs. Borrowing Date Contractual Rate Final Maturity Date Carrying Value December 2018 December 2017 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ 17,235 $ 18,041 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,224 17,217 July 21, 2017 LIBOR plus 1.43% January 22, 2029 — 21,709 August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,674 21,686 August 17, 2017 LIBOR plus 1.43% April 30, 2030 — 22,922 September 14, 2017 LIBOR plus 1.41% April 22, 2030 — 25,468 September 14, 2017 EURIBOR plus 2.21% September 14, 2024 18,614 19,561 November 21, 2017 LIBOR plus 1.34% May 15, 2030 — 26,202 February 21, 2018 LIBOR plus 1.27% February 21, 2019 21,060 — $ 95,807 $ 172,806 |
Securities Sold under Agreement
Securities Sold under Agreements to Repurchase | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Securities sold under agreements to repurchase | SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE On May 29, 2018, the Company, entered into a €100.0 million master credit facility agreement (the “CLO Financing Facility”) to finance a portion of the risk retention investments in certain European CLOs managed by the Company. Subject to the terms and conditions of the CLO Financing Facility, the Company and the counterparty may enter into repurchase agreements on such terms agreed upon by the parties. Each transaction entered into under the CLO Financing Facility will bear interest at a rate based on the weighted average effective interest rate of each class of securities that have been sold plus a spread to be agreed upon by the parties. As of December 31, 2018 , €44.7 million of the CLO Financing Facility remained available. Each transaction entered into under the CLO Financing Facility provides for payment netting and, in the case of a default or similar event with respect to the counterparty to the CLO Financing Facility, provides for netting across transactions. Generally, upon a counterparty default, the Company can terminate all transactions under the CLO Financing Facility and offset amounts it owes in respect of any one transaction against collateral it has received in respect of any other transactions under the CLO Financing Facility; provided, however, that in the case of certain defaults, the Company may only be able to terminate and offset solely with respect to the transaction affected by the default. During the term of a transaction entered into under the CLO Financing Facility, the Company will deliver cash or additional securities acceptable to the counterparty if the securities sold are in default. Upon termination of a transaction, the Company will repurchase the previously sold securities from the counterparty at a previously determined repurchase price. The CLO Financing Facility may be terminated at any time upon certain defaults or circumstances agreed upon by the parties. The repurchase agreements may result in credit exposure in the event the counterparty to the transaction is unable to fulfill its contractual obligations. The Company minimizes the credit risk associated with these activities by monitoring counterparty credit exposure and collateral values. Other than margin requirements, the Company is not subject to additional terms or contingencies which would expose the Company to additional obligations based upon the performance of the securities pledged as collateral. The table below presents securities sold under agreements to repurchase that are offset, if any, as well as securities transferred to counterparties related to such transactions (capped so that the net amount presented will not be reduced below zero). No other material financial instruments were subject to master netting agreements or other similar agreements: As of December 31, 2018 Securities Sold under Agreements to Repurchase Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities in the Consolidated Balance Sheet Securities Transferred Net Amount (dollars in thousands) As of December 31, 2018 $ 62,801 $ — $ 62,801 $ 62,186 $ 615 The securities sold under agreements to repurchase have a set scheduled maturity date that corresponds to the maturities of the securities sold under such transaction. The table below presents the remaining final contractual maturity of the securities sold under agreement to repurchase by class of collateral pledged: As of December 31, 2018 Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total (dollars in thousands) Investments in CLOs $ — $ — $ — $ 62,801 $ 62,801 |
Preferred Units
Preferred Units | 12 Months Ended |
Dec. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Units | PREFERRED UNITS Pursuant to a securities purchase agreement, dated September 29, 2016 (the “Purchase Agreement”), certain of the Company’s executive managing directors, including Daniel S. Och (the “EMD Purchasers”), agreed to purchase up to a total of 400,000 Preferred Units for an aggregate amount of up to $400.0 million . On October 5, 2016, the Company completed a $250.0 million issuance and sale of 250,000 Preferred Units. On January 23, 2017, the Company completed an additional $150.0 million issuance and sale of 150,000 Preferred Units. As of December 31, 2018, 400,000 Preferred Units remained issued and outstanding. As further discussed in Note 19 , as part of the Recapitalization the existing Preferred Units (the “Existing Preferred”) were restructured into new debt securities (the “Debt Securities”) and new preferred equity securities (the “New Preferred Securities”) (collectively, the “Existing Preferred Restructuring”). No distributions were paid on the Preferred Units from the date of issuance through the date of the Recapitalization. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES The following table presents management fees and incentive income recognized as revenues for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016 Management Fees Incentive Income Management Fees Incentive Income Management Fees Incentive Income (dollars in thousands) Multi-strategy funds $ 168,902 $ 71,972 $ 214,116 $ 409,823 $ 426,159 $ 138,229 Credit Opportunistic credit funds 41,035 89,182 44,753 99,308 45,716 77,283 Institutional Credit Strategies 50,212 — 35,381 — 27,656 — Real estate funds 19,307 40,811 21,027 7,603 21,464 17,873 Other 2,406 931 4,181 11,266 12,161 55 Total $ 281,862 $ 202,896 $ 319,458 $ 528,000 $ 533,156 $ 233,440 A liability for unearned incentive income is generally recognized when the Company receives incentive income distributions from its funds, primarily its real estate funds, for which incentive income has not yet met the recognition threshold of being probable that a significant reversal of cumulative revenue will not occur. The following table presents the activity in the Company’s unearned incentive income for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 2017 2016 (dollars in thousands) Beginning of Year $ 143,710 $ 96,079 $ — Deconsolidation of funds on adoption of ASU 2015-02 — — 81,972 Effects of adoption of ASU 2014-09 (99,422 ) — — Amounts collected during the period 54,538 53,915 22,557 Amounts recognized during the period (37,429 ) (6,284 ) (8,450 ) End of Year $ 61,397 $ 143,710 $ 96,079 The Company recognizes management fees over the period in which the performance obligation is satisfied. The Company records incentive income when it is probable that a significant reversal of income will not occur. The majority of management fees and incentive income receivable at each balance sheet date is generally collected during the following quarter. The following table presents the composition of the Company’s income and fees receivable as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 (dollars in thousands) Management fees $ 20,368 $ 21,242 Incentive income 62,475 333,214 Income and Fees Receivable $ 82,843 $ 354,456 |
Equity-Based Compensation Expen
Equity-Based Compensation Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation Expenses | EQUITY-BASED COMPENSATION EXPENSES The Company grants equity-based compensation in the form of RSUs, PSUs, Group A Units and Group P Units to its executive managing directors, employees and the independent members of the Board under the terms of the 2007 Equity Incentive Plan and the 2013 Incentive Plan. The following table presents information regarding the impact of equity-based compensation grants on the Company’s consolidated statements of comprehensive income (loss): Year Ended December 31, 2018 2017 2016 (dollars in thousands) Expense recorded within compensation and benefits $ 87,130 $ 84,169 $ 75,217 Corresponding tax benefit $ 2,811 $ 4,720 $ 3,116 The following tables present activity related to the Company’s unvested equity awards for the year ended December 31, 2018 : Equity-Classified RSUs Liability-Classified RSUs PSUs Unvested RSUs Weighted-Average Grant-Date Fair Value Unvested RSUs Weighted-Average Unvested PSUs Weighted-Average December 31, 2017 1,453,060 $ 46.74 — $ — — $ — Granted 3,905,020 $ 23.34 29,084 $ 15.00 1,000,000 $ 11.82 Vested (1,279,619 ) $ 41.03 (330,550 ) $ 55.24 — $ — Canceled or forfeited (934,722 ) $ 36.18 — $ — — $ — Modified from Group A Units and Group P Units 640,797 $ 63.62 734,599 $ 63.62 — $ — December 31, 2018 3,784,536 $ 30.00 433,133 $ 66.75 1,000,000 $ 11.82 Group A Units Group P Units Unvested Group A Units Weighted-Average Unvested Group P Units Weighted-Average December 31, 2017 841,066 $ 97.70 7,185,000 $ 12.46 Vested (166,104 ) $ 95.30 — $ — Canceled or forfeited — $ — (625,000 ) $ 12.46 Modified to RSUs (600,000 ) $ 97.50 (2,900,000 ) $ 12.46 December 31, 2018 74,962 $ 105.26 3,660,000 $ 12.46 Restricted Share Units (RSUs) An RSU entitles the holder to receive a Class A Share, or cash equal to the fair value of a Class A Share at the election of the Board, upon completion of the requisite service period. All of the RSUs granted to date accrue dividend equivalents equal to the dividend amounts paid on the Company’s Class A Shares. To date, these dividend equivalents have been awarded in the form of additional RSUs that also accrue additional dividend equivalents. As a result, dividend equivalents declared on equity-classified RSUs are recorded similar to a stock dividend, resulting in (i) increases in the Company’s accumulated deficit and the accumulated deficit component of noncontrolling interests on the same pro rata basis as earnings of the Oz Operating Group are allocated and (ii) increases in the Company’s paid-in capital and the paid-in capital component of noncontrolling interests on the same pro rata basis. No compensation expense is recognized related to these dividend equivalents. Delivery of dividend equivalents on outstanding RSUs is contingent upon the vesting of the underlying RSUs. In the three months ended March 31, 2018, a certain executive managing director forfeited 600,000 Group A Units and 2,900,000 Group P Units for RSUs and certain other profit-sharing interests. The forfeiture of these units was accounted for as a modification to 640,797 equity-classified RSUs and 734,599 liability-classified RSUs, and other awards. The fair value of the modified awards was $63.62 per RSU and was based on the fair value of the original awards immediately before they were modified. The Company will continue to recognize at least the minimum compensation expense that would have been previously recognized prior to the modification. The weighted-average grant-date fair value of equity-classified RSUs granted was $23.34 , $31.60 and $43.60 for the years ended December 31, 2018 , 2017 and 2016 , respectively. As of December 31, 2018 , total unrecognized compensation expense related to equity-classified awards totaled $90.3 million with a weighted-average amortization period of 2.8 years. As of December 31, 2018 , total unrecognized compensation expense related to liability-classified awards totaled $28.9 million with a weighted-average amortization period of 4.0 years. The following table presents information related to the settlement of RSUs: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 12,044 $ 13,016 $ 12,675 Fair value of RSUs settled in cash $ 3,879 $ 130 $ — Fair value of RSUs withheld to satisfy tax withholding obligations $ 4,436 $ 7,577 $ 7,960 Number of RSUs withheld to satisfy tax withholding obligations 329,591 280,269 222,856 PSUs In 2018, the Company began granting PSUs. A PSU entitles the holder to receive a Class A Share, or cash equal to the fair value of a Class A Share at the election of the Board of Directors, upon completion of the requisite service period, as well as satisfying certain performance conditions based on achievement of targeted total shareholder return on Class A Shares. PSUs do not begin to accrue dividend equivalents until the requisite service period has been completed and performance conditions have been achieved. In the years ended December 31, 2018 , the Company granted 1,000,000 PSUs, with a weighted average grant date fair value $11.82 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 35% , dividend rate of 10% , and risk-free discount rate of 2.6% . The requisite service period for these awards was estimated to be 3.1 years at the time of the grant. The Company used historical volatility in its estimate of the expected volatility. As of December 31, 2018 , total unrecognized compensation expense related to these units totaled $8.3 million with a weighted-average amortization period of 2.2 years. The PSUs granted to-date vest subject to continued and uninterrupted service (“PSU Service Condition”) until the third anniversary of the grant date and the meeting of a market performance threshold of the total shareholder return on Class A Shares of the Company (“PSU Performance Condition”). The PSU Performance Condition is defined as follows: 20% of PSUs vest if a total shareholder return of 25% is achieved; an additional 40% of PSUs vest if a total shareholder return of 50% is achieved; an additional 20% of PSUs vest if a total shareholder return of 75% is achieved; and the final 20% of PSUs vest if a total shareholder return of 125% is achieved. In each case, the PSU Performance Condition must be met for each threshold by the sixth anniversary of the grant date. If the PSU grant has not satisfied both the PSU Service Condition and the PSU Performance Condition by the sixth anniversary of the grant date, it will be forfeited and canceled immediately. Group A Units The Company recognizes compensation expense for Group A Units equal to the market value of the Company’s Class A Shares at the date of grant, less a 5% discount for transfer restrictions that remain in place after vesting. The weighted-average grant-date fair value of Group A Units was $21.85 and $41.20 for the years ended December 31, 2017 and 2016 , respectively. There were no grants for the year ended December 31, 2018. As of December 31, 2018 , total unrecognized compensation expense related to these units totaled $5.1 million with a weighted-average amortization period of 1.3 years. Group P Units In March 2017, the Company granted 7,185,000 Group P Units (“Incentive Award”), with the weighted-average grant-date fair value of $12.50 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 36% , dividend rate of 10% , and risk-free discount rate of 2.2% . The Company used historical volatility in its estimate of the expected volatility. The requisite service period for these awards was estimated to be 3.7 years at the time of the grant. As of December 31, 2018 , total unrecognized compensation expense related to the Group P Units totaled $22.3 million with a weighted-average amortization period of 1.8 years. There have been no other grants of Group P Units. A grant of Group P Units will conditionally vest upon the applicable executive managing directors satisfying a service condition (the “Service Condition”) and certain market performance-based targets, expressed as percentages (the “Performance Condition”). The Performance Condition is considered a market condition for accounting purposes as its achievement is dependent on the return provided to shareholders during a specified period, which is defined as follows: 20% of P Units vest if a total shareholder return of 25% is achieved; an additional 40% of P Units vest if a total shareholder return of 50% is achieved; an additional 20% of P Units vest if a total shareholder return of 75% is achieved; and the final 20% of P Units vest if a total shareholder return of 125% is achieved. Achievement of the applicable Performance Conditions earlier than estimated can materially affect the amount of equity-based compensation expense recognized by the Company in any given period. Executive managing directors will be entitled to receive distributions on their Group P Units only after satisfaction of the Service Condition and the Performance Condition, from which time the executive managing director will be entitled to receive the same distributions per unit on each Group P Unit as holders of Group A Units and Group D Units. If a holder of an Incentive Award has not satisfied both the Service Condition and the applicable Performance Condition has not been met with respect to the units comprising such Incentive Award by the sixth anniversary of the respective grant date, such units will be forfeited and canceled immediately. Upon satisfaction of the Service Condition and the Performance Condition, Group P Units may be exchanged at the executive managing director’s discretion for Class A Shares (or the cash value thereof, as determined by the Board) provided that sufficient Appreciation (as defined in the Oz Operating Partnerships’ limited partnership agreements) has occurred for each Group P Unit to have become economically equivalent to a Group A Unit. Upon the exchange of a Group P Unit for a Class A Share (or the cash equivalent), the exchanging executive managing director will have a right to potential future payments owed to him or her under the tax receivable agreement. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (“the TCJA”) was signed into law. The TCJA includes a broad range of tax reforms including a reduction in the corporate income tax rate to 21% from 35% effective January 1, 2018. The Company recognized the tax effects of the TCJA during the three months ended December 31, 2017, and recorded $280.8 million in deferred tax expense related solely to the impact of the TCJA. The $280.8 million in deferred tax expense recorded in 2017 related to the TCJA was comprised of $190.4 million of deferred tax expense due to the remeasurement of deferred tax assets at the 21% tax rate, and $90.4 million of additional tax expense related to the change in the tax receivable agreement liability as a result of the reduction in the corporate tax rate. Accounting for the TCJA was completed as of December 31, 2018 , there were no material adjustments recorded in 2018 related to the original impact recorded for the TCJA in 2017. As flow-through entities for income tax purposes, the Registrant and the Oz Operating Partnerships are not subject to income taxes except from foreign taxes attributable to their operations in foreign jurisdictions and unincorporated business taxes (“UBT”) for a portion of OZ Management LP’s income. Any taxable income or loss generated by the Oz Operating Group is passed through to and included in the taxable income or loss of its limited partners, which includes the Company’s intermediate holding companies and noncontrolling interests held by active and former executive managing directors. As a result, the Company does not record income taxes on pre-tax income or loss attributable to the noncontrolling interests in the Oz Operating Partnerships, except for foreign and UBT taxes discussed above. The Registrant owns its interests in OZ Management LP and OZ Advisors LP through Oz Corp, which is subject to U.S. federal, state and local corporate income taxes. The Registrant owns its interests in OZ Advisors II LP through Oz Holding, which is a flow-through entity for income tax purposes. The following table presents the components of the Company’s provision for income taxes: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Current: Federal income taxes $ 1 $ 103 $ 19 State and local income taxes 1,165 2,172 4,885 Foreign income taxes 2,735 2,520 3,746 3,901 4,795 8,650 Deferred: Federal income taxes 3,304 322,162 7,760 State and local income taxes 5,736 (9,828 ) (6,131 ) Foreign income taxes (441 ) 430 607 8,599 312,764 2,236 Total Provision for Income Taxes $ 12,500 $ 317,559 $ 10,886 The foreign income tax provision was calculated on $8.2 million , $21.3 million and $(3.6) million of pre-tax income (loss) generated in foreign jurisdictions for the years ended December 31, 2018 , 2017 and 2016 , respectively. Deferred income tax assets and liabilities represent the tax effects of the temporary differences between the GAAP bases and tax bases of the Company’s assets and liabilities. The following table presents the Company’s deferred income tax assets and liabilities before the impact of offsetting deferred income tax assets and liabilities within the same legal entity and tax jurisdiction: December 31, 2018 December 31, 2017 (dollars in thousands) Deferred Income Tax Assets: Tax goodwill $ 234,437 $ 272,636 Net operating loss 96,524 76,100 Investments in partnerships 19,607 20,440 Tax credit carryforwards 15,550 16,102 Employee compensation 1,027 626 Other 869 2,145 368,014 388,049 Valuation allowance (11,959 ) (12,028 ) Total Deferred Income Tax Assets $ 356,055 $ 376,021 Total Deferred Income Tax Liabilities $ 1,030 $ 1,167 The majority of the Company’s deferred income tax assets relate to tax goodwill in the United States that arose in connection with the Company’s IPO and concurrent private Class A Share offering in 2007 (collectively, the “2007 Offerings”), as well as subsequent exchanges of Group A Units for Class A Shares. These deferred income tax assets are derived from goodwill recognized for tax purposes that are subsequently amortized and result in future taxable deductions and cash savings to the Company. The Company entered into a tax receivable agreement to pay a portion of these tax savings to the Company’s executive managing directors and the Ziffs. The tax goodwill amounts presented above include the increases that these tax receivable agreement payments will have on future tax goodwill. See Note 17 for additional information regarding the tax receivable agreement. As of December 31, 2018 , the Company had federal income tax credit carryforwards of approximately $15.5 million that, if not used, will expire between 2019 and 2026 . As of December 31, 2018 , the Company had $260.8 million of net operating losses available to offset future taxable income for federal income tax purposes that will expire between 2030 and 2037 , and $91.8 million of net operating losses available to be carried forward without expiration. Additionally, $167.1 million of net operating losses are available to offset future taxable income for state income tax purposes and $163.4 million for local income tax purposes that will expire between 2035 and 2038 . The Company has determined that it may not realize certain foreign income tax credits within the limited carryforward period available. Accordingly, a valuation allowance for $12.0 million as of December 31, 2018 and 2017 , respectively, has been established for these items. The following is a reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate: Year Ended December 31, 2018 2017 2016 Statutory U.S. federal income tax rate 21.00 % 35.00 % 35.00 % Income passed through to noncontrolling interests -17.01 % -10.40 % -23.10 % Other state and local income taxes -16.53 % 4.42 % -2.47 % RSU excess deferred income tax write-off -11.33 % 0.50 % — % Foreign income taxes -6.32 % 0.63 % -0.96 % Income not subject to entity level tax 4.21 % -4.54 % -3.01 % Return-to-Provision adjustment -3.57 % -0.30 % 1.44 % Nondeductible fines and penalties — % — % -12.78 % Nondeductible transaction costs -3.52 % — % — % Impact of federal tax reform — % 40.34 % — % Other, net -1.27 % 1.64 % 2.31 % Effective Income Tax Rate -34.34 % 67.29 % -3.57 % The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The income tax years under examination vary by jurisdiction. In general, the Company has not been subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2014 ; however, certain subsidiaries have not been subject to income tax examinations for years prior to 2012 for state and local and 2007 for foreign jurisdictions. The Company recognizes tax benefits for amounts that are “more likely than not” to be sustained upon examination by tax authorities. For uncertain tax positions in which the benefit to be realized does not meet the “more likely than not” threshold, the Company establishes a liability, which is included within other liabilities in the consolidated balance sheets. In 2014, the Company recorded a liability for unrecognized tax benefits of $7.0 million . The Company did not accrue interest or penalties related to uncertain tax positions. There has been no change to the liability through December 31, 2018 . As of December 31, 2018 , the Company does not believe that there will be a significant change to the uncertain tax positions during the next 12 months. The amount of the Company’s total unrecognized tax benefits that, if recognized, would affect its effective tax rate was $4.2 million as of December 31, 2018 . There are no unremitted earnings with respect to the foreign subsidiaries of the Company due to the flow-through nature of these entities. |
General, Administrative and Oth
General, Administrative and Other | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
General, Administrative and Other | GENERAL, ADMINISTRATIVE AND OTHER The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss): Year Ended December 31, 2018 2017 2016 (dollars in thousands) Professional services $ 52,163 $ 43,343 $ 74,859 Occupancy and equipment 28,769 33,358 35,998 Information processing and communications 25,917 28,274 34,485 Recurring placement and related service fees 16,247 20,153 38,424 Insurance 7,391 7,609 15,333 Business development 4,075 6,685 13,440 Foreign exchange losses and (gains) 2,766 (726 ) 419 Other expenses 12,899 13,375 21,409 150,227 152,071 234,367 Settlements expense (1) 31,750 — 412,101 Total General, Administrative and Other $ 181,977 $ 152,071 $ 646,468 _______________ (1) Settlements expense represent accruals for certain contingencies discussed in Note 17 . |
(Loss) Earnings Per Class A Sha
(Loss) Earnings Per Class A Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Class A Share | (LOSS) EARNINGS PER CLASS A SHARE Basic (loss) earnings per Class A Share is computed by dividing the net (loss) income attributable to Class A Shareholders by the weighted-average number of Class A Shares outstanding for the period. For the years ended December 31, 2018 , 2017 and 2016 , the Company included 142,512 , 110,373 and 114,461 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted (loss) earnings per Class A Share. The Company did not include the Group P Units or PSUs in the calculations of dilutive (loss) earnings per Class A Share, as the applicable market performance conditions have not yet been met as of December 31, 2018 . The following tables present the computation of basic and diluted earnings per Class A Share: Year Ended December 31, 2018 Net Loss Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Loss Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ (24,284 ) 19,270,929 $ (1.26 ) Effect of dilutive securities: Group A Units — — 26,073,057 RSUs — — 4,826,130 Diluted $ (24,284 ) 19,270,929 $ (1.26 ) Year Ended December 31, 2017 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ 18,222 18,642,379 $ 0.98 Effect of dilutive securities: Group A Units — — 27,230,147 RSUs — 75,797 — Diluted $ 18,222 18,718,176 $ 0.97 Year Ended December 31, 2016 Net Loss Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Loss Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ (130,762 ) 18,267,017 $ (7.16 ) Effect of dilutive securities: Group A Units (219,109 ) 29,731,710 — RSUs — — 1,434,330 Diluted $ (349,871 ) 47,998,727 $ (7.29 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Due from Related Parties Amounts due from related parties relate primarily to amounts due from the funds for expenses paid on their behalf. These amounts are reimbursed to the Company on an ongoing basis. Due to Related Parties Amounts due to related parties relate primarily to future payments owed to the Company’s executive managing directors under the tax receivable agreement, as discussed further in Note 17 . The Company made no payments under the tax receivable agreement in the years ended December 31, 2018 , 2017 and 2016 . Management Fees and Incentive Income Earned from Related Parties and Waived Fees The Company earns substantially all of its management fees and incentive income from the funds, which are considered related parties as the Company manages the operations of and makes investment decisions for these funds. As of December 31, 2018 and 2017 , respectively, approximately $1.9 billion and $2.8 billion of the Company’s assets under management represented investments by the Company, its executive managing directors, employees and certain other related parties in the Company’s funds. As of December 31, 2018 and 2017 , approximately 29% and 71% , of these affiliated assets under management were not charged management fees and were not subject to an incentive income calculation. The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 14,017 $ 10,574 $ 18,243 Incentive income $ 7,530 $ 14,052 $ 12,266 Corporate Aircraft The Company’s corporate aircraft were used for business purposes. From time to time, certain executive managing directors used the aircraft for personal use. For the years ended December 31, 2017 and 2016 , the Company charged $360 thousand and $744 thousand , respectively, for personal use of the aircraft by certain executive managing directors. The Company sold its aircraft during the first half of 2017. Other In relation to the Recapitalization described in Note 19 , the Company will pay for Mr. Och’s expenses incurred in connection with these transactions up to $5.0 million , of which $4.5 million had been incurred through December 31, 2018. In addition, the Company will pay for reasonable expenses, if any, incurred by holders of the New Preferred Securities in connection with protecting the interests or enforcing the rights of such securities. See Note 19 for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Tax Receivable Agreement The purchase of Group A Units from the executive managing directors and the Ziffs with the proceeds from the 2007 Offerings, and subsequent taxable exchanges by them of Partner Equity Units for Class A Shares on a one-for-one basis (or, at the Company’s option, a cash equivalent), resulted, and, in the case of future exchanges, are anticipated to result, in an increase in the tax basis of the tangible and intangible assets of the Oz Operating Group that would not otherwise have been available. As a result, the Company expects that its future tax liability will be reduced. Pursuant to the tax receivable agreement entered into among the Company, the executive managing directors and the Ziffs, the Company has agreed to pay to the executive managing directors and the Ziffs 85% of the amount of tax savings, if any, actually realized by the Company. The Company recorded its initial estimate of future payments under the tax receivable agreement as a decrease to paid-in capital and an increase in amounts due to related parties in the consolidated financial statements. Subsequent adjustments to the liability for future payments under the tax receivable agreement related to changes in estimated future tax rates or state income tax apportionment are recognized through current period earnings in the consolidated statements of comprehensive income (loss). In connection with the departure of certain former executive managing directors since the IPO, the right to receive payments under the tax receivable agreement by those former executive managing directors was contributed to the Oz Operating Group. As a result, the Company expects to pay to the remaining executive managing directors and the Ziffs approximately 78% (from 85% at the time of the IPO) of the amount of cash savings, if any, in federal, state and local income taxes in the United States that the Company actually realizes as a result of the increases in tax basis. The estimate of the timing and the amount of future payments under the tax receivable agreement involves several assumptions that do not account for the significant uncertainties associated with these potential payments, including an assumption that Oz Corp will have sufficient taxable income in the relevant tax years to utilize the tax benefits that would give rise to an obligation to make payments. The actual timing and amount of any actual payments under the tax receivable agreement will vary based upon these and a number of other factors. As of December 31, 2018 , the estimated future payment under the tax receivable agreement was $277.8 million , which is recorded in due to related parties on the consolidated balance sheets. In 2017, the Company reduced its tax receivable agreement liability due to the decrease in future U.S. federal corporate income tax rates pursuant to the TCJA. See Note 13 . In September 2016, the Company amended the tax receivable agreement to provide that no amounts will be due or payable under the agreement with respect to the 2015 and 2016 taxable years. As a result, the Company released $72.6 million of previously accrued tax receivable agreement liability, which reduced its deferred income tax assets by $33.4 million . The net impact of $39.2 million was recognized as an increase to shareholders’ equity in 2016. As a result of finalizing the 2016 tax returns in 2017, the Company released an additional $18.0 million of previously accrued tax receivable agreement liability, which reduced its deferred income tax assets by $7.5 million . The net impact of $10.5 million was recognized as an increase to shareholders’ equity in 2017. The table below presents the maximum amounts that would be payable under the tax receivable agreement assuming that the Company will have sufficient taxable income each year to fully realize the expected tax savings and without taking into account the effect of the 2019 amendment to the tax receivable agreement, the Recapitalization or the expected change in corporate classification. In light of the numerous factors affecting the Company’s obligation to make such payments, the timing and amounts of any such actual payments may differ materially from those presented in the table. The impact of any net operating losses is included in the “Thereafter” amount in the table below. Potential Payments Under Tax Receivable Agreement (dollars in thousands) 2019 $ 72,249 2020 29,294 2021 29,483 2022 32,619 2023 29,489 Thereafter 84,639 Total Payments $ 277,773 In February 2019, as a part of the Recapitalization the Company amended its tax receivable agreement, see Note 19 for additional details. Lease Obligations The Company has non-cancelable operating leases for its headquarters in New York expiring in 2029 and various other operating leases for its offices in London, Hong Kong, Mumbai, Shanghai, and other locations, expiring on various dates through 2024 . The Company recognizes expense related to its operating leases on a straight-line basis over the lease term taking into account any rent holiday periods. The following table presents minimum operating lease payments as of December 31, 2018 . Future minimum lease payments for capital leases were not material as of December 31, 2018 . Operating Leases (dollars in thousands) 2019 $ 16,516 2020 23,324 2021 21,826 2022 19,807 2023 19,095 Thereafter 97,587 Total Payments $ 198,155 For the years ended December 31, 2018 , 2017 and 2016 , the Company recorded rent expense on a straight-line basis of $19.5 million , $17.8 million , and $22.5 million , respectively, within general, administrative and other expenses in the consolidated statements of comprehensive income (loss). As of December 31, 2018 , the Company has pledged collateral related to its lease obligations of $6.2 million , which is included within investments in the consolidated balance sheets. Litigation From time to time, the Company is involved in litigation and claims incidental to the conduct of the Company’s business. The Company is also subject to extensive scrutiny by regulatory agencies globally that have, or may in the future have, regulatory authority over the Company and its business activities. This has resulted, or may in the future result, in regulatory agency investigations, litigation and subpoenas and costs related to each. On May 5, 2014, a purported class of shareholders filed a lawsuit against the Company in the U.S. District Court for the Southern District of New York ( Menaldi v. Och-Ziff Capital Mgmt., et al. ). The amended complaint asserted claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from February 9, 2012 to August 22, 2014. Daniel Och, Joel Frank and Michael Cohen were also named as defendants. On March 16, 2015, all defendants moved to dismiss the amended complaint. On February 17, 2016, the court entered an order granting in part the motion to dismiss filed by the Company and Messrs. Och and Frank and dismissing Mr. Cohen from the action. On March 23, 2016, the Company and Messrs. Och and Frank filed their answer to the amended complaint. On November 18, 2016, plaintiffs filed a second amended complaint asserting claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from November 18, 2011 to April 11, 2016. The second amended complaint alleged, among other things, breaches of certain disclosure obligations with respect to matters that were under investigation by the SEC and the DOJ, and named the Company and Messrs. Och, Frank and Cohen as defendants. On November 23, 2016, Mr. Cohen objected to being named as a defendant in the second amended complaint on procedural grounds. On December 21, 2016, the court directed the plaintiffs to file a motion for permission to renew their claims against Mr. Cohen. Plaintiffs filed their motion on January 7, 2017. On January 11, 2017, the Company filed a motion to dismiss those portions of the second amended complaint that sought to revive dismissed claims or assert new claims against it, and Messrs. Och and Frank filed motions to dismiss as well. On September 29, 2017, the court granted the Company’s motion to dismiss in its entirety and dismissed plaintiffs’ revived claims and new claims against the Company and Messrs. Och and Frank. The court also dismissed Mr. Cohen from the matter entirely and denied plaintiffs’ request to file a further amended complaint. On September 14, 2017, the court entered an order granting plaintiffs’ motion for class certification. On September 17, 2018, the parties notified the court that they had reached an agreement in principle to settle the matter. On October 2, 2018, the parties’ stipulation of settlement was filed with the court. Under the parties’ stipulation of settlement, the Company agreed to pay $28.8 million in exchange for a full release from plaintiffs and the class members they represent. On October 3, 2018, the court entered an order preliminarily approving the settlement. On December 17, 2018, plaintiffs filed a motion for final approval of the settlement. On January 16, 2019 the court held a hearing for final approval of the settlement and entered an order and judgment approving the settlement in all respects and dismissing the action with prejudice. The Company recorded a $10.0 million legal provision in the second quarter of 2018 in connection with the Menaldi matter and recorded an additional $18.8 million legal provision in the third quarter of 2018. The chance of any additional loss in connection with this matter is remote. In addition, in U.S. v. Oz Africa Management GP, LLC , Cr. No. 16-515 (NGG) (EDNY), certain former shareholders of a Canadian mining company filed a letter with the court stating they plan to seek restitution at the sentencing hearing for Oz Africa Management GP, LLC. The Company believes the threatened claim is without merit and intends to defend it vigorously. The issue has been fully briefed for the court. The Company is unable to reasonably estimate an amount, if any, of loss or range of loss possible for this matter. Investment Commitments From time to time, certain funds consolidated by the Company may have commitments to fund investments. These commitments are funded through contributions from investors in those funds, including the Company if it is an investor in the relevant fund. The Company has unfunded capital commitments of $31.1 million to certain funds it manages. It expects to fund these commitments over the next three years. In addition, certain related parties of the Company, collectively, have unfunded capital commitments to funds managed by the Company of up to $55.7 million . The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company’s executive managing directors individually. Other Contingencies During the second quarter of 2018, the Company recorded a $3.0 million legal provision to resolve a commercial dispute. The Company resolved this matter in the third quarter of 2018 and will not incur any additional loss related to this matter. In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company currently has two operating segments: Oz Funds and Real Estate. T he Oz Funds segment provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles. The Real Estate segment provides asset management services to the Company’s real estate funds. In the fourth quarter of 2018, the Real Estate segment met the threshold for a reportable segment. As a result, the Company began reporting operating segment results for both segments and has adjusted prior-period disclosures to present comparable information. In addition to analyzing the Company’s results on a GAAP basis, management also reviews its results on an “Economic Income” basis. Economic Income excludes the adjustments described below that are required for presentation of the Company’s results on a GAAP basis, but that management does not consider when evaluating operating segment performance in any given period. Management uses Economic Income as the basis on which it evaluates the Company’s financial performance and makes resource allocation and other operating decisions. Management considers it important that investors review the same operating information that it uses. Economic Income is a measure of pre-tax operating performance that excludes the following from the Company’s results on a GAAP basis: • Income allocations to the Company’s executive managing directors on their direct interests in the Oz Operating Group. Management reviews operating performance at the Oz Operating Group level, where substantially all of the Company’s operations are performed, prior to making any income allocations. • Equity-based compensation expenses, depreciation and amortization expenses, changes in the tax receivable agreement liability, net losses on early retirement of debt, gains and losses on fixed assets, and gains and losses on investments in funds, as management does not consider these items to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement. • Amounts related to the consolidated funds, including the related eliminations of management fees and incentive income, as management reviews the total amount of management fees and incentive income earned in relation to total assets under management and fund performance. In addition, expenses related to incentive income profit-sharing arrangements are generally recognized at the same time the related incentive income revenue is recognized, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Further, deferred cash compensation is expensed in full in the year granted for Economic Income, rather than over the service period for GAAP. Finally, management reviews Economic Income revenues by presenting management fees net of recurring placement and related service fees, rather than considering these fees an expense, and by excluding the impact of eliminations related to the consolidated funds. Management does not regularly review assets by operating segment in assessing operating segment performance and the allocation of company resources; therefore, the Company does not present total assets by operating segment. Substantially all interest income and all interest expense related to indebtedness outstanding is allocated to the Oz Funds segment. Segment Operating Results Year Ended December 31, 2018 2017 2016 (dollars in thousands) Oz Funds: Economic Income Revenues $ 424,159 $ 805,634 $ 700,950 Economic Income $ 72,524 $ 332,603 $ (217,006 ) Real Estate: Economic Income Revenues $ 59,048 $ 27,353 $ 29,228 Economic Income $ 13,343 $ 5,132 $ 5,431 Total Company: Economic Income Revenues $ 483,207 $ 832,987 $ 730,178 Economic Income $ 85,867 $ 337,735 $ (211,575 ) Reconciliation of Segment Revenues to Consolidated Revenues Year Ended December 31, 2018 2017 2016 (dollars in thousands) Total consolidated revenues $ 507,223 $ 858,337 $ 770,364 Adjustment to management fees (1) (17,488 ) (20,151 ) (38,424 ) Adjustment to other revenues (2) (39 ) (1,097 ) — Income of consolidated funds (6,489 ) (4,102 ) (1,762 ) Total Segment Revenues $ 483,207 $ 832,987 $ 730,178 _______________ (1) Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. (2) Adjustment to exclude realized gains on sale of fixed assets. Reconciliation of Segment Economic Income to Net (Loss) Income Attributable to Class A Shareholders Year Ended December 31, 2018 2017 2016 (dollars in thousands) Net (Loss) Income Attributable to Class A Shareholders $ (24,284 ) $ 18,222 $ (130,762 ) Change in redemption value of Preferred Units — 2,853 6,082 Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC (24,284 ) 21,075 (124,680 ) Net (loss) income allocated to Group A Units (25,716 ) 130,730 (195,087 ) Equity-based compensation, net of RSUs settled in cash 83,268 84,039 75,217 Adjustment to recognize deferred cash compensation in the period of grant 10,445 (28,893 ) (1,851 ) Income taxes 12,500 317,559 10,886 Net losses on early retirement of debt 14,303 — — Allocations to Group D Units 3,060 6,674 — Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance (3,094 ) 22,967 6,752 Changes in tax receivable agreement liability (2,218 ) (222,859 ) 1,663 Depreciation, amortization and net gains and losses on fixed assets 10,308 10,334 19,882 Other adjustments 7,295 (3,891 ) (4,357 ) Economic Income $ 85,867 $ 337,735 $ (211,575 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Dividend On March 7, 2019 , the Company announced a cash dividend of $0.23 per Class A Share. The dividend is payable on March 29, 2019 , to holders of record as of the close of business on March 22, 2019 . Recapitalization On February 7, 2019, the Company completed the Recapitalization, which included a series of transactions that involved the reallocation of ownership in the Oz Operating Group to existing members of senior management, a “Distribution Holiday” on interests held by active and former executive managing directors, an amendment to the tax receivable agreement, a “Cash Sweep” to pay down the 2018 Term Loan and Restructured Securities (as defined below), and various other related transactions. In addition, (i) $200.0 million of the existing Preferred Units was restructured into the Debt Securities and (ii) the remaining $200.0 million of existing Preferred Units was restructured into the New Preferred Securities (collectively with the Debt Securities, the “Restructured Securities”). In addition, the holders of the Existing Preferred have forfeited an additional 749,813 Group A Units (which were recapitalized into Group A-1 Units). Reallocation of Equity As part of the Recapitalization, the Company’s founder, Mr. Daniel S. Och and the other holders of Group A Units have collectively reallocated 35% of their Group A Units to existing members of senior management and for potential grants to new hires. The reallocation has been effected by (i) recapitalizing such Group A Units into Group A-1 Units held by the holders of the Group A Units and (ii) creating and making grants to existing members of senior management (and reserving for future grants to active managing directors and new hires) of Group E Units. The Group A-1 Units will be canceled at such time and to the extent as such Group E Units vest and achieve a book-up. Upon vesting, holders of Group E Units will be entitled to vote a corresponding number of Class B Shares. Following the Liquidity Redemption (as defined below) and Mr. Och’s receipt of the Credit Fund Balance Redemption (as defined below), and until such time as the relevant Group E Units become vested, the Class B Shares corresponding to the Group A-1 Units will be voted pro rata in accordance with the vote of the Class A Shares held by non-affiliates. The Recapitalization also provides holders of Group D Units with a one-time election to convert such holders’ Group D Units into Group E Units. Distribution Holiday In addition, as part of the Recapitalization, the Oz Operating Partnerships initiated a distribution holiday (the “Distribution Holiday”) on the Group A Units, Group D Units, Group E Units and Group P Units and on certain RSUs that will terminate on the earlier of (x) 45 days after the last day of the first calendar quarter as of which the achievement of $600.0 million of Distribution Holiday Economic Income (as defined in the Oz Operating Partnerships’ limited partnership agreements) is realized and (y) April 1, 2026. During the Distribution Holiday, (i) the Oz Operating Partnerships shall only make distributions with respect to Group B Units, (ii) the performance thresholds of Group P Units shall be adjusted to take into account performance and distributions during such period, (iii) RSUs will receive dividend equivalents in respect of dividends or distributions paid on the Class A Shares, in each of the foregoing clauses (i) and (ii) in an aggregate amount not to exceed $4.00 per Group P Unit or RSU, as applicable, cumulatively during the Distribution Holiday, and in accordance with their existing terms (provided that such $4.00 cap shall not apply to any RSUs held by non-executive managing director employees or executive managing directors who are not receiving Group E Units) and (iv) income shall be allocated for tax purposes to reflect the revised distribution entitlements of the Group A / B / D / E / P Units. Following the termination of the Distribution Holiday, Group A Units, Group D Units and Group E Units (whether vested or unvested) shall receive distributions even if such units have not been booked-up. On December 31, 2018, Mr. Och submitted redemption notices for 50% of all liquid balances of Mr. Och and his related parties. The receipt by Mr. Och and his related parties of redemption proceeds associated with the redemption of all of their liquid balance in the funds or accounts managed by the Registrant, its subsidiaries and their respective affiliates (other than their liquid balances in the Oz Credit Opportunities Master Fund), for which redemption notices were delivered to effect such redemptions for the quarters ended December 31, 2018 and March 31, 2019 is referred to as the “Liquidity Redemption.” The Registrant, Oz Corp, Oz Holding and the Oz Operating Partnerships agreed that, subject to the occurrence of certain restrictions on the withdrawal by Mr. Och and his related parties of their capital in the funds managed by the Company, the Liquidity Redemption will be made as to the remainder of Mr. Och’s liquid balances effective as of March 31, 2019 (with payment to be made in the normal course consistent with regular practice in accordance with the applicable fund documents). Mr. Och agreed not to revoke any previously submitted redemption notices giving effect to the Liquidity Redemption and the redemption by Mr. Och and his related parties of all their liquid balances in the OZ Credit Opportunities Master Fund, Ltd. which is expected to be redeemed in full on September 30, 2019, for which redemption notices have been delivered (the “Credit Fund Balance Redemption”). Cash Sweep As part of the Recapitalization, the Company instituted a “Cash Sweep” with regards to the paydowns of the 2018 Term Loan and the Restructured Securities. During the Distribution Holiday, on a quarterly basis, for each of the first three quarters of the year 100% of all Economic Income (subject to certain adjustments described in the New Preferred Unit Designations) will be applied to repay the 2018 Term Loan and then to redeem the New Preferred Securities, in each case, together with accrued interest. The Cash Sweep will not apply to the extent that it would result in the Oz Operating Group having a minimum “Free Cash Balance” (as defined in the New Preferred Unit Designations) of less than $200.0 million except in certain specified circumstances. In the fourth quarter of each year, an amount equal to the excess of the Free Cash Balance over the minimum Free Cash Balance of $200.0 million , will be used to repay the 2018 Term Loan and redeem the New Preferred Securities. In addition, without duplication of the Cash Sweep, (i) certain of the proceeds resulting from the realization of incentive income from certain longer term assets under management described in the New Preferred Securities agreement (“Designated Accrued Unrecognized Incentive”) and (ii) 85% of the net cash proceeds from any asset sales (as defined in the New Preferred Securities agreement), will be used to repay the 2018 Term Loan and redeem the New Preferred Securities. As long as the Cash Sweep is in effect, the Oz Operating Group may only use funds from a cumulative discretionary one-time basket of up to $50.0 million in the aggregate, or reserve up to $17.0 million in the aggregate (the “Discretionary Basket”), to engage in certain “Restricted Activities” (as defined below) or any other activities related to the strategic expansion of the Oz Operating Group, and may not use any other funds of the Oz Operating Group to fund such activities, subject to certain exceptions. The Discretionary Basket will not be subject to the Distribution Holiday or the Cash Sweep and, subject to certain exceptions, may only be used to fund new firm investments or new firm products or to fund share buybacks (including RSU cash settlements in excess of permitted amounts) in an aggregate amount not to exceed $25.0 million (the “Restricted Activities”). The Discretionary Basket may not be used to fund employee compensation payments. New Preferred Securities Pursuant to the New Preferred Unit Designations, the Oz Operating Partnerships issued New Preferred Securities with an aggregate liquidation preference of $200.0 million , in exchange for $200.0 million of the Existing Preferred. Other than following the occurrence of a Discount Termination Event (as defined in the New Preferred Unit Designations), the Oz Operating Partnerships will have the option to redeem the New Preferred Securities at a 25% discount until March 31, 2021 and then at a 10% discount at any time between April 1, 2021 and the day prior to March 31, 2022. Any mandatory payments as a result of the Cash Sweep will be entitled to the same discount. To the extent that the New Preferred Securities are not repaid in full prior to March 31, 2022, at the option of the holder thereof, all or any portion of the New Preferred Securities will be converted into Debt Securities in an aggregate principal amount equal to the Liquidation Value (as defined below) of such New Preferred Securities, with such Debt Securities having the same terms as the initial $200.0 million of Debt Securities described below. Pursuant to the New Preferred Unit Designations, distributions on the New Preferred Securities will be payable on the liquidation preference amount on a cumulative basis at an initial distribution rate of 0% per annum until February 19, 2020 (the “Step Up Date”), after which the distribution rate will increase in stages thereafter to a maximum of 10% per annum on and after the eighth anniversary of the Step Up Date. In addition, following the occurrence of a change of control event, the Oz Operating Partnerships will redeem the New Preferred Securities at a redemption price equal to the liquidation preference plus all accumulated but unpaid distributions (collectively, the “Liquidation Value”). If the Oz Operating Partnerships fail to redeem all of the outstanding New Preferred Securities after such change of control event, the distribution rate will increase by 7% per annum, beginning on the 31st day following such event. Pursuant to the New Preferred Unit Designations, the Oz Operating Partnerships will not be required to effect such redemption until the earlier of (i) the date that is 20 days following such change of control event and (ii) the payment in full of all loans and other obligations and the termination of all commitments under the 2018 Term Loan. In addition, from and after March 31, 2022, if the amounts that were distributed to partners of the Oz Operating Partnerships in respect of their equity interests in the Oz Operating Partnerships (other than amounts distributed in respect of tax distributions or certain other distributions) or utilized for repurchase of units by such entities (or which were available but not used for such purposes) for the immediately preceding fiscal year were in excess of $100.0 million in the aggregate, then an amount equal to 20% of such excess shall be utilized to redeem the New Preferred Securities on a pro rata basis at a redemption price equal to the Liquidation Value. Furthermore, if the average closing price of the Company’s Class A Shares exceeds $150.00 per share for the previous 20 trading days from and after the Recapitalization Closing, the Oz Operating Partnerships have agreed to use their reasonable best efforts to redeem all of the outstanding New Preferred Securities as promptly as practicable. If such event occurs prior to the maturity date of the 2018 Term Loan and all obligations under the 2018 Term Loan have not been prepaid in accordance with the terms thereof, the Company has agreed to use its reasonable best efforts to obtain consents from its lenders in order to redeem the New Preferred Securities as promptly as practicable. Subordinated Credit Facility In connection with the Recapitalization, and as part of the Existing Preferred Restructuring, the Oz Operating Partnerships, each as a borrower, entered into the Subordinated Credit Agreement under which the Debt Securities were issued with certain parties thereto, as lenders, and the Subordinated Credit Agreement Administrative Agent. The Debt Securities mature on the earlier of (i) the fifth anniversary of the date on which all obligations under the New Preferred Unit Designations have been in paid in full and (ii) April 1, 2026. Pursuant to the terms of the New Preferred Unit Designations and the Governance Agreement to the extent that the New Preferred Securities are not repaid in full prior to March 31, 2022, then, at the option of the holder thereof, all or any portion of the liquidation preference of such New Preferred Securities shall be automatically converted into incremental Debt Securities under the Subordinated Credit Agreement without any further action by the Oz Operating Partnerships. Except as otherwise provided in the Subordinated Credit Agreement, any such incremental Debt Securities of any class will have terms and conditions identical to those of the initial Debt Securities of such class under the Subordinated Credit Agreement. Commencing February 1, 2020, the Debt Securities will bear interest at a per annum rate equal to, at the borrower’s option, one, three or six-month (or twelve-month with the consent of each lender) LIBOR plus 4.75% , or a base rate plus 3.75% . Commencing on the earlier to occur of (i) the first anniversary of the date on which all Existing Preferred are paid in full and (ii) March 31, 2022, the Debt Securities amortize in quarterly installments each in a principal amount equal to 5% of the aggregate principal amount of the Debt Securities of the applicable borrower on the effective date of the Subordinated Credit Agreement or, in the case of incremental Debt Securities of such borrower, the date New Preferred Securities are exchanged for incremental Debt Securities pursuant to the terms of the New Preferred Unit Designations; provided that in no event shall amortization payments in any fiscal year be required to exceed $40.0 million . For a period of nine months after the repayment of the New Preferred Securities, the borrowers will have the option to voluntarily repay up to $200.0 million of the initial Debt Securities at a 5% discount. The Subordinated Credit Agreement requires that certain sister advisor companies and material domestic subsidiary advisors formed or acquired after the Recapitalization Closing and that are “Investment Advisers” or “Relying Advisers” (as defined in the Advisers Act) guarantee the obligations of the Oz Operating Partnerships and the other guarantors under the Subordinated Credit Agreement. The Subordinated Credit Agreement contains customary representations and warranties and covenants for a transaction of this type, including two financial maintenance covenants. The first financial maintenance covenant prohibits total fee-paying assets under management to be less than $20.0 billion as of the last day of any fiscal quarter, and the second prohibits the total net secured leverage ratio as of the last day of any fiscal quarter, beginning with the fiscal quarter ending on December 31, 2018, to exceed (i) 3.00 to 1.00, or (ii) following the third anniversary of the Recapitalization Closing, 2.50 to 1.00. The Subordinated Credit Agreement also includes a covenant requiring compliance with the provisions of the Implementing Agreements that will impose restrictions on distributions, including certain tax distributions, during the Distribution Holiday, requiring prepayment of loans under the Amended Senior Credit Agreement and thereafter, New Preferred Securities, in each case with excess cash above a certain threshold, and restricting the incurrence of indebtedness for borrowed money and certain liens, in each case subject to exceptions set forth in the Implementing Agreements. Certain of the Registrant’s subsidiaries, including, but not limited to, funds and other investment vehicles owned or managed by us and our subsidiaries, are excluded from the representations and warranties and the restrictions contained in certain of the foregoing covenants. The Subordinated Credit Agreement contains customary events of default for a transaction of this type and is based on substantially the same terms as the Amended Senior Credit Agreement. If an event of default under the Subordinated Credit Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding a majority of the Debt Securities, upon notice by the Subordinated Credit Agreement Administrative Agent to the borrowers, the obligations under the Subordinated Credit Agreement shall become immediately due and payable. In addition, if the Oz Operating Partnerships or any of their material subsidiaries become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Subordinated Credit Agreement will automatically become immediately due and payable. Amendment to Senior Credit Agreement Under the terms of the Senior Credit Agreement Amendment, the effectiveness of certain modifications to the Senior Credit Agreement were subject to the satisfaction of specified conditions set forth in the Senior Credit Agreement Amendment (the “Modification Effectiveness Conditions”). The Modification Effectiveness Conditions included, but were not limited to, the prepayment by the Senior Credit Agreement Borrower of not less than $100.0 million in aggregate principal amount outstanding of the term loans under the Senior Credit Agreement (such prepayment, the “Amendment Prepayment”), entry into definitive documentation in connection with the Recapitalization and the payment of a fee to the consenting term loan lenders under the Senior Credit Agreement equal to 0.25% of the aggregate principal amount of the term loans held by such lender immediately after giving effect to Amendment Prepayment . The Senior Credit Agreement Borrower made the Amendment Prepayment in the amount of $100.0 million on February 7, 2019, and the Modification Effectiveness Conditions were satisfied on February 7, 2019, at which time the Senior Credit Agreement was amended to, among other things, permit the various transactions contemplated by the Recapitalization, including, but not limited to, the following amendments: • The negative covenants allow for the exchange of $200.0 million of Existing Preferred for $200.0 million of Debt Securities and, in the event the Amended Senior Credit Agreement remains outstanding at that time, allows for the issuance of an additional $200.0 million of incremental debt under the Subordinated Credit Agreement (as defined below) in exchange for the remaining New Preferred Securities on or after March 31, 2022. • The total net leverage ratio financial covenant level remained unchanged, but the definition was amended to a total net secured leverage ratio that will exclude the new $200.0 million of Debt Securities, and such financial covenant will only be tested if net secured indebtedness under the Amended Senior Credit Agreement is greater than zero. • The restricted payments basket for preferred dividends was reduced from $24.0 million per year to $12.0 million per year to reflect the reduction in the amount of Existing Preferred as a result of the exchange of Existing Preferred for Debt Securities. • A new covenant was added to require compliance with the provisions of the Implementing Agreements that impose restrictions on distributions, including certain tax distributions, during the Distribution Holiday, requiring prepayment of loans under the Amended Senior Credit Agreement with excess cash above a certain threshold, and restricting the incurrence of indebtedness for borrowed money and certain liens, in each case subject to exceptions set forth in the Implementing Agreements. • Effective as of February 7, 2019, the Senior Credit Agreement Borrower terminated in full the commitments under the 2018 Revolving Credit Facility. At the time of such termination, no revolving loans were outstanding under the 2018 Revolving Credit Facility. The Company paid down an additional $20.0 million of the 2018 Term Loan on March 7, 2019, in accordance with the Cash Sweep discussed above. Amendment to Tax Receivable Agreement In connection with the Recapitalization, the Company amended the tax receivable agreement, which provides that, conditioned on the Company electing to be classified as, or converting into, a corporation for U.S. tax purposes during 2019, Mr. Och and the other recipients of payments under the tax receivable agreement will not be due any payments in respect of the 2017 tax year and will be due partial payments (based on comparing taxable income and Economic Income) in respect of the 2018 tax year, and the percentage of cash savings required to be paid with respect to the 2019 tax year and thereafter, as well as with respect to cash savings from subsequent exchanges of units, will be reduced from 85% to 75% . Expected Changes in Tax Status and Legal Structure The Registrant intends to (i) change its tax classification from a partnership to a corporation effective April 1, 2019 and (ii) subsequently convert from a limited liability company into a corporation. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements of the Company. The most critical of these estimates are related to (i) fair value measurements of the assets and liabilities of the funds, which impacts the Company’s management fees and incentive income; (ii) the determination of whether to recognize incentive income; (iii) the determination of whether or not to consolidate a variable interest entity; and (iv) the estimate of future taxable income, which impacts the carrying amount of the Company’s deferred income tax assets. While management believes that the estimates utilized in preparing the consolidated financial statements are reasonable and prudent, actual results could differ materially from those estimates. |
Foreign Currency | Foreign Currency The functional currency of substantially all of the Company’s consolidated subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars at the closing rates of exchange on the balance sheet date. Gains and losses on transactions denominated in foreign currencies due to changes in exchange rates are recorded as other expenses within general, administrative and other in the consolidated statements of comprehensive income (loss). |
Consolidation | Consolidation Policies The Company adopted Accounting Standards Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis as of January 1, 2016 using the modified retrospective method of transition, which resulted in a cumulative effect adjustment to opening equity on the date of adoption. The impact to the Company’s opening retained earnings in 2016 was driven by the cumulative effect of a change in the incentive income recognition methodology for the funds no longer consolidated by the Company, net of deferred income tax effects. The Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds are generally organized using a “master-feeder” structure. Fund investors, including the Company’s executive managing directors, employees and other related parties, to the extent they invest in a given fund, generally invest directly into the feeder funds. These feeder funds are typically limited partnerships or limited companies that hold direct or indirect interests in a master fund. The master fund, together with its subsidiaries, is the primary investment vehicle for its feeder funds. The Company generally collects its management fees and incentive income from the feeder funds or subsidiaries of the feeder funds (“intermediate funds”), and generally does not collect any management fees or incentive income directly from the master funds. The Company also organizes certain funds (e.g., its real estate funds and closed-end opportunistic credit funds) without the use of a master-feeder structure. These are typically organized as limited partnerships, in which the Company is the general partner and collects management fees and incentive income directly from these entities; however, in the case of the real estate funds, the Company collects management fees directly from those funds’ investors. Finally, CLOs are collateralized financing vehicles that issue notes to investors and use those proceeds to acquire various types of credit-related investments that serve as collateral for the notes. Senior notes issued by these vehicles make periodic payments based on a stated interest rate, while the most subordinated notes have no stated interest rate but receive periodic payments from excess cash flows remaining after periodic payments have been made to the other notes and for fees and expenses due. The Company generally directs the activities of its funds through its role as general partner or as the investment manager or CLO collateral manager with decision-making rights. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Fee arrangements are not considered variable interests when they are commensurate with the level of effort required to provide services and include only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length, and where the Company does not hold other interests in the entity that would absorb more than an insignificant amount of the variability of the entity. Where the Company does not have a variable interest in the entity, it will not consolidate the entity. Where the Company has a variable interest, it is required to determine whether the entity will be considered as a Variable Interest Entity (“VIE”) or Voting Interest Entity (“VOE”), the classification of which will determine the analysis that the Company is required to perform when determining whether it should consolidate the entity. The consolidated financial statements include the accounts of the Registrant and entities in which it, directly or indirectly, is determined to have a controlling financial interest under the following set of guidelines: • VIEs— The Company determines whether, if by design, an entity has any of the following characteristics: (i) equity investors who lack the characteristics of a controlling financial interest; (ii) the entity does not have sufficient equity at risk to finance its expected activities without additional subordinated financial support from other parties; or (iii) substantially all of the activities of the entity are performed on behalf of a party with disproportionately few voting rights. An entity with any one of these characteristics is a VIE. Partnerships, and similarly structured entities, will be considered as VIEs where a simple majority of third party investors with equity at risk are not able to exercise substantive kick-out or participating rights over the general partner. • VOEs— Where an entity does not have the characteristics of a VIE, it is a VOE. The determination of whether a fund is a VIE or a VOE is based on the facts and circumstances for each individual fund in accordance with the guidelines described below. Classification of such entities is reassessed where there is a substantive change in the governing documents or contractual arrangements of the entity, to the capital structure of the entity or in the activities of the entity. The Company continuously reassesses whether it should consolidate a VIE or VOE. Funds that are VIEs Funds that are VIEs are generally VIEs because fund investors are deemed to lack the characteristics of a controlling financial interest or the entity does not have sufficient equity at risk. The party identified as the primary beneficiary of a VIE is required to consolidate the entity. A party is the primary beneficiary of a VIE where it has a controlling financial interest in the entity, which is defined as (i) the power to direct the activities of the entity that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Where the Company does not have a controlling financial interest, but is part of a related party group under common control that collectively has characteristics of a controlling financial interest, the Company may be required to determine which party within the related party group is more closely associated with the VIE and would therefore consolidate a VIE. This assessment would also be performed where power is shared within a related party group that collectively has characteristics of a controlling financial interest. For the purposes of determining whether it is the primary beneficiary of a fund that is a VIE, the Company considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. The types of funds that are VIEs and not consolidated are generally (i) master funds and intermediate fund vehicles for the Company’s multi-strategy funds, as well as opportunistic credit, real estate and certain other fund vehicles, as third party investors in these entities have not been granted substantive removal rights; and (ii) CLOs, as they lack sufficient equity at risk to finance their expected activities without additional subordinated financial support from other parties. The Company does not consolidate VIEs where it does not have a controlling financial interest. The types of funds that are VIEs consolidated by the Company are certain new funds that the Company has seeded and generally expects to deconsolidate when the fund has a certain level of additional third party capital. Funds that are VOEs Funds that are corporations, or similarly structured entities, that are not VIEs would be consolidated by the Company where the Company has a majority equity investment and has control over significant operating, financial and investing decisions of the entity. The Company will generally not consolidate partnerships, or similarly structured entities, that are not VIEs where a single investor or simple majority of third party investors with equity have the ability to exercise substantive kick-out or participating rights. The types of funds that are VOEs and not consolidated by the Company are generally feeder funds of the Company’s multi-strategy funds, as third party fund investors in these entities have been granted substantive removal rights. The Company does not currently consolidate any funds that are VOEs. |
Allocations of Oz Operating Group Earnings and Capital | Allocations of Oz Operating Group Earnings and Capital The Company consolidates the Oz Operating Group. Earnings of the Oz Operating Group are allocated on a pro rata basis between the Group A Units, which interests are reflected within net income (loss) attributable to noncontrolling interests, and Group B Units, which interests are reflected within net income (loss) attributable to Och-Ziff Capital Management Group LLC, in the consolidated statements of comprehensive income (loss). Paid-in capital of the Oz Operating Group is also allocated pro rata between the Group A Units, which interests are reflected within noncontrolling interests, and Group B Units, which interests are reflected within the Company’s paid-in capital, in the consolidated balance sheets. As of December 31, 2018 , Group P Units are not participating in the earnings of the Oz Operating Group, as certain service and performance conditions, as described in Note 12 , have not been met as of the reporting period end. See Note 3 for additional information regarding the Company’s interest in the Oz Operating Group. |
Noncontrolling Interests and Appropriated Retained Earnings (Deficit) | Noncontrolling Interests and Appropriated Retained Deficit The Group A Units represent interests in the Oz Operating Group not held by the Company, and amounts attributable to these units are presented as noncontrolling interests in the consolidated balance sheets. Additionally, the Company consolidates certain credit funds that it manages, wherein investors are able to redeem their interests on a monthly basis. Amounts relating to these fund investors’ interests in these funds are presented as redeemable noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests are presented as net income (loss) attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss). The Company also consolidated the CLOs it managed prior to adoption of ASU 2015-02 on January 1, 2016. The Company elected the fair value option for the notes and loans payable of the consolidated CLOs upon the initial consolidation of each CLO. The recognition of the difference between the fair value of assets and liabilities of consolidated CLOs was presented as appropriated retained deficit. See Note 3 for additional information regarding noncontrolling interests. |
Preferred Units | Preferred Units The Company presents Preferred Units as redeemable noncontrolling interests, outside of permanent equity on the Company’s consolidated balance sheet, as the redemption of the Preferred Units may be effected in a manner not solely in control of the Company. The Company recorded the proceeds from the issuance and sale net of transactions costs. As the redemption of the Preferred Units is outside of the control of the Company, the carrying value of the Preferred Units is their current full redemption value. The change in redemption value was treated as a reduction of the common equity holders’ interests in the Oz Operating Group. The pro rata share of the change in redemption value that was allocable to the Registrant was treated as a reduction of net income (loss) attributable to Class A Shareholder when calculating earnings (loss) per Class A Share. See Note 10 for additional information on the Preferred Units. |
Revenue Recognition, Management Fees and Incentive Income | Revenue Recognition Policies The Company provides asset management services to its customers, including certain administrative services related to the funds’ operations, in exchange for management and incentive fees, which are included in the Company’s agreements with its customers. The services provided in connection with the identified performance obligations are satisfied over time. The agreements are generally automatically renewed on an annual basis unless the agreements are terminated by the general partner or directors of the respective funds. Management Fees Management fees for the Company’s multi-strategy funds typically range from 0.96% to 2.25% annually of assets under management based on the net asset value of these funds. For the Company’s opportunistic credit funds, management fees typically range from 0.50% to 1.75% annually based on the net asset value of these funds. Management fees for Institutional Credit Strategies, which primarily relate to CLOs, generally range from 0.35% to 0.50% annually based on the par value of the collateral and cash held in the CLOs. Management fees for the Company’s real estate funds typically range from 0.75% to 1.50% annually based on the amount of capital committed or invested during the investment period, and on the amount of invested capital after the investment period. Management fees are recognized over the period during which the related services are performed. Management fees are generally calculated and paid to the Company on a quarterly basis in advance, based on the amount of assets under management at the beginning of the quarter. Management fees are prorated for capital inflows and redemptions during the quarter. Accordingly, changes in the Company’s management fee revenues from quarter to quarter are driven by changes in the quarterly opening balances of assets under management, the relative magnitude and timing of inflows and redemptions during the respective quarter, as well as the impact of differing management fee rates charged on those inflows and redemptions. The Company considers management fees to be a form of variable consideration, as the amount earned each quarter may depend on various contingencies, such as the value of assets under management, capital inflows and outflows during the period, or changes in committed or invested capital. Management fees, however, are generally recognized at the end of each reporting period and are not subject to clawback and, therefore, the value of the management fees the Company is entitled to receive at the end of each quarter is generally no longer subject to the constraint. Incentive Income The Company earns incentive income based on the cumulative performance of the funds over a commitment period. Prior to the adoption of new revenue recognition accounting guidance in 2018, incentive income was recognized at the end of the applicable commitment period when the amounts were contractually payable, or “crystallized,” and when no longer subject to clawback. Beginning in 2018, as a result of the adoption of the new revenue recognition accounting guidance, the Company recognizes incentive income when such amounts are probable of not significantly reversing. Incentive income is typically equal to 20% of the realized and unrealized profits, net of management fees, attributable to each fund investor in the Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds. Incentive income excludes unrealized gains and losses attributable to investments that the Company, as investment manager, believes lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance (“Special Investments”). For the Company’s closed-end opportunistic credit funds, real estate funds and certain other funds, incentive income is typically equal to 20% of the realized profits, net of management fees, attributable to each fund investor. For CLOs, incentive income is typically 20% of the excess cash flows available to the holders of the subordinated notes. The Company’s ability to earn incentive income from some of its funds may be impacted by hurdle rates, whereby the Company is not entitled to incentive income until the investment returns exceed an agreed upon benchmark. For a portion of these assets subject to hurdle rates, once the investment performance has exceeded the hurdle rate, the Company may receive a preferential “catch-up” allocation, equal to a full 20% of the net profits attributable to investors in these assets. All of the Company’s multi-strategy funds and open-end opportunistic credit funds are subject to a perpetual loss carry forward, or perpetual “high-water mark,” meaning the Company will not be able to earn incentive income with respect to positive investment performance it generates for a fund investor in any year following negative investment performance until that loss is recouped, at which point a fund investor’s investment surpasses the high-water mark. The Company earns incentive income on any profits, net of management fees, in excess of the high-water mark. The commitment period for most of the Company’s multi-strategy assets under management is for a period of one year on a calendar-year basis with incentive income recognized annually on December 31. The Company may also recognize incentive income related to fund investor redemptions at other times during the year, and on assets under management subject to commitment periods that are longer than one year. The Company may also recognize incentive income for tax distributions that the Company is entitled to that cover estimated tax obligations of the Company related to the management of certain funds. These distributions are not subject to clawback once distributed to the Company. Incentive income is considered variable consideration, the recognition of which is subject to constraint. Incentive income is no longer constrained when it is probable that a significant reversal will not occur. Determining the amount of incentive income to record is subject to qualitative and quantitative factors including, where a fund is in its life-cycle, whether the Company has received or is entitled to receive incentive income distributions and potential sales of fund investments. The Company continuously evaluates whether there are additional considerations that could potentially impact the recognition of incentive income. To the extent that distributions have been received, but for which the recognition of incentive income is not appropriate, the Company will recognize a liability for unearned incentive income. See Note 11 for additional information regarding the Company’s revenues. |
Other Revenues | Other Revenues Other revenues consist primarily of interest income on investments in CLOs and cash and cash equivalents. Interest income is recognized on an effective yield basis. Additionally, prior to the sale of the Company’s aircraft in the first half of 2017, revenue related to non-business use of the corporate aircraft by certain executive managing directors was also included within other revenues and was recognized on an accrual basis based on actual flight hours. |
Compensation and Benefits | Compensation and Benefits Compensation and benefits is comprised of salaries, benefits, payroll taxes, and discretionary and guaranteed cash bonus expense. The Company generally recognizes compensation and benefits expenses over the related service period. Bonus Compensation On an annual basis, compensation and benefits comprise a significant portion of total expenses, with discretionary cash bonuses generally comprising a significant portion of total compensation and benefits. The Company accrues minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued during the first three quarters of each year, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year. Equity-Based Compensation Compensation expense related to equity-classified share-based payments with a service condition is based on the grant-date fair value and recognized on a straight-line basis over the requisite service period for awards with both cliff vesting and graded vesting. The Company accounts for forfeitures on share-based compensation arrangements as they occur. The Company recognizes all income tax effects of awards within consolidated net income (loss) when the awards vest or are settled. For liability-classified share-based payments, the Company recognizes compensation expense over the requisite service period adjusted to the fair value as of the end of the reporting period. Compensation expense related to equity-classified share-based payments related to Group P Units, which include both a service and a market condition, is based on the estimated fair value of the awards at the date of grant, using graded vesting, which separately considers and recognizes compensation expense over the requisite service period for each tranche. See Note 12 for additional information on the Company’s equity-based compensation plans. Group D Units The Group D Units are not considered equity under GAAP, and therefore no equity-based compensation expense is recognized related to these units when they are granted. Distributions to holders of Group D Units are included within compensation and benefits in the consolidated statements of comprehensive income (loss). These distributions are accrued in the quarter in which the related income was earned and are paid out the following quarter at the same time distributions on the Group A Units and dividends on the Company’s Class A Shares are paid. A Group D Unit converts into a Group A Unit to the extent the Company determines that it has become economically equivalent to a Group A Unit. Upon the conversion of Group D Units into Group A Units, we recognize a one-time charge for the grant-date fair value of the vested units and begin to amortize the grant-date fair value of the unvested units over the vesting period. Profit Sharing Arrangements The Company also has profit-sharing arrangements whereby certain employees and executive managing directors are entitled to a share of incentive income distributed to the Company by certain funds. To the extent that the payments made by the Company to the employees and executive managing directors are probable and reasonably estimable, the Company accrues these payments as compensation expense, which may occur prior to the recognition of the related incentive income. Deferred Cash Interests (DCIs) DCIs are granted to certain employees and executive managing directors as a form of compensation. DCIs generally vest over a three year period, subject to an employee’s or executive managing director’s continued service. Upon vesting, the Company pays the employee or executive managing director an amount in cash equal to the notional investment in specified funds represented by the DCIs, as adjusted for fund performance over the service period. Except as otherwise provided in the relevant deferred cash interest plan or in an award agreement, in the event of a termination of the employee’s or executive managing director’s service, any portion of the DCIs that are unvested as of the date of termination will be forfeited. The Company recognizes the total notional investment as compensation expense, as adjusted for notional fund performance, over the related service period. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities resulting from temporary differences between the GAAP and tax bases of assets and liabilities are measured at the balance sheet date using enacted income tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The Company offsets deferred income tax assets and liabilities for presentation in its consolidated balance sheets when such assets and liabilities are within the same legal entity and related to the same taxing jurisdiction. The realization of deferred income tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the enacted tax law in the applicable tax jurisdiction. A valuation allowance is established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether a valuation allowance should be established, as well as the amount of such allowance. The Company recognizes the income tax accounting effects of changes in tax law or rates (including retroactive changes) in the period of enactment . Future events such as changes in tax legislation could have an impact on the provision for income taxes and the effective income tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The Company records interest and penalties related to income taxes within income taxes in the consolidated statements of comprehensive income (loss). |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers highly-rated liquid investments that have an original maturity of three months or less from the date of purchase to be cash equivalents. Cash equivalents are recorded at amortized cost plus accrued interest. As of December 31, 2018 , the majority of the Company’s cash and cash equivalents were held with one major financial institution, which exposes the Company to a certain degree of credit risk concentration. Restricted cash represents amounts that are restricted as to usage due to regulatory reasons. The following table summarizes the Company’s cash and cash equivalents and restricted cash balances as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 (dollars in thousands) Cash and cash equivalents $ 315,809 $ 469,513 Restricted cash 8,075 — Total Cash and Cash Equivalents and Restricted Cash $ 323,884 $ 469,513 |
Investments | Investments Investments in CLOs The Company elected to measure its investments in notes issued by CLOs managed by the Company at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net (losses) gains on investments in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method, and includes this income within other revenues in the consolidated statements of comprehensive income (loss). Investments in Other Funds The Company’s equity investments in funds are accounted for under the equity method of accounting. The Company recognizes its share of earnings within net (losses) gains on investments in the consolidated statements of comprehensive income (loss). Investments in United States Government Obligations The Company invests in United States government obligations to manage excess liquidity. These investments are carried at fair value, as the Company has elected the fair value option in order to include any gains or losses within consolidated net income (loss). These investments are recorded in the consolidated balance sheet within cash and cash equivalents for investments with an original maturity from the date of purchase of three months or less, and within investments for those longer than three months. Changes in fair value of these investments were immaterial for the years ended December 31, 2018 , 2017 and 2016 . |
Transfers of Financial Assets | Transfers of Financial Assets From time to time, the Company purchases loans in the open market and sells the loans at cost to CLOs it manages. The Company accounts for the transfer of these loans as a sale upon meeting the following requirements: (i) the transferred assets are legally isolated from the Company; (ii) holder of the notes issued by the CLO (other than the Company) must have the right to sell or pledge their notes; and (iii) the Company may not maintain effective control over the transferred loans. The Company continues to recognize acquired loans until the requirements are met. Any loans for which the requirements above have not been met are classified as held for sale and measured at the lower of cost or fair value. See Note 4 for additional information. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost less accumulated depreciation and amortization within other assets, net in the consolidated balance sheets. The Company evaluates fixed assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be fully recovered. Depreciation and amortization of fixed assets are calculated using the straight-line method over the following depreciable lives: the shorter of the related lease term or expected useful life for leasehold improvements and 3.0 years to 7.0 years for all other fixed assets. If a fixed asset is reclassified as held for sale, it is carried at the lower of existing carrying value or its estimated net selling price, and the asset is no longer depreciated. |
Goodwill | Goodwill Goodwill is included within other assets, net in the Company’s consolidated balance sheets and relates to the Company’s 2007 acquisition of an additional 25% interest in its domestic real estate operations from one of its former joint venture partners. The Company tests goodwill for impairment on an annual basis or more frequently if events or circumstances justify conducting an interim test. |
Securities Sold Under Agreement to Repurchase | Securities Sold Under Agreements to Repurchase Securities sold under agreements to repurchase (“repurchase agreements”) are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. Securities transferred to counterparties under repurchase agreements are included within investments in the consolidated balance sheets. Cash received under a repurchase agreement is recognized a liability within securities sold under agreements to repurchase in the consolidated balance sheets. Interest expense is recognized on an effective yield basis and is included within interest expenses in the consolidated statements of comprehensive income (loss). See Note 9 for additional information. |
Policies of Consolidated Funds | Policies of Consolidated Funds The funds are considered investment companies for GAAP purposes. Pursuant to specialized accounting guidance for investment companies and the retention of that guidance in the Company’s consolidated financial statements, the investments held by the consolidated funds’ are reflected in the consolidated financial statements at their estimated fair values. |
Income of Consolidated Funds | Income of Consolidated Funds Income of consolidated funds consists of interest income, dividend income and other miscellaneous items. Interest income is recorded on an accrual basis. The consolidated funds may place debt obligations, including bank debt and other participation interests, on non-accrual status and, when necessary, reduce current interest income by charging off any interest receivable when collection of all or a portion of such accrued interest has become doubtful. The balance of non-accrual investments as of December 31, 2018 and 2017 , and the impact of such investments for the years ended December 31, 2018 , 2017 and 2016 , were not material. Dividend income is recorded on the ex-dividend date, net of withholding taxes, if applicable. Premiums and discounts are amortized and accreted, respectively, to income of consolidated funds in the consolidated statements of comprehensive income (loss). |
Expenses of Consolidated Funds | Expenses of Consolidated Funds Expenses of consolidated funds consist of interest expense and other miscellaneous expenses. Interest expense is recorded on an accrual basis. |
Investments of Consolidated Funds, at Fair Value | Investments of Consolidated Funds, at Fair Value Investments of consolidated funds, at fair value include the consolidated funds’ investments in securities, investment companies and other investments. Securities transactions are recorded on a trade-date basis. Realized gains and losses on sales of investments of the funds are determined on a specific identification basis and are included within net gains (losses) of consolidated funds in the consolidated statements of comprehensive income (loss). The fair value of investments held by the consolidated funds is based on observable market prices when available. Such values are generally based on the last reported sales price as of the reporting date. In the absence of readily ascertainable market values, the determination of the fair value of investments held by the consolidated funds may require significant judgment or estimation. For information regarding the valuation of these assets, see Note 4 . |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition , and most industry-specific revenue recognition guidance. The core principle of the guidance is that an entity should recognize 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 those goods or services. The Company adopted ASU 2014-09 using a modified retrospective application approach as of the beginning of the first quarter of 2018 to all contracts within the scope of the standard as of the date of adoption. As a result of the adoption of ASU 2014-09, the Company now recognizes certain incentive income earlier than as prescribed under guidance in effect for prior years as the threshold for recognition of incentive income under ASU 2014-09 is lower than under the previous standard. The Company recognized an opening adjustment to shareholders’ equity of $117.0 million , which is net of $11.3 million of income tax, of which $41.9 million was attributable to Class A shareholders. The following table details the post-tax impact on the Company’s opening shareholders’ equity, by fund type, upon the adoption of ASU 2014-09: (dollars in thousands) Multi-strategy funds $ 2,727 Opportunistic credit funds 24,462 Real estate funds 89,795 Total $ 116,984 The adoption of this guidance resulted in a decrease to the liability for unearned incentive income of $99.4 million and an increase in income and fees receivable of $28.8 million . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The Company elected to early adopt the standard in the third quarter of 2018. The impacts of adoption are reflected in certain disclosures in Note 4 and include removing disclosures related to: the amount of and reasons for transfers between Levels I and II of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level III fair value measurements. The adoption of the standard did not have a material effect on the Company’s consolidated financial statements. None of the other changes to GAAP that went into effect in the year ended December 31, 2018 has had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 significantly changes accounting for lease arrangements, in particular from the perspective of the lessee. The Company is not currently a lessor in any significant lease arrangements, but is a lessee in several lease arrangements that would be impacted by the ASU. The Company has determined that substantially all of its operating leases will be reported as lease obligations, along with offsetting right to use assets on its consolidated balance sheet at their present value, and will continue to recognize associated expenses within consolidated net income (loss) in a manner similar to the existing accounting for leases (i.e., on a straight-line basis over the lease term). The requirements of ASU 2016-02 are effective for the Company beginning in the first quarter of 2019. The Company is electing to use the practical expedients available under the transition provisions under which the Company would not need to reassess whether an arrangement is or contains a lease, lease classification, and the accounting for initial direct costs. The Company will adopt ASU 2016-02 using a modified retrospective application approach as of the beginning of the first quarter of 2019 to all contracts within the scope of the standard as of the date and will not present the impacts of the adoption to comparative periods in the financial statements in the year of adoption. As of December 31, 2018 , the Company has $198.2 million of undiscounted minimum operating lease payments, substantially all of which will be recognized as a lease obligation, along with an associated right-of-use asset, subject to certain adjustments, upon adoption of ASU 2016-02. For the impacted leases the Company will continue to recognize expense on a straight-line basis over the life of the arrangements. The Company does not expect the adoption of this guidance to have a material impact on consolidated net income See Note 17 for details related to the Company’s existing operating lease obligations. None of the other changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements. |
Fair Value Disclosure | Fair Value Disclosures Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Assets and liabilities measured at fair value are classified into one of the following categories: • Level I – Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives. • Level II – Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives. • Level III – Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include CLOs, real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations and investments in affiliated credit funds. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | The following table summarizes the Company’s cash and cash equivalents and restricted cash balances as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 (dollars in thousands) Cash and cash equivalents $ 315,809 $ 469,513 Restricted cash 8,075 — Total Cash and Cash Equivalents and Restricted Cash $ 323,884 $ 469,513 |
Impact of Adoption of ASU 2014-09 | The following table details the post-tax impact on the Company’s opening shareholders’ equity, by fund type, upon the adoption of ASU 2014-09: (dollars in thousands) Multi-strategy funds $ 2,727 Opportunistic credit funds 24,462 Real estate funds 89,795 Total $ 116,984 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Components of Net (Loss) Income Attributable to Noncontrolling Interests | The following table presents the components of the net (loss) income attributable to noncontrolling interests: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Group A Units $ (25,716 ) $ 130,730 $ (195,087 ) Consolidated funds — — 262 Other 807 900 1,068 $ (24,909 ) $ 131,630 $ (193,757 ) |
Components of Shareholders' Equity Attributable to Noncontrolling Interests | The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: December 31, 2018 December 31, 2017 (dollars in thousands) Group A Units $ 415,928 $ 353,791 Other 3,503 4,111 $ 419,431 $ 357,902 |
Redeemable Noncontrolling Interests Roll Forward | The Preferred Units and fund investors’ interests in certain consolidated funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests: Year Ended December 31, 2018 2017 2016 Funds Preferred Units Total Funds Preferred Units Total Funds Preferred Units Total (dollars in thousands) Beginning balance $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 $ 832,284 $ — $ 832,284 Deconsolidation of funds on adoption of ASU 2015-02 — — — — — — (813,116 ) — (813,116 ) Change in redemption value of Preferred Units — — — — 7,446 7,446 — 16,043 16,043 Preferred Units issuance, net of issuance costs — — — — 150,054 150,054 — 246,457 246,457 Capital contributions 147,217 — 147,217 2,329 — 2,329 3 — 3 Capital distributions (15,465 ) — (15,465 ) — — — — — — Comprehensive income 291 — 291 1,667 — 1,667 2,450 — 2,450 Ending Balance $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 |
Investments and Fair Value Di_2
Investments and Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Investments Summary | The following table presents the components of the Company’s investments as reported in the consolidated balance sheets: December 31, 2018 December 31, 2017 (dollars in thousands) United States government obligations, at fair value $ 179,510 $ 12,973 CLOs, at fair value 181,868 211,749 Other investments, equity method 28,519 14,252 Total Investments $ 389,897 $ 238,974 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2018 : As of December 31, 2018 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 58,054 $ — $ — $ 58,054 Included within investments: United States government obligations $ 179,510 $ — $ — $ 179,510 CLOs (1) $ — $ — $ 181,868 $ 181,868 Investments of consolidated funds: Bank debt $ — $ 91,345 $ 75,613 $ 166,958 Corporate bonds — 4,537 — 4,537 Total Investments of Consolidated Funds $ — $ 95,882 $ 75,613 $ 171,495 _______________ (1) As of December 31, 2018 , investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2017 : As of December 31, 2017 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 99,704 $ — $ — $ 99,704 Included within investments: United States government obligations $ 12,973 $ — $ — $ 12,973 CLOs (1) $ — $ — $ 211,749 $ 211,749 Investments of consolidated funds: Bank debt $ — $ 24,559 $ 18,807 $ 43,366 _______________ (1) As of December 31, 2017 , investments in CLOs had contractual principal amounts of $189.2 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables summarize the changes in the Company’s Level III assets and liabilities for the years ended December 31, 2018 : December 31, 2017 Transfers Transfers Investment Investment Gains / Losses December 31, 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 211,749 $ — $ — $ 157,099 $ (175,272 ) $ (11,708 ) $ 181,868 Investments of consolidated funds: Bank debt $ 18,807 $ 1,671 $ (1,244 ) $ 146,658 $ (88,600 ) $ (1,679 ) $ 75,613 The following tables summarize the changes in the Company’s Level III assets and liabilities for the years ended December 31, 2017 : December 31, 2016 Transfers In Transfers Out Investment Purchases / Issuances Investment Sales Gains/Losses December 31, 2017 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 21,341 $ — $ — $ 185,404 $ (647 ) $ 5,651 $ 211,749 Investments of consolidated funds: Bank debt $ 18,127 $ 587 $ (17,311 ) $ 89,225 $ (73,069 ) $ 1,248 $ 18,807 In the second quarter of 2017, the Company consolidated a CLO, for which the amounts related to the initial consolidation of the CLO are reflected in the investment purchases in the table above. The Company deconsolidated the CLO in the third quarter of 2017, and such amounts related to the deconsolidation of the CLO are included within investment sales. |
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | The table below summarizes the net change in unrealized gains and losses on the Company’s Level III investments held as of the reporting date: Year Ended December 31, 2018 2017 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ (9,998 ) $ 5,651 Investments of consolidated funds: Bank debt $ (2,160 ) $ 97 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | The table below presents the assets and liabilities of VIEs consolidated by the Company: December 31, 2018 December 31, 2017 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ 171,495 $ 43,366 Other assets of consolidated funds 21,090 13,331 Total Assets $ 192,585 $ 56,697 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 14,541 11,340 Total Liabilities $ 14,541 $ 11,340 The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability. The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, insignificant direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 17 . The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated. The table below presents the net assets of VIEs in which the Company has variable interests along with the maximum risk of loss as a result of the Company’s involvement with VIEs: December 31, 2018 December 31, 2017 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 10,236,438 $ 8,300,163 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 62,038 144,124 Income and fees receivable 31,658 24,953 Investments in funds 190,674 222,192 Maximum Exposure to Loss $ 284,370 $ 391,269 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Other Assets | The following table presents the components of other assets, net as reported in the consolidated balance sheets: December 31, 2018 December 31, 2017 (dollars in thousands) Fixed Assets: Leasehold improvements $ 54,257 $ 53,419 Computer hardware and software 48,178 44,190 Furniture, fixtures and equipment 8,373 8,571 Accumulated depreciation and amortization (67,558 ) (58,671 ) Fixed assets, net 43,250 47,509 Goodwill 22,691 22,691 Prepaid expenses 11,629 12,862 Loans held for sale — 29,110 Other 4,833 4,189 Total Other Assets, Net $ 82,403 $ 116,361 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Components of Other Liabilities | The following table presents the components of other liabilities as reported in the consolidated balance sheets: December 31, 2018 December 31, 2017 (dollars in thousands) Accrued expenses $ 27,683 $ 21,955 Unused trade commissions 8,615 — Uncertain tax positions 7,000 7,000 Deferred rent credit 6,231 8,283 Loan trades payable 4,978 29,110 Other 9,096 8,774 Total Other Liabilities $ 63,603 $ 75,122 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instruments [Abstract] | |
Schedule of Maturities of Long-term Debt | The table below presents scheduled principal payments as of December 31, 2018 on the Company’s debt obligations for each of the next five years. As further discussed in Note 19 , in connection with the Recapitalization, the Company amended the 2018 Term Loan in February 2019, and prepaid $100.0 million of amounts outstanding under the 2018 Term Loan. Such prepayments have been applied to reduce scheduled installments of principal of the 2018 Term Loan in forward order of maturity. Additionally, any additional prepayments may also be applied in a similar manner. 2018 Term Loan CLO Investments Loans Total (dollars in thousands) 2019 $ 15,625 $ 21,068 $ 36,693 2020 $ 37,500 $ — $ 37,500 2021 $ 37,500 $ — $ 37,500 2022 $ 37,500 $ — $ 37,500 2023 $ 71,875 $ 17,362 $ 89,237 |
CLO Investments Loans Table | The table below presents information related to CLO Investments Loans as of December 31, 2018 and 2017 . Carrying values presented below are net of discounts, if any, and unamortized deferred financing costs. The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or the date at which the Company no longer holds a risk retention investment in the respective CLO. As a result of a recent court decision that vacates application of U.S. risk retention rules in certain CLO transactions, the Company sold certain investments in CLOs and paid off the associated CLO Investments Loans. In the third quarter of 2018, the Company repaid one of its CLO Investments Loans and refinanced the related investment under the CLO Financing Facility described in Note 9 . The Company continues to hold investments in its European CLOs. Borrowing Date Contractual Rate Final Maturity Date Carrying Value December 2018 December 2017 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ 17,235 $ 18,041 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,224 17,217 July 21, 2017 LIBOR plus 1.43% January 22, 2029 — 21,709 August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,674 21,686 August 17, 2017 LIBOR plus 1.43% April 30, 2030 — 22,922 September 14, 2017 LIBOR plus 1.41% April 22, 2030 — 25,468 September 14, 2017 EURIBOR plus 2.21% September 14, 2024 18,614 19,561 November 21, 2017 LIBOR plus 1.34% May 15, 2030 — 26,202 February 21, 2018 LIBOR plus 1.27% February 21, 2019 21,060 — $ 95,807 $ 172,806 |
Securities Sold under Agreeme_2
Securities Sold under Agreements to Repurchase (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Schedule of Repurchase Agreements Offsetting Disclosures | The table below presents securities sold under agreements to repurchase that are offset, if any, as well as securities transferred to counterparties related to such transactions (capped so that the net amount presented will not be reduced below zero). No other material financial instruments were subject to master netting agreements or other similar agreements: As of December 31, 2018 Securities Sold under Agreements to Repurchase Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities in the Consolidated Balance Sheet Securities Transferred Net Amount (dollars in thousands) As of December 31, 2018 $ 62,801 $ — $ 62,801 $ 62,186 $ 615 |
Schedule of Remaining Contractual Maturity of Repurchase Agreements | The securities sold under agreements to repurchase have a set scheduled maturity date that corresponds to the maturities of the securities sold under such transaction. The table below presents the remaining final contractual maturity of the securities sold under agreement to repurchase by class of collateral pledged: As of December 31, 2018 Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total (dollars in thousands) Investments in CLOs $ — $ — $ — $ 62,801 $ 62,801 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Management Fees and Incentive Income Recognized | The following table presents management fees and incentive income recognized as revenues for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016 Management Fees Incentive Income Management Fees Incentive Income Management Fees Incentive Income (dollars in thousands) Multi-strategy funds $ 168,902 $ 71,972 $ 214,116 $ 409,823 $ 426,159 $ 138,229 Credit Opportunistic credit funds 41,035 89,182 44,753 99,308 45,716 77,283 Institutional Credit Strategies 50,212 — 35,381 — 27,656 — Real estate funds 19,307 40,811 21,027 7,603 21,464 17,873 Other 2,406 931 4,181 11,266 12,161 55 Total $ 281,862 $ 202,896 $ 319,458 $ 528,000 $ 533,156 $ 233,440 |
Unearned Incentive Income Roll Forward | A liability for unearned incentive income is generally recognized when the Company receives incentive income distributions from its funds, primarily its real estate funds, for which incentive income has not yet met the recognition threshold of being probable that a significant reversal of cumulative revenue will not occur. The following table presents the activity in the Company’s unearned incentive income for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 2017 2016 (dollars in thousands) Beginning of Year $ 143,710 $ 96,079 $ — Deconsolidation of funds on adoption of ASU 2015-02 — — 81,972 Effects of adoption of ASU 2014-09 (99,422 ) — — Amounts collected during the period 54,538 53,915 22,557 Amounts recognized during the period (37,429 ) (6,284 ) (8,450 ) End of Year $ 61,397 $ 143,710 $ 96,079 |
Income and Fees Receivable | The following table presents the composition of the Company’s income and fees receivable as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 (dollars in thousands) Management fees $ 20,368 $ 21,242 Incentive income 62,475 333,214 Income and Fees Receivable $ 82,843 $ 354,456 |
Equity-Based Compensation Exp_2
Equity-Based Compensation Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Equity-Based Compensation Expense | The following table presents information regarding the impact of equity-based compensation grants on the Company’s consolidated statements of comprehensive income (loss): Year Ended December 31, 2018 2017 2016 (dollars in thousands) Expense recorded within compensation and benefits $ 87,130 $ 84,169 $ 75,217 Corresponding tax benefit $ 2,811 $ 4,720 $ 3,116 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following tables present activity related to the Company’s unvested equity awards for the year ended December 31, 2018 : Equity-Classified RSUs Liability-Classified RSUs PSUs Unvested RSUs Weighted-Average Grant-Date Fair Value Unvested RSUs Weighted-Average Unvested PSUs Weighted-Average December 31, 2017 1,453,060 $ 46.74 — $ — — $ — Granted 3,905,020 $ 23.34 29,084 $ 15.00 1,000,000 $ 11.82 Vested (1,279,619 ) $ 41.03 (330,550 ) $ 55.24 — $ — Canceled or forfeited (934,722 ) $ 36.18 — $ — — $ — Modified from Group A Units and Group P Units 640,797 $ 63.62 734,599 $ 63.62 — $ — December 31, 2018 3,784,536 $ 30.00 433,133 $ 66.75 1,000,000 $ 11.82 Group A Units Group P Units Unvested Group A Units Weighted-Average Unvested Group P Units Weighted-Average December 31, 2017 841,066 $ 97.70 7,185,000 $ 12.46 Vested (166,104 ) $ 95.30 — $ — Canceled or forfeited — $ — (625,000 ) $ 12.46 Modified to RSUs (600,000 ) $ 97.50 (2,900,000 ) $ 12.46 December 31, 2018 74,962 $ 105.26 3,660,000 $ 12.46 |
Settlement of Restricted Share Units | The following table presents information related to the settlement of RSUs: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 12,044 $ 13,016 $ 12,675 Fair value of RSUs settled in cash $ 3,879 $ 130 $ — Fair value of RSUs withheld to satisfy tax withholding obligations $ 4,436 $ 7,577 $ 7,960 Number of RSUs withheld to satisfy tax withholding obligations 329,591 280,269 222,856 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The following table presents the components of the Company’s provision for income taxes: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Current: Federal income taxes $ 1 $ 103 $ 19 State and local income taxes 1,165 2,172 4,885 Foreign income taxes 2,735 2,520 3,746 3,901 4,795 8,650 Deferred: Federal income taxes 3,304 322,162 7,760 State and local income taxes 5,736 (9,828 ) (6,131 ) Foreign income taxes (441 ) 430 607 8,599 312,764 2,236 Total Provision for Income Taxes $ 12,500 $ 317,559 $ 10,886 |
Schedule of Deferred Tax Assets and Liabilities | The following table presents the Company’s deferred income tax assets and liabilities before the impact of offsetting deferred income tax assets and liabilities within the same legal entity and tax jurisdiction: December 31, 2018 December 31, 2017 (dollars in thousands) Deferred Income Tax Assets: Tax goodwill $ 234,437 $ 272,636 Net operating loss 96,524 76,100 Investments in partnerships 19,607 20,440 Tax credit carryforwards 15,550 16,102 Employee compensation 1,027 626 Other 869 2,145 368,014 388,049 Valuation allowance (11,959 ) (12,028 ) Total Deferred Income Tax Assets $ 356,055 $ 376,021 Total Deferred Income Tax Liabilities $ 1,030 $ 1,167 |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate: Year Ended December 31, 2018 2017 2016 Statutory U.S. federal income tax rate 21.00 % 35.00 % 35.00 % Income passed through to noncontrolling interests -17.01 % -10.40 % -23.10 % Other state and local income taxes -16.53 % 4.42 % -2.47 % RSU excess deferred income tax write-off -11.33 % 0.50 % — % Foreign income taxes -6.32 % 0.63 % -0.96 % Income not subject to entity level tax 4.21 % -4.54 % -3.01 % Return-to-Provision adjustment -3.57 % -0.30 % 1.44 % Nondeductible fines and penalties — % — % -12.78 % Nondeductible transaction costs -3.52 % — % — % Impact of federal tax reform — % 40.34 % — % Other, net -1.27 % 1.64 % 2.31 % Effective Income Tax Rate -34.34 % 67.29 % -3.57 % |
General, Administrative and O_2
General, Administrative and Other (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Components of General, Administrative and Other Expenses | The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss): Year Ended December 31, 2018 2017 2016 (dollars in thousands) Professional services $ 52,163 $ 43,343 $ 74,859 Occupancy and equipment 28,769 33,358 35,998 Information processing and communications 25,917 28,274 34,485 Recurring placement and related service fees 16,247 20,153 38,424 Insurance 7,391 7,609 15,333 Business development 4,075 6,685 13,440 Foreign exchange losses and (gains) 2,766 (726 ) 419 Other expenses 12,899 13,375 21,409 150,227 152,071 234,367 Settlements expense (1) 31,750 — 412,101 Total General, Administrative and Other $ 181,977 $ 152,071 $ 646,468 _______________ (1) Settlements expense represent accruals for certain contingencies discussed in Note 17 . |
(Loss) Earnings Per Class A S_2
(Loss) Earnings Per Class A Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted (Loss) Earnings Per Class A Share | The following tables present the computation of basic and diluted earnings per Class A Share: Year Ended December 31, 2018 Net Loss Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Loss Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ (24,284 ) 19,270,929 $ (1.26 ) Effect of dilutive securities: Group A Units — — 26,073,057 RSUs — — 4,826,130 Diluted $ (24,284 ) 19,270,929 $ (1.26 ) Year Ended December 31, 2017 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ 18,222 18,642,379 $ 0.98 Effect of dilutive securities: Group A Units — — 27,230,147 RSUs — 75,797 — Diluted $ 18,222 18,718,176 $ 0.97 Year Ended December 31, 2016 Net Loss Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Loss Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ (130,762 ) 18,267,017 $ (7.16 ) Effect of dilutive securities: Group A Units (219,109 ) 29,731,710 — RSUs — — 1,434,330 Diluted $ (349,871 ) 47,998,727 $ (7.29 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Management Fees and Incentive Income Earned from Related Parties | The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds: Year Ended December 31, 2018 2017 2016 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 14,017 $ 10,574 $ 18,243 Incentive income $ 7,530 $ 14,052 $ 12,266 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimated Future Maximum Payments Under Tax Receivable Agreement | The table below presents the maximum amounts that would be payable under the tax receivable agreement assuming that the Company will have sufficient taxable income each year to fully realize the expected tax savings and without taking into account the effect of the 2019 amendment to the tax receivable agreement, the Recapitalization or the expected change in corporate classification. In light of the numerous factors affecting the Company’s obligation to make such payments, the timing and amounts of any such actual payments may differ materially from those presented in the table. The impact of any net operating losses is included in the “Thereafter” amount in the table below. Potential Payments Under Tax Receivable Agreement (dollars in thousands) 2019 $ 72,249 2020 29,294 2021 29,483 2022 32,619 2023 29,489 Thereafter 84,639 Total Payments $ 277,773 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents minimum operating lease payments as of December 31, 2018 . Future minimum lease payments for capital leases were not material as of December 31, 2018 . Operating Leases (dollars in thousands) 2019 $ 16,516 2020 23,324 2021 21,826 2022 19,807 2023 19,095 Thereafter 97,587 Total Payments $ 198,155 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Operating Results | Segment Operating Results Year Ended December 31, 2018 2017 2016 (dollars in thousands) Oz Funds: Economic Income Revenues $ 424,159 $ 805,634 $ 700,950 Economic Income $ 72,524 $ 332,603 $ (217,006 ) Real Estate: Economic Income Revenues $ 59,048 $ 27,353 $ 29,228 Economic Income $ 13,343 $ 5,132 $ 5,431 Total Company: Economic Income Revenues $ 483,207 $ 832,987 $ 730,178 Economic Income $ 85,867 $ 337,735 $ (211,575 ) |
Reconciliation of Segment Revenues to Consolidated Revenues | Reconciliation of Segment Revenues to Consolidated Revenues Year Ended December 31, 2018 2017 2016 (dollars in thousands) Total consolidated revenues $ 507,223 $ 858,337 $ 770,364 Adjustment to management fees (1) (17,488 ) (20,151 ) (38,424 ) Adjustment to other revenues (2) (39 ) (1,097 ) — Income of consolidated funds (6,489 ) (4,102 ) (1,762 ) Total Segment Revenues $ 483,207 $ 832,987 $ 730,178 _______________ (1) Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. (2) Adjustment to exclude realized gains on sale of fixed assets. Reconciliation of Segment Revenues to Consolidated Revenues Year Ended December 31, 2018 2017 2016 (dollars in thousands) Total consolidated revenues $ 507,223 $ 858,337 $ 770,364 Adjustment to management fees (1) (17,488 ) (20,151 ) (38,424 ) Adjustment to other revenues (2) (39 ) (1,097 ) — Income of consolidated funds (6,489 ) (4,102 ) (1,762 ) Total Segment Revenues $ 483,207 $ 832,987 $ 730,178 _______________ (1) Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. (2) Adjustment to exclude realized gains on sale of fixed assets. |
Reconciliation of Segment Economic Income to Net (Loss) Income Attributable to Class A Shareholders | Reconciliation of Segment Economic Income to Net (Loss) Income Attributable to Class A Shareholders Year Ended December 31, 2018 2017 2016 (dollars in thousands) Net (Loss) Income Attributable to Class A Shareholders $ (24,284 ) $ 18,222 $ (130,762 ) Change in redemption value of Preferred Units — 2,853 6,082 Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC (24,284 ) 21,075 (124,680 ) Net (loss) income allocated to Group A Units (25,716 ) 130,730 (195,087 ) Equity-based compensation, net of RSUs settled in cash 83,268 84,039 75,217 Adjustment to recognize deferred cash compensation in the period of grant 10,445 (28,893 ) (1,851 ) Income taxes 12,500 317,559 10,886 Net losses on early retirement of debt 14,303 — — Allocations to Group D Units 3,060 6,674 — Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance (3,094 ) 22,967 6,752 Changes in tax receivable agreement liability (2,218 ) (222,859 ) 1,663 Depreciation, amortization and net gains and losses on fixed assets 10,308 10,334 19,882 Other adjustments 7,295 (3,891 ) (4,357 ) Economic Income $ 85,867 $ 337,735 $ (211,575 ) |
Overview - Additional Informati
Overview - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Share Transactions [Line Items] | |
Preferred Units, liquidation preference per unit | $ 1,000 |
Reverse share split ratio | 0.10 |
Oz Operating Group | |
Share Transactions [Line Items] | |
Group D Unit Interest in Operating Group | 7.80% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 315,809 | $ 469,513 | ||
Restricted cash | 8,075 | 0 | ||
Total Cash and Cash Equivalents and Restricted Cash | $ 323,884 | $ 469,513 | $ 329,813 | $ 254,070 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Effects of Adoption of the Revenue Standard (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle | $ 116,984 | $ (813,116) |
Accounting Standards Update 2014-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle | 116,984 | |
Accounting Standards Update 2014-09 | Multi-strategy funds | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle | 2,727 | |
Accounting Standards Update 2014-09 | Opportunistic credit funds | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle | 24,462 | |
Accounting Standards Update 2014-09 | Real estate funds | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle | $ 89,795 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2007 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Acquisition of an Additional Interest in Domestic Real Estate, percentage | 25.00% | |||
Cumulative effect of new accounting principle | $ 116,984 | $ (813,116) | ||
Impact of Adoption of ASU 2014-09 on Unearned Incentive Income | (99,422) | |||
Undiscounted minimum operating lease payments | $ 198,155 | |||
Class A Shareholders' | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of new accounting principle | 41,922 | |||
Multi-strategy funds | Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 0.96% | |||
Multi-strategy funds | Maximum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 2.25% | |||
Opportunistic credit funds | Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 0.50% | |||
Opportunistic credit funds | Maximum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 1.75% | |||
Institutional Credit Strategies | Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 0.35% | |||
Institutional Credit Strategies | Maximum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 0.50% | |||
Real estate funds | Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 0.75% | |||
Real estate funds | Maximum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Rates | 1.50% | |||
Multi-Strategy and Open-End Credit Funds [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Incentive Income Rate | 20.00% | |||
Closed-End Credit and Real Estate Funds [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Incentive Income Rate | 20.00% | |||
CLOs [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Incentive Income Rate | 20.00% | |||
Accounting Standards Update 2014-09 | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of new accounting principle | 116,984 | |||
Impact of Adoption of ASU 2014-09 on Income Tax Effects Allocated to Equity | $ 11,300 | |||
Impact of Adoption of ASU 2014-09 on Unearned Incentive Income | (99,400) | |||
Impact of Adoption of ASU 2014-09 on Incentive Receivable | 28,800 | |||
Accounting Standards Update 2014-09 | Class A Shareholders' | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of new accounting principle | 41,900 | |||
Accounting Standards Update 2014-09 | Multi-strategy funds | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of new accounting principle | 2,727 | |||
Accounting Standards Update 2014-09 | Opportunistic credit funds | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of new accounting principle | 24,462 | |||
Accounting Standards Update 2014-09 | Real estate funds | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of new accounting principle | $ 89,795 | |||
Depreciable life of fixed assets | Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Depreciable life of fixed assets | Maximum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 7 years |
Noncontrolling Interests - Com
Noncontrolling Interests - Components of Net (Loss) Income Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | $ (24,909) | $ 131,630 | $ (193,757) |
Group A Units | |||
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | (25,716) | 130,730 | (195,087) |
Consolidated funds | |||
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | 0 | 0 | 262 |
Other | |||
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | $ 807 | $ 900 | $ 1,068 |
Noncontrolling Interests - C_2
Noncontrolling Interests - Components of Shareholders' Equity Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 419,431 | $ 357,902 |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | 415,928 | 353,791 |
Other | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 3,503 | $ 4,111 |
Noncontrolling Interests - Red
Noncontrolling Interests - Redeemable Noncontrolling Interest (Detail) - USD ($) $ in Thousands | Jan. 23, 2017 | Oct. 05, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Noncontrolling Interest [Line Items] | |||||
Cumulative effect of new accounting principle | $ 116,984 | $ (813,116) | |||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | $ 445,617 | 284,121 | 832,284 | ||
Change in redemption value of Preferred Units | 0 | 7,446 | 16,043 | ||
Issuance and sale of Preferred Units, net of issuance costs | 0 | 150,054 | 246,457 | ||
Capital contributions | 147,217 | 2,329 | 3 | ||
Capital distributions | (15,465) | 0 | 0 | ||
Comprehensive income | 291 | 1,667 | 2,450 | ||
Ending Balance | 577,660 | 445,617 | 284,121 | ||
Consolidated funds | |||||
Noncontrolling Interest [Line Items] | |||||
Cumulative effect of new accounting principle | (813,116) | ||||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 25,617 | 21,621 | 832,284 | ||
Change in redemption value of Preferred Units | 0 | 0 | 0 | ||
Issuance and sale of Preferred Units, net of issuance costs | 0 | 0 | 0 | ||
Capital contributions | 147,217 | 2,329 | 3 | ||
Capital distributions | (15,465) | 0 | |||
Comprehensive income | 291 | 1,667 | 2,450 | ||
Ending Balance | 157,660 | 25,617 | 21,621 | ||
2016 Preferred Units | |||||
Noncontrolling Interest [Line Items] | |||||
Cumulative effect of new accounting principle | 0 | ||||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 420,000 | 262,500 | 0 | ||
Change in redemption value of Preferred Units | 0 | 7,446 | 16,043 | ||
Issuance and sale of Preferred Units, net of issuance costs | $ 150,000 | $ 250,000 | 0 | 150,054 | 246,457 |
Capital contributions | 0 | 0 | 0 | ||
Capital distributions | 0 | 0 | |||
Comprehensive income | 0 | 0 | 0 | ||
Ending Balance | $ 420,000 | $ 420,000 | $ 262,500 |
Noncontrolling Interests - Add
Noncontrolling Interests - Additional Information (Detail) - shares | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||
Number of Group A Units canceled pursuant to the Relinquishment Agreement | 3,000,000 | ||
Number of D Units Reallocated if Forfeited | 3,000,000 | ||
Oz Operating Group | |||
Noncontrolling Interest [Line Items] | |||
Percentage of ownership in entity | 41.50% | 43.60% | |
Group A Units | |||
Noncontrolling Interest [Line Items] | |||
Relinquishment of Group A Units (shares) | 350,000 |
Investments and Fair Value Di_3
Investments and Fair Value Disclosures - Schedule of Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
United States government obligations, at fair value | $ 179,510 | $ 12,973 |
CLOs, at fair value | 181,868 | 211,749 |
Other investments, equity method | 28,519 | 14,252 |
Investments | $ 389,897 | $ 238,974 |
Investments and Fair Value Di_4
Investments and Fair Value Disclosures - Schedule of Investments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | $ 179,510 | $ 12,973 | ||
CLOs | 181,868 | 211,749 | ||
Investments of Consolidated Funds [Abstract] | ||||
Investments | 389,897 | 238,974 | ||
Management company related | Fair Value, Measurements, Recurring | ||||
Included Within Cash And Cash Equivalents [Abstract] | ||||
United States government obligations | 58,054 | 99,704 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | 179,510 | 12,973 | ||
CLOs | 181,868 | [1] | 211,749 | [2] |
Management company related | Fair Value, Measurements, Recurring | Level I | ||||
Included Within Cash And Cash Equivalents [Abstract] | ||||
United States government obligations | 58,054 | 99,704 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | 179,510 | 12,973 | ||
CLOs | 0 | 0 | ||
Management company related | Fair Value, Measurements, Recurring | Level II | ||||
Included Within Cash And Cash Equivalents [Abstract] | ||||
United States government obligations | 0 | 0 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | 0 | 0 | ||
CLOs | 0 | 0 | ||
Management company related | Fair Value, Measurements, Recurring | Level III | ||||
Included Within Cash And Cash Equivalents [Abstract] | ||||
United States government obligations | 0 | 0 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | 0 | 0 | ||
CLOs | 181,868 | [1] | 211,749 | [2] |
Consolidated funds | Fair Value, Measurements, Recurring | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 166,958 | 43,366 | ||
Corporate bonds | 4,537 | |||
Investments | 171,495 | |||
Consolidated funds | Fair Value, Measurements, Recurring | Level I | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 0 | 0 | ||
Corporate bonds | 0 | |||
Investments | 0 | |||
Consolidated funds | Fair Value, Measurements, Recurring | Level II | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 91,345 | 24,559 | ||
Corporate bonds | 4,537 | |||
Investments | 95,882 | |||
Consolidated funds | Fair Value, Measurements, Recurring | Level III | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 75,613 | 18,807 | ||
Corporate bonds | 0 | |||
Investments | 75,613 | |||
CLOs | Management company related | ||||
Investments of Consolidated Funds [Abstract] | ||||
Contractual principal on investments in CLOs | $ 171,500 | $ 189,200 | ||
[1] | As of December 31, 2018, investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. | |||
[2] | As of December 31, 2017, investments in CLOs had contractual principal amounts of $189.2 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. |
Investments and Fair Value Di_5
Investments and Fair Value Disclosures - Schedule of Changes in Company's Level III Investments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Management company related | CLOs | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 211,749 | $ 21,341 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Investment Purchases / Issuances | 157,099 | 185,404 |
Investment Sales / Settlements | (175,272) | (647) |
Gains / Losses | (11,708) | 5,651 |
Ending Balance | 181,868 | 211,749 |
Consolidated funds | Bank debt | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 18,807 | 18,127 |
Transfers In | 1,671 | 587 |
Transfers Out | (1,244) | (17,311) |
Investment Purchases / Issuances | 146,658 | 89,225 |
Investment Sales / Settlements | (88,600) | (73,069) |
Gains / Losses | (1,679) | 1,248 |
Ending Balance | $ 75,613 | $ 18,807 |
Investments and Fair Value Di_6
Investments and Fair Value Disclosures - Schedule of Net Unrealized Gains (Losses) on Company's Level III Assets and Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Management company related | CLOs | ||
Fair Value, Investments Measured On Recurring Basis [Line Items] | ||
Unrealized gains (losses) on Level III assets and liabilities held as of the balance sheet date | $ (9,998) | $ 5,651 |
Consolidated funds | Bank debt | ||
Fair Value, Investments Measured On Recurring Basis [Line Items] | ||
Unrealized gains (losses) on Level III assets and liabilities held as of the balance sheet date | $ (2,160) | $ 97 |
Investments and Fair Value Di_7
Investments and Fair Value Disclosures - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Loans held for sale | $ 0 | $ 29,110 |
Loans sold to CLOs | $ 29,800 | 71,300 |
Risk retention percentage | 5.00% | |
Retained interest investments made | $ 24,900 | 45,400 |
Fair value of investments in retained interests | 89,400 | 70,400 |
Cash flows from retained interests | $ 6,400 | 647 |
Nonrecurring Fair Value Measurements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Loans held for sale | 29,100 | |
Nonrecurring Fair Value Measurements | Level II | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Loans held for sale | 26,700 | |
Nonrecurring Fair Value Measurements | Level III | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Loans held for sale | $ 2,400 |
Variable Interest Entities - A
Variable Interest Entities - Assets and Liabilities of Funds that are VIEs and Consolidated by Company (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | $ 171,495 | $ 43,366 |
Other assets of consolidated funds | 21,090 | 13,331 |
Total Assets | 1,447,391 | 1,639,433 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 14,541 | 11,340 |
Total Liabilities | 879,186 | 1,289,745 |
Variable Interest Entity, Primary Beneficiary | ||
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 171,495 | 43,366 |
Other assets of consolidated funds | 21,090 | 13,331 |
Total Assets | 192,585 | 56,697 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 14,541 | 11,340 |
Total Liabilities | $ 14,541 | $ 11,340 |
Variable Interest Entities -_2
Variable Interest Entities - Assets and Liabilities Related to VIEs that are Not Consolidated (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Maximum risk of loss as a result of the Company’s involvement with VIEs: | ||
Income and fees receivable | $ 82,843 | $ 354,456 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Net assets of unconsolidated VIEs in which the Company has a variable interest | 10,236,438 | 8,300,163 |
Maximum risk of loss as a result of the Company’s involvement with VIEs: | ||
Unearned revenues | 62,038 | 144,124 |
Income and fees receivable | 31,658 | 24,953 |
Investments in funds | 190,674 | 222,192 |
Maximum Exposure to Loss | $ 284,370 | $ 391,269 |
Other Assets, Net - Components
Other Assets, Net - Components of Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed Assets: | ||
Leasehold improvements | $ 54,257 | $ 53,419 |
Computer hardware and software | 48,178 | 44,190 |
Furniture, fixtures and equipment | 8,373 | 8,571 |
Accumulated depreciation and amortization | (67,558) | (58,671) |
Fixed assets, net | 43,250 | 47,509 |
Goodwill | 22,691 | 22,691 |
Prepaid expenses | 11,629 | 12,862 |
Loans held for sale | 0 | 29,110 |
Other | 4,833 | 4,189 |
Total Other Assets, Net | $ 82,403 | $ 116,361 |
Other Liabilities - Components
Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $ 27,683 | $ 21,955 |
Unused trade commissions | 8,615 | 0 |
Uncertain tax positions | 7,000 | 7,000 |
Deferred rent credit | 6,231 | 8,283 |
Loan trades payable | 4,978 | 29,110 |
Other | 9,096 | 8,774 |
Total Other Liabilities | $ 63,603 | $ 75,122 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Debt Principal Payments (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Long-term Debt, Maturities, Repayments of Principal in Year One | $ 36,693 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 37,500 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 37,500 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 37,500 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 89,237 |
CLO Investments Loans | |
Debt Instrument [Line Items] | |
Long-term Debt, Maturities, Repayments of Principal in Year One | 21,068 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 17,362 |
2018 Term Loan | |
Debt Instrument [Line Items] | |
Long-term Debt, Maturities, Repayments of Principal in Year One | 15,625 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 37,500 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 37,500 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 37,500 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | $ 71,875 |
Debt Obligations - Schedule _2
Debt Obligations - Schedule of CLO Investments Loans (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 289,987 | $ 569,379 |
CLO Investments Loans | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 95,807 | 172,806 |
CLO Investments Loans | November 28, 2016 | ||
Debt Instrument [Line Items] | ||
Maturity date | Dec. 15, 2023 | |
Borrowings outstanding | $ 17,235 | 18,041 |
CLO Investments Loans | November 28, 2016 | EURIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 2.23% | |
CLO Investments Loans | June 07, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Nov. 16, 2029 | |
Borrowings outstanding | $ 17,224 | 17,217 |
CLO Investments Loans | June 07, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.48% | |
CLO Investments Loans | July 21, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Jan. 22, 2029 | |
Borrowings outstanding | $ 0 | 21,709 |
CLO Investments Loans | July 21, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.43% | |
CLO Investments Loans | August 02, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Jan. 21, 2030 | |
Borrowings outstanding | $ 21,674 | 21,686 |
CLO Investments Loans | August 02, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.41% | |
CLO Investments Loans | August 17, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Apr. 30, 2030 | |
Borrowings outstanding | $ 0 | 22,922 |
CLO Investments Loans | August 17, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.43% | |
CLO Investments Loans | September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Apr. 22, 2030 | |
Borrowings outstanding | $ 0 | 25,468 |
CLO Investments Loans | September 14, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.41% | |
CLO Investments Loans | September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Sep. 14, 2024 | |
Borrowings outstanding | $ 18,614 | 19,561 |
CLO Investments Loans | September 14, 2017 | EURIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 2.21% | |
CLO Investments Loans | November 21, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | May 15, 2030 | |
Borrowings outstanding | $ 0 | 26,202 |
CLO Investments Loans | November 21, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.34% | |
CLO Investments Loans | February 21, 2018 | ||
Debt Instrument [Line Items] | ||
Maturity date | Feb. 21, 2019 | |
Borrowings outstanding | $ 21,060 | $ 0 |
CLO Investments Loans | February 21, 2018 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.27% |
Debt Obligations - Additional
Debt Obligations - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 07, 2019 | Feb. 07, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 10, 2018 |
Debt Instrument [Line Items] | ||||||
Repayment of debt obligations | $ 595,463 | $ 167,516 | $ 3,667 | |||
2014 Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of debt obligations | 400,000 | |||||
2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | $ 200,000 | $ 250,000 | ||||
Maturity date | Apr. 10, 2023 | |||||
Fee-paying assets under management covenant amount | $ 20,000,000 | |||||
Economic income ratio through third anniversary of closing date | 300.00% | |||||
Economic income ratio following third anniversary of closing date | 250.00% | |||||
2018 Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility borrowing capacity | $ 100,000 | |||||
2018 Revolving Credit Facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Undrawn commitment fee | 0.20% | |||||
2018 Revolving Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Undrawn commitment fee | 0.75% | |||||
CLO Investments Loans | ||||||
Debt Instrument [Line Items] | ||||||
Collateral on CLO Investments Loans | $ 112,800 | $ 206,600 | ||||
Base Rate | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 3.75% | |||||
LIBOR | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
Subsequent Event | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 20,000 | $ 100,000 |
Securities Sold under Agreeme_3
Securities Sold under Agreements to Repurchase - Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Transfers and Servicing of Financial Assets [Abstract] | ||
Gross Amounts of Recognized Liabilities | $ 62,801 | |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | |
Net Amounts of Liabilities in the Consolidated Balance Sheet | 62,801 | $ 0 |
Securities Transferred | 62,186 | |
Net Amount | $ 615 |
Securities Sold under Agreeme_4
Securities Sold under Agreements to Repurchase - Remaining Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | $ 62,801 | $ 0 |
CLOs | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 62,801 | |
CLOs | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 0 | |
CLOs | Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 0 | |
CLOs | 30-90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 0 | |
CLOs | Greater Than 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | $ 62,801 |
Securities Sold under Agreeme_5
Securities Sold under Agreements to Repurchase - Additional Details (Details) - Repurchase agreements credit facility € in Millions | Dec. 31, 2018EUR (€) |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |
Repurchase agreements credit facility borrowing capacity | € 100 |
Repurchase agreements credit facility undrawn balance | € 44.7 |
Preferred Units - Additional I
Preferred Units - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 23, 2017 | Oct. 05, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Noncontrolling Interest [Line Items] | |||||
Preferred Units, amount issued | $ 0 | $ 150,054 | $ 246,457 | ||
2016 Preferred Units | |||||
Noncontrolling Interest [Line Items] | |||||
Preferred Units, units outstanding | 400,000 | ||||
Preferred Units, amount outstanding | $ 400,000 | ||||
Preferred Units, amount issued | $ 150,000 | $ 250,000 | $ 0 | $ 150,054 | $ 246,457 |
Preferred Units, units issued | 150,000 | 250,000 |
Revenues - Management Fees and
Revenues - Management Fees and Incentive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | $ 202,896 | $ 528,000 | $ 233,440 |
Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 281,862 | 319,458 | 533,156 |
Multi-strategy funds | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 71,972 | 409,823 | 138,229 |
Multi-strategy funds | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 168,902 | 214,116 | 426,159 |
Opportunistic credit funds | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 89,182 | 99,308 | 77,283 |
Opportunistic credit funds | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 41,035 | 44,753 | 45,716 |
Institutional Credit Strategies | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 0 | 0 | 0 |
Institutional Credit Strategies | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 50,212 | 35,381 | 27,656 |
Real estate funds | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 40,811 | 7,603 | 17,873 |
Real estate funds | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 19,307 | 21,027 | 21,464 |
Other | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 931 | 11,266 | 55 |
Other | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | $ 2,406 | $ 4,181 | $ 12,161 |
Revenues - Unearned Incentive I
Revenues - Unearned Incentive Income Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||||
Effect of Adoption of ASU 2015-02 on Unearned Incentive | $ 81,972 | |||
Effect of Adoption of ASU 2014-09 on Unearned Incentive | $ (99,422) | |||
Beginning of Year | $ 143,710 | 96,079 | $ 0 | |
Amounts collected during the period | 54,538 | 53,915 | 22,557 | |
Amounts recognized during the period | (37,429) | (6,284) | (8,450) | |
End of Period | $ 61,397 | $ 143,710 | $ 96,079 |
Revenues - Income and Fees Rece
Revenues - Income and Fees Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | $ 82,843 | $ 354,456 |
Management fees | ||
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | 20,368 | 21,242 |
Incentive income | ||
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | $ 62,475 | $ 333,214 |
Equity-Based Compensation Exp_3
Equity-Based Compensation Expenses - Equity-Based Compensation Expense Summary (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expense recorded within compensation and benefits | $ 87,130 | $ 84,169 | $ 75,217 |
Corresponding tax benefit | $ 2,811 | $ 4,720 | $ 3,116 |
Equity-Based Compensation Exp_4
Equity-Based Compensation Expenses - Activity Related to Unvested Equity Awards (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity-classified RSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 1,453,060 | ||
Unvested Units, Granted | 3,905,020 | ||
Unvested Units, Vested | (1,279,619) | ||
Unvested Units, Canceled or Forfeited | (934,722) | ||
Unvested Units, Modified | 640,797 | ||
Unvested Units, End of Reporting Period | 3,784,536 | 1,453,060 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 46.74 | ||
Weighted-Average Grant-Date Fair Value, Granted | 23.34 | $ 31.60 | $ 43.60 |
Weighted-Average Grant-Date Fair Value, Vested | 41.03 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 36.18 | ||
Weighted-Average Grant-Date Fair Value, Modified | 63.62 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 30 | $ 46.74 | |
Liability-classified RSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 0 | ||
Unvested Units, Granted | 29,084 | ||
Unvested Units, Vested | (330,550) | ||
Unvested Units, Canceled or Forfeited | 0 | ||
Unvested Units, Modified | 734,599 | ||
Unvested Units, End of Reporting Period | 433,133 | 0 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 0 | ||
Weighted-Average Grant-Date Fair Value, Granted | 15 | ||
Weighted-Average Grant-Date Fair Value, Vested | 55.24 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 0 | ||
Weighted-Average Grant-Date Fair Value, Modified | 63.62 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 66.75 | $ 0 | |
PSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 0 | ||
Unvested Units, Granted | 1,000,000 | ||
Unvested Units, Vested | 0 | ||
Unvested Units, Canceled or Forfeited | 0 | ||
Unvested Units, Modified | 0 | ||
Unvested Units, End of Reporting Period | 1,000,000 | 0 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 0 | ||
Weighted-Average Grant-Date Fair Value, Granted | 11.82 | ||
Weighted-Average Grant-Date Fair Value, Vested | 0 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 0 | ||
Weighted-Average Grant-Date Fair Value, Modified | 0 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 11.82 | $ 0 | |
Group A Units | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 841,066 | ||
Unvested Units, Vested | (166,104) | ||
Unvested Units, Canceled or Forfeited | 0 | ||
Unvested Units, Modified | (600,000) | ||
Unvested Units, End of Reporting Period | 74,962 | 841,066 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 97.70 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 21.85 | $ 41.20 | |
Weighted-Average Grant-Date Fair Value, Vested | 95.30 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 0 | ||
Weighted-Average Grant-Date Fair Value, Modified | 97.50 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 105.26 | $ 97.70 | |
Group P Units | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 7,185,000 | ||
Unvested Units, Granted | 7,185,000 | ||
Unvested Units, Vested | 0 | ||
Unvested Units, Canceled or Forfeited | (625,000) | ||
Unvested Units, Modified | (2,900,000) | ||
Unvested Units, End of Reporting Period | 3,660,000 | 7,185,000 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 12.46 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 12.50 | ||
Weighted-Average Grant-Date Fair Value, Vested | 0 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 12.46 | ||
Weighted-Average Grant-Date Fair Value, Modified | 12.46 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 12.46 | $ 12.46 |
Equity-Based Compensation Exp_5
Equity-Based Compensation Expenses - Settlement of RSUs (Detail) - RSUs - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs settled in Class A Shares | $ 12,044 | $ 13,016 | $ 12,675 |
Fair value of RSUs settled in cash | 3,879 | 130 | 0 |
Fair value of RSUs withheld to satisfy tax withholding obligations | $ 4,436 | $ 7,577 | $ 7,960 |
Number of RSUs withheld to satisfy tax withholding obligations | 329,591 | 280,269 | 222,856 |
Equity-Based Compensation Exp_6
Equity-Based Compensation Expenses - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity-classified RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | (640,797) | ||
Weighted-Average Grant-Date Fair Value, Modified | $ 63.62 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 23.34 | $ 31.60 | $ 43.60 |
Unrecognized Compensation Expense | $ 90.3 | ||
Weighted-Average Amortization Period | 2 years 10 months | ||
Unvested Units, Granted | 3,905,020 | ||
Liability-classified RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | (734,599) | ||
Weighted-Average Grant-Date Fair Value, Modified | $ 63.62 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 15 | ||
Unrecognized Compensation Expense | $ 28.9 | ||
Weighted-Average Amortization Period | 4 years | ||
Unvested Units, Granted | 29,084 | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 0 | ||
Weighted-Average Grant-Date Fair Value, Modified | $ 0 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 11.82 | ||
Unrecognized Compensation Expense | $ 8.3 | ||
Weighted-Average Amortization Period | 2 years 2 months | ||
Unvested Units, Granted | 1,000,000 | ||
Expected Volatility Rate | 35.00% | ||
Expected Dividend Rate | 10.00% | ||
Risk Free Interest Rate | 2.60% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 3 years 1 month 6 days | ||
PSUs | Performance threshold - 125% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | ||
PSUs | Performance threshold - 75% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | ||
PSUs | Performance threshold - 50% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 40.00% | ||
PSUs | Performance threshold - 25% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | ||
PSUs | Incremental 20% Vest, Total 20% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 25.00% | ||
PSUs | Incremental 40% Vest, Total 60% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 50.00% | ||
PSUs | Incremental 20% Vest, Total 80% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 75.00% | ||
PSUs | Incremental 20% Vest, Total 100% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 125.00% | ||
Group A Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 600,000 | ||
Weighted-Average Grant-Date Fair Value, Modified | $ 97.50 | ||
Weighted-Average Grant-Date Fair Value, Granted | 21.85 | $ 41.20 | |
Unrecognized Compensation Expense | $ 5.1 | ||
Weighted-Average Amortization Period | 1 year 3 months | ||
Discount for Transfer Restrictions | 5.00% | ||
Group P Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 2,900,000 | ||
Weighted-Average Grant-Date Fair Value, Modified | $ 12.46 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 12.50 | ||
Unrecognized Compensation Expense | $ 22.3 | ||
Weighted-Average Amortization Period | 1 year 10 months | ||
Unvested Units, Granted | 7,185,000 | ||
Expected Volatility Rate | 36.00% | ||
Expected Dividend Rate | 10.00% | ||
Risk Free Interest Rate | 2.20% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 3 years 8 months 12 days | ||
Group P Units | Performance threshold - 125% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | ||
Group P Units | Performance threshold - 75% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | ||
Group P Units | Performance threshold - 50% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 40.00% | ||
Group P Units | Performance threshold - 25% | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | ||
Group P Units | Incremental 20% Vest, Total 20% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 25.00% | ||
Group P Units | Incremental 40% Vest, Total 60% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 50.00% | ||
Group P Units | Incremental 20% Vest, Total 80% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 75.00% | ||
Group P Units | Incremental 20% Vest, Total 100% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of Performance Condition for Units vesting | 125.00% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal income taxes, Current | $ 1 | $ 103 | $ 19 |
State and local income taxes, Current | 1,165 | 2,172 | 4,885 |
Foreign income taxes, Current | 2,735 | 2,520 | 3,746 |
Provision for Income Taxes, Current | 3,901 | 4,795 | 8,650 |
Deferred: | |||
Federal income taxes, Deferred | 3,304 | 322,162 | 7,760 |
State and local income taxes, Deferred | 5,736 | (9,828) | (6,131) |
Foreign income taxes, Deferred | (441) | 430 | 607 |
Provision for Income Taxes, Deferred | 8,599 | 312,764 | 2,236 |
Total Provision for Income Taxes | $ 12,500 | $ 317,559 | $ 10,886 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Income Tax Assets: | ||
Tax goodwill | $ 234,437 | $ 272,636 |
Net operating loss | 96,524 | 76,100 |
Investments in partnerships | 19,607 | 20,440 |
Tax credit carryforwards | 15,550 | 16,102 |
Employee compensation | 1,027 | 626 |
Deferred Tax Assets, Other | 869 | 2,145 |
Deferred Income Tax Assets | 368,014 | 388,049 |
Valuation allowance | (11,959) | (12,028) |
Total Deferred Income Tax Assets | 356,055 | 376,021 |
Deferred Income Tax Liabilities: | ||
Total Deferred Income Tax Liabilities | $ 1,030 | $ 1,167 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory U.S. Federal Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 21.00% | 35.00% | 35.00% |
Income passed through to noncontrolling interests | (17.01%) | (10.40%) | (23.10%) |
Other state and local income taxes | (16.53%) | 4.42% | (2.47%) |
RSU excess deferred income tax write-off | (11.33%) | 0.50% | 0.00% |
Foreign income taxes | (6.32%) | 0.63% | (0.96%) |
Income not subject to entity level tax | 4.21% | (4.54%) | (3.01%) |
Return-to-Provision adjustment | (3.57%) | (0.30%) | 1.44% |
Nondeductible fines and penalties | 0.00% | 0.00% | (12.78%) |
Nondeductible transaction costs | (3.52%) | 0.00% | 0.00% |
Impact of federal tax reform | 0.00% | 40.34% | 0.00% |
Other, net | (1.27%) | 1.64% | 2.31% |
Effective Income Tax Rate | (34.34%) | 67.29% | (3.57%) |
Income Taxes - Additional Info
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards | |||
Impact of TCJA on Deferred Income Tax Assets | $ 280,800 | ||
Impact of TCJA from Revaluation of Deferred Income Tax Assets | 190,400 | ||
Impact of TCJA on TRA Liability | 90,400 | ||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | $ 8,200 | 21,300 | $ (3,600) |
Valuation allowance pertaining to state and local tax credit carryforwards | $ 11,959 | 12,028 | |
Open Tax Year | 2014 | ||
Unrecognized Tax Benefits | $ 7,000 | 7,000 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 4,200 | ||
Foreign Country | |||
Operating Loss Carryforwards | |||
Valuation allowance pertaining to state and local tax credit carryforwards | $ 12,000 | $ 12,000 | |
Open Tax Year | 2007 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Open Tax Year | 2012 | ||
Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards | $ 15,500 | ||
Operating loss carryforwards, subject to expiration | 260,800 | ||
Operating loss carryforwards, not subject to expiration | 91,800 | ||
State Income Tax | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, subject to expiration | 167,100 | ||
Local Income Tax | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, subject to expiration | $ 163,400 | ||
Minimum | State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2035 | ||
Minimum | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards expiration date | Dec. 31, 2019 | ||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2030 | ||
Maximum | State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2038 | ||
Maximum | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards expiration date | Dec. 31, 2026 | ||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2037 |
General, Administrative and O_3
General, Administrative and Other - Components of General, Administrative and Other Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Other Income and Expenses [Abstract] | ||||
Professional services | $ 52,163 | $ 43,343 | $ 74,859 | |
Occupancy and equipment | 28,769 | 33,358 | 35,998 | |
Information processing and communications | 25,917 | 28,274 | 34,485 | |
Recurring placement and related service fees | 16,247 | 20,153 | 38,424 | |
Insurance | 7,391 | 7,609 | 15,333 | |
Business development | 4,075 | 6,685 | 13,440 | |
Foreign exchange losses and (gains) | 2,766 | (726) | 419 | |
Other expenses | 12,899 | 13,375 | 21,409 | |
General and Administrative Expense before Settlements Expense | 150,227 | 152,071 | 234,367 | |
Settlements expense | [1] | 31,750 | 0 | 412,101 |
Total General, Administrative and Other | $ 181,977 | $ 152,071 | $ 646,468 | |
[1] | Settlements expense represent accruals for certain contingencies discussed in Note 17. |
(Loss) Earnings Per Class A S_3
(Loss) Earnings Per Class A Share - Computation of Basic and Diluted (Loss) Earnings Per Class A Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
(Loss) Earnings Per Share [Line Items] | |||
Net (Loss) Income Attributable to Class A Shareholders | $ (24,284) | $ 18,222 | $ (130,762) |
Net (Loss) Income Attributable to Class A Shareholders, Diluted | $ (24,284) | $ 18,222 | $ (349,871) |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 19,270,929 | 18,642,379 | 18,267,017 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 19,270,929 | 18,718,176 | 47,998,727 |
(Loss) Income Per Class A Share, Basic (in dollars per share) | $ (1.26) | $ 0.98 | $ (7.16) |
(Loss) Income Per Class A Share, Diluted (in dollars per share) | $ (1.26) | $ 0.97 | $ (7.29) |
Group A Units | |||
(Loss) Earnings Per Share [Line Items] | |||
Net (Loss) Income Attributable to Class A Shareholders, Effect of dilutive securities | $ 0 | $ 0 | $ (219,109) |
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 0 | 29,731,710 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 26,073,057 | 27,230,147 | 0 |
RSUs | |||
(Loss) Earnings Per Share [Line Items] | |||
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 75,797 | 0 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 4,826,130 | 0 | 1,434,330 |
(Loss) Earnings Per Class A S_4
(Loss) Earnings Per Class A Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
RSUs | |||
(Loss) Earnings Per Share [Line Items] | |||
Vested RSUs included in weighted-average Class A Shares outstanding | 142,512 | 110,373 | 114,461 |
Related Party Transactions - M
Related Party Transactions - Management Fees and Incentive Income Earned from Related Parties and Waived Fees (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Management fees | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | $ 281,862 | $ 319,458 | $ 533,156 |
Incentive Income | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | 202,896 | 528,000 | 233,440 |
Fees charged on investments held by related parties: | Management fees | Executive Managing Directors, Employees and Other Related Parties | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | 14,017 | 10,574 | 18,243 |
Fees charged on investments held by related parties: | Incentive Income | Executive Managing Directors, Employees and Other Related Parties | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | $ 7,530 | $ 14,052 | $ 12,266 |
Related Party Transactions - A
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Other revenues | $ 15,976 | $ 6,777 | $ 2,006 |
General, administrative and other | 181,977 | 152,071 | 646,468 |
Executive Managing Directors, Employees and Other Related Parties | Amount of Related Party Assets Under Management | |||
Related Party Transaction [Line Items] | |||
Assets under management | $ 1,900,000 | $ 2,800,000 | |
Executive Managing Directors, Employees and Other Related Parties | Percent of Related Party Assets Under Management Not Charged Fees | |||
Related Party Transaction [Line Items] | |||
Percent of assets under management not charged management and incentive fees | 29.00% | 71.00% | |
Executive Managing Directors | Revenues from Personal Use of Corporate Aircraft | |||
Related Party Transaction [Line Items] | |||
Other revenues | $ 360 | $ 744 | |
Mr. Och | Maximum Amount of Personal Recapitalization Expenses to be Reimbursed | |||
Related Party Transaction [Line Items] | |||
General, administrative and other | $ 5,000 | ||
Mr. Och | Reimbursement of Personal Recapitalization Expenses Incurred | |||
Related Party Transaction [Line Items] | |||
General, administrative and other | $ 4,500 |
Commitments and Contingencies -
Commitments and Contingencies - Estimated Potential Payments Under Tax Receivable Agreement (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Tax Receivable Agreement [Abstract] | |
Tax Receivable Agreement Future Maximum Payments Due in the Next Fiscal Year | $ 72,249 |
Tax Receivable Agreement Future Maximum Payments Due In Two Year | 29,294 |
Tax Receivable Agreement Future Maximum Payments Due In Three Years | 29,483 |
Tax Receivable Agreement Future Maximum Payments Due In Four Years | 32,619 |
Tax Receivable Agreement Future Maximum Payments Due In Five Years | 29,489 |
Tax Receivable Agreement Future Maximum Payments Due Thereafter | 84,639 |
Estimated future payments under tax receivable agreement | $ 277,773 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Operating Lease Commitments (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Operating Leases, Future Minimum Payments Due in the Next Fiscal Year | $ 16,516 |
Operating Leases, Future Minimum Payments Due in Two Years | 23,324 |
Operating Leases, Future Minimum Payments Due in Three Years | 21,826 |
Operating Leases, Future Minimum Payments Due in Four Years | 19,807 |
Operating Leases, Future Minimum Payments Due in Five Years | 19,095 |
Operating Leases, Future Minimum Payments Due Thereafter | 97,587 |
Operating Leases, Future Minimum Payments Due | $ 198,155 |
Commitments and Contingencies
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 19, 2007 | ||
Loss Contingencies [Line Items] | |||||||
Percentage of tax savings to be paid under tax receivable agreement | 78.00% | 78.00% | 85.00% | ||||
Estimated future payments under tax receivable agreement | $ 277,773 | $ 277,773 | |||||
Reduction In Tax Receivable Agreement Liability Due To Waiver | $ 18,000 | $ 72,600 | |||||
Decrease In Deferred Income Tax Asset Due To Tax Receivable Agreement Liability Waiver | 7,500 | 33,400 | |||||
Increase In Paid In Capital As A Result Of Waiver Of Certain Payments Due Under The Tax Receivable Agreement | 0 | 10,520 | 39,233 | ||||
Operating leases, rent expense | 19,500 | 17,800 | 22,500 | ||||
Lease collateral | 6,200 | 6,200 | |||||
Settlements expense | [1] | 31,750 | $ 0 | $ 412,101 | |||
Unfunded capital commitments of the Company to funds managed | 31,100 | 31,100 | |||||
Unfunded capital commitments of certain related parties to funds managed | 55,700 | $ 55,700 | |||||
New York | |||||||
Loss Contingencies [Line Items] | |||||||
Non cancelable lease expiration year | 2029 | ||||||
Other Locations | |||||||
Loss Contingencies [Line Items] | |||||||
Non cancelable lease expiration year | 2024 | ||||||
Menaldi | |||||||
Loss Contingencies [Line Items] | |||||||
Settlements expense | $ 18,800 | $ 10,000 | $ 28,800 | ||||
A commercial matter | |||||||
Loss Contingencies [Line Items] | |||||||
Settlements expense | $ 3,000 | ||||||
[1] | Settlements expense represent accruals for certain contingencies discussed in Note 17. |
Segment Information - Segment
Segment Information - Segment Operating Results (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 507,223 | $ 858,337 | $ 770,364 |
Economic Income | (48,902) | 154,372 | (315,987) |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 483,207 | 832,987 | 730,178 |
Economic Income | 85,867 | 337,735 | (211,575) |
Operating Segments | Oz Funds Segment | |||
Segment Reporting Information [Line Items] | |||
Revenues | 424,159 | 805,634 | 700,950 |
Economic Income | 72,524 | 332,603 | (217,006) |
Operating Segments | Real Estate Segment | |||
Segment Reporting Information [Line Items] | |||
Revenues | 59,048 | 27,353 | 29,228 |
Economic Income | $ 13,343 | $ 5,132 | $ 5,431 |
Segment Information - Reconcil
Segment Information - Reconciliation of Segment Revenues to Consolidated Revenues (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 507,223 | $ 858,337 | $ 770,364 | |
Income of consolidated funds | (6,489) | (4,102) | (1,762) | |
Material Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Adjustment to management fees | [1] | (17,488) | (20,151) | (38,424) |
Adjustment to other revenue | [2] | (39) | (1,097) | 0 |
Income of consolidated funds | (6,489) | (4,102) | (1,762) | |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 483,207 | $ 832,987 | $ 730,178 | |
[1] | Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. | |||
[2] | Adjustment to exclude realized gains on sale of fixed assets. |
Segment Information - Reconc_2
Segment Information - Reconciliation of Economic Income to Net (Loss) Income Attributable to Class A Shareholders (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Net (Loss) Income Attributable to Class A Shareholders | $ (24,284) | $ 18,222 | $ (130,762) |
Change in redemption value of Preferred Units | 0 | 2,853 | 6,082 |
Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC | (24,284) | 21,075 | (124,680) |
Income taxes | 12,500 | 317,559 | 10,886 |
Net losses on early retirement of debt | 14,303 | 0 | 0 |
Changes in tax receivable agreement liability | (2,218) | (222,859) | 1,663 |
Depreciation, amortization and net gains and losses on fixed assets | 10,308 | 10,334 | 19,882 |
Economic Income | (48,902) | 154,372 | (315,987) |
Material Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Net (loss) income allocated to Group A Units | (25,716) | 130,730 | (195,087) |
Equity-based compensation, net of RSUs settled in cash | 83,268 | 84,039 | 75,217 |
Adjustment to recognize deferred cash compensation in the period of grant | 10,445 | (28,893) | (1,851) |
Income taxes | 12,500 | 317,559 | 10,886 |
Net losses on early retirement of debt | 14,303 | 0 | 0 |
Allocations to Group D Units | 3,060 | 6,674 | 0 |
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | (3,094) | 22,967 | 6,752 |
Changes in tax receivable agreement liability | (2,218) | (222,859) | 1,663 |
Depreciation, amortization and net gains and losses on fixed assets | 10,308 | 10,334 | 19,882 |
Other adjustments | 7,295 | (3,891) | (4,357) |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Economic Income | $ 85,867 | $ 337,735 | $ (211,575) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Mar. 15, 2019 | Mar. 07, 2019 | Feb. 07, 2019 | Dec. 31, 2018 | Apr. 10, 2018 | Nov. 19, 2007 |
Subsequent Event [Line Items] | ||||||
Percentage of tax savings to be paid under tax receivable agreement | 78.00% | 85.00% | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Dividends announcement date | Mar. 7, 2019 | |||||
Cash dividend (in dollars per share) | $ 0.23 | |||||
Dividends payable date | Mar. 29, 2019 | |||||
Dividends record date | Mar. 22, 2019 | |||||
Number of Group A Units forfeited in connection with Recapitalization | 749,813 | |||||
Percent of Group A Units reallocated in connection with Recapitalization | 35.00% | |||||
Number of days after the last day of the first quarter of achievement of the Distribution Holiday Economic Income target | 45 days | |||||
Distribution Holiday Economic Income target | $ 600 | |||||
Maximum distribution adjusted for Group P Units and credited on certain RSUs during Distribution Holiday | $ 4 | |||||
Percent of liquid balances for which redemption notice was delivered by Mr. Och | 50.00% | |||||
Percent of Economic Income to be swept as part of Cash Sweep during the Distribution Holiday | 100.00% | |||||
Minimum Free Cash Balance threshold to which the Cash Sweep will apply except in certain specified circumstances | $ 200 | |||||
Percent of net cash proceeds from any asset sale subject to Cash Sweep | 85.00% | |||||
Cash Sweep cumulative discretionary one-time basket | $ 50 | |||||
Amount of cash that can be reserved from Cash Sweep for Restricted Activities | 17 | |||||
Cash Sweep permitted Restricted Activities aggregate amount | $ 25 | |||||
Percentage of tax savings to be paid under tax receivable agreement | 75.00% | |||||
2019 Debt Securities | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Borrowings outstanding | $ 200 | |||||
Percent discount on repayment within nine months of repayment of 2019 Preferred Units | 5.00% | |||||
Threshold of Distributions That Would Cause A Portion To Be Used For Redemption | $ 100 | |||||
Percent of the Excess Over Threshold That Would Cause Redemption | 20.00% | |||||
Threshold of Average Closing Price of Class A Shares | $ 150 | |||||
Number of Trading Days | 20 days | |||||
Percent of original principal amount amortized in quarterly installments | 5.00% | |||||
Maximum amortization payments in any fiscal year | $ 40 | |||||
Fee-paying assets under management covenant amount | $ 20,000 | |||||
Economic income ratio through third anniversary of closing date | 300.00% | |||||
Economic income ratio following third anniversary of closing date | 250.00% | |||||
2018 Term Loan | ||||||
Subsequent Event [Line Items] | ||||||
Borrowings outstanding | $ 200 | $ 250 | ||||
Restricted payment basket for preferred dividends | 24 | |||||
Fee-paying assets under management covenant amount | $ 20,000 | |||||
Economic income ratio through third anniversary of closing date | 300.00% | |||||
Economic income ratio following third anniversary of closing date | 250.00% | |||||
2018 Term Loan | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Restricted payment basket for preferred dividends | $ 12 | |||||
Repayments of debt | $ 20 | 100 | ||||
2016 Preferred Units | ||||||
Subsequent Event [Line Items] | ||||||
Preferred Units, amount outstanding | $ 400 | |||||
2016 Preferred Units | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Amount of Existing Preferred Units restructured as Debt Securities | 200 | |||||
Amount of Existing Preferred Units restructured as New Preferred Securities | 200 | |||||
Preferred Units, amount outstanding | 200 | |||||
2019 Preferred Units | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Preferred Units, amount outstanding | $ 200 | |||||
Discount on early redemption of 2019 Preferred Units through March 31, 2021 | 25.00% | |||||
Discount on early redemption of 2019 Preferred Units April 1, 2021 and the day prior to March 31, 2022 | 10.00% | |||||
Preferred Units, distribution rate, percentage | 0.00% | |||||
Maximum distribution rate per annum following eighth anniversary of Step-up Date | 10.00% | |||||
Per annum increase in distribution rate following a change of control event | 7.00% | |||||
Number of Days After a Change in Control That an Increase In Distribution Rate Occurs | 20 days | |||||
LIBOR | 2019 Debt Securities | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
LIBOR | 2018 Term Loan | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
Base Rate | 2019 Debt Securities | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate spread over basis | 3.75% | |||||
Base Rate | 2018 Term Loan | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate spread over basis | 3.75% |