Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | Och-Ziff Capital Management Group Inc. | |
Entity Central Index Key | 0001403256 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Filer Category | Accelerated Filer | |
Class A Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 20,590,013 | |
Class B Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 29,208,952 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 144,750 | $ 315,809 |
Restricted cash | 9,263 | 8,075 |
Investments (includes assets measured at fair value of $327,230 and $361,378, of which $61,715 and $62,186 related to securities sold under agreements to repurchase as of March 31, 2019 and December 31, 2018, respectively) | 362,837 | 389,897 |
Income and fees receivable | 73,443 | 82,843 |
Due from related parties | 20,679 | 20,754 |
Deferred income tax assets | 349,289 | 355,025 |
Operating lease assets | 123,454 | 0 |
Other assets, net | 85,519 | 82,403 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 164,755 | 171,495 |
Other assets of consolidated funds | 22,618 | 21,090 |
Total Assets | 1,356,607 | 1,447,391 |
Liabilities | ||
Compensation payable | 27,204 | 105,036 |
Unearned incentive income | 63,769 | 61,397 |
Due to related parties | 283,249 | 281,821 |
Operating lease liabilities | 136,166 | 0 |
Debt obligations | 321,804 | 289,987 |
Securities sold under agreements to repurchase | 61,437 | 62,801 |
Other liabilities | 43,430 | 63,603 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 16,943 | 14,541 |
Total Liabilities | 954,002 | 879,186 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interests | 299,290 | 577,660 |
Shareholders’ Equity (Deficit) | ||
Paid-in capital | 3,235,728 | 3,135,841 |
Accumulated deficit | (3,577,250) | (3,564,727) |
Shareholders’ deficit attributable to Class A Shareholders | (341,522) | (428,886) |
Shareholders’ equity attributable to noncontrolling interests | 444,837 | 419,431 |
Total Shareholders’ Equity (Deficit) | 103,315 | (9,455) |
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity (Deficit) | 1,356,607 | 1,447,391 |
Class A Shares | ||
Shareholders’ Equity (Deficit) | ||
Par value of stock | 0 | 0 |
Class B Shares | ||
Shareholders’ Equity (Deficit) | ||
Par value of stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments measured at fair value | $ 327,230 | $ 361,378 |
Assets sold under agreements to repurchase at fair value | $ 61,715 | $ 62,186 |
Class A Shares | ||
Common stock, no par value | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 20,484,430 | 19,905,126 |
Common stock, shares outstanding | 20,484,430 | 19,905,126 |
Class B Shares | ||
Common stock, no par value | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 29,208,952 | 29,458,948 |
Common stock, shares outstanding | 29,208,952 | 29,458,948 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Other revenues | $ 3,769 | $ 4,542 |
Income of consolidated funds | 2,604 | 584 |
Total Revenues | 123,194 | 128,410 |
Expenses | ||
Compensation and benefits | 85,715 | 68,924 |
Interest expense | 6,208 | 6,598 |
General, administrative and other | 37,788 | 37,850 |
Expenses of consolidated funds | 55 | 84 |
Total Expenses | 129,766 | 113,456 |
Other Income | ||
Net losses on early retirement of debt | (5,458) | 0 |
Net gains on investments | 2,689 | 312 |
Net gains of consolidated funds | 3,746 | 492 |
Total Other Income | 977 | 804 |
(Loss) Income Before Income Taxes | (5,595) | 15,758 |
Income taxes | 3,386 | 3,012 |
Consolidated and Comprehensive Net (Loss) Income | (8,981) | 12,746 |
Less: Net loss (income) attributable to noncontrolling interests | 7,234 | (8,635) |
Less: Net income attributable to redeemable noncontrolling interests | (5,534) | (621) |
Net (Loss) Income Attributable to Och-Ziff Capital Management Group Inc. | (7,281) | 3,490 |
Less: Change in redemption value of Preferred Units | 44,364 | 0 |
Net Income Attributable to Class A Shareholders | $ 37,083 | $ 3,490 |
Earnings per Class A Share | ||
Income Per Class A Share, Basic (in dollars per share) | $ 1.81 | $ 0.18 |
Income Per Class A Share, Diluted (in dollars per share) | $ 1.73 | $ 0.18 |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 20,475,359 | 19,223,092 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 21,491,970 | 45,678,707 |
Management fees | ||
Revenues | ||
Investment management revenues | $ 63,623 | $ 72,450 |
Incentive income | ||
Revenues | ||
Investment management revenues | $ 53,198 | $ 50,834 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Class A Shares | Class B Shares | Paid-in Capital | Accumulated Deficit | Shareholders' Deficit Attributable to Class A Shareholders | Shareholders' Equity Attributable to Noncontrolling Interests |
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | |||||||
Impact of Adoption - ASC 606 | $ 116,984 | $ 41,922 | $ 41,922 | $ 75,062 | |||
Balance at Beginning of Period (values) at Dec. 31, 2017 | (95,929) | $ 3,102,074 | (3,555,905) | (453,831) | 357,902 | ||
Balance at Beginning of Period (shares) at Dec. 31, 2017 | 18,957,321 | 33,933,948 | |||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | |||||||
Capital contributions | 750 | 750 | |||||
Capital distributions | (17,690) | (17,690) | |||||
Cash dividends declared on Class A Shares | (13,354) | (13,354) | (13,354) | ||||
Dividend equivalents on Class A restricted share units | 1,072 | (1,072) | |||||
Equity-based compensation, net of taxes (values) | 18,476 | 7,803 | 7,803 | 10,673 | |||
Equity-based compensation (shares) | 155,656 | (3,500,000) | |||||
Impact of changes in Oz Operating Group ownership | 190 | 190 | (190) | ||||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | 12,125 | 3,490 | 3,490 | 8,635 | |||
Balance at End of Period (values) at Mar. 31, 2018 | 21,362 | 3,111,139 | (3,524,919) | (413,780) | 435,142 | ||
Balance at End of Period (shares) at Mar. 31, 2018 | 19,112,977 | 30,433,948 | |||||
Balance at Beginning of Period (values) at Dec. 31, 2018 | (9,455) | 3,135,841 | (3,564,727) | (428,886) | 419,431 | ||
Balance at Beginning of Period (shares) at Dec. 31, 2018 | 19,905,126 | 29,458,948 | |||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | |||||||
Capital contributions | 427 | 427 | |||||
Capital distributions | (285) | (285) | |||||
Cash dividends declared on Class A Shares | (4,703) | (4,703) | (4,703) | ||||
Dividend equivalents on Class A restricted share units | 539 | (539) | |||||
Equity-based compensation, net of taxes (values) | 34,118 | 19,700 | 19,700 | 14,418 | |||
Equity-based compensation (shares) | 579,304 | (249,996) | |||||
Impact of changes in Oz Operating Group ownership | (124) | (124) | 124 | ||||
Reallocation of equity and income tax effects of Recapitalization | (3,678) | 35,408 | 35,408 | (39,086) | |||
Change in redemption value of Preferred Units | 101,406 | 44,364 | 44,364 | 57,042 | |||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | (14,515) | (7,281) | (7,281) | (7,234) | |||
Balance at End of Period (values) at Mar. 31, 2019 | $ 103,315 | $ 3,235,728 | $ (3,577,250) | $ (341,522) | $ 444,837 | ||
Balance at End of Period (shares) at Mar. 31, 2019 | 20,484,430 | 29,208,952 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' Equity (Deficit) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends Paid per Class A Share (in dollars per share) | $ 0.23 | $ 0.70 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities | ||
Consolidated net (loss) income | $ (8,981) | $ 12,746 |
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | ||
Amortization of equity-based compensation | 37,223 | 22,171 |
Depreciation, amortization and net gains and losses on fixed assets | 2,411 | 2,372 |
Net losses on early retirement of debt | 5,458 | 0 |
Deferred income taxes | 2,064 | 2,157 |
Operating and finance lease assets amortization | 2,683 | 0 |
Operating and finance lease liabilities accretion | 2,627 | 0 |
Net gains on investments, net of dividends | (2,064) | (312) |
Operating cash flows due to changes in: | ||
Income and fees receivable | 9,400 | 315,488 |
Due from related parties | 75 | (5,248) |
Other assets, net | (686) | 23,342 |
Compensation payable | (80,690) | (184,414) |
Unearned incentive income | 2,371 | 10,930 |
Due to related parties | 1,428 | (43) |
Operating lease liabilities | (2,383) | 0 |
Other liabilities | (14,225) | (16,435) |
Consolidated funds related items: | ||
Net gains of consolidated funds | (3,746) | (492) |
Purchases of investments | (49,598) | (87,438) |
Proceeds from sale of investments | 60,094 | 63,739 |
Other assets of consolidated funds | (1,541) | (29,191) |
Other liabilities of consolidated funds | 2,402 | 30,567 |
Net Cash (Used in) Provided by Operating Activities | (35,678) | 159,939 |
Cash Flows from Investing Activities | ||
Purchases of fixed assets | (287) | (1,205) |
Purchases of United States government obligations | 0 | (7,435) |
Maturities of United States government obligations | 11,800 | 13,000 |
Investments in funds | (14,631) | (77,990) |
Return of investments in funds | 30,345 | 3,353 |
Net Cash Provided by (Used in) Investing Activities | 27,227 | (70,277) |
Cash Flows from Financing Activities | ||
Contributions from noncontrolling and redeemable noncontrolling interests | 2,134 | 22,857 |
Distributions to noncontrolling and redeemable noncontrolling interests | (15,897) | (18,023) |
Dividends on Class A Shares | (4,703) | (13,354) |
Proceeds from debt obligations, net of issuance costs | 0 | 60,719 |
Repayment of debt obligations, including prepayment costs | (141,068) | (69) |
Other, net | (1,886) | (2,065) |
Net Cash (Used in) Provided by Financing Activities | (161,420) | 50,065 |
Net Change in Cash and Cash Equivalents and Restricted Cash | (169,871) | 139,727 |
Cash and Cash Equivalents and Restricted Cash, Beginning of Period | 323,884 | 469,513 |
Cash and Cash Equivalents and Restricted Cash, End of Period | 154,013 | 609,240 |
Cash paid during the period: | ||
Interest | 5,487 | 1,362 |
Income taxes | 2,462 | 644 |
Reconciliation of cash and cash equivalents and restricted cash | ||
Cash and Cash Equivalents, at Carrying Value | 144,750 | 609,240 |
Restricted cash | $ 9,263 | $ 0 |
Overview
Overview | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | OVERVIEW Och-Ziff Capital Management Group Inc, (the “Registrant”), a Delaware corporation, 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 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, 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. Oz Holding was merged into Oz Corp effective April 1, 2019. 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 3 for additional details. Company Structure As of March 31, 2019 , 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 in the Oz Operating Group. 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 3 , this proxy will terminate on the “Transition Date,” which will be on or around May 29, 2019. 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 March 31, 2019 : • Group A Units —Group A Units are limited partner interests issued to certain executive managing directors. Beginning on the final day of the Distribution Holiday (as defined in Note 3 ), each executive managing directors may exchange his or her vested and booked-up (as defined below) Group A Units over a period of two years in three equal installments commencing upon the final day of the Distribution Holiday and on each of the first and second anniversary thereof (or, for units that become vested and booked-up Group A Units after the final day of the Distribution Holiday, from the later of the date on which they would have been exchangeable in accordance with the foregoing and the date on which they become vested and booked-up Group A Units) (and thereafter such units will remain exchangeable), in each case, subject to certain restrictions. A “book-up” is when sufficient appreciation has occurred to meet a prescribed capital account book-up target under the terms of the Oz Operating Partnership limited partnership agreements In connection with the Recapitalization, each Group A Unit was recapitalized into 0.65 Group A Units and 0.35 Group A-1 Units. Holders of Group A Units do not receive distributions during the Distribution Holiday. Group A Unit grants are accounted for as equity-based compensation. See Note 14 for additional information. • Group A-1 Units —Group A-1 Units are limited partner interests into which 0.35 of each Group A Unit was recapitalized in connection with the reallocation that was effectuated by the Recapitalization. The Group A-1 Units will be canceled at such time and to the extent that the Group E Units associated with such Group A-1 Units vest and achieve a book-up. Group A-1 Units are not eligible to receive distributions at any time and do not participate in the net income (loss) of the Oz Operating Group. However, the holders of Group A-1 Units shall participate in any sale, change of control or other liquidity event. In the Recapitalization, the holders of the 2016 Preferred Units (as defined below) forfeited 749,813 Group A Units, which were recapitalized into Group A-1 Units. • Group B Units —Each intermediate holding company holds a general partner interest and Group B Units in each Oz Operating Group entity that it controls. Our intermediate holding companies own all of the Group B Units, which represent equity interest in the Oz Operating Group. Except during the Distribution Holiday as described above, the Group B Units are economically identical to the Group A Units held by executive managing directors, but are not exchangeable for Class A Shares and are not subject to vesting, forfeiture or minimum retained ownership requirements. • Group E Units —Group E Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group E Unit converts into a Group A Unit and becomes exchangeable for one Class A Share (or the cash equivalent thereof) to the extent there has been a sufficient amount of appreciation for a Group E Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Oz Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group E Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right , in a change of control transaction or other liquidity event only to the extent of their relative positive capital accounts (if any). In connection with the Recapitalization, all outstanding Group D Units, which were non-equity profits interests, converted into Group E Units on a one-for-one basis. Holders of Group E Units do not receive distributions during the Distribution Holiday. See Note 3 for additional information. Group E Unit grants are accounted for as equity-based compensation. See Note 14 for additional information. • Group P Units —Group P Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. 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 performance conditions at such time and, with respect to exchanges, to the extent there has been sufficient appreciation for a Group P Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Oz Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group P Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right , in a change of control transaction or other liquidity event only to the extent that certain performance conditions are met and to the extent of their relative positive capital accounts (if any). 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 14 for additional information. • Preferred Units — The Preferred Units are non-voting preferred equity interests in the Oz Operating Group entities. Preferred Units issued in 2016 and 2017 are collectively referred to as the “2016 Preferred Units.” The Preferred Units issued in 2019 are referred to as “the 2019 Preferred Units.” See Note 10 for additional information. The Company’s current and former executive managing directors hold a number of Class B Shares of the Registrant equal to the number of Group A Units, Group A-1 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. One Class B Share will be issued to each holder of Group E Units upon the vesting of each such holder’s Group E Unit, at which time a corresponding number of Class B Shares held by holders of Group A-1 Units will be canceled. The following table presents the number of shares and units (excluding Preferred Units) of the Registrant and the Oz Operating Group, respectively, that were outstanding as of March 31, 2019 : As of March 31, 2019 Och-Ziff Capital Management Group Inc. Class A Shares 20,484,430 Class B Shares 29,208,952 Oz Operating Partnerships Group A Units 16,019,506 Group A-1 Units 9,779,446 Group B Units 20,484,430 Group E Units 13,542,440 Group P Units 3,410,000 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 14 for additional information. 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, Oz Operating Group 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 unaudited, interim, consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”). In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. All significant intercompany transactions and balances have been eliminated in consolidation. The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. For example, incentive income for the majority of the Company’s multi-strategy assets under management is recognized in the fourth quarter each year, based on full year investment performance. Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , as amended, as of January 1, 2019 (“ASC 842”). The Company applied ASC 842 to lease arrangements outstanding as of the date of adoption. The Company did not restate prior periods and there were no adjustments to retained earnings upon adoption of ASC 842. The Company applied the package of practical expedients permitted under the transition guidance within the new standard, including carrying forward the historical lease classification and not reassessing whether certain costs capitalized under the prior guidance are eligible for capitalization under ASC 842. Adoption of ASC 842 resulted in the recognition of $126.0 million and $135.9 million of operating lease assets and liabilities, respectively, with the net of these amounts offsetting the deferred rent credit liability in existence immediately prior to adoption. The Company determines if an arrangement is a lease at inception. Right-of-use lease assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Right-of-use lease assets represent the Company’s right to use a leased asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company does not recognize right-of-use lease assets and lease liabilities for leases with an initial term of one year or less. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments. The Company gave consideration to its recently issued term loan, as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The operating lease assets include any lease payments made and excludes lease incentives. Lease terms include options to extend or terminate when it is reasonably certain that the Company will exercise that option. In addition, the Company separates lease and non-lease components embedded within lease agreements, except for data center leases. Right-of-use assets and liabilities related to operating leases are included within operating lease assets and operating lease liabilities, respectively, in the Company’s consolidated balance sheets. Right-of-use assets and liabilities related to finance leases are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets. Lease expense for operating lease payments, which is comprised of amortization of right-of-use assets and interest accretion on lease liabilities, is generally recognized on a straight-line basis over the lease term and included within general, administrative and other expenses in the consolidated statements of comprehensive income. Amortization of right-of-use lease assets related to finance leases is included within general, administrative and other expenses and interest accretion on lease liabilities related to finance leases is included within interest expense. Subrental income is recognized on a straight-line basis over the lease term and is included within other revenues in the consolidated statements of comprehensive income. Where the Company has entered into a sublease arrangement, the Company will evaluate the lease arrangement for impairment. To the extent an impairment of the right-of-use lease asset is recognized, the Company will amortize the remaining lease asset on a straight-line basis over the remaining lease term. Recently Adopted Accounting Pronouncements Other than the adoption of ASC 842 discussed above, none of the other changes to GAAP that went into effect in the three months ended March 31, 2019 had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements No changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements. |
Recapitalization (Notes)
Recapitalization (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Recapitalization [Abstract] | |
Recapitalization | RECAPITALIZATION On February 7, 2019, the Company completed the Recapitalization, which included a series of transactions that involved the reallocation of certain ownership interests 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 (as defined in Note 8 ) and 2019 Preferred Units, and various other related transactions. In addition, (i) $200.0 million of the 2016 Preferred Units was restructured into the Debt Securities (as defined in Note 8 ) and (ii) $200.0 million of the 2016 Preferred Units was restructured into the 2019 Preferred Units. In addition, the holders of the 2016 Preferred Units forfeited an additional 749,813 Group A Units (which were recapitalized into Group A-1 Units). Reallocation of Equity 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 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. Distribution Holiday 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 and PSUs shall be adjusted to take into account performance and distributions during such period, and (iii) RSUs will continue to receive dividend equivalents in respect of dividends or distributions paid on the Class A Shares. For executive managing directors that have received Group E Units, distributions on Group P Units, RSUs and PSUs is limited to an aggregate amount not to exceed $4.00 per Group P Unit, PSU or RSU, as applicable, cumulatively during the Distribution Holiday. Following the termination of the Distribution Holiday, Group A Units and Group E Units (whether vested or unvested) shall receive distributions even if such units have not been booked-up. The Distribution Holiday was effective retroactively to October 1, 2018. As a result, the Company recorded and adjustment to paid-in capital and noncontrolling interests to reallocate a portion of pre-Recapitalization earnings and related income tax effects from noncontrolling interests to the Company’s paid-in capital. Such adjustment is recorded within Recapitalization adjustment in the consolidated statement of shareholders’ equity (deficit). In connection with his transition from the Company, Mr. Och submitted redemption notices for all liquid balances of Mr. Och and his related parties (other than their liquid balances in the Oz Credit Opportunities Master Fund) - half of which would be redeemed effective as of December 31, 2018 and the remainder effective March 31, 2019. The receipt by Mr. Och and his related parties of redemption proceeds associated with these redemptions is referred to as the “Liquidity Redemption.” Redemptions are generally paid in the month following the effective date of the redemption. The Liquidity Redemptions had been completed as of April 29, 2019. Mr. Och and his related parties are redeeming their liquid balances in the OZ Credit Opportunities Master Fund effective 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 2019 Preferred Units. 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 2019 Preferred Unit Designations as defined in Note 10 ) will be applied to repay the 2018 Term Loan and then to redeem the 2019 Preferred Units, 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 2019 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 2019 Preferred Units. 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 2019 Preferred Units Designations (“Designated Accrued Unrecognized Incentive”) and (ii) 85% of the net cash proceeds from any Asset Sales (as defined in the 2019 Preferred Units Designations), will be used to repay the 2018 Term Loan and redeem the 2019 Preferred Units. 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. |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | NONCONTROLLING INTERESTS 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. Prior to the Recapitalization, the attribution of net income (loss) of each Oz Operating Partnership was based on the relative ownership percentages of the Group A Units (noncontrolling interests) and the Group B Units (indirectly held by the Registrant). In applying the substantive profit sharing arrangements in the Oz Operating Partnership limited partnership agreements to the Company’s consolidated financial statements, for periods subsequent to the Recapitalization and for the duration of the Distribution Holiday, the Company will allocate net income of each Oz Operating Partnership in any fiscal year solely to the Group B Units and any net loss on a pro rata basis based on the relative ownership percentages of the Group A Units and Group B Units. To the extent an Oz Operating Partnership incurs a net loss in an interim period, any net income recognized in a subsequent interim period in the same fiscal year is allocated on a pro rata basis to the extent of previously allocated net loss. Conversely, to the extent an Oz Operating Partnership recognizes net income in an interim period, any net loss incurred in a subsequent interim period in the same fiscal year is allocated solely to the Group B Units to the extent of previously allocated net income. The table below sets forth the calculation of noncontrolling interests related to the Group A Units for each Oz Operating Partnership (rounding differences may occur). The blended participation percentages presented below take into account ownership changes throughout the year. In addition, the blended participation percentages in 2019 take into account the difference in methodology described above for the period prior to the Recapitalization Date compared to the period following the Recapitalization Date. For example, Oz Advisors LP had net income in the period prior to the Recapitalization Date, and as a result, allocates a portion of its net income for the three months ended March 31, 2019 to the Group A Units. Oz Management LP Oz Advisors LP Oz Advisors II LP Total Oz Operating Group (dollars in thousands) January 1, 2019 to March 31, 2019 Net (loss) income $ (32,049 ) $ 17,497 $ 2,053 $ (12,499 ) Blended participation percentage 44 % 38 % 0 % 59 % Net (Loss) Income Attributable to Group A Units $ (14,064 ) $ 6,695 $ — $ (7,369 ) January 1, 2018 to March 31, 2018 Net income (loss) $ 2,405 $ 17,735 $ (5,653 ) $ 14,487 Blended participation percentage 58 % 58 % 58 % 58 % Net Income (Loss) Attributable to Group A Units $ 1,389 $ 10,247 $ (3,266 ) $ 8,370 The following table presents the components of the net (loss) income attributable to noncontrolling interests: Three Months Ended March 31, 2019 2018 (dollars in thousands) Group A Units $ (7,369 ) $ 8,370 Other 135 265 $ (7,234 ) $ 8,635 The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: March 31, 2019 December 31, 2018 (dollars in thousands) Group A Units $ 441,056 $ 415,928 Other 3,781 3,503 $ 444,837 $ 419,431 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: Three Months Ended March 31, 2019 2018 Funds Preferred Units Total Funds Preferred Units Total (dollars in thousands) Beginning balance $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 Fair value of Debt Securities exchanged for 2016 Preferred Units — (167,799 ) (167,799 ) — — — Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units — (137,759 ) (137,759 ) — — — Issuance of 2019 Preferred Units, net of issuance costs — 136,964 136,964 — — — Change in redemption value — (101,406 ) (101,406 ) — — — Capital contributions 1,707 — 1,707 22,107 — 22,107 Capital distributions (15,611 ) — (15,611 ) (333 ) — (333 ) Comprehensive income 5,534 — 5,534 621 — 621 Ending Balance $ 149,290 $ 150,000 $ 299,290 $ 48,012 $ 420,000 $ 468,012 |
Investments and Fair Value Disc
Investments and Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 December 31, 2018 (dollars in thousands) United States government obligations, at fair value $ 168,762 $ 179,510 CLOs, at fair value 158,468 181,868 Other investments, equity method 35,607 28,519 Total Investments $ 362,837 $ 389,897 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 an 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 March 31, 2019 : As of March 31, 2019 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 32,784 $ — $ — $ 32,784 Included within investments: United States government obligations $ 168,762 $ — $ — $ 168,762 CLOs (1) $ — $ — $ 158,468 $ 158,468 Investments of consolidated funds: Bank debt $ — $ 101,724 $ 59,169 $ 160,893 Corporate bonds — 3,862 — 3,862 Total Investments of Consolidated Funds $ — $ 105,586 $ 59,169 $ 164,755 _______________ (1) As of March 31, 2019 , investments in CLOs had contractual principal amounts of $147.3 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, 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. Reconciliation of Fair Value Measurements Categorized within Level III Gains and losses, excluding those of the consolidated funds are recorded within net 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 three months ended March 31, 2019 : December 31, 2018 Transfers Transfers Investment Investment Gains / Losses March 31, 2019 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 181,868 $ — $ — $ 808 $ (23,135 ) $ (1,073 ) $ 158,468 Investments of consolidated funds: Bank debt $ 75,613 $ 5,178 $ (23,617 ) $ 17,557 $ (16,082 ) $ 520 $ 59,169 Corporate bonds $ — $ — $ — $ 987 $ (981 ) $ (6 ) $ — The following tables summarize the changes in the Company’s Level III assets and liabilities for the three months ended March 31, 2018 : December 31, 2017 Transfers In Transfers Out Investment Purchases / Issuances Investment Sales Gains/Losses March 31, 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 211,749 $ — $ — $ 76,622 $ (2,775 ) $ 1,374 $ 286,970 Investments of consolidated funds: Bank debt $ 18,807 $ 1,004 $ (2,906 ) $ 28,560 $ (26,563 ) $ 232 $ 19,134 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: Three Months Ended March 31, 2019 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ (914 ) $ 974 Investments of consolidated funds: Bank debt $ 436 $ 89 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. 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 March 31, 2019 . 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. Loans Sold to CLOs Managed by the Company In the three months ended March 31, 2018 , the Company sold $23.4 million of loans to CLOs managed by the Company. No loans were sold in the three months ended March 31, 2019 . 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 three months ended March 31, 2018 , the Company made $24.9 million of investments related to these retained interests. No investments related to these retained interests were made in the three months ended March 31, 2019 . As of March 31, 2019 and December 31, 2018 , the Company’s investments in these retained interests had a fair value of $89.3 million and $89.4 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 three months ended March 31, 2019 and 2018 , the Company received $909 thousand and $3.7 million , 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 of the Company’s Annual Report for a discussion of entities that are VIEs and the evaluation of those entities for consolidation by the Company. The table below presents the assets and liabilities of VIEs consolidated by the Company. March 31, 2019 December 31, 2018 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ 164,755 $ 171,495 Other assets of consolidated funds 22,618 21,090 Total Assets $ 187,373 $ 192,585 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 16,943 14,541 Total Liabilities $ 16,943 $ 14,541 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 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 19 . 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: March 31, 2019 December 31, 2018 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 11,501,276 $ 10,236,438 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 67,347 62,038 Income and fees receivable 38,805 31,658 Investments in funds 171,623 190,674 Maximum Exposure to Loss $ 277,775 $ 284,370 |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company has non-cancelable operating leases for its headquarters in New York and its offices in London, Hong Kong, Mumbai, Shanghai, and various data centers. The Company does not have renewal options, other than a three-year renewal option for its lease in Hong Kong, which was not included in the determination of the related lease asset and liability. The Company also subleases a portion of its office space in London through the end of the lease term. Finally, the Company has finance leases for computer hardware. Three Months Ended March 31, 2019 (dollars in thousands) Lease Cost Operating lease cost $ 5,149 Short-term lease cost 18 Finance lease cost - amortization of leased assets 137 Finance lease cost - imputed interest on lease liabilities 24 Less: Sublease income (384 ) Net Lease Cost $ 4,944 Three Months Ended March 31, 2019 (dollars in thousands) Supplemental Lease Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 3,998 Operating cash flows for finance leases $ 24 Finance cash flows for finance leases $ 457 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 126,000 Financing leases $ 1,702 March 31, 2019 Lease Term and Discount Rate Weighted average remaining lease term Operating leases 9.9 years Finance leases 2.9 years Weighted average discount rate Operating leases 7.9 % Finance leases 7.9 % Operating Finance (dollars in thousands) Maturity of Lease Liabilities April 1, 2019 to December 31, 2019 $ 16,136 $ 157 2020 22,535 618 2021 21,042 618 2022 19,858 — 2023 19,146 — Thereafter 97,587 — Total Lease Payments 196,304 1,393 Imputed interest (60,138 ) (129 ) Total Lease Liabilities $ 136,166 $ 1,264 As of March 31, 2019 , the Company has pledged collateral related to its lease obligations of $6.2 million , which is included within investments in the consolidated balance sheets. Operating Lease (dollars in thousands) Sublease Rent Payments Receivable April 1, 2019 to December 31, 2019 $ 1,162 2020 1,550 2021 1,550 2022 1,550 2023 1,213 Thereafter — Total Sublease Rent Payments Receivable $ 7,025 |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Debt Instruments [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS Debt Securities 2018 Term Loan CLO Investments Loans Total (dollars in thousands) Maturity of Debt Obligations April 1, 2019 to December 31, 2019 $ — $ — $ — $ — 2020 — — — — 2021 — — — — 2022 40,000 8,125 — 48,125 2023 40,000 71,875 16,998 128,873 Thereafter 120,000 — 57,498 177,498 Total Payments 200,000 80,000 74,496 354,496 Unamortized discounts & deferred financing costs (30,244 ) (1,956 ) (492 ) (32,692 ) Total Debt Obligations $ 169,756 $ 78,044 $ 74,004 $ 321,804 Debt Securities In connection with the Recapitalization, the Oz Operating Partnerships, each as a borrower, entered into a Senior Subordinated Credit Agreement under which $200.0 million of Debt Securities were issued in exchange for an equal amount of 2016 Preferred Units. The Debt Securities mature on the earlier of (i) the fifth anniversary of the date on which all obligations under the 2019 Preferred Unit Designations have been in paid in full and (ii) April 1, 2026 . 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 2019 Preferred Units 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 2019 Preferred Units are exchanged for incremental Debt Securities; 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 2019 Preferred Units, the borrowers will have the option to voluntarily repay the initial Debt Securities at a 5% discount. The Subordinated Credit Agreement contains customary representations and warranties and covenants for a transaction of this type and financial covenants consistent with those described below for the 2018 Term Loan. The Subordinated Credit Agreement also requires prepayment of loans under the 2018 Term Loan and the 2019 Preferred Units in accordance with the Cash Sweep, and restricts the incurrence of indebtedness for borrowed money and certain liens, in each case subject to exceptions set forth in the Implementing Agreements. 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 2018 Term Loan. 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. 2018 Term Loan 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”). Effective as of February 7, 2019, the Company terminated in full the commitments under the 2018 Revolving Credit Facility. At the time of such termination, no borrowings were outstanding under the 2018 Revolving Credit Facility. In connection with the Recapitalization, the Company 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”). In accordance with the Amended Senior Credit Agreement, indebtedness outstanding under the 2018 Term Loan will be payable in accordance with the provisions of the Cash Sweep described in Note 3 . 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 Amended Senior Credit Agreement. In connection with the Recapitalization and the Senior Credit Agreement Amendment, the Company repaid $100.0 million of amounts outstanding under the 2018 Term Loan. In accordance with the Cash Sweep, the Company repaid an additional $20.0 million during the first quarter of 2019, and an additional $25.0 million on May 8, 2019 . 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 Amended 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 Amended 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 Amended Senior Credit Agreement, which excludes the Debt Securities) 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 March 31, 2019 , the Company was in compliance with the financial maintenance covenants. The Amended Senior Credit Agreement requires 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. In the event the Amended Senior Credit Agreement remains outstanding at that time, the Amended Senior Credit Facility allows for the issuance of an additional $200.0 million of incremental Debt Securities in exchange for the remaining Preferred Units on or after March 31, 2022. The Amended Senior Credit Agreement also allows restricted payments for preferred dividends of up to $12.0 million per year. The Amended Senior Credit Agreement contains customary events of default. If an event of default under the Amended 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 Amended 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 Amended Senior Credit Agreement will automatically become immediately due and payable. 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 $89.4 million and $112.8 million as of March 31, 2019 and December 31, 2018 , respectively. Carrying amounts presented in the table 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. Borrowing Date Contractual Rate Final Maturity Date Carrying Value March 2019 December 2018 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ 16,875 $ 17,235 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,229 17,224 August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,676 21,674 September 14, 2017 EURIBOR plus 2.21% September 14, 2024 18,224 18,614 February 21, 2018 LIBOR plus 1.27% February 21, 2019 — 21,060 $ 74,004 $ 95,807 |
Securities Sold under Agreement
Securities Sold under Agreements to Repurchase | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 , €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: 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 March 31, 2019 $ 61,437 $ — $ 61,437 $ 61,437 $ — 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: Investments in CLOs Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total (dollars in thousands) As of March 31, 2019 $ — $ — $ — $ 61,437 $ 61,437 As of December 31, 2018 $ — $ — $ — $ 62,801 $ 62,801 |
Preferred Units
Preferred Units | 3 Months Ended |
Mar. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Units | PREFERRED UNITS 2016 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 $400.0 million of 2016 Preferred Units, all of which remained issued an outstanding as of December 31, 2018. 2019 Preferred Units Pursuant to the 2019 Preferred Unit Designations, the Oz Operating Partnerships issued 2019 Preferred Units with an aggregate liquidation preference of $200.0 million , in exchange for $200.0 million of the 2016 Preferred Units. Other than following the occurrence of a Discount Termination Event (as defined in the 2019 Preferred Unit Designations), the Oz Operating Partnerships will have the option to redeem the 2019 Preferred Units at a 25% discount until March 31, 2021, and then at a 10% discount at any time between April 1, 2021 and March 30, 2022. Any mandatory payments as a result of the Cash Sweep will be entitled to the same discount. To the extent that the 2019 Preferred Units are not repaid in full prior to March 31, 2022, at the option of the holder thereof, all or any portion of the 2019 Preferred Units will be converted into Debt Securities in an aggregate principal amount equal to the Liquidation Value (as defined below) of such 2019 Preferred Units, with such Debt Securities having the same terms as the existing $200.0 million of Debt Securities. Pursuant to the New Preferred Unit Designations, distributions on the 2019 Preferred Units 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 2019 Preferred Units 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 2019 Preferred Units 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 2019 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. 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 used 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 used to redeem the 2019 Preferred Units 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 2019 Preferred Units 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 2019 Preferred Units as promptly as practicable. |
Other Assets, Net
Other Assets, Net | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 December 31, 2018 (dollars in thousands) Fixed Assets: Leasehold improvements $ 54,257 $ 54,257 Computer hardware and software 45,836 48,178 Furniture, fixtures and equipment 8,373 8,373 Accumulated depreciation and amortization (69,058 ) (67,558 ) Fixed assets, net 39,408 43,250 Goodwill 22,691 22,691 Prepaid expenses 17,055 11,629 Other 6,365 4,833 Total Other Assets, Net $ 85,519 $ 82,403 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES The following table presents the components of other liabilities as reported in the consolidated balance sheets: March 31, 2019 December 31, 2018 (dollars in thousands) Accrued expenses $ 20,722 $ 27,683 Unused trade commissions 8,649 8,615 Uncertain tax positions 7,000 7,000 Deferred rent credit — 6,231 Trades payable — 4,978 Other 7,059 9,096 Total Other Liabilities $ 43,430 $ 63,603 |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES The following table presents management fees and incentive income recognized as revenues for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Management Fees Incentive Income Management Fees Incentive Income (dollars in thousands) Multi-strategy funds $ 34,381 $ 14,984 $ 44,406 $ 11,832 Credit Opportunistic credit funds 10,435 30,920 11,107 34,235 Institutional Credit Strategies 13,723 — 11,193 — Real estate funds 4,832 7,294 4,764 4,767 Other 252 — 980 — Total $ 63,623 $ 53,198 $ 72,450 $ 50,834 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 three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (dollars in thousands) Beginning of Period $ 61,397 $ 143,710 Effects of adoption of ASU 2014-09 — (99,422 ) Amounts collected during the period 7,832 15,565 Amounts recognized during the period (5,460 ) (4,635 ) End of Period $ 63,769 $ 55,218 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 March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 (dollars in thousands) Management fees $ 22,977 $ 20,368 Incentive income 50,466 62,475 Income and Fees Receivable $ 73,443 $ 82,843 |
Equity-Based Compensation Expen
Equity-Based Compensation Expenses | 3 Months Ended |
Mar. 31, 2019 | |
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, Group E 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): Three Months Ended March 31, 2019 2018 (dollars in thousands) Expense recorded within compensation and benefits $ 37,223 $ 22,171 Corresponding tax benefit $ 1,936 $ 1,726 The following tables present activity related to the Company’s unvested equity awards for the three months ended March 31, 2019 : 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, 2018 3,784,536 $ 30.00 433,133 $ 66.75 1,000,000 $ 11.82 Granted 1,334,766 $ 12.98 47,933 $ 13.45 — $ — Vested (610,372 ) $ 20.70 — $ — — $ — Canceled or forfeited (65,532 ) $ 25.36 — $ — — $ — March 31, 2019 4,443,398 $ 26.34 481,066 $ 61.45 1,000,000 $ 11.82 Group A Units Group E Units Group P Units Unvested Group A Units Weighted-Average Unvested Group E Units Weighted-Average Unvested Group P Units Weighted-Average December 31, 2018 74,962 $ 105.26 — $ — 3,660,000 $ 12.46 Granted — $ — 13,542,440 $ 8.22 — $ — Vested — $ — (1,173,671 ) $ 8.12 (200,000 ) $ 5.42 Canceled or forfeited (26,421 ) $ 105.26 — $ — (250,000 ) $ 12.46 March 31, 2019 48,541 $ 105.26 12,368,769 $ 8.23 3,210,000 $ 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. As a result of the Recapitalization, the Company modified certain RSUs awards provided to certain executive managing directors to cap the cumulative distributions that the RSUs would be entitled to receive during the Distribution Holiday. As the resulting fair value of the RSU awards was lower than the original grant fair value, the Company continues to recognize the compensation expense that would have been previously recognized prior to the modification. As of March 31, 2019 , total unrecognized compensation expense related to equity-classified awards totaled $91.4 million with a weighted-average amortization period of 2.7 years. As of March 31, 2019 , total unrecognized compensation expense related to liability-classified awards totaled $27.9 million with a weighted-average amortization period of 3.7 years. The following table presents information related to the settlement of RSUs: Three Months Ended March 31, 2019 2018 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 7,420 $ 3,845 Fair value of RSUs settled in cash $ — $ 276 Fair value of RSUs withheld to satisfy tax withholding obligations $ 246 $ 1,327 Number of RSUs withheld to satisfy tax withholding obligations 20,193 94,583 PSUs As of March 31, 2019 , total unrecognized compensation expense related to these units totaled $7.4 million with a weighted-average amortization period of 1.9 years. See the Company’s Annual Report for additional information regarding the PSUs. Group A Units As of March 31, 2019 , total unrecognized compensation expense related to the Group A Units totaled $2.7 million with a weighted-average amortization period of 1.0 years. See the Company’s Annual Report for additional information regarding the Group A Units. Group E Units As a part of the Recapitalization described in Note 3 , in the three months ended March 31, 2019 , the Company granted Group E Units. The Group E Units are not entitled to participate in distributions during the Distribution Holiday. The right of the Group E Units to participate in distributions is considered a performance condition that does not affect vesting. The Company is required to recognize compensation cost based on the grant date fair value of Group E Units where the performance condition is probable of being met. The fair value of the Group E Units was calculated using the price of the Company’s Class A Shares at the date of grant, adjusted to reflect that Group E Units are not entitled to participate in distributions during the Distribution Holiday and for post-vesting transfer restrictions. As of March 31, 2019 , total unrecognized compensation expense related to these units totaled $93.6 million with a weighted-average amortization period of 2.3 years. Expense for the Group E Units is recognized on an accelerated basis (i.e., each tranche will be recognized over its respective service period), as the value of the award is dependent at least in part on a performance condition. Group P Units As of March 31, 2019 , total unrecognized compensation expense related to the Group P Units totaled $16.8 million with a weighted-average amortization period of 1.6 years. See the Company’s Annual Report for additional information regarding the Group P Units. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as tax laws and regulations change. Additionally, the amount of incentive income and discretionary cash bonuses recorded in any given quarter can have a significant impact on the Company’s effective tax rate. Accordingly, the effective tax rate for interim periods is not indicative of the tax rate expected for a full year. The Registrant and each of the Oz Operating Partnerships are partnerships for U.S. federal income tax purposes. Due to the Company’s legal structure, only a portion of the income earned by the Company is subject to corporate-level tax rates in the United States and in foreign jurisdictions. The following is a reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate: Three Months Ended March 31, 2019 2018 Statutory U.S. federal income tax rate 21.00 % 21.00 % Income passed through to noncontrolling interests -38.43 % -13.13 % Nondeductible transaction costs -37.08 % — % Tax effects of income recorded to equity in connection with the Recapitalization 28.96 % — % Foreign income taxes -18.71 % 2.98 % RSU excess deferred income tax write-off -18.52 % 1.82 % State and local income taxes -13.64 % 3.33 % Income not subject to entity level tax 7.82 % 2.93 % Other, net 8.08 % 0.18 % Effective Income Tax Rate -60.52 % 19.11 % In accordance with GAAP, 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. As of March 31, 2019 and December 31, 2018 , the Company had a liability for unrecognized tax benefits of $7.0 million . As of and for the three months ended March 31, 2019 , the Company did not accrue interest or penalties related to uncertain tax positions. As of March 31, 2019 , the Company does not believe that there will be a significant change to the uncertain tax positions during the next 12 months. The Company’s total unrecognized tax benefits that, if recognized, would affect its effective tax rate was $4.2 million as of March 31, 2019 . The Registrant changed its tax classification from a partnership to a corporation effective April 1, 2019 and subsequently converted from a Delaware limited liability company into a Delaware corporation effective May 9, 2019. |
General, Administrative and Oth
General, Administrative and Other | 3 Months Ended |
Mar. 31, 2019 | |
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): Three Months Ended March 31, 2019 2018 (dollars in thousands) Professional services $ 14,960 $ 13,471 Occupancy and equipment 7,584 6,465 Information processing and communications 5,362 6,794 Recurring placement and related service fees 3,342 4,349 Insurance 2,152 1,852 Business development 1,098 1,090 Foreign exchange losses and (gains) 48 1,083 Other expenses 3,242 2,746 Total General, Administrative and Other $ 37,788 $ 37,850 |
Earnings Per Class A Share
Earnings Per Class A Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Class A Share | EARNINGS PER CLASS A SHARE Basic earnings per Class A Share is computed by dividing the net income attributable to Class A Shareholders by the weighted-average number of Class A Shares outstanding for the period. For the three months ended March 31, 2019 and 2018 , the Company included 184,254 and 184,132 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 earnings per Class A Share. When calculating dilutive earnings per Class A Share, the Company applies the treasury stock method to unvested RSUs and the if-converted method to vested Group A Units and Group E Units. The Company applies the treasury stock method to unvested Group A Units and Group E Units and the if-converted method on the resulting number of units that would be issued. The Company did not include the Group P Units or PSUs in the calculations of dilutive earnings per Class A Share, as the applicable market performance conditions have not yet been met as of March 31, 2019 . The following tables present the computation of basic and diluted earnings per Class A Share: Three Months Ended March 31, 2019 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 $ 37,083 20,475,359 $ 1.81 Effect of dilutive securities: Group A Units — — 20,039,945 Group E Units — 1,016,611 — RSUs — — 4,606,223 Diluted $ 37,083 21,491,970 $ 1.73 Three Months Ended March 31, 2018 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 $ 3,490 19,223,092 $ 0.18 Effect of dilutive securities: Group A Units 4,776 26,455,615 — RSUs — — 3,475,715 Diluted $ 8,266 45,678,707 $ 0.18 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
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 19. The Company made no payments under the tax receivable agreement in the three months ended March 31, 2019 and 2018 . 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 March 31, 2019 and 2018 , respectively, approximately $1.4 billion and $2.6 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 March 31, 2019 and 2018 , approximately 21% and 74% , of these 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: Three Months Ended March 31, 2019 2018 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 2,725 $ 2,082 Incentive income $ 1,561 $ 1,264 Other In relation to the Recapitalization described in Note 3 , the Company paid for Mr. Och’s expenses incurred in connection with these transactions in the amount of $5.0 million , of which $4.5 million had been incurred in the fourth quarter of 2018, and the remainder was incurred in the first quarter of 2019. In addition, the Company will pay for reasonable expenses, if any, incurred by holders of the 2019 Preferred Units in connection with protecting the interests or enforcing the rights of such securities. See Note 10 for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 , 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 connection with the Recapitalization, the Company amended the tax receivable agreement. See Note 21 for additional information. 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 $33.6 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 $69.5 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 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 | 3 Months Ended |
Mar. 31, 2019 | |
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. • Non-cash interest expense accretion on Debt Securities issued in exchange for 2016 Preferred Units in connection with the Recapitalization. Upon exchange, Debt Securities were recognized at fair value and are being accreted to par value over time through interest expense for GAAP; however, management does not consider this interest accretion to be reflective of the operating performance of the Company. • 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 Three Months Ended March 31, 2019 2018 (dollars in thousands) Oz Funds: Economic Income Revenues $ 105,064 $ 113,647 Economic Income $ 33,290 $ 51,275 Real Estate: Economic Income Revenues $ 11,918 $ 9,399 Economic Income $ 4,487 $ 1,467 Total Company: Economic Income Revenues $ 116,982 $ 123,046 Economic Income $ 37,777 $ 52,742 Reconciliation of Segment Revenues to Consolidated Revenues Three Months Ended March 31, 2019 2018 (dollars in thousands) Total consolidated revenues $ 123,194 $ 128,410 Adjustment to management fees (1) (3,608 ) (4,741 ) Adjustment to other revenues (2) — (39 ) Income of consolidated funds (2,604 ) (584 ) Total Segment Revenues $ 116,982 $ 123,046 _______________ (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 Income Attributable to Class A Shareholders Three Months Ended March 31, 2019 2018 (dollars in thousands) Net Income Attributable to Class A Shareholders $ 37,083 $ 3,490 Change in redemption value of Preferred Units (44,364 ) — Net (Loss) Income Allocated to Och-Ziff Capital Management Group Inc. (7,281 ) 3,490 Net (loss) income allocated to Group A Units (7,369 ) 8,370 Equity-based compensation, net of RSUs settled in cash 37,223 21,895 Adjustment to recognize deferred cash compensation in the period of grant 2,568 12,783 Recapitalization-related non-cash interest expense accretion 2,311 — Income taxes 3,386 3,012 Net losses on early retirement of debt 5,458 — Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance 2,377 (162 ) Depreciation, amortization and net gains and losses on fixed assets 2,411 2,372 Other adjustments (3,307 ) 982 Economic Income $ 37,777 $ 52,742 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Dividend On May 9, 2019 , the Company announced a cash dividend of $0.37 per Class A Share. The dividend is payable on May 28, 2019 , to holders of record as of the close of business on May 20, 2019 . 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% . The amendment to the tax receivable agreement was effective on April 1, 2019, the date on which the Registrant changed its tax classification from a partnership to a corporation. Accordingly, the Company will reflect the impact of the amendment in its financial statement in the second quarter of 2019. Changes in Tax Status and Legal Structure The Registrant changed its tax classification from a partnership to a corporation effective April 1, 2019, and subsequently converted from a Delaware limited liability company into a Delaware corporation effective May 9, 2019. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited, interim, consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”). In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. All significant intercompany transactions and balances have been eliminated in consolidation. The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. For example, incentive income for the majority of the Company’s multi-strategy assets under management is recognized in the fourth quarter each year, based on full year investment performance. |
Leases | Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , as amended, as of January 1, 2019 (“ASC 842”). The Company applied ASC 842 to lease arrangements outstanding as of the date of adoption. The Company did not restate prior periods and there were no adjustments to retained earnings upon adoption of ASC 842. The Company applied the package of practical expedients permitted under the transition guidance within the new standard, including carrying forward the historical lease classification and not reassessing whether certain costs capitalized under the prior guidance are eligible for capitalization under ASC 842. Adoption of ASC 842 resulted in the recognition of $126.0 million and $135.9 million of operating lease assets and liabilities, respectively, with the net of these amounts offsetting the deferred rent credit liability in existence immediately prior to adoption. The Company determines if an arrangement is a lease at inception. Right-of-use lease assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Right-of-use lease assets represent the Company’s right to use a leased asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company does not recognize right-of-use lease assets and lease liabilities for leases with an initial term of one year or less. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments. The Company gave consideration to its recently issued term loan, as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The operating lease assets include any lease payments made and excludes lease incentives. Lease terms include options to extend or terminate when it is reasonably certain that the Company will exercise that option. In addition, the Company separates lease and non-lease components embedded within lease agreements, except for data center leases. Right-of-use assets and liabilities related to operating leases are included within operating lease assets and operating lease liabilities, respectively, in the Company’s consolidated balance sheets. Right-of-use assets and liabilities related to finance leases are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets. Lease expense for operating lease payments, which is comprised of amortization of right-of-use assets and interest accretion on lease liabilities, is generally recognized on a straight-line basis over the lease term and included within general, administrative and other expenses in the consolidated statements of comprehensive income. Amortization of right-of-use lease assets related to finance leases is included within general, administrative and other expenses and interest accretion on lease liabilities related to finance leases is included within interest expense. Subrental income is recognized on a straight-line basis over the lease term and is included within other revenues in the consolidated statements of comprehensive income. Where the Company has entered into a sublease arrangement, the Company will evaluate the lease arrangement for impairment. To the extent an impairment of the right-of-use lease asset is recognized, the Company will amortize the remaining lease asset on a straight-line basis over the remaining lease term. |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements Other than the adoption of ASC 842 discussed above, none of the other changes to GAAP that went into effect in the three months ended March 31, 2019 had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements No 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 an input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability |
Overview (Tables)
Overview (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Shares and Operating Group Units | The following table presents the number of shares and units (excluding Preferred Units) of the Registrant and the Oz Operating Group, respectively, that were outstanding as of March 31, 2019 : As of March 31, 2019 Och-Ziff Capital Management Group Inc. Class A Shares 20,484,430 Class B Shares 29,208,952 Oz Operating Partnerships Group A Units 16,019,506 Group A-1 Units 9,779,446 Group B Units 20,484,430 Group E Units 13,542,440 Group P Units 3,410,000 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Calculation of Noncontrolling Interests Attributable to Group A Units | The table below sets forth the calculation of noncontrolling interests related to the Group A Units for each Oz Operating Partnership (rounding differences may occur). The blended participation percentages presented below take into account ownership changes throughout the year. In addition, the blended participation percentages in 2019 take into account the difference in methodology described above for the period prior to the Recapitalization Date compared to the period following the Recapitalization Date. For example, Oz Advisors LP had net income in the period prior to the Recapitalization Date, and as a result, allocates a portion of its net income for the three months ended March 31, 2019 to the Group A Units. Oz Management LP Oz Advisors LP Oz Advisors II LP Total Oz Operating Group (dollars in thousands) January 1, 2019 to March 31, 2019 Net (loss) income $ (32,049 ) $ 17,497 $ 2,053 $ (12,499 ) Blended participation percentage 44 % 38 % 0 % 59 % Net (Loss) Income Attributable to Group A Units $ (14,064 ) $ 6,695 $ — $ (7,369 ) January 1, 2018 to March 31, 2018 Net income (loss) $ 2,405 $ 17,735 $ (5,653 ) $ 14,487 Blended participation percentage 58 % 58 % 58 % 58 % Net Income (Loss) Attributable to Group A Units $ 1,389 $ 10,247 $ (3,266 ) $ 8,370 |
Components of Net (Loss) Income Attributable to Noncontrolling Interests | The following table presents the components of the net (loss) income attributable to noncontrolling interests: Three Months Ended March 31, 2019 2018 (dollars in thousands) Group A Units $ (7,369 ) $ 8,370 Other 135 265 $ (7,234 ) $ 8,635 |
Components of Shareholders' Equity Attributable to Noncontrolling Interests | The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: March 31, 2019 December 31, 2018 (dollars in thousands) Group A Units $ 441,056 $ 415,928 Other 3,781 3,503 $ 444,837 $ 419,431 |
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: Three Months Ended March 31, 2019 2018 Funds Preferred Units Total Funds Preferred Units Total (dollars in thousands) Beginning balance $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 Fair value of Debt Securities exchanged for 2016 Preferred Units — (167,799 ) (167,799 ) — — — Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units — (137,759 ) (137,759 ) — — — Issuance of 2019 Preferred Units, net of issuance costs — 136,964 136,964 — — — Change in redemption value — (101,406 ) (101,406 ) — — — Capital contributions 1,707 — 1,707 22,107 — 22,107 Capital distributions (15,611 ) — (15,611 ) (333 ) — (333 ) Comprehensive income 5,534 — 5,534 621 — 621 Ending Balance $ 149,290 $ 150,000 $ 299,290 $ 48,012 $ 420,000 $ 468,012 |
Investments and Fair Value Di_2
Investments and Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Investments Summary | The following table presents the components of the Company’s investments as reported in the consolidated balance sheets: March 31, 2019 December 31, 2018 (dollars in thousands) United States government obligations, at fair value $ 168,762 $ 179,510 CLOs, at fair value 158,468 181,868 Other investments, equity method 35,607 28,519 Total Investments $ 362,837 $ 389,897 |
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 March 31, 2019 : As of March 31, 2019 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 32,784 $ — $ — $ 32,784 Included within investments: United States government obligations $ 168,762 $ — $ — $ 168,762 CLOs (1) $ — $ — $ 158,468 $ 158,468 Investments of consolidated funds: Bank debt $ — $ 101,724 $ 59,169 $ 160,893 Corporate bonds — 3,862 — 3,862 Total Investments of Consolidated Funds $ — $ 105,586 $ 59,169 $ 164,755 _______________ (1) As of March 31, 2019 , investments in CLOs had contractual principal amounts of $147.3 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, 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 |
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 three months ended March 31, 2019 : December 31, 2018 Transfers Transfers Investment Investment Gains / Losses March 31, 2019 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 181,868 $ — $ — $ 808 $ (23,135 ) $ (1,073 ) $ 158,468 Investments of consolidated funds: Bank debt $ 75,613 $ 5,178 $ (23,617 ) $ 17,557 $ (16,082 ) $ 520 $ 59,169 Corporate bonds $ — $ — $ — $ 987 $ (981 ) $ (6 ) $ — The following tables summarize the changes in the Company’s Level III assets and liabilities for the three months ended March 31, 2018 : December 31, 2017 Transfers In Transfers Out Investment Purchases / Issuances Investment Sales Gains/Losses March 31, 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 211,749 $ — $ — $ 76,622 $ (2,775 ) $ 1,374 $ 286,970 Investments of consolidated funds: Bank debt $ 18,807 $ 1,004 $ (2,906 ) $ 28,560 $ (26,563 ) $ 232 $ 19,134 |
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: Three Months Ended March 31, 2019 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ (914 ) $ 974 Investments of consolidated funds: Bank debt $ 436 $ 89 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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. March 31, 2019 December 31, 2018 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ 164,755 $ 171,495 Other assets of consolidated funds 22,618 21,090 Total Assets $ 187,373 $ 192,585 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 16,943 14,541 Total Liabilities $ 16,943 $ 14,541 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 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 19 . 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: March 31, 2019 December 31, 2018 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 11,501,276 $ 10,236,438 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 67,347 62,038 Income and fees receivable 38,805 31,658 Investments in funds 171,623 190,674 Maximum Exposure to Loss $ 277,775 $ 284,370 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Cost | Three Months Ended March 31, 2019 (dollars in thousands) Lease Cost Operating lease cost $ 5,149 Short-term lease cost 18 Finance lease cost - amortization of leased assets 137 Finance lease cost - imputed interest on lease liabilities 24 Less: Sublease income (384 ) Net Lease Cost $ 4,944 Three Months Ended March 31, 2019 (dollars in thousands) Supplemental Lease Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 3,998 Operating cash flows for finance leases $ 24 Finance cash flows for finance leases $ 457 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 126,000 Financing leases $ 1,702 March 31, 2019 Lease Term and Discount Rate Weighted average remaining lease term Operating leases 9.9 years Finance leases 2.9 years Weighted average discount rate Operating leases 7.9 % Finance leases 7.9 % |
Maturity of Lease Liabilities | Operating Finance (dollars in thousands) Maturity of Lease Liabilities April 1, 2019 to December 31, 2019 $ 16,136 $ 157 2020 22,535 618 2021 21,042 618 2022 19,858 — 2023 19,146 — Thereafter 97,587 — Total Lease Payments 196,304 1,393 Imputed interest (60,138 ) (129 ) Total Lease Liabilities $ 136,166 $ 1,264 |
Sublease Rent Payments Receivable | Operating Lease (dollars in thousands) Sublease Rent Payments Receivable April 1, 2019 to December 31, 2019 $ 1,162 2020 1,550 2021 1,550 2022 1,550 2023 1,213 Thereafter — Total Sublease Rent Payments Receivable $ 7,025 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Instruments [Abstract] | |
Schedule of Maturities of Long-term Debt | Debt Securities 2018 Term Loan CLO Investments Loans Total (dollars in thousands) Maturity of Debt Obligations April 1, 2019 to December 31, 2019 $ — $ — $ — $ — 2020 — — — — 2021 — — — — 2022 40,000 8,125 — 48,125 2023 40,000 71,875 16,998 128,873 Thereafter 120,000 — 57,498 177,498 Total Payments 200,000 80,000 74,496 354,496 Unamortized discounts & deferred financing costs (30,244 ) (1,956 ) (492 ) (32,692 ) Total Debt Obligations $ 169,756 $ 78,044 $ 74,004 $ 321,804 |
CLO Investments Loans Table | Carrying amounts presented in the table 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. Borrowing Date Contractual Rate Final Maturity Date Carrying Value March 2019 December 2018 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ 16,875 $ 17,235 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,229 17,224 August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,676 21,674 September 14, 2017 EURIBOR plus 2.21% September 14, 2024 18,224 18,614 February 21, 2018 LIBOR plus 1.27% February 21, 2019 — 21,060 $ 74,004 $ 95,807 |
Securities Sold under Agreeme_2
Securities Sold under Agreements to Repurchase (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: 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 March 31, 2019 $ 61,437 $ — $ 61,437 $ 61,437 $ — 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: Investments in CLOs Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total (dollars in thousands) As of March 31, 2019 $ — $ — $ — $ 61,437 $ 61,437 As of December 31, 2018 $ — $ — $ — $ 62,801 $ 62,801 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 December 31, 2018 (dollars in thousands) Fixed Assets: Leasehold improvements $ 54,257 $ 54,257 Computer hardware and software 45,836 48,178 Furniture, fixtures and equipment 8,373 8,373 Accumulated depreciation and amortization (69,058 ) (67,558 ) Fixed assets, net 39,408 43,250 Goodwill 22,691 22,691 Prepaid expenses 17,055 11,629 Other 6,365 4,833 Total Other Assets, Net $ 85,519 $ 82,403 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Components of Other Liabilities | The following table presents the components of other liabilities as reported in the consolidated balance sheets: March 31, 2019 December 31, 2018 (dollars in thousands) Accrued expenses $ 20,722 $ 27,683 Unused trade commissions 8,649 8,615 Uncertain tax positions 7,000 7,000 Deferred rent credit — 6,231 Trades payable — 4,978 Other 7,059 9,096 Total Other Liabilities $ 43,430 $ 63,603 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Management Fees Incentive Income Management Fees Incentive Income (dollars in thousands) Multi-strategy funds $ 34,381 $ 14,984 $ 44,406 $ 11,832 Credit Opportunistic credit funds 10,435 30,920 11,107 34,235 Institutional Credit Strategies 13,723 — 11,193 — Real estate funds 4,832 7,294 4,764 4,767 Other 252 — 980 — Total $ 63,623 $ 53,198 $ 72,450 $ 50,834 |
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 three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (dollars in thousands) Beginning of Period $ 61,397 $ 143,710 Effects of adoption of ASU 2014-09 — (99,422 ) Amounts collected during the period 7,832 15,565 Amounts recognized during the period (5,460 ) (4,635 ) End of Period $ 63,769 $ 55,218 |
Income and Fees Receivable | The following table presents the composition of the Company’s income and fees receivable as of March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 (dollars in thousands) Management fees $ 22,977 $ 20,368 Incentive income 50,466 62,475 Income and Fees Receivable $ 73,443 $ 82,843 |
Equity-Based Compensation Exp_2
Equity-Based Compensation Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): Three Months Ended March 31, 2019 2018 (dollars in thousands) Expense recorded within compensation and benefits $ 37,223 $ 22,171 Corresponding tax benefit $ 1,936 $ 1,726 |
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 three months ended March 31, 2019 : 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, 2018 3,784,536 $ 30.00 433,133 $ 66.75 1,000,000 $ 11.82 Granted 1,334,766 $ 12.98 47,933 $ 13.45 — $ — Vested (610,372 ) $ 20.70 — $ — — $ — Canceled or forfeited (65,532 ) $ 25.36 — $ — — $ — March 31, 2019 4,443,398 $ 26.34 481,066 $ 61.45 1,000,000 $ 11.82 Group A Units Group E Units Group P Units Unvested Group A Units Weighted-Average Unvested Group E Units Weighted-Average Unvested Group P Units Weighted-Average December 31, 2018 74,962 $ 105.26 — $ — 3,660,000 $ 12.46 Granted — $ — 13,542,440 $ 8.22 — $ — Vested — $ — (1,173,671 ) $ 8.12 (200,000 ) $ 5.42 Canceled or forfeited (26,421 ) $ 105.26 — $ — (250,000 ) $ 12.46 March 31, 2019 48,541 $ 105.26 12,368,769 $ 8.23 3,210,000 $ 12.46 |
Settlement of Restricted Share Units | The following table presents information related to the settlement of RSUs: Three Months Ended March 31, 2019 2018 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 7,420 $ 3,845 Fair value of RSUs settled in cash $ — $ 276 Fair value of RSUs withheld to satisfy tax withholding obligations $ 246 $ 1,327 Number of RSUs withheld to satisfy tax withholding obligations 20,193 94,583 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
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: Three Months Ended March 31, 2019 2018 Statutory U.S. federal income tax rate 21.00 % 21.00 % Income passed through to noncontrolling interests -38.43 % -13.13 % Nondeductible transaction costs -37.08 % — % Tax effects of income recorded to equity in connection with the Recapitalization 28.96 % — % Foreign income taxes -18.71 % 2.98 % RSU excess deferred income tax write-off -18.52 % 1.82 % State and local income taxes -13.64 % 3.33 % Income not subject to entity level tax 7.82 % 2.93 % Other, net 8.08 % 0.18 % Effective Income Tax Rate -60.52 % 19.11 % |
General, Administrative and O_2
General, Administrative and Other (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): Three Months Ended March 31, 2019 2018 (dollars in thousands) Professional services $ 14,960 $ 13,471 Occupancy and equipment 7,584 6,465 Information processing and communications 5,362 6,794 Recurring placement and related service fees 3,342 4,349 Insurance 2,152 1,852 Business development 1,098 1,090 Foreign exchange losses and (gains) 48 1,083 Other expenses 3,242 2,746 Total General, Administrative and Other $ 37,788 $ 37,850 |
Earnings Per Class A Share (Tab
Earnings Per Class A Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Class A Share | The following tables present the computation of basic and diluted earnings per Class A Share: Three Months Ended March 31, 2019 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 $ 37,083 20,475,359 $ 1.81 Effect of dilutive securities: Group A Units — — 20,039,945 Group E Units — 1,016,611 — RSUs — — 4,606,223 Diluted $ 37,083 21,491,970 $ 1.73 Three Months Ended March 31, 2018 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 $ 3,490 19,223,092 $ 0.18 Effect of dilutive securities: Group A Units 4,776 26,455,615 — RSUs — — 3,475,715 Diluted $ 8,266 45,678,707 $ 0.18 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: Three Months Ended March 31, 2019 2018 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 2,725 $ 2,082 Incentive income $ 1,561 $ 1,264 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Operating Results | Segment Operating Results Three Months Ended March 31, 2019 2018 (dollars in thousands) Oz Funds: Economic Income Revenues $ 105,064 $ 113,647 Economic Income $ 33,290 $ 51,275 Real Estate: Economic Income Revenues $ 11,918 $ 9,399 Economic Income $ 4,487 $ 1,467 Total Company: Economic Income Revenues $ 116,982 $ 123,046 Economic Income $ 37,777 $ 52,742 |
Reconciliation of Segment Revenues to Consolidated Revenues | Reconciliation of Segment Revenues to Consolidated Revenues Three Months Ended March 31, 2019 2018 (dollars in thousands) Total consolidated revenues $ 123,194 $ 128,410 Adjustment to management fees (1) (3,608 ) (4,741 ) Adjustment to other revenues (2) — (39 ) Income of consolidated funds (2,604 ) (584 ) Total Segment Revenues $ 116,982 $ 123,046 _______________ (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 Income Attributable to Class A Shareholders | Reconciliation of Segment Economic Income to Net Income Attributable to Class A Shareholders Three Months Ended March 31, 2019 2018 (dollars in thousands) Net Income Attributable to Class A Shareholders $ 37,083 $ 3,490 Change in redemption value of Preferred Units (44,364 ) — Net (Loss) Income Allocated to Och-Ziff Capital Management Group Inc. (7,281 ) 3,490 Net (loss) income allocated to Group A Units (7,369 ) 8,370 Equity-based compensation, net of RSUs settled in cash 37,223 21,895 Adjustment to recognize deferred cash compensation in the period of grant 2,568 12,783 Recapitalization-related non-cash interest expense accretion 2,311 — Income taxes 3,386 3,012 Net losses on early retirement of debt 5,458 — Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance 2,377 (162 ) Depreciation, amortization and net gains and losses on fixed assets 2,411 2,372 Other adjustments (3,307 ) 982 Economic Income $ 37,777 $ 52,742 |
Overview - Schedule of Shares a
Overview - Schedule of Shares and Operating Group Units (Detail) - shares | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Class A Shares | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 20,484,430 | 19,905,126 | 19,112,977 | 18,957,321 |
Class B Shares | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 29,208,952 | 29,458,948 | 30,433,948 | 33,933,948 |
Group A Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 16,019,506 | |||
Group A-1 Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 9,779,446 | |||
Group B Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 20,484,430 | |||
Group E Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 13,542,440 | |||
Group P Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 3,410,000 |
Overview - Additional Informati
Overview - Additional Information (Detail) | Feb. 07, 2019shares | Mar. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Ratio of Group A Units Recapitalized as Group A Units | 0.65 | |
Ratio of Group A Units Recapitalized as Group A-1 Units | 0.35 | |
Number of Group A Units forfeited in connection with Recapitalization | 749,813 | |
Reverse share split ratio | 0.10 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Summary of Significant Accounting Policies [Line Items] | |||
Operating lease assets | $ 123,454 | $ 0 | |
Operating lease liabilities | $ 136,166 | $ 0 | |
Accounting Standards Update 2016-02 [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Operating lease assets | $ 126,000 | ||
Operating lease liabilities | $ 135,900 |
Recapitalization - Additional D
Recapitalization - Additional Details (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 07, 2019 | Mar. 31, 2019 |
Noncontrolling Interest [Line Items] | ||
Number of Group A Units forfeited in connection with Recapitalization | 749,813 | |
Percent of Group A Units reallocated in connection with Recapitalization | 35.00% | |
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 | |
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 | |
2016 Preferred Units | ||
Noncontrolling Interest [Line Items] | ||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200 | |
Amount of 2016 Preferred Units restructured as 2019 Preferred Units | $ 200 |
Noncontrolling Interests - Cal
Noncontrolling Interests - Calculation of Noncontrolling Interests Attributable to Group A Units (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) | $ (7,281) | $ 3,490 |
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | (7,234) | 8,635 |
Oz Management LP | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) | $ (32,049) | $ 2,405 |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 44.00% | 58.00% |
Oz Advisors LP | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) | $ 17,497 | $ 17,735 |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 38.00% | 58.00% |
Oz Advisors II LP | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) | $ 2,053 | $ (5,653) |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 0.00% | 58.00% |
Oz Operating Group | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) | $ (12,499) | $ 14,487 |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 59.00% | 58.00% |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | $ (7,369) | $ 8,370 |
Group A Units | Oz Management LP | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | (14,064) | 1,389 |
Group A Units | Oz Advisors LP | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | 6,695 | 10,247 |
Group A Units | Oz Advisors II LP | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | 0 | (3,266) |
Group A Units | Oz Operating Group | ||
Noncontrolling Interest [Line Items] | ||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | $ (7,369) | $ 8,370 |
Noncontrolling Interests - Com
Noncontrolling Interests - Components of Net (Loss) Income Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||
Net (Loss) Income Attributable to Noncontrolling Interests | $ (7,234) | $ 8,635 |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Net (Loss) Income Attributable to Noncontrolling Interests | (7,369) | 8,370 |
Other | ||
Noncontrolling Interest [Line Items] | ||
Net (Loss) Income Attributable to Noncontrolling Interests | $ 135 | $ 265 |
Noncontrolling Interests - C_2
Noncontrolling Interests - Components of Shareholders' Equity Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 444,837 | $ 419,431 |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | 441,056 | 415,928 |
Other | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 3,781 | $ 3,503 |
Noncontrolling Interests - Red
Noncontrolling Interests - Redeemable Noncontrolling Interest (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 577,660 | $ 445,617 |
Fair value of Debt Securities exchanged for 2016 Preferred Units | (167,799) | |
Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units | (137,759) | |
Issuance of 2019 Preferred Units, net of issuance costs | 136,964 | |
Change in redemption value | (101,406) | |
Capital contributions | 1,707 | 22,107 |
Capital distributions | (15,611) | (333) |
Comprehensive income | 5,534 | 621 |
Ending Balance | 299,290 | 468,012 |
Funds | ||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | 157,660 | 25,617 |
Change in redemption value | 0 | |
Capital contributions | 1,707 | 22,107 |
Capital distributions | (15,611) | (333) |
Comprehensive income | 5,534 | 621 |
Ending Balance | 149,290 | 48,012 |
Preferred Units | ||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | 420,000 | 420,000 |
Fair value of Debt Securities exchanged for 2016 Preferred Units | (167,799) | |
Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units | (137,759) | |
Issuance of 2019 Preferred Units, net of issuance costs | 136,964 | |
Change in redemption value | (101,406) | |
Capital contributions | 0 | 0 |
Capital distributions | 0 | 0 |
Comprehensive income | 0 | 0 |
Ending Balance | $ 150,000 | $ 420,000 |
Investments and Fair Value Di_3
Investments and Fair Value Disclosures - Schedule of Investments (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
United States government obligations, at fair value | $ 168,762 | $ 179,510 |
CLOs, at fair value | 158,468 | 181,868 |
Other investments, equity method | 35,607 | 28,519 |
Investments | $ 362,837 | $ 389,897 |
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 | Mar. 31, 2019 | Dec. 31, 2018 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | $ 168,762 | $ 179,510 | ||
CLOs | 158,468 | 181,868 | ||
Investments of Consolidated Funds [Abstract] | ||||
Investments | 362,837 | 389,897 | ||
Management company related | Fair Value, Measurements, Recurring | ||||
Included Within Cash And Cash Equivalents [Abstract] | ||||
United States government obligations | 32,784 | 58,054 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | 168,762 | 179,510 | ||
CLOs | 158,468 | [1] | 181,868 | [2] |
Management company related | Fair Value, Measurements, Recurring | Level I | ||||
Included Within Cash And Cash Equivalents [Abstract] | ||||
United States government obligations | 32,784 | 58,054 | ||
Included Within Investments [Abstract] | ||||
United States government obligations | 168,762 | 179,510 | ||
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 | 158,468 | [1] | 181,868 | [2] |
Funds | Fair Value, Measurements, Recurring | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 160,893 | 166,958 | ||
Corporate bonds | 3,862 | 4,537 | ||
Investments | 164,755 | 171,495 | ||
Funds | Fair Value, Measurements, Recurring | Level I | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 0 | 0 | ||
Corporate bonds | 0 | |||
Investments | 0 | 0 | ||
Funds | Fair Value, Measurements, Recurring | Level II | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 101,724 | 91,345 | ||
Corporate bonds | 3,862 | 4,537 | ||
Investments | 105,586 | 95,882 | ||
Funds | Fair Value, Measurements, Recurring | Level III | ||||
Investments of Consolidated Funds [Abstract] | ||||
Bank debt | 59,169 | 75,613 | ||
Corporate bonds | 0 | |||
Investments | 59,169 | 75,613 | ||
CLOs | Management company related | ||||
Investments of Consolidated Funds [Abstract] | ||||
Contractual principal on investments in CLOs | $ 147,300 | $ 171,500 | ||
[1] | As of March 31, 2019, investments in CLOs had contractual principal amounts of $147.3 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, 2018, investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments |
Investments and Fair Value Di_5
Investments and Fair Value Disclosures - Schedule of Changes in Company's Level III Investments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Management company related | CLOs | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 181,868 | $ 211,749 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Investment Purchases / Issuances | 808 | 76,622 |
Investment Sales / Settlements | (23,135) | (2,775) |
Gains / Losses | (1,073) | 1,374 |
Ending Balance | 158,468 | 286,970 |
Funds | Bank debt | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 75,613 | 18,807 |
Transfers In | 5,178 | 1,004 |
Transfers Out | (23,617) | (2,906) |
Investment Purchases / Issuances | 17,557 | 28,560 |
Investment Sales / Settlements | (16,082) | (26,563) |
Gains / Losses | 520 | 232 |
Ending Balance | 59,169 | $ 19,134 |
Funds | Corporate bonds | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 987 | |
Investment Sales / Settlements | (981) | |
Gains / Losses | (6) | |
Ending Balance | $ 0 |
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 | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
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 | $ (914) | $ 974 |
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 | $ 436 | $ 89 |
Investments and Fair Value Di_7
Investments and Fair Value Disclosures - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |||
Loans sold to CLOs | $ 0 | $ 23,400 | |
Risk retention percentage | 5.00% | ||
Retained interest investments made | $ 0 | 24,900 | |
Fair value of investments in retained interests | 89,300 | $ 89,400 | |
Cash flows from retained interests | $ 909 | $ 3,700 |
Variable Interest Entities - A
Variable Interest Entities - Assets and Liabilities of Funds that are VIEs and Consolidated by Company (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | $ 164,755 | $ 171,495 |
Other assets of consolidated funds | 22,618 | 21,090 |
Total Assets | 1,356,607 | 1,447,391 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 16,943 | 14,541 |
Total Liabilities | 954,002 | 879,186 |
Variable Interest Entity, Primary Beneficiary | ||
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 164,755 | 171,495 |
Other assets of consolidated funds | 22,618 | 21,090 |
Total Assets | 187,373 | 192,585 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 16,943 | 14,541 |
Total Liabilities | $ 16,943 | $ 14,541 |
Variable Interest Entities -_2
Variable Interest Entities - Assets and Liabilities Related to VIEs that are Not Consolidated (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Maximum risk of loss as a result of the Company’s involvement with VIEs: | ||
Income and fees receivable | $ 73,443 | $ 82,843 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Net assets of unconsolidated VIEs in which the Company has a variable interest | 11,501,276 | 10,236,438 |
Maximum risk of loss as a result of the Company’s involvement with VIEs: | ||
Unearned revenues | 67,347 | 62,038 |
Income and fees receivable | 38,805 | 31,658 |
Investments in funds | 171,623 | 190,674 |
Maximum Exposure to Loss | $ 277,775 | $ 284,370 |
Leases - Lease Cost (Detail)
Leases - Lease Cost (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 5,149 |
Short-term lease cost | 18 |
Finance lease cost - amortization of leased assets | 137 |
Finance lease cost - imputed interest on lease liabilities | 24 |
Less: Sublease income | (384) |
Net Lease Cost | $ 4,944 |
Leases - Supplemental Lease Cas
Leases - Supplemental Lease Cash Flow Information (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 3,998 |
Operating cash flows for finance leases | 24 |
Finance cash flows for finance leases | 457 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 126,000 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 1,702 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Detail) | Mar. 31, 2019 |
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 9 years 10 months 24 days |
Finance Lease, Weighted Average Remaining Lease Term | 2 years 10 months 24 days |
Operating Lease, Weighted Average Discount Rate, Percent | 7.90% |
Finance Lease, Weighted Average Discount Rate, Percent | 7.90% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 16,136 | |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 22,535 | |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 21,042 | |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 19,858 | |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 19,146 | |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 97,587 | |
Lessee, Operating Lease, Liability, Payments, Due | 196,304 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (60,138) | |
Operating lease liabilities | 136,166 | $ 0 |
Finance Lease, Liability, Payments, Remainder of Fiscal Year | 157 | |
Finance Lease, Liability, Payments, Due Year Two | 618 | |
Finance Lease, Liability, Payments, Due Year Three | 618 | |
Finance Lease, Liability, Payments, Due Year Four | 0 | |
Finance Lease, Liability, Payments, Due Year Five | 0 | |
Finance Lease, Liability, Payments, Due after Year Five | 0 | |
Finance Lease, Liability, Payments, Due | 1,393 | |
Finance Lease, Liability, Undiscounted Excess Amount | (129) | |
Finance Lease, Liability | $ 1,264 |
Leases - Additional Informatio
Leases - Additional Information (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Lease collateral | $ 6.2 |
Leases Sublease Rent Payments R
Leases Sublease Rent Payments Receivable (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Lessor, Operating Lease, Payments to be Received, Remainder of Fiscal Year | $ 1,162 |
Lessor, Operating Lease, Payments to be Received, Two Years | 1,550 |
Lessor, Operating Lease, Payments to be Received, Three Years | 1,550 |
Lessor, Operating Lease, Payments to be Received, Four Years | 1,550 |
Lessor, Operating Lease, Payments to be Received, Five Years | 1,213 |
Lessor, Operating Lease, Payments to be Received, Thereafter | 0 |
Lessor, Operating Lease, Payments to be Received | $ 7,025 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Debt Principal Payments (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Apr. 10, 2018 |
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 0 | ||
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 | 48,125 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 128,873 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 177,498 | ||
Borrowings outstanding | 354,496 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (32,692) | ||
Debt obligations | 321,804 | $ 289,987 | |
Debt Securities | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 0 | ||
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 | 40,000 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 40,000 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 120,000 | ||
Borrowings outstanding | 200,000 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (30,244) | ||
Debt obligations | 169,756 | ||
2018 Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 0 | ||
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 | 8,125 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 71,875 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 0 | ||
Borrowings outstanding | 80,000 | $ 250,000 | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (1,956) | ||
Debt obligations | 78,044 | ||
CLO Investments Loans | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 0 | ||
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 | 16,998 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 57,498 | ||
Borrowings outstanding | 74,496 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (492) | ||
Debt obligations | $ 74,004 | $ 95,807 |
Debt Obligations - Schedule _2
Debt Obligations - Schedule of CLO Investments Loans (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 321,804 | $ 289,987 |
CLO Investments Loans | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 74,004 | 95,807 |
CLO Investments Loans | November 28, 2016 | ||
Debt Instrument [Line Items] | ||
Maturity date | Dec. 15, 2023 | |
Borrowings outstanding | $ 16,875 | 17,235 |
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 | $ 17,229 | 17,224 |
CLO Investments Loans | June 07, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.48% | |
CLO Investments Loans | August 02, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Jan. 21, 2030 | |
Borrowings outstanding | $ 21,676 | 21,674 |
CLO Investments Loans | August 02, 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 | $ 18,224 | 18,614 |
CLO Investments Loans | September 14, 2017 | EURIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 2.21% | |
CLO Investments Loans | February 21, 2018 | ||
Debt Instrument [Line Items] | ||
Maturity date | Feb. 21, 2019 | |
Borrowings outstanding | $ 0 | $ 21,060 |
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 | May 08, 2019 | Feb. 07, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Apr. 10, 2018 |
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | $ 354,496 | |||||
Repayment of debt obligations | 141,068 | $ 69 | ||||
Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200,000 | |||||
Maturity date | Apr. 1, 2026 | |||||
Percent of original principal amount amortized in quarterly installments | 5.00% | |||||
Maximum annual amortization payments | $ 40,000 | |||||
Percent discount on repayment within nine months of repayment of 2019 Preferred Units | 5.00% | |||||
Borrowings outstanding | $ 200,000 | |||||
2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
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% | |||||
Borrowings outstanding | $ 80,000 | $ 250,000 | ||||
Repayment of debt obligations | $ 100,000 | 20,000 | ||||
Restricted payment basket for preferred dividends | 12,000 | |||||
Amount of additional Debt Securities that can be issued | $ 200,000 | |||||
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] | ||||||
Borrowings outstanding | $ 74,496 | |||||
Collateral on CLO Investments Loans | $ 89,400 | $ 112,800 | ||||
LIBOR | Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
LIBOR | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
Base Rate | Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 3.75% | |||||
Base Rate | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 3.75% | |||||
Subsequent Event | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of debt obligations | $ 25,000 |
Securities Sold under Agreeme_3
Securities Sold under Agreements to Repurchase - Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Transfers and Servicing of Financial Assets [Abstract] | ||
Gross Amounts of Recognized Liabilities | $ 61,437 | $ 62,801 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities in the Consolidated Balance Sheet | 61,437 | 62,801 |
Securities Transferred | 61,437 | 62,186 |
Net Amount | $ 0 | $ 615 |
Securities Sold under Agreeme_4
Securities Sold under Agreements to Repurchase - Remaining Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | $ 61,437 | $ 62,801 |
CLOs | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 61,437 | 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 | 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 | 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 | 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 | $ 61,437 | $ 62,801 |
Securities Sold under Agreeme_5
Securities Sold under Agreements to Repurchase - Additional Details (Details) - Repurchase agreements credit facility € in Millions | Mar. 31, 2019EUR (€) |
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 ($) $ / shares in Units, $ in Millions | Feb. 07, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
2016 Preferred Units | |||
Noncontrolling Interest [Line Items] | |||
Preferred Units, amount outstanding | $ 400 | ||
Amount of 2016 Preferred Units restructured as 2019 Preferred Units | $ 200 | ||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200 | ||
2019 Preferred Units | |||
Noncontrolling Interest [Line Items] | |||
Preferred Units, amount outstanding | $ 200 | ||
Preferred Units, distribution rate, percentage | 0.00% | ||
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% | ||
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 | ||
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 | ||
Debt Securities | |||
Noncontrolling Interest [Line Items] | |||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200 |
Other Assets, Net - Components
Other Assets, Net - Components of Other Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fixed Assets: | ||
Leasehold improvements | $ 54,257 | $ 54,257 |
Computer hardware and software | 45,836 | 48,178 |
Furniture, fixtures and equipment | 8,373 | 8,373 |
Accumulated depreciation and amortization | (69,058) | (67,558) |
Fixed assets, net | 39,408 | 43,250 |
Goodwill | 22,691 | 22,691 |
Prepaid expenses | 17,055 | 11,629 |
Other | 6,365 | 4,833 |
Total Other Assets, Net | $ 85,519 | $ 82,403 |
Other Liabilities - Components
Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $ 20,722 | $ 27,683 |
Unused trade commissions | 8,649 | 8,615 |
Uncertain tax positions | 7,000 | 7,000 |
Deferred rent credit | 0 | 6,231 |
Trades payable | 0 | 4,978 |
Other | 7,059 | 9,096 |
Total Other Liabilities | $ 43,430 | $ 63,603 |
Revenues - Management Fees and
Revenues - Management Fees and Incentive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Incentive income | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | $ 53,198 | $ 50,834 |
Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 63,623 | 72,450 |
Multi-strategy funds | Incentive income | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 14,984 | 11,832 |
Multi-strategy funds | Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 34,381 | 44,406 |
Opportunistic credit funds | Incentive income | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 30,920 | 34,235 |
Opportunistic credit funds | Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 10,435 | 11,107 |
Institutional Credit Strategies | Incentive income | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 0 | 0 |
Institutional Credit Strategies | Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 13,723 | 11,193 |
Real estate funds | Incentive income | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 7,294 | 4,767 |
Real estate funds | Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 4,832 | 4,764 |
Other | Incentive income | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | 0 | 0 |
Other | Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Investment management revenues | $ 252 | $ 980 |
Revenues - Unearned Incentive I
Revenues - Unearned Incentive Income Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||||
Effect of Adoption of ASU 2014-09 on Unearned Incentive | $ 0 | $ (99,422) | ||
Beginning of Year | $ 61,397 | $ 143,710 | ||
Amounts collected during the period | 7,832 | 15,565 | ||
Amounts recognized during the period | (5,460) | (4,635) | ||
End of Period | $ 63,769 | $ 55,218 |
Revenues - Income and Fees Rece
Revenues - Income and Fees Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | $ 73,443 | $ 82,843 |
Management fees | ||
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | 22,977 | 20,368 |
Incentive income | ||
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | $ 50,466 | $ 62,475 |
Equity-Based Compensation Exp_3
Equity-Based Compensation Expenses - Equity-Based Compensation Expense Summary (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expense recorded within compensation and benefits | $ 37,223 | $ 22,171 |
Corresponding tax benefit | $ 1,936 | $ 1,726 |
Equity-Based Compensation Exp_4
Equity-Based Compensation Expenses - Activity Related to Unvested Equity Awards (Detail) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Equity-classified RSUs | |
Unvested Units | |
Unvested Units, Beginning of Year | shares | 3,784,536 |
Unvested Units, Granted | shares | 1,334,766 |
Unvested Units, Vested | shares | (610,372) |
Unvested Units, Canceled or Forfeited | shares | (65,532) |
Unvested Units, End of Reporting Period | shares | 4,443,398 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ / shares | $ 30 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 12.98 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 20.70 |
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | $ / shares | 25.36 |
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ / shares | $ 26.34 |
Liability-classified RSUs | |
Unvested Units | |
Unvested Units, Beginning of Year | shares | 433,133 |
Unvested Units, Granted | shares | 47,933 |
Unvested Units, Vested | shares | 0 |
Unvested Units, Canceled or Forfeited | shares | 0 |
Unvested Units, End of Reporting Period | shares | 481,066 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ / shares | $ 66.75 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 13.45 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ / shares | $ 61.45 |
PSUs | |
Unvested Units | |
Unvested Units, Beginning of Year | shares | 1,000,000 |
Unvested Units, Granted | shares | 0 |
Unvested Units, Vested | shares | 0 |
Unvested Units, Canceled or Forfeited | shares | 0 |
Unvested Units, End of Reporting Period | shares | 1,000,000 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ / shares | $ 11.82 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ / shares | $ 11.82 |
Group A Units | |
Unvested Units | |
Unvested Units, Beginning of Year | shares | 74,962 |
Unvested Units, Granted | shares | 0 |
Unvested Units, Vested | shares | 0 |
Unvested Units, Canceled or Forfeited | shares | (26,421) |
Unvested Units, End of Reporting Period | shares | 48,541 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ / shares | $ 105.26 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | $ / shares | 105.26 |
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ / shares | $ 105.26 |
Group E Units | |
Unvested Units | |
Unvested Units, Beginning of Year | shares | 0 |
Unvested Units, Granted | shares | 13,542,440 |
Unvested Units, Vested | shares | (1,173,671) |
Unvested Units, Canceled or Forfeited | shares | 0 |
Unvested Units, End of Reporting Period | shares | 12,368,769 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ / shares | $ 0 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 8.22 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 8.12 |
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ / shares | $ 8.23 |
Group P Units | |
Unvested Units | |
Unvested Units, Beginning of Year | shares | 3,660,000 |
Unvested Units, Granted | shares | 0 |
Unvested Units, Vested | shares | (200,000) |
Unvested Units, Canceled or Forfeited | shares | (250,000) |
Unvested Units, End of Reporting Period | shares | 3,210,000 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ / shares | $ 12.46 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 5.42 |
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | $ / shares | 12.46 |
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ / shares | $ 12.46 |
Equity-Based Compensation Exp_5
Equity-Based Compensation Expenses - Settlement of RSUs (Detail) - RSUs - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of RSUs settled in Class A Shares | $ 7,420 | $ 3,845 |
Fair value of RSUs settled in cash | 0 | 276 |
Fair value of RSUs withheld to satisfy tax withholding obligations | $ 246 | $ 1,327 |
Number of RSUs withheld to satisfy tax withholding obligations | 20,193 | 94,583 |
Equity-Based Compensation Exp_6
Equity-Based Compensation Expenses - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Equity-classified RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 91.4 |
Weighted-Average Amortization Period | 2 years 266 days |
Liability-classified RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 27.9 |
Weighted-Average Amortization Period | 3 years 270 days |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 7.4 |
Weighted-Average Amortization Period | 1 year 333 days |
Group A Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 2.7 |
Weighted-Average Amortization Period | 1 year 16 days |
Group E Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 93.6 |
Weighted-Average Amortization Period | 2 years 4 months |
Group P Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 16.8 |
Weighted-Average Amortization Period | 1 year 222 days |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory U.S. Federal Income Tax Rate (Detail) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. federal income tax rate | 21.00% | 21.00% |
Income passed through to noncontrolling interests | (38.43%) | (13.13%) |
Nondeductible transaction costs | (37.08%) | 0.00% |
Effective Income Tax Rate Reconciliation, Recapitalization Adjustment, Percent | 28.96% | 0.00% |
Foreign income taxes | (18.71%) | 2.98% |
RSU excess deferred income tax write-off | (18.52%) | 1.82% |
State and local income taxes | (13.64%) | 3.33% |
Income not subject to entity level tax | 7.82% | 2.93% |
Other, net | 8.08% | 0.18% |
Effective Income Tax Rate | (60.52%) | 19.11% |
Income Taxes - Additional Info
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards | ||
Unrecognized Tax Benefits | $ 7 | $ 7 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 4.2 |
General, Administrative and O_3
General, Administrative and Other - Components of General, Administrative and Other Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | ||
Professional services | $ 14,960 | $ 13,471 |
Occupancy and equipment | 7,584 | 6,465 |
Information processing and communications | 5,362 | 6,794 |
Recurring placement and related service fees | 3,342 | 4,349 |
Insurance | 2,152 | 1,852 |
Business development | 1,098 | 1,090 |
Foreign exchange losses and (gains) | 48 | 1,083 |
Other expenses | 3,242 | 2,746 |
Total General, Administrative and Other | $ 37,788 | $ 37,850 |
Earnings Per Class A Share - C
Earnings Per Class A Share - Computation of Basic and Diluted Earnings Per Class A Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Line Items] | ||
Net Income Attributable to Class A Shareholders | $ 37,083 | $ 3,490 |
Net Income Attributable to Class A Shareholders, Diluted | $ 37,083 | $ 8,266 |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 20,475,359 | 19,223,092 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 21,491,970 | 45,678,707 |
Income Per Class A Share, Basic (in dollars per share) | $ 1.81 | $ 0.18 |
Income Per Class A Share, Diluted (in dollars per share) | $ 1.73 | $ 0.18 |
Group A Units | ||
Earnings Per Share [Line Items] | ||
Net Income Attributable to Class A Shareholders, Effect of dilutive securities | $ 0 | $ 4,776 |
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 26,455,615 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 20,039,945 | 0 |
Group E Units | ||
Earnings Per Share [Line Items] | ||
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 1,016,611 | |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 0 | |
RSUs | ||
Earnings Per Share [Line Items] | ||
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 0 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 4,606,223 | 3,475,715 |
Earnings Per Class A Share - A
Earnings Per Class A Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
RSUs | ||
Earnings Per Share [Line Items] | ||
Vested RSUs included in weighted-average Class A Shares outstanding | 184,254 | 184,132 |
Related Party Transactions - M
Related Party Transactions - Management Fees and Incentive Income Earned from Related Parties and Waived Fees (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Management fees | ||
Related Party Transaction [Line Items] | ||
Investment management revenues | $ 63,623 | $ 72,450 |
Incentive Income | ||
Related Party Transaction [Line Items] | ||
Investment management revenues | 53,198 | 50,834 |
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 | 2,725 | 2,082 |
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 | $ 1,561 | $ 1,264 |
Related Party Transactions - A
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Other revenues | $ 3,769 | $ 4,542 | |
General, administrative and other | 37,788 | 37,850 | |
Executive Managing Directors, Employees and Other Related Parties | Amount of Related Party Assets Under Management | |||
Related Party Transaction [Line Items] | |||
Assets under management | $ 1,400,000 | $ 2,600,000 | |
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 | 21.00% | 74.00% | |
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 - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Mar. 31, 2019 | Nov. 19, 2007 | |
Loss Contingencies [Line Items] | |||||
Percentage of tax savings to be paid under tax receivable agreement | 78.00% | 85.00% | |||
Estimated future payments under tax receivable agreement | $ 277.8 | ||||
Unfunded capital commitments of the Company to funds managed | 33.6 | ||||
Unfunded capital commitments of certain related parties to funds managed | $ 69.5 | ||||
Menaldi | |||||
Loss Contingencies [Line Items] | |||||
Settlements expense | $ 18.8 | $ 10 | $ 28.8 |
Segment Information - Segment
Segment Information - Segment Operating Results (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 123,194 | $ 128,410 |
Economic Income | (8,981) | 12,746 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 116,982 | 123,046 |
Economic Income | 37,777 | 52,742 |
Operating Segments | Oz Funds Segment | ||
Segment Reporting Information [Line Items] | ||
Revenues | 105,064 | 113,647 |
Economic Income | 33,290 | 51,275 |
Operating Segments | Real Estate Segment | ||
Segment Reporting Information [Line Items] | ||
Revenues | 11,918 | 9,399 |
Economic Income | $ 4,487 | $ 1,467 |
Segment Information - Reconcil
Segment Information - Reconciliation of Segment Revenues to Consolidated Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||
Revenues | $ 123,194 | $ 128,410 | |
Income of consolidated funds | (2,604) | (584) | |
Material Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Adjustment to management fees | [1] | (3,608) | (4,741) |
Adjustment to other revenue | [2] | 0 | (39) |
Income of consolidated funds | (2,604) | (584) | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 116,982 | $ 123,046 | |
[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 Income Attributable to Class A Shareholders (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Net Income Attributable to Class A Shareholders | $ 37,083 | $ 3,490 |
Change in redemption value of Preferred Units | (44,364) | 0 |
Net (Loss) Income Allocated to Och-Ziff Capital Management Group Inc. | (7,281) | 3,490 |
Income taxes | 3,386 | 3,012 |
Net losses on early retirement of debt | 5,458 | 0 |
Depreciation, amortization and net gains and losses on fixed assets | 2,411 | 2,372 |
Economic Income | (8,981) | 12,746 |
Material Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Change in redemption value of Preferred Units | (44,364) | 0 |
Net (loss) income allocated to Group A Units | (7,369) | 8,370 |
Equity-based compensation, net of RSUs settled in cash | 37,223 | 21,895 |
Adjustment to recognize deferred cash compensation in the period of grant | 2,568 | 12,783 |
Recapitalization-related non-cash interest expense accretion | 2,311 | 0 |
Income taxes | 3,386 | 3,012 |
Net losses on early retirement of debt | 5,458 | 0 |
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 2,377 | (162) |
Depreciation, amortization and net gains and losses on fixed assets | 2,411 | 2,372 |
Other adjustments | (3,307) | 982 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Economic Income | $ 37,777 | $ 52,742 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - $ / shares | May 09, 2019 | Apr. 01, 2019 | Mar. 31, 2019 | 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 | May 9, 2019 | |||
Cash dividend (in dollars per share) | $ 0.37 | |||
Dividends payable date | May 28, 2019 | |||
Dividends record date | May 20, 2019 | |||
Percentage of tax savings to be paid under tax receivable agreement | 75.00% |