Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | OAK | |
Entity Registrant Name | Oaktree Capital Group, LLC | |
Entity Central Index Key | 1,403,528 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 71,178,664 | |
Class B Units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 86,007,356 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash-equivalents | $ 1,049,331 | $ 959,465 |
Receivable for securities sold | 62,265 | 98,738 |
Derivative assets, at fair value | 9,005 | 5,751 |
Total assets | 9,122,721 | 9,014,796 |
Liabilities: | ||
Derivative liabilities, at fair value | 37,112 | 21,586 |
Debt obligations | 862,934 | 862,401 |
Total liabilities | 6,203,781 | 6,133,631 |
Commitments and contingencies (Note 17) | ||
Non-controlling redeemable interests in consolidated funds | 861,864 | 860,548 |
Unitholders’ capital: | ||
Paid-in capital | 866,576 | 788,413 |
Retained earnings | 99,789 | 80,128 |
Accumulated other comprehensive income | 357 | 443 |
Class A unitholders’ capital | 966,722 | 868,984 |
Non-controlling interests in consolidated subsidiaries | 1,079,586 | 1,121,237 |
Non-controlling interests in consolidated funds | 10,768 | 30,396 |
Total unitholders’ capital | 2,057,076 | 2,020,617 |
Total liabilities and unitholders’ capital | 9,122,721 | 9,014,796 |
Class A units, no par value, unlimited units authorized, 71,171,509 and 65,310,226 units issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | ||
Unitholders’ capital: | ||
Common stock | 0 | 0 |
Class B units, no par value, unlimited units authorized, 86,007,356 and 90,975,687 units issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | ||
Unitholders’ capital: | ||
Common stock | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | ||
Assets | ||
Cash and cash-equivalents | 634,691 | 481,631 |
U.S. Treasury and other securities | 229,274 | 176,602 |
Corporate investments (includes $56,377 and $50,778 measured at fair value as of March 31, 2018 and December 31, 2017, respectively) | 1,002,201 | 1,009,631 |
Due from affiliates | 153,425 | 223,224 |
Deferred tax assets | 243,241 | 202,460 |
Investments, at fair value | 56,377 | 50,778 |
Other assets | 562,633 | 564,529 |
Liabilities: | ||
Accrued compensation expense | 201,806 | 274,984 |
Accounts payable, accrued expenses and other liabilities | 173,855 | 158,716 |
Due to affiliates | 211,736 | 177,873 |
Derivative liabilities, at fair value | 34,921 | 20,633 |
Debt obligations | 745,546 | 746,274 |
Consolidated Funds | ||
Assets | ||
Cash and cash-equivalents | 414,640 | 477,834 |
Investments, at fair value | 5,717,648 | 5,660,540 |
Dividends and interest receivable | 22,156 | 21,144 |
Due from brokers | 62,911 | 54,289 |
Receivable for securities sold | 78,147 | 141,582 |
Derivative assets, at fair value | 346 | 731 |
Other assets | 1,408 | 599 |
Liabilities: | ||
Accounts payable, accrued expenses and other liabilities | 20,257 | 18,111 |
Payables for securities purchased | 590,154 | 580,906 |
Securities sold short, at fair value | 69,808 | 86,467 |
Derivative liabilities, at fair value | 2,191 | 953 |
Distributions payable | 6,625 | 7,354 |
Borrowings under credit facilities | 862,934 | 862,401 |
Debt obligations | $ 3,318,869 | $ 3,219,592 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Class A Units | ||
Par Value (in dollars per share) | $ 0 | $ 0 |
Units Authorized (in shares) | Unlimited | Unlimited |
Issued (in shares) | 71,171,509 | 65,310,226 |
Outstanding (in shares) | 71,171,509 | 65,310,226 |
Class B Units | ||
Par Value (in dollars per share) | $ 0 | $ 0 |
Units Authorized (in shares) | Unlimited | Unlimited |
Issued (in shares) | 86,007,356 | 90,975,687 |
Outstanding (in shares) | 86,007,356 | 90,975,687 |
Oaktree Capital Group Excluding Consolidated Funds | ||
Investments, at fair value | $ 56,377 | $ 50,778 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Management fees | $ 185,415 | $ 180,928 |
Incentive income | 151,906 | 108,657 |
Total revenues | 337,321 | 289,585 |
Expenses: | ||
Compensation and benefits | (108,754) | (104,487) |
Equity-based compensation | (14,621) | (14,953) |
Incentive income compensation | (84,815) | (34,608) |
Total compensation and benefits expense | (208,190) | (154,048) |
General and administrative | (32,964) | (32,219) |
Depreciation and amortization | (6,402) | (3,824) |
Consolidated fund expenses | (3,480) | (2,471) |
Total expenses | (251,036) | (192,562) |
Other income (loss): | ||
Interest expense | (40,579) | (48,770) |
Interest and dividend income | 62,619 | 47,960 |
Net realized gain (loss) on consolidated funds’ investments | 14,599 | (1,872) |
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments | (14,386) | 24,678 |
Investment income | 34,563 | 50,451 |
Non-Operating Group income (expense) | 697 | 4,663 |
Total other income | 57,513 | 77,110 |
Income before income taxes | 143,798 | 174,133 |
Income taxes | (6,397) | (12,302) |
Net income | 137,401 | 161,831 |
Less: | ||
Net income attributable to Oaktree Capital Group, LLC | $ 52,732 | $ 54,915 |
Distributions declared per Class A unit (in dollars per share) | $ 0.76 | $ 0.63 |
Net income per unit (basic and diluted): | ||
Net income per Class A unit (in dollars per share) | $ 0.78 | $ 0.87 |
Weighted average number of Class A units outstanding (in shares) | 67,918 | 63,022 |
Consolidated Funds | ||
Less: | ||
Net (income) loss attributable to non-controlling interests | $ (10,725) | $ (9,692) |
Consolidated Subsidiaries | ||
Less: | ||
Net (income) loss attributable to non-controlling interests | $ (73,944) | $ (97,224) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net income | $ 137,401 | $ 161,831 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (219) | (4,657) |
Unrealized gain on interest-rate swap designated as cash-flow hedge | 60 | |
Other comprehensive loss, net of tax | (219) | (4,597) |
Total comprehensive income | 137,182 | 157,234 |
Less: Comprehensive income attributable to non-controlling interests | (84,536) | (104,192) |
Comprehensive income attributable to Oaktree Capital Group, LLC | 52,646 | 53,042 |
Oaktree Capital Group, LLC | ||
Net income | 52,732 | 54,915 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (86) | (1,897) |
Unrealized gain on interest-rate swap designated as cash-flow hedge | 24 | |
Other comprehensive loss, net of tax | (86) | (1,873) |
Total comprehensive income | 52,646 | 53,042 |
Less: Comprehensive income attributable to non-controlling interests | 0 | 0 |
Comprehensive income attributable to Oaktree Capital Group, LLC | 52,646 | 53,042 |
Non-controlling Interests in Consolidated Subsidiaries | ||
Net income | 73,944 | 97,224 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (133) | (2,760) |
Unrealized gain on interest-rate swap designated as cash-flow hedge | 36 | |
Other comprehensive loss, net of tax | (133) | (2,724) |
Total comprehensive income | 73,811 | 94,500 |
Less: Comprehensive income attributable to non-controlling interests | (73,811) | (94,500) |
Comprehensive income attributable to Oaktree Capital Group, LLC | 0 | 0 |
Non-controlling Interests in Consolidated Funds | ||
Net income | 10,725 | 9,692 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized gain on interest-rate swap designated as cash-flow hedge | 0 | |
Other comprehensive loss, net of tax | 0 | 0 |
Total comprehensive income | 10,725 | 9,692 |
Less: Comprehensive income attributable to non-controlling interests | (10,725) | (9,692) |
Comprehensive income attributable to Oaktree Capital Group, LLC | $ 0 | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 137,401 | $ 161,831 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Adoption of revenue recognition standard | 48,709 | 0 |
Investment income | (34,563) | (50,451) |
Depreciation and amortization | 6,402 | 3,824 |
Equity-based compensation | 14,621 | 14,953 |
Net realized and unrealized (gain) loss from consolidated funds’ investments | (213) | (22,806) |
Amortization (accretion) of original issue and market discount of consolidated funds’ investments, net | (838) | (413) |
Income distributions from corporate investments in funds and companies | 60,794 | 44,465 |
Other non-cash items | 139 | 517 |
Cash flows due to changes in operating assets and liabilities: | ||
Net cash provided by (used in) operating activities | 147,730 | (245,574) |
Cash flows from investing activities: | ||
Purchases of U.S. Treasury and other securities | (142,163) | (220,035) |
Proceeds from maturities and sales of U.S. Treasury and other securities | 89,654 | 380,741 |
Corporate investments in funds and companies | (76,149) | (8,150) |
Distributions and proceeds from corporate investments in funds and companies | 209,006 | 79,998 |
Purchases of fixed assets | (205) | (4,250) |
Net cash provided by investing activities | 80,143 | 228,304 |
Cash flows from financing activities: | ||
Net cash used in financing activities | (125,750) | (14,751) |
Effect of exchange rate changes on cash | 58 | (3,168) |
Net increase (decrease) in cash and cash-equivalents | 102,181 | (35,189) |
Deconsolidation of funds | (12,315) | 0 |
Cash and cash-equivalents, beginning balance | 959,465 | 959,200 |
Cash and cash-equivalents, ending balance | 1,049,331 | 924,011 |
Consolidated Funds | ||
Cash flows due to changes in operating assets and liabilities: | ||
Increase in dividends and interest receivable | (826) | (631) |
(Increase) decrease in due from brokers | (8,622) | 48,895 |
(Increase) decrease in receivables for securities sold | 65,327 | (104,540) |
Increase in other assets | (809) | (78) |
Increase in accounts payable, accrued expenses and other liabilities | 1,985 | 6,246 |
Increase in payables for securities purchased | 833 | 332,907 |
Purchases of securities | (1,147,150) | (1,537,496) |
Proceeds from maturities and sales of securities | 1,015,016 | 912,891 |
Cash flows from financing activities: | ||
Payment of debt issuance costs | (899) | 0 |
Repayment on debt obligations issued by CLOs | (455,691) | (412,500) |
Distributions to non-controlling interests | (93,323) | (9,762) |
Contributions from non-controlling interests | 59,745 | 34,786 |
Proceeds from debt obligations issued by CLOs | 505,480 | 412,500 |
Borrowings on credit facilities | 0 | 91,500 |
Repayments on credit facilities | 0 | (8,251) |
Cash and cash-equivalents, beginning balance | 477,834 | |
Cash and cash-equivalents, ending balance | 414,640 | 561,122 |
Oaktree Capital Group Excluding Consolidated Funds | ||
Cash flows due to changes in operating assets and liabilities: | ||
(Increase) decrease in other assets | (6,298) | 1,325 |
Increase in net due to affiliates | 69,374 | 69,025 |
Decrease in accrued compensation expense | (73,603) | (132,186) |
Increase in accounts payable, accrued expenses and other liabilities | 51 | 6,148 |
Cash flows from financing activities: | ||
Proceeds from issuance of Class A units | 219,750 | 0 |
Purchase of OCGH units | (219,525) | 0 |
Repurchase and cancellation of units | (10,453) | (9,689) |
Distributions to Class A unitholders | (53,426) | (39,785) |
Distributions to OCGH unitholders | (73,933) | (72,376) |
Payment of debt issuance costs | (2,235) | 0 |
Distributions to non-controlling interests | (1,240) | (1,174) |
Cash and cash-equivalents, beginning balance | 481,631 | |
Cash and cash-equivalents, ending balance | $ 634,691 | $ 362,889 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Changes in Unitholders' Capital (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital, value | $ 2,020,617 | $ 1,885,171 | ||
Cumulative-effect adjustment from adoption of accounting guidance | $ 48,709 | $ 0 | ||
Issuance of units | 219,750 | |||
Repurchase and cancellation of units | (229,978) | (9,689) | ||
Deferred tax effect resulting from the purchase of OCGH units | 6,051 | |||
Equity reallocation between controlling and non-controlling interests | (73,830) | (12,061) | ||
Capital increase related to equity-based compensation | 13,697 | 13,673 | ||
Distributions declared | (148,399) | (113,924) | ||
Net income | 126,848 | 152,828 | ||
Foreign currency translation adjustment, net of tax | (219) | (4,657) | ||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax | 60 | |||
Unitholders' capital, value | 2,057,076 | 1,923,462 | ||
Paid-in Capital | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital, value | 788,413 | 749,618 | ||
Cumulative-effect adjustment from adoption of accounting guidance | 0 | (352) | ||
Issuance of units | 219,750 | |||
Repurchase and cancellation of units | (227,424) | (7,186) | ||
Equity reallocation between controlling and non-controlling interests | 73,830 | 12,061 | ||
Capital increase related to equity-based compensation | 5,956 | 5,571 | ||
Distributions declared | 0 | |||
Unitholders' capital, value | 866,576 | 759,712 | ||
Retained Earnings | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital, value | 80,128 | 54,494 | ||
Cumulative-effect adjustment from adoption of accounting guidance | 20,355 | 352 | ||
Distributions declared | (53,426) | (39,785) | ||
Net income | 52,732 | 54,915 | ||
Unitholders' capital, value | 99,789 | 69,976 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital, value | 443 | 1,793 | ||
Foreign currency translation adjustment, net of tax | (86) | (1,897) | ||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax | 24 | |||
Unitholders' capital, value | 357 | (80) | ||
Non-controlling Interests in Consolidated Subsidiaries | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital, value | 1,121,237 | 1,050,319 | ||
Cumulative-effect adjustment from adoption of accounting guidance | $ 28,354 | $ 0 | ||
Repurchase and cancellation of units | (2,554) | (2,503) | ||
Equity reallocation between controlling and non-controlling interests | (73,830) | (12,061) | ||
Capital increase related to equity-based compensation | 7,741 | 8,102 | ||
Distributions declared | (75,173) | (73,550) | ||
Net income | 73,944 | 97,224 | ||
Foreign currency translation adjustment, net of tax | (133) | (2,760) | ||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax | 36 | |||
Unitholders' capital, value | 1,079,586 | 1,064,807 | ||
Non-controlling Interests in Consolidated Funds | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital, value | 30,396 | 28,947 | ||
Distributions declared | (19,800) | (589) | ||
Net income | 172 | 689 | ||
Foreign currency translation adjustment, net of tax | 0 | 0 | ||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax | 0 | |||
Unitholders' capital, value | $ 10,768 | $ 29,047 | ||
Class A Units | Common Units | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital (in shares) | 65,310 | 63,032 | ||
Issuance of units (in shares) | 6,143 | 1,333 | ||
Cancellation of units associated with forfeitures (in shares) | (81) | |||
Repurchase and cancellation of units (in shares) | (200) | (180) | ||
Unitholders' capital (in shares) | 71,172 | 64,185 | ||
Class B Units | Common Units | ||||
Increase (decrease) in Stockholders' Equity: | ||||
Unitholders' capital (in shares) | 90,976 | 91,758 | ||
Issuance of units (in shares) | 114 | 21 | ||
Cancellation of units (in shares) | (140) | |||
Repurchase and cancellation of units (in shares) | (5,083) | (71) | ||
Unitholders' capital (in shares) | 86,007 | 91,568 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Oaktree Capital Group, LLC (together with its subsidiaries, “Oaktree” or the “Company”) is a leader among global investment managers specializing in alternative investments. Oaktree emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. Funds managed by Oaktree (the “Oaktree funds”) include commingled funds, separate accounts, collateralized loan obligation vehicles (“CLOs”) and publicly-traded business development companies (“BDCs”). Commingled funds include open-end and closed-end limited partnerships in which the Company makes an investment and for which it serves as the general partner. CLOs are structured finance vehicles in which the Company typically makes an investment and for which it serves as collateral manager. Oaktree Capital Group, LLC is a Delaware limited liability company that was formed on April 13, 2007. The Company is owned by its Class A and Class B unitholders. Oaktree Capital Group Holdings GP, LLC acts as the Company’s manager and is the general partner of Oaktree Capital Group Holdings, L.P. (“OCGH”), which owns 100% of the Company’s outstanding Class B units. OCGH is owned by the Company’s senior executives, current and former employees, and certain other investors (collectively, the “OCGH unitholders”). The Company’s operations are conducted through a group of operating entities collectively referred to as the “Oaktree Operating Group.” OCGH has a direct economic interest in the Oaktree Operating Group and the Company has an indirect economic interest in the Oaktree Operating Group. The interests in the Oaktree Operating Group are referred to as the “Oaktree Operating Group units.” An Oaktree Operating Group unit is not a separate legal interest but represents one limited partnership interest in each of the Oaktree Operating Group entities. Class A units are entitled to one vote per unit. Class B units are entitled to ten votes per unit and do not represent an economic interest in the Company. The number of Class B units held by OCGH increases or decreases in response to corresponding changes in OCGH’s economic interest in the Oaktree Operating Group; consequently, the OCGH unitholders’ economic interest in the Oaktree Operating Group is reflected within non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. Basis of Presentation The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) such that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. Certain of the Oaktree funds consolidated by the Company are investment companies that follow a specialized basis of accounting established by GAAP. All intercompany transactions and balances have been eliminated in consolidation. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 23, 2018. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies of the Company Consolidation The Company consolidates entities in which it has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. A limited partnership or similar entity is a variable interest entity (“VIE”) if the unaffiliated limited partners do not have substantive kick-out or participating rights. Most of the Oaktree funds are VIEs because they have not granted unaffiliated limited partners substantive kick-out or participating rights. The Company consolidates those VIEs in which it is the primary beneficiary. An entity is deemed to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Company holds a variable interest is a VIE and (b) whether the Company’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance-based fees), would give it a controlling financial interest. A decision maker’s fee arrangement is not considered a variable interest if (a) it is compensation for services provided, commensurate with the level of effort required to provide those services, and part of a compensation arrangement that includes only terms, conditions or amounts that are customarily present in arrangements for similar services negotiated at arm’s length (“at-market”), and (b) the decision maker does not hold any other variable interests that absorb more than an insignificant amount of the potential VIE’s expected residual returns. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Company, affiliates of the Company or third parties) or amendments to the governing documents of the respective Oaktree funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. The Company does not consolidate most of the Oaktree funds because it is not the primary beneficiary of those funds due to the fact that its fee arrangements are considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in those funds that are considered to be more than insignificant. Please see note 5 for more information regarding both consolidated and unconsolidated VIEs. For entities that are not VIEs, consolidation is evaluated through a majority voting interest model. “Consolidated funds” refers to Oaktree-managed funds and CLOs that the Company is required to consolidate. When funds or CLOs are consolidated, the Company reflects the assets, liabilities, revenues, expenses and cash flows of the funds or CLOs on a gross basis, and the majority of the economic interests in those funds or CLOs, which are held by third-party investors, are reflected as non-controlling interests in consolidated funds or debt obligations of CLOs in the condensed consolidated financial statements. All of the revenues earned by the Company as investment manager of the consolidated funds are eliminated in consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the consolidation of a fund does not impact net income or loss attributable to the Company. Certain entities in which the Company has the ability to exert significant influence, including unconsolidated Oaktree funds for which the Company acts as general partner, are accounted for under the equity method of accounting. Non-controlling Redeemable Interests in Consolidated Funds The Company records non-controlling interests to reflect the economic interests of the unaffiliated limited partners. These interests are presented as non-controlling redeemable interests in consolidated funds within the condensed consolidated statements of financial condition, outside of the permanent capital section. Limited partners in open-end and evergreen funds generally have the right to withdraw their capital, subject to the terms of the respective limited partnership agreements, over periods ranging from one month to three years . While limited partners in consolidated closed-end funds generally have not been granted redemption rights, these limited partners do have withdrawal or redemption rights in certain limited circumstances that are beyond the control of the Company, such as instances in which retaining the limited partnership interest could cause the limited partner to violate a law, regulation or rule. The allocation of net income or loss to non-controlling redeemable interests in consolidated funds is based on the relative ownership interests of the unaffiliated limited partners after the consideration of contractual arrangements that govern allocations of income or loss. At the consolidated level, potential incentives are allocated to non-controlling redeemable interests in consolidated funds until such incentives become allocable to the Company under the substantive contractual terms of the limited partnership agreements of the funds. Non-controlling Interests in Consolidated Funds Non-controlling interests in consolidated funds represent the equity interests held by third-party investors in CLOs that had not yet priced as of the respective period end. All non-controlling interests in those CLOs are attributed a share of income or loss arising from the respective CLO based on the relative ownership interests of third-party investors after consideration of contractual arrangements that govern allocations of income or loss. Investors in those CLOs are generally unable to redeem their interests until the respective CLO liquidates, is called or otherwise terminates. Non-controlling Interests in Consolidated Subsidiaries Non-controlling interests in consolidated subsidiaries reflect the portion of unitholders’ capital attributable to OCGH unitholders (“OCGH non-controlling interest”) and third parties. All non-controlling interests in consolidated subsidiaries are attributed a share of income or loss in the respective consolidated subsidiary based on the relative economic interests of the OCGH unitholders or third parties after consideration of contractual arrangements that govern allocations of income or loss. Please see note 13 for more information. Acquisitions The Company accounts for business combinations using the acquisition method of accounting, which requires the use of estimates and judgment to measure the fair value of identifiable tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquiree as of the acquisition date. Contingent consideration that is determined to be part of the business combination is recognized at fair value as of the acquisition date and is included in the purchase price. Transaction costs are expensed as incurred. Transactions that do not meet the definition of a business are accounted for as asset acquisitions. The cost of an asset acquisition is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Transaction costs are included in the cost of the acquisition and no goodwill is recognized. Goodwill and Intangibles Goodwill represents the excess of cost over the fair value of identifiable net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead is tested for impairment annually in the fourth quarter of each fiscal year, or more frequently when events or circumstances indicate that impairment may have occurred. The Company’s acquired identifiable intangible assets primarily relate to contractual rights to earn future management fees and incentive income. Finite-lived intangible assets are amortized over their estimated useful lives, which range from seven to 25 years, and are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Fair Value of Financial Instruments GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market observability. Market price observability is affected by a number of factors, such as the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I – Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement. The types of investments in Level I include exchange-traded equities, debt and derivatives with quoted prices. • Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. The types of investments in Level II generally include corporate bonds and loans, government and agency securities, less liquid and restricted equity investments, over-the-counter traded derivatives, debt obligations of consolidated CLOs, and other investments where the fair value is based on observable inputs. • Level III – Valuations for which one or more significant inputs are unobservable. These inputs reflect the Company’s assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices of quoted securities in markets for which there are few transactions, less public information exists or prices vary among brokered market makers. The types of investments in Level III include non-publicly traded equity, debt, real estate and derivatives. In some instances, the inputs used to value an instrument may fall into multiple levels of the fair-value hierarchy. In such instances, the instrument’s level within the fair-value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair-value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. Transfers of assets into or out of each fair value hierarchy level as a result of changes in the observability of the inputs used in measuring fair value are accounted for as of the beginning of the reporting period. Transfers resulting from a specific event, such as a reorganization or restructuring, are accounted for as of the date of the event that caused the transfer. In the absence of observable market prices, the Company values Level III investments using valuation methodologies applied on a consistent basis. The quarterly valuation process for Level III investments begins with each portfolio company, property or security being valued by the investment and/or valuation teams. With the exception of open-end funds, all unquoted Level III investment values are reviewed and approved by (i) the Company’s valuation officer, who is independent of the investment teams, (ii) a designated investment professional of each strategy and (iii) for a substantial majority of unquoted Level III holdings as measured by market value, a valuation committee of the respective strategy. For open-end funds, unquoted Level III investment values are reviewed and approved by the Company’s valuation officer. For certain investments, the valuation process also includes a review by independent valuation parties, at least annually, to determine whether the fair values determined by management are reasonable. Results of the valuation process are evaluated each quarter, including an assessment of whether the underlying calculations should be adjusted or recalibrated. In connection with this process, the Company periodically evaluates changes in fair-value measurements for reasonableness, considering items such as industry trends, general economic and market conditions, and factors specific to the investment. Certain assets are valued using prices obtained from pricing vendors or brokers. The Company seeks to obtain prices from at least two pricing vendors for the subject or similar securities. In cases where vendor pricing is not reflective of fair value, a secondary vendor is unavailable, or no vendor pricing is available, a comparison value made up of quotes for the subject or similar securities received from broker dealers may be used. These investments may be classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. The Company evaluates the prices obtained from brokers or pricing vendors based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Company also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Company performs due diligence procedures surrounding pricing vendors to understand their methodology and controls to support their use in the valuation process. Fair Value Option The Company has elected the fair value option for certain corporate investments that otherwise would not have reflected unrealized gains and losses in current-period earnings. Such election is irrevocable and is applied on an investment-by-investment basis at initial recognition. Unrealized gains and losses resulting from changes in fair value are reflected as a component of investment income in the condensed consolidated statements of operations. The Company’s accounting for these investments is similar to its accounting for investments held by the consolidated funds at fair value and the valuation methods are consistent with those used to determine the fair value of the consolidated funds’ investments. The Company has elected the fair value option for the financial assets and financial liabilities of its consolidated CLOs. The assets and liabilities of CLOs are primarily reflected within the investments, at fair value and within the debt obligations of CLOs line items in the condensed consolidated statements of financial condition. The Company’s accounting for CLO assets is similar to its accounting for its funds with respect to both carrying investments held by CLOs at fair value and the valuation methods used to determine the fair value of those investments. The fair value of CLO liabilities are measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Realized gains or losses and changes in the fair value of CLO assets, respectively, are included in net realized gain on consolidated funds’ investments and net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Interest income of CLOs is included in interest and dividend income, and interest expense and other expenses, respectively, are included in interest expense and consolidated fund expenses in the condensed consolidated statements of operations. Changes in the fair value of a CLO’s financial liabilities in accordance with the CLO measurement guidance are included in net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Please see notes 7 and 11 for more information. Accounting Policies of Consolidated Funds Investments, at Fair Value The consolidated funds include investment limited partnerships and CLOs that reflect their investments, including majority-owned and controlled investments, at fair value. The Company has retained the specialized investment company accounting guidance under GAAP for investment limited partnerships with respect to consolidated investments and has elected the fair value option for the financial assets of CLOs. Thus, the consolidated investments are reflected in the condensed consolidated statements of financial condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Non-publicly traded debt and equity securities and other securities or instruments for which reliable market quotations are not available are valued by management using valuation methodologies applied on a consistent basis. These securities may initially be valued at the acquisition price as the best indicator of fair value. The Company reviews the significant unobservable inputs, valuations of comparable investments and other similar transactions for investments valued at acquisition price to determine whether another valuation methodology should be utilized. Subsequent valuations will depend on the facts and circumstances known as of the valuation date and the application of valuation methodologies as further described below under “—Non-publicly Traded Equity and Real Estate Investments.” The fair value may also be based on a pending transaction expected to close after the valuation date. Exchange-traded Investments Securities listed on one or more national securities exchanges are valued at their last reported sales price on the date of valuation. If no sale occurred on the valuation date, the security is valued at the mean of the last “bid” and “ask” prices on the valuation date. Securities that are not readily marketable due to legal restrictions that may limit or restrict transferability are generally valued at a discount from quoted market prices. The discount would reflect the amount market participants would require due to the risk relating to the inability to access a public market for the security for the specified period and would vary depending on the nature and duration of the restriction and the perceived risk and volatility of the underlying securities. Securities with longer duration restrictions or higher volatility are generally valued at a higher discount. Such discounts are generally estimated based on put option models or an analysis of market studies. Instances where the Company has applied discounts to quoted prices of restricted listed securities have been infrequent. The impact of such discounts is not material to the Company’s condensed consolidated statements of financial condition and results of operations for all periods presented. Credit-oriented Investments (including Real Estate Loan Portfolios) Investments in corporate and government debt which are not listed or admitted to trading on any securities exchange are valued at the mean of the last bid and ask prices on the valuation date based on quotations supplied by recognized quotation services or by reputable broker-dealers. The market-yield approach is considered in the valuation of non-publicly traded debt securities, utilizing expected future cash flows and discounted using estimated current market rates. Discounted cash-flow calculations may be adjusted to reflect current market conditions and/or the perceived credit risk of the borrower. Consideration is also given to a borrower’s ability to meet principal and interest obligations; this may include an evaluation of collateral and/or the underlying value of the borrower utilizing techniques described below under “—Non-publicly Traded Equity and Real Estate Investments.” Non-publicly Traded Equity and Real Estate Investments The fair value of equity and real estate investments is determined using a cost, market or income approach. The cost approach is based on the current cost of reproducing a real estate investment less deterioration and functional and economic obsolescence. The market approach utilizes valuations of comparable public companies and transactions, and generally seeks to establish the enterprise value of the portfolio company or investment property using a market-multiple methodology. This approach takes into account the financial measure (such as EBITDA, adjusted EBITDA, free cash flow, net operating income, net income, book value or net asset value) believed to be most relevant for the given company or investment property. Consideration also may be given to factors such as acquisition price of the security or investment property, historical and projected operational and financial results for the portfolio company, the strengths and weaknesses of the portfolio company or investment property relative to its comparable companies or properties, industry trends, general economic and market conditions, and others deemed relevant. The income approach is typically a discounted cash-flow method that incorporates expected timing and level of cash flows. It incorporates assumptions in determining growth rates, income and expense projections, discount and capitalization rates, capital structure, terminal values, and other factors. The applicability and weight assigned to market and income approaches are determined based on the availability of reliable projections and comparable companies and transactions. The valuation of securities may be impacted by expectations of investors’ receptiveness to a public offering of the securities, the size of the holding of the securities and any associated control, information with respect to transactions or offers for the securities (including the transaction pursuant to which the investment was made and the elapsed time from the date of the investment to the valuation date), and applicable restrictions on the transferability of the securities. These valuation methodologies involve a significant degree of management judgment. Accordingly, valuations by the Company do not necessarily represent the amounts that eventually may be realized from sales or other dispositions of investments. Fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the condensed consolidated financial statements. Recent Accounting Developments In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for goodwill impairments by eliminating step 2 of the goodwill impairment test. This step currently requires an entity to perform a hypothetical purchase price allocation to derive the implied fair value of goodwill. Under the new guidance, an impairment loss is recognized if the carrying value of a reporting unit exceeds its fair value. The impairment loss would equal the amount of that excess, limited to the total amount of goodwill. All other goodwill impairment guidance remains largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance is effective for the Company in the first quarter of 2020 on a prospective basis, with early adoption permitted. The Company expects that adoption of this guidance will not have a material impact on the consolidated financial statements. In August 2016, the FASB issued guidance on the classification of certain cash receipts and payments in the statement of cash flows. The amendments add to or clarify guidance on a number of cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity-method investees and beneficial interests in securitization transactions. The Company adopted this guidance in the first quarter of 2018 on a retrospective basis. The impact of adoption was not material to the Company’s consolidated financial statements. In February 2016, the FASB issued guidance that will require a lessee to recognize a lease asset and a lease liability for most of its operating leases. Under current GAAP, operating leases are not recognized by a lessee in its statements of financial position. In general, the new asset and liability will each equal the present value of lease payments. The guidance does not significantly change the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee. The Company expects to adopt the guidance in the first quarter of 2019 under the modified retrospective transition approach, which requires application of the new guidance at the beginning of the earliest comparative period presented. The Company does not expect that adoption will have a material impact on the consolidated statements of operations because all of the Company’s leases are currently classified as operating leases, which under the guidance will continue to be recognized as expense on a straight-line basis. The adoption, however, will result in a significant gross-up in total assets and total liabilities on the consolidated statements of financial position. As of March 31, 2018, the Company’s minimum lease payments under lease obligations aggregated $155.0 million . In May 2014, the FASB issued guidance on revenue recognition that superseded most existing revenue recognition guidance, including industry-specific guidance. The guidance outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, and provides a largely principles-based framework for addressing revenue recognition issues on a comprehensive basis. Under the guidance, revenue is recognized when an entity satisfies a performance obligation by transferring control of a promised good or service to a customer in an amount that reflects the consideration for which the entity expects to be entitled for that good or service. The guidance also requires qualitative and quantitative disclosures about revenue that has been recognized and revenue that is expected to be recognized in the future from existing contracts, significant judgments and changes in those judgments made by management in recognizing revenue, disaggregation of revenue, and information about contract balances. The Company adopted this guidance in the first quarter of 2018 on a modified retrospective basis. The most significant effect of the guidance for the Company relates to the recognition of incentive income. The guidance requires the Company to recognize incentive income when it concludes that it is probable that significant reversals of revenue will not occur in subsequent periods. Under legacy GAAP, the amount of incentive income recognized by the Company was generally limited to the amount not contingent on a future event. Upon adoption, the Company recorded a cumulative-effect increase to unitholders’ capital of $ 48.7 million , net of tax, as of January 1, 2018. This adjustment relates to incentive income that would have met the “probable that significant reversal will not occur” criteria as of that date. In addition, effective January 1, 2018, certain reimbursements received by the Company from the investment funds it manages are reported as revenues on a gross basis with an equal offset to expenses in the consolidated statements of operations. Please see note 4 for more information on revenues. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2018 | |
Asset Acquisitions [Abstract] | |
ACQUISITIONS | ACQUISITIONS On October 17, 2017, the Company completed a transaction in which it became the new investment adviser to two business development companies (the “BDCs”): Oaktree Specialty Lending Corporation (NASDAQ: OCSL) and Oaktree Strategic Income Corporation (NASDAQ: OCSI). Upon the closing of the transaction (the “BDC acquisition”), the Company paid $ 320.0 million in cash to Fifth Street Management LLC (“FSM”), net of certain transaction-related expenses, for all of FSM’s right, title and interest in specified business records related to FSM’s then-existing investment advisory agreements with each BDC. The transaction was accounted for as an asset acquisition. The net purchase price was $ 319.4 million , consisting of the $ 320.0 million cash payment, net of certain transaction-related expenses and reimbursements received from the seller. Of the purchase price, $ 319.4 million was allocated to finite-lived contractual rights, $ 56.2 million to indemnification assets and $ 56.2 million to contingent liabilities. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES On January 1, 2018, the Company adopted the new revenue recognition standard on a modified retrospective basis. As a result, prior period amounts continue to be reported under historic GAAP. Upon adoption, the Company recorded a cumulative-effect increase to unitholders’ capital as of January 1, 2018 of $ 48.7 million , net of tax. This adjustment relates to incentive income that would have met the “probable that significant reversal will not occur” criteria as of January 1, 2018 under the new revenue standard. Revenue Recognition The Company earns management fees and incentive income from the investment advisory services it provides to its customers. Revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company typically enters into contracts with investment funds to provide investment management and administrative services. These services are generally capable of being distinct and each is accounted for as separate performance obligations comprised of distinct service periods because the services are performed over time. The Company determined that for accounting purposes the investment funds are generally considered to be the customers with respect to commingled funds, while the individual investors are the customers with respect to separate account and fund-of-one vehicles. The Company receives management fees and/or incentive income with respect to its investment management services, and it is reimbursed by the funds for expenses incurred or paid on behalf of the funds with respect to its investment advisory services and its administrative services. The Company evaluates whether it is the principal (i.e., report as management fees on a gross basis) or agent (i.e., report as management fees on a net basis) with respect to each performance obligation and associated reimbursement arrangements. The Company has elected to apply the variable consideration exemption for its fee arrangements with its customers. Management Fees Management fees are recognized over the period in which the investment management services are performed because customers simultaneously consume and receive benefits that are satisfied over time. The contractual terms of management fees generally vary by fund structure. For most closed-end funds, the management fee rate is applied against committed capital during the fund’s investment period and the lesser of total funded capital or cost basis of assets in the liquidation period. Certain closed-end funds pay management fees during the investment period based on drawn capital or cost basis. Additionally, for closed-end funds that pay management fees based on committed capital, the Company may elect to delay the start of the fund’s investment period and thus its full management fees, in which case it earns management fees based on drawn capital, and in certain cases outstanding borrowings under a fund-level credit facility made in lieu of drawing capital, until the Company elects to start the fund’s investment period. In the case of CLOs, the management fee is based on the aggregate par value of collateral assets and principal cash, as defined in the applicable CLO indentures, and a portion of the management fees is dependent on the sufficiency of the particular vehicle’s cash flow. For open-end and evergreen funds, the management fee is generally based on the NAV of the fund. For the publicly-traded BDCs, the management fee is based on gross assets (including assets acquired with leverage), net of cash. In the case of certain open-end fund accounts, the Company has the potential to earn performance-based fees, typically in reference to a relevant benchmark index or hurdle rate, which are classified as management fees. The Company also earns quarterly incentive fees on the investment income from certain evergreen funds, such as the publicly-traded BDCs and other fund accounts, which are generally recurring in nature and reflected as management fees. The ultimate amount of management fees that will be earned over the life of the contract is subject to a large number and broad range of possible outcomes due to market volatility and other factors outside of the Company’s control. However, the amount of revenue earned in any given period is generally determined at the end of each reporting period and relates to services performed during that period. The impact on management fees as a result of applying the new revenue standard was an increase of $ 4.2 million for the three months ended March 31, 2018. This amount relates to the gross-up of reimbursable costs incurred on behalf of Oaktree funds in which the Company has determined it is the principal. Such costs are presented in compensation and benefits and general and administrative expenses. Incentive Income Incentive income generally represents 20% of each closed-end fund’s profits, subject to the return of contributed capital and a preferred return of typically 8% per annum, and up to 20% of certain evergreen fund’s annual profits, subject to high-water marks or hurdle rates. Incentive income is recognized when it is probable that a significant reversal will not occur. Revenue recognition is typically met (a) for closed-end funds, only after all contributed capital and the preferred return on that capital have been distributed to the fund’s investors, and (b) for certain evergreen funds, at the conclusion of each annual measurement period. Potential incentive income is highly susceptible to market volatility, the judgment and actions of third parties, and other factors outside of the Company’s control. The Company’s experience has demonstrated little predictive value in the amount of potential incentive income ultimately earned due to the highly uncertain nature of returns inherent in the markets and contingencies associated with many realization events. As a result, the amount of incentive income recognized in any given period is generally determined after giving consideration to a number of factors, including whether the fund is in its investment or liquidation period, and the nature and level of risk associated with changes in fair value of the remaining assets in the fund. In general, it would be unlikely that any amount of potential incentive income would be recognized until (a) the uncertainty is resolved or (b) the fund is near final liquidation, assets are under contract for sale or are of low risk of significant fluctuation in fair value, and the assets are significantly in excess of the threshold at which incentive income would be earned. The impact on incentive income as a result of applying the new revenue standard was a decrease of $ 47.0 million for the three months ended March 31, 2018. Incentives received by Oaktree before the revenue recognition criteria have been met are deferred and recorded as a deferred incentive income liability within accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. The Company may receive tax distributions related to taxable income allocated by funds, which are treated as an advance of incentive income and subject to the same recognition criteria. Tax distributions are contractually not subject to clawback. The following schedule presents revenues disaggregated by fund structure, each of which is affected by economic factors related to the asset class composition of the holdings and the contractual terms such as the basis for calculating the management fees and investors’ ability to redeem: Three Months Ended March 31, 2018 2017 Management Fees Closed-end $ 123,387 $ 127,721 Open-end 37,552 39,945 Evergreen 24,476 13,262 Total $ 185,415 $ 180,928 Incentive Income Closed-end $ 151,906 $ 108,657 Contract Balances The Company receives management fees monthly or quarterly in accordance with its contracts with customers. Incentive income is received when the fund makes a distribution. Contract assets relate to the Company’s conditional right to receive payment for its performance completed under the contract. Receivables are recorded when the right to consideration becomes unconditional (i.e., only requires the passage of time). Contract liabilities (i.e., deferred revenues) relate to payments received in advance of performance under the contract. Contract liabilities are recognized as revenues when the Company provides investment management services. The table below sets forth contract balances for the periods indicated: As of March 31, 2018 December 31, 2017 Receivables (1) $ 62,265 $ 98,738 Contract assets (1) 24,000 54,221 Contract liabilities (2) (23,592 ) (25,297 ) (1) The decline in balances was primarily related to payments received, net of accruals. (2) |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company consolidates VIEs for which it is the primary beneficiary. VIEs include funds managed by Oaktree and CLOs for which Oaktree acts as collateral manager. The purpose of these VIEs is to provide investment opportunities for investors in exchange for management fees and, in certain cases, performance-based fees. While the investment strategies of the funds and CLOs differ by product, in general the fundamental risks of the funds and CLOs have similar characteristics, including loss of invested capital and reduction or absence of management and performance-based fees. As general partner or collateral manager, respectively, Oaktree generally considers itself the sponsor of the applicable fund or CLO. The Company does not provide performance guarantees and, other than capital commitments, has no financial obligation to provide funding to VIEs. Consolidated VIEs As of March 31, 2018, the Company consolidated 20 VIEs for which it was the primary beneficiary, including 11 funds managed by Oaktree, eight CLOs for which Oaktree serves as collateral manager, and Oaktree AIF Holdings, Inc., which was formed to hold certain assets for regulatory and other purposes. Two of the consolidated funds, Oaktree Enhanced Income Retention Holdings III, LLC and Oaktree CLO RR Holder, LLC, were formed to satisfy risk retention requirements under Section 15G of the Exchange Act. One of the CLOs had not priced as of March 31, 2018. As of December 31, 2017, the Company consolidated 21 VIEs. As of March 31, 2018, the assets and liabilities of the 19 consolidated VIEs representing funds and CLOs amounted to $6.0 billion and $4.7 billion , respectively. The assets of these consolidated VIEs primarily consisted of investments in debt and equity securities, while their liabilities primarily represented debt obligations issued by CLOs. The assets of these VIEs may be used only to settle obligations of the same VIE. In addition, there is no recourse to the Company for the VIEs’ liabilities. In exchange for managing either the funds’ or CLOs’ collateral, the Company typically earns management fees and may earn performance fees, all of which are eliminated in consolidation. As of March 31, 2018, the Company’s investments in consolidated VIEs had a carrying value of $485.1 million , which represented its maximum risk of loss as of that date. The Company’s investments in CLOs are generally subordinated to other interests in the CLOs and entitle the Company to receive a pro-rata portion of the residual cash flows, if any, from the CLOs. Please see note 11 for more information on CLO debt obligations. Unconsolidated VIEs The Company holds variable interests in certain VIEs in the form of direct equity interests that are not consolidated because it is not the primary beneficiary, inasmuch as its fee arrangements are considered at-market and it does not hold interests in those entities that are considered more than insignificant. The carrying value of the Company’s investments in VIEs that were not consolidated are shown below. Carrying Value as of March 31, 2018 December 31, 2017 Corporate investments $ 911,132 $ 930,699 Due from affiliates 87,482 160,257 Maximum exposure to loss $ 998,614 $ 1,090,956 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Corporate Investments Corporate investments consist of investments in funds and companies in which the Company does not have a controlling financial interest. Investments for which the Company is deemed to exert significant influence are accounted for under the equity method of accounting and reflect Oaktree’s ownership interest in each fund or company. In the case of investments for which the Company is not deemed to exert significant influence or control, the fair value option of accounting has been elected. Investment income represents the Company’s pro-rata share of income or loss from these funds or companies, or the change in fair value of the investment, as applicable. Oaktree’s general partnership interests are substantially illiquid. While investments in funds reflect each respective fund’s holdings at fair value, equity-method investments in DoubleLine Capital LP and its affiliates (collectively, “DoubleLine”) and other companies are not adjusted to reflect the fair value of the underlying company. The fair value of the underlying investments in Oaktree funds is based on the Company’s assessment, which takes into account expected cash flows, earnings multiples and/or comparisons to similar market transactions, among other factors. Valuation adjustments reflecting consideration of credit quality, concentration risk, sales restrictions and other liquidity factors are integral to valuing these instruments. Corporate investments consisted of the following: As of Corporate Investments March 31, 2018 December 31, 2017 Equity-method investments: Funds $ 910,479 $ 916,559 Companies 35,345 42,294 Other investments, at fair value 56,377 50,778 Total corporate investments $ 1,002,201 $ 1,009,631 The components of investment income are set forth below: Three Months Ended March 31, Investment Income 2018 2017 Equity-method investments: Funds $ 27,266 $ 32,921 Companies 18,138 15,894 Other investments, at fair value (10,841 ) 1,636 Total investment income $ 34,563 $ 50,451 Equity-method Investments The Company’s equity-method investments include its investments in Oaktree funds for which it serves as general partner and other third-party funds and companies that are not consolidated but for which the Company is deemed to exert significant influence. The Company’s share of income or loss generated by these investments is recorded within investment income in the condensed consolidated statements of operations. The Company’s equity-method investments in Oaktree funds principally reflect the Company’s general partner interests in those funds, which typically does not exceed 2.5% in each fund. The Oaktree funds are investment companies that follow a specialized basis of accounting established by GAAP. Equity-method investments in companies include the Company’s one-fifth equity stake in DoubleLine. Each reporting period, the Company evaluates each of its equity-method investments to determine if any are considered significant, as defined by the SEC. As of or for the year ended December 31, 2017, no individual equity-method investment met the significance criteria. As a result, separate financial statements were not required for any of the Company’s equity-method investments. Summarized financial information of the Company’s equity-method investments is set forth below. As of Statements of Financial Condition March 31, 2018 December 31, 2017 Assets: Cash and cash-equivalents $ 2,495,772 $ 2,654,311 Investments, at fair value 41,915,841 41,754,054 Other assets 2,051,923 2,116,751 Total assets $ 46,463,536 $ 46,525,116 Liabilities and Capital: Debt obligations $ 8,064,952 $ 8,393,314 Other liabilities 2,184,074 2,264,579 Total liabilities 10,249,026 10,657,893 Total capital 36,214,510 35,867,223 Total liabilities and capital $ 46,463,536 $ 46,525,116 Three Months Ended March 31, Statements of Operations 2018 2017 Revenues / investment income $ 477,491 $ 520,610 Interest expense (67,230 ) (47,014 ) Other expenses (201,436 ) (211,158 ) Net realized and unrealized gain on investments 530,361 924,551 Net income $ 739,186 $ 1,186,989 Other Investments, at Fair Value Other investments, at fair value primarily consist of (a) investments in certain Oaktree and non-Oaktree funds for which the fair value option of accounting has been elected and (b) derivatives utilized to hedge the Company’s exposure to investment income earned from its funds. The following table summarizes net gains (losses) attributable to the Company’s other investments: Three Months Ended March 31, 2018 2017 Realized gain (loss) $ 796 $ 1,496 Net change in unrealized gain (loss) (11,637 ) 140 Total gain (loss) $ (10,841 ) $ 1,636 Investments of Consolidated Funds Investments, at Fair Value Investments held and securities sold short by the consolidated funds are summarized below: Fair Value as of Fair Value as a Percentage of Investments of Consolidated Funds as of Investments March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 United States: Debt securities: Consumer discretionary $ 796,820 $ 796,681 13.9 % 14.0 % Consumer staples 114,094 100,863 2.0 1.8 Energy 126,046 106,414 2.2 1.9 Financials 153,572 161,807 2.7 2.9 Government 1,534 3,033 0.0 0.1 Health care 400,027 416,779 7.0 7.4 Industrials 415,020 441,440 7.3 7.8 Information technology 474,554 431,010 8.3 7.6 Materials 364,346 384,310 6.4 6.8 Real estate 131,746 146,836 2.3 2.6 Telecommunication services 161,496 178,984 2.8 3.2 Utilities 95,167 117,805 1.7 2.1 Total debt securities (cost: $3,210,058 and $3,284,346 as of March 31, 2018 and December 31, 2017, respectively) 3,234,422 3,285,962 56.6 58.2 Equity securities: Consumer discretionary 1,397 1,778 0.1 0.0 Energy 554 649 0.0 0.0 Financials 725 3,061 0.0 0.1 Health care 1,364 527 0.0 0.0 Industrials 175 316 0.0 0.0 Telecommunication services — 305 — 0.0 Utilities 1,107 1,192 0.0 0.0 Total equity securities (cost: $6,199 and $8,102 as of March 31, 2018 and December 31, 2017, respectively) 5,322 7,828 0.1 0.1 Real estate: Real estate — 121,588 — 2.1 Total real estate securities (cost: $0 and $121,582 as of March 31, 2018 and December 31, 2017, respectively) — 121,588 — 2.1 Fair Value as of Fair Value as a Percentage of Investments of Consolidated Funds as of Investments March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Europe: Debt securities: Consumer discretionary $ 659,689 $ 573,270 11.5 % 10.1 % Consumer staples 155,063 121,636 2.7 2.1 Energy 8,919 5,929 0.2 0.1 Financials 40,008 40,130 0.7 0.7 Health care 368,119 333,693 6.4 5.9 Industrials 194,467 163,972 3.4 2.9 Information technology 121,296 95,409 2.1 1.7 Materials 279,123 267,252 4.9 4.7 Real estate 13,562 12,528 0.2 0.2 Telecommunication services 285,254 278,358 5.0 4.9 Utilities 3,014 8,949 0.1 0.2 Total debt securities (cost: $2,130,240 and $1,894,727 as of March 31, 2018 and December 31, 2017, respectively) 2,128,514 1,901,126 37.2 33.5 Equity securities: Consumer staples 1,057 1,449 0.0 0.0 Energy 4,377 3,827 0.1 0.1 Financials 5,536 7,410 0.1 0.1 Health care 858 601 0.0 0.0 Materials 1,089 1,622 0.0 0.0 Total equity securities (cost: $9,632 and $12,787 as of March 31, 2018 and December 31, 2017, respectively) 12,917 14,909 0.2 0.2 Asia and other: Debt securities: Consumer discretionary 16,020 30,332 0.3 0.5 Consumer staples 3,850 748 0.1 0.0 Energy 9,635 10,175 0.2 0.2 Financials 31,607 20,362 0.5 0.4 Health care 6,337 13,806 0.1 0.2 Industrials 42,317 22,935 0.7 0.4 Information technology 233 536 0.0 0.0 Materials 10,622 8,515 0.2 0.2 Real estate 6,270 6,272 0.1 0.1 Telecommunication services 15,543 8,104 0.3 0.1 Utilities 1,057 769 0.0 0.0 Total debt securities (cost: $145,078 and $124,723 as of March 31, 2018 and December 31, 2017, respectively) 143,491 122,554 2.5 2.1 Fair Value as of Fair Value as a Percentage of Investments of Consolidated Funds as of Investments March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Asia and other: Equity securities: Consumer discretionary $ 22,577 $ 29,026 0.4 % 0.5 % Consumer staples 9,462 7,279 0.2 0.1 Energy 6,670 5,551 0.1 0.1 Financials 56,818 58,632 1.1 1.2 Industrials 31,445 34,019 0.6 0.7 Information technology 19,897 23,900 0.3 0.4 Materials 18,923 28,590 0.3 0.5 Real estate 17,303 15,339 0.3 0.3 Telecommunication services 2,148 1,735 0.0 0.0 Utilities 7,739 2,502 0.1 0.0 Total equity securities (cost: $189,517 and $185,164 as of March 31, 2018 and December 31, 2017, respectively) 192,982 206,573 3.4 3.8 Total debt securities 5,506,427 5,309,642 96.3 93.8 Total equity securities 211,221 229,310 3.7 4.1 Total real estate securities — 121,588 — 2.1 Total investments, at fair value $ 5,717,648 $ 5,660,540 100.0 % 100.0 % Securities Sold Short Equity securities (proceeds: $66,783 and $82,502 as of March 31, 2018 and December 31, 2017, respectively) $ (69,808 ) $ (86,467 ) As of March 31, 2018 and December 31, 2017, no single issuer or investment had a fair value that exceeded 5% of Oaktree’s total consolidated net assets. Net Gains (Losses) From Investment Activities of Consolidated Funds Net gains (losses) from investment activities in the condensed consolidated statements of operations consist primarily of realized and unrealized gains and losses on the consolidated funds’ investments (including foreign-exchange gains and losses attributable to foreign-denominated investments and related activities) and other financial instruments. Unrealized gains or losses result from changes in the fair value of these investments and other financial instruments. Upon disposition of an investment, unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period. The following table summarizes net gains (losses) from investment activities: Three Months Ended March 31, 2018 2017 Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Investments and other financial instruments $ 11,322 $ (30,588 ) $ 739 $ 3,736 CLO liabilities (1) — 18,072 — 19,831 Foreign-currency forward contracts (2) 1,439 (711 ) 179 (314 ) Total-return and interest-rate swaps (2) 20 (86 ) (746 ) 1,235 Options and futures (2) 1,818 (1,073 ) (2,044 ) 190 Total $ 14,599 $ (14,386 ) $ (1,872 ) $ 24,678 (1) Represents the net change in the fair value of CLO liabilities based on the more observable fair value of CLO assets, as measured under the CLO measurement guidance. Please see note 2 for more information. (2) Please see note 8 for additional information. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair Value of Financial Assets and Liabilities The short-term nature of cash and cash-equivalents, receivables and accounts payable causes each of their carrying values to approximate fair value. The fair value of short-term investments included in cash and cash-equivalents is a Level I valuation. The Company’s other financial assets and financial liabilities by fair-value hierarchy level are set forth below. Please see notes 11 and 18 for the fair value of the Company’s outstanding debt obligations and amounts due from/to affiliates, respectively. As of March 31, 2018 As of December 31, 2017 Level I Level II Level III Total Level I Level II Level III Total Assets U.S. Treasury and other securities (1) $ 229,274 $ — $ — $ 229,274 $ 176,602 $ — $ — $ 176,602 Corporate investments — 4,255 53,095 57,350 — 1,833 50,902 52,735 Foreign-currency forward contracts (2) — 8,659 — 8,659 — 5,020 — 5,020 Total assets $ 229,274 $ 12,914 $ 53,095 $ 295,283 $ 176,602 $ 6,853 $ 50,902 $ 234,357 Liabilities Contingent consideration (3) $ — $ — $ (16,203 ) $ (16,203 ) $ — $ — $ (18,778 ) $ (18,778 ) Foreign-currency forward contracts (4) — (15,153 ) — (15,153 ) — (13,154 ) — (13,154 ) Cross-currency swap (3) — (19,768 ) — (19,768 ) — (7,479 ) — (7,479 ) Total liabilities $ — $ (34,921 ) $ (16,203 ) $ (51,124 ) $ — $ (20,633 ) $ (18,778 ) $ (39,411 ) (1) Carrying value approximates fair value due to the short-term nature. (2) Amounts are included in other assets in the condensed consolidated statements of financial condition. (3) Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. (4) Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition, except for $973 and $1,957 as of March 31, 2018 and December 31, 2017, respectively, which are included within corporate investments in the condensed consolidated statements of financial condition. There were no transfers between Level I and Level II positions for the three months ended March 31, 2018 and 2017. The table below sets forth a summary of changes in the fair value of Level III financial instruments: Three Months Ended March 31, 2018 2017 Corporate Investments Contingent Consideration Liability Corporate Investments Contingent Consideration Liability Beginning balance $ 50,902 $ (18,778 ) $ 74,663 $ (23,567 ) Contributions or additions 1,293 — 156 — Distributions (815 ) — (3,135 ) — Net gain (loss) included in earnings 1,715 2,575 3,757 (601 ) Ending balance $ 53,095 $ (16,203 ) $ 75,441 $ (24,168 ) Net change in unrealized gains (losses) attributable to financial instruments still held at end of period $ 919 $ 2,575 $ 2,261 $ (601 ) The table below sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the Company’s Level III financial instruments: Fair Value as of Significant Unobservable Input Financial Instrument March 31, 2018 December 31, 2017 Valuation Technique Range Weighted Average Corporate investment – Limited partnership interests $ 53,095 $ 50,902 Market approach Not applicable Not applicable Not applicable Contingent consideration liability (16,203 ) (18,778 ) Discounted cash flow Assumed % of total potential contingent payments 0% – 100% 34% Fair Value of Financial Instruments Held By Consolidated Funds The short-term nature of cash and cash-equivalents held at the consolidated funds causes their carrying value to approximate fair value. The fair value of cash-equivalents is a Level I valuation. Derivatives may relate to a mix of Level I, II or III investments, and therefore their fair-value hierarchy level may not correspond to the fair-value hierarchy level of the economically hedged investment. The table below summarizes the investments and other financial instruments of the consolidated funds by fair-value hierarchy level: As of March 31, 2018 As of December 31, 2017 Level I Level II Level III Total Level I Level II Level III Total Assets Investments: Corporate debt – bank debt $ — $ 4,570,896 $ 94,495 $ 4,665,391 $ — $ 4,340,860 $ 86,999 $ 4,427,859 Corporate debt – all other 1,158 752,477 87,401 841,036 736 805,659 75,388 881,783 Equities – common stock 206,139 34 3,703 209,876 222,439 65 3,427 225,931 Equities – preferred stock 645 89 611 1,345 3,041 338 — 3,379 Real estate — — — — — — 121,588 121,588 Total investments 207,942 5,323,496 186,210 5,717,648 226,216 5,146,922 287,402 5,660,540 Derivatives: Foreign-currency forward contracts — 227 — 227 — 590 — 590 Swaps — 30 — 30 — 49 — 49 Options and futures 89 — — 89 92 — — 92 Total derivatives 89 257 — 346 92 639 — 731 Total assets $ 208,031 $ 5,323,753 $ 186,210 $ 5,717,994 $ 226,308 $ 5,147,561 $ 287,402 $ 5,661,271 Liabilities CLO debt obligations: Senior secured notes (1) $ — $ (3,203,723 ) $ — $ (3,203,723 ) $ — $ (3,107,955 ) $ — $ (3,107,955 ) Subordinated notes (1) — (115,146 ) — (115,146 ) — (111,637 ) — (111,637 ) Total CLO debt obligations — (3,318,869 ) — (3,318,869 ) — (3,219,592 ) — (3,219,592 ) Securities sold short: Equity securities (69,808 ) — — (69,808 ) (86,467 ) — — (86,467 ) Derivatives: Foreign-currency forward contracts — (911 ) — (911 ) — (817 ) — (817 ) Swaps — (203 ) — (203 ) — (136 ) — (136 ) Options and futures (1,077 ) — — (1,077 ) — — — — Total derivatives (1,077 ) (1,114 ) — (2,191 ) — (953 ) — (953 ) Total liabilities $ (70,885 ) $ (3,319,983 ) $ — $ (3,390,868 ) $ (86,467 ) $ (3,220,545 ) $ — $ (3,307,012 ) (1) The fair value of CLO liabilities is classified based on the more observable fair value of CLO assets. Please see notes 2 and 11 for more information. The following tables set forth a summary of changes in the fair value of Level III investments: Corporate Debt – Bank Debt Corporate Debt – All Other Equities – Common Stock Equities – Preferred Stock Real Estate Total Three Months Ended March 31, 2018 Beginning balance $ 86,999 $ 75,388 $ 3,427 $ — $ 121,588 $ 287,402 Deconsolidation of funds — — — — (121,087 ) (121,087 ) Transfers into Level III 25,164 607 490 — — 26,261 Transfers out of Level III (7,289 ) (490 ) (57 ) — — (7,836 ) Purchases 4,816 31,123 56 236 — 36,231 Sales (17,472 ) (19,110 ) (311 ) — (501 ) (37,394 ) Realized gains (losses), net 328 86 — — — 414 Unrealized appreciation (depreciation), net 1,949 (203 ) 98 375 — 2,219 Ending balance $ 94,495 $ 87,401 $ 3,703 $ 611 $ — $ 186,210 Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period $ 1,965 $ (185 ) $ 96 $ 375 $ — $ 2,251 Three Months Ended March 31, 2017 Beginning balance $ 208,868 $ 28,793 $ 6,693 $ — $ — $ 244,354 Transfers into Level III 19,844 — — — — 19,844 Transfers out of Level III (41,469 ) — — — — (41,469 ) Purchases 15,008 16,199 — — — 31,207 Sales (24,134 ) (6,416 ) (116 ) — — (30,666 ) Realized gains (losses), net 104 195 87 — — 386 Unrealized appreciation (depreciation), net 859 162 (19 ) — — 1,002 Ending balance $ 179,080 $ 38,933 $ 6,645 $ — $ — $ 224,658 Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period $ 447 $ 162 $ (19 ) $ — $ — $ 590 Total realized and unrealized gains and losses recorded for Level III investments are included in net realized gain on consolidated funds’ investments or net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Transfers between Level I and Level II positions for the three months ended March 31, 2018 included $ 0.7 million from Level I to Level II due to a decline in trading activity for one credit-oriented security, which was valued using vendor prices. Transfers between Level I and Level II positions for the three months ended March 31, 2017 included $0.4 million from Level I to Level II due to a decline in trading activity for one credit-oriented security, which was valued using broker quotes. Transfers out of Level III are generally attributable to certain investments that experienced a more significant level of market trading activity or completed an initial public offering during the respective period and thus were valued using observable inputs. Transfers into Level III typically reflect either investments that experienced a less significant level of market trading activity during the period or portfolio companies that undertook restructurings or bankruptcy proceedings and thus were valued in the absence of observable inputs. The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of March 31, 2018: Investment Type Fair Value Valuation Technique Significant Unobservable (1)(2) Range Weighted Average (3) Credit-oriented investments: Consumer $ 1,819 Discounted cash flow (4) Discount rate 11% – 20% 17% 18,085 Recent market information (5) Quoted prices Not applicable Not applicable 6,201 Recent transaction price (8) Not applicable Not applicable Not applicable Financials: 66,963 Recent market information (5) Quoted prices Not applicable Not applicable Industrials: 7,173 Discounted cash flow (4) Discount rate 6% – 11% 9% 11,842 Recent market information (5) Quoted prices Not applicable Not applicable Information 5,421 Discounted cash flow (4) Discount rate 12% – 13% 13% 10,574 Recent market information (5) Quoted prices Not applicable Not applicable Real estate: 2,764 Discounted cash flow (4) Discount rate 11% – 13% 12% 21,477 Recent market information (5) Quoted prices Not applicable Not applicable Other: 11,683 Discounted cash flow (4) Discount rate 8% – 16% 13% 17,894 Recent market information (5) Quoted prices Not applicable Not applicable Equity investments: 1,253 Discounted cash flow (4) Discount rate 9% – 30% 11% 1,386 Market approach (6) Earnings multiple (7) 4x – 10x 8x 1,675 Recent market information (5) Quoted prices Not applicable Not applicable Total Level III $ 186,210 The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of December 31, 2017: Investment Type Fair Value Valuation Technique Significant Unobservable (1)(2) Range Weighted Average (3) Credit-oriented investments: Financials: $ 53,732 Recent market information (5) Quoted prices Not applicable Not applicable Industrials: 14,563 Discounted cash flow (4) Discount rate 6% – 11% 7% 3,782 Recent market information (5) Quoted prices Not applicable Not applicable Information 5,331 Discounted cash flow (4) Discount rate 11% – 13% 12% 13,965 Recent market information (5) Quoted prices Not applicable Not applicable Real estate: 2,897 Discounted cash flow (4) Discount rate 11% – 13% 12% 22,297 Recent market information (5) Quoted prices Not applicable Not applicable 327 Recent transaction price (8) Not applicable Not applicable Not applicable Other: 15,881 Discounted cash flow (4) Discount rate 8% – 20% 12% 660 Market approach (6) Earnings multiple (7) 8x – 10x 9x 29,452 Recent market information (5) Quoted prices Not applicable Not applicable Equity investments: 378 Market approach (6) Earnings multiple (7) 9x – 11x 10x 1,343 Discounted cash flow (4) Discount rate 11% – 30% 13% 1,707 Recent market information (5) Quoted prices Not applicable Not applicable Real estate investments: Real estate: 121,087 Recent transaction price (8) Not applicable Not applicable Not applicable Total Level III $ 287,402 (1) The discount rate is the significant unobservable input used in the fair-value measurement of performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments and real estate loan portfolios. An increase (decrease) in the discount rate would result in a lower (higher) fair-value measurement. (2) Multiple of either earnings or underlying assets is the significant unobservable input used in the market approach for the fair-value measurement of distressed credit-oriented investments, credit-oriented investments in which the consolidated funds have a controlling interest in the underlying issuer, equity investments and certain real estate-oriented investments. An increase (decrease) in the multiple would result in a higher (lower) fair-value measurement. (3) The weighted average is based on the fair value of the investments included in the range. (4) A discounted cash-flow method is generally used to value performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments, real estate-oriented investments and real estate loan portfolios. (5) Certain investments are valued using vendor prices or broker quotes for the subject or similar securities. Generally, investments valued in this manner are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. (6) A market approach is generally used to value distressed investments and investments in which the consolidated funds have a controlling interest in the underlying issuer. (7) Earnings multiples are based on comparable public companies and transactions with comparable companies. The Company typically utilizes multiples of EBITDA; however, in certain cases the Company may use other earnings multiples believed to be most relevant to the investment. The Company typically applies the multiple to trailing twelve-months’ EBITDA. However, in certain cases other earnings measures, such as pro forma EBITDA, may be utilized if deemed to be more relevant. (8) Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date. A significant amount of judgment may be required when using unobservable inputs, including assessing the accuracy of source data and the results of pricing models. The Company assesses the accuracy and reliability of the sources it uses to develop unobservable inputs. These sources may include third-party vendors that the Company believes are reliable and commonly utilized by other marketplace participants. As described in note 2, other factors beyond the unobservable inputs described above may have a significant impact on investment valuations. During the three months ended March 31, 2018 and 2017, there were no changes in the valuation techniques for Level III securities. |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | DERIVATIVES AND HEDGING The Company enters into derivatives as part of its overall risk management strategy or to facilitate its investment management activities. Risks associated with fluctuations in interest rates and foreign-currency exchange rates in the normal course of business are addressed as part of the Company’s overall risk management strategy that may include the use of derivatives to economically hedge or reduce these exposures. From time to time, the Company may enter into (a) foreign-currency option and forward contracts to reduce earnings and cash-flow volatility associated with changes in foreign-currency exchange rates, and (b) interest-rate swaps to manage all or a portion of the interest-rate risk associated with its variable-rate borrowings. As a result of the use of these or other derivative contracts, the Company is exposed to the risk that counterparties will fail to fulfill their contractual obligations. The Company attempts to mitigate this counterparty risk by entering into derivative contracts only with major financial institutions that have investment-grade credit ratings. Counterparty credit risk is evaluated in determining the fair value of derivatives. When the Company enters into a derivative contract, it may elect to designate the derivative as a hedging instrument and apply hedge accounting as part of its overall risk management strategy. In other situations, when a derivative does not qualify for hedge accounting or when the derivative and the hedged item are both recorded in current-period earnings and thus deemed to be economic hedges, hedge accounting is not applied. Freestanding derivatives are financial instruments that the Company enters into as part of its overall risk management strategy but does not utilize hedge accounting. These financial instruments may include foreign-currency exchange contracts, interest-rate swaps and other derivative contracts. There were no derivatives outstanding that were designated as hedging instruments for accounting purposes as of March 31, 2018 and December 31, 2017. The fair value of freestanding derivatives consisted of the following: Assets Liabilities Notional Fair Value Notional Fair Value As of March 31, 2018 Foreign-currency forward contracts $ 220,186 $ 8,659 $ (254,708 ) $ (15,153 ) Cross-currency swap — — (261,548 ) (19,768 ) Total $ 220,186 $ 8,659 $ (516,256 ) $ (34,921 ) As of December 31, 2017 Foreign-currency forward contracts $ 288,451 $ 5,020 $ (242,972 ) $ (13,154 ) Cross-currency swap — — (255,210 ) (7,479 ) Total $ 288,451 $ 5,020 $ (498,182 ) $ (20,633 ) Realized and unrealized gains and losses arising from freestanding derivatives were recorded in the condensed consolidated statements of operations as follows: Three Months Ended March 31, 2018 2017 Investment income $ (12,373 ) $ (873 ) General and administrative expense (1) (3,072 ) (2,683 ) Total $ (15,445 ) $ (3,556 ) (1) To the extent that the Company’s freestanding derivatives are utilized to hedge its foreign-currency exposure to investment income and management fees earned from consolidated funds, the related hedged items are eliminated in consolidation, with the derivative impact (a positive number reflects a reduction in expenses) reflected in consolidated general and administrative expense. Derivatives Held By Consolidated Funds Certain consolidated funds utilize derivatives in their ongoing investment operations. These derivatives primarily consist of foreign-currency forward contracts and options utilized to manage currency risk, interest-rate swaps to hedge interest-rate risk, options and futures used to hedge certain exposures for specific securities, and total-return swaps utilized mainly to obtain exposure to leveraged loans or to participate in foreign markets not readily accessible. The primary risk exposure for options and futures is price, while the primary risk exposure for total-return swaps is credit. None of the derivative instruments are accounted for as a hedging instrument utilizing hedge accounting. Three Months Ended March 31, 2018 2017 Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Foreign-currency forward contracts 1,439 (711 ) 179 (314 ) Total-return and interest-rate swaps 20 (86 ) (746 ) 1,235 Options and futures 1,818 (1,073 ) (2,044 ) 190 Total $ 3,277 $ (1,870 ) $ (2,611 ) $ 1,111 Balance Sheet Offsetting The Company recognizes all derivatives as assets or liabilities at fair value in its condensed consolidated statements of financial condition. In connection with its derivative activities, the Company generally enters into agreements subject to enforceable master netting arrangements that allow the Company to offset derivative assets and liabilities in the same currency by specific derivative type or, in the event of default by the counterparty, to offset derivative assets and liabilities with the same counterparty. While these derivatives are eligible to be offset in accordance with applicable accounting guidance, the Company has elected to present derivative assets and liabilities based on gross fair value in its condensed consolidated statements of financial condition. The table below sets forth the setoff rights and related arrangements associated with derivatives held by the Company. The “gross amounts not offset in statements of financial condition” columns represent derivatives that management has elected not to offset in the consolidated statements of financial condition even though they are eligible to be offset in accordance with applicable accounting guidance. Gross and Net Amounts of Assets (Liabilities) Presented Gross Amounts Not Offset in Statements of Financial Condition Net Amount As of March 31, 2018 Derivative Assets (Liabilities) Cash Collateral Received (Pledged) Derivative Assets: Foreign-currency forward contracts $ 8,659 $ 8,659 $ — $ — Derivative assets of consolidated funds: Foreign-currency forward contracts 227 111 — 116 Total-return and interest-rate swaps 30 30 — — Options and futures 89 — — 89 Subtotal 346 141 — 205 Total $ 9,005 $ 8,800 $ — $ 205 Derivative Liabilities: Foreign-currency forward contracts $ (15,153 ) $ (8,659 ) $ — $ (6,494 ) Cross-currency swap (19,768 ) — — (19,768 ) Subtotal (34,921 ) (8,659 ) — (26,262 ) Derivative liabilities of consolidated funds: Foreign-currency forward contracts (911 ) (111 ) — (800 ) Total-return and interest-rate swaps (203 ) (30 ) — (173 ) Options and futures (1,077 ) — (1,077 ) — Subtotal (2,191 ) (141 ) (1,077 ) (973 ) Total $ (37,112 ) $ (8,800 ) $ (1,077 ) $ (27,235 ) Gross and Net Amounts of Assets (Liabilities) Presented Gross Amounts Not Offset in Statements of Financial Condition Net Amount As of December 31, 2017 Derivative Assets (Liabilities) Cash Collateral Received (Pledged) Derivative Assets: Foreign-currency forward contracts $ 5,020 $ 5,020 $ — $ — Derivative assets of consolidated funds: Foreign-currency forward contracts 590 115 — 475 Total-return and interest-rate swaps 49 49 — — Options and futures 92 — — 92 Subtotal 731 164 — 567 Total $ 5,751 $ 5,184 $ — $ 567 Derivative Liabilities: Foreign-currency forward contracts $ (13,154 ) $ (5,020 ) $ — $ (8,134 ) Cross-currency swap (7,479 ) — — (7,479 ) Subtotal (20,633 ) (5,020 ) — (15,613 ) Derivative liabilities of consolidated funds: Foreign-currency forward contracts (817 ) (115 ) — (702 ) Total-return and interest-rate swaps (136 ) (49 ) (87 ) — Subtotal (953 ) (164 ) (87 ) (702 ) Total $ (21,586 ) $ (5,184 ) $ (87 ) $ (16,315 ) |
FIXED ASSETS
FIXED ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | FIXED ASSETS Fixed assets, which consist of furniture and equipment, capitalized software, office leasehold improvements, and company-owned aircraft, are included in other assets in the condensed consolidated statements of financial position. The following table sets forth the Company’s fixed assets and accumulated depreciation: As of March 31, 2018 December 31, 2017 Furniture, equipment and capitalized software $ 25,994 $ 25,618 Leasehold improvements 67,913 66,940 Corporate aircraft 66,120 66,120 Other 5,309 5,229 Fixed assets 165,336 163,907 Accumulated depreciation (56,618 ) (53,744 ) Fixed assets, net $ 108,718 $ 110,163 |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | GOODWILL AND INTANGIBLES Goodwill represents the excess of cost over the fair value of identifiable net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead is tested for impairment annually in the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate that impairment may have occurred. As of March 31, 2018, the Company had determined there was no goodwill impairment. The carrying value of goodwill was $69.3 million as of March 31, 2018 and December 31, 2017. The following table summarizes the carrying value of intangible assets: As of March 31, 2018 December 31, 2017 Contractual rights $ 347,452 $ 347,452 Accumulated amortization (20,448 ) (16,301 ) Intangible assets, net $ 327,004 $ 331,151 Amortization expense associated with the Company’s intangible assets was $4.2 million and $1.0 million for the three months ended March 31, 2018 and 2017, respectively. Amortization expense is estimated to be $12.6 million for the remaining nine months of 2018, $16.8 million per annum for each of the years ending December 31, 2019 and 2020, $15.1 million for 2021, and $12.8 million for 2022. Goodwill and intangible assets are included in other assets in the condensed consolidated statements of financial position. |
DEBT OBLIGATIONS AND CREDIT FAC
DEBT OBLIGATIONS AND CREDIT FACILITIES | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS AND CREDIT FACILITIES | DEBT OBLIGATIONS AND CREDIT FACILITIES The Company’s debt obligations are set forth below: As of March 31, 2018 December 31, 2017 $250,000, 3.78%, issued in December 2017, payable on December 18, 2032 $ 250,000 $ 250,000 $250,000, variable-rate term loan, issued in March 2014, payable on March 29, 2023 (1) 150,000 150,000 $50,000, 3.91%, issued in September 2014, payable on September 3, 2024 50,000 50,000 $100,000, 4.01%, issued in September 2014, payable on September 3, 2026 100,000 100,000 $100,000, 4.21%, issued in September 2014, payable on September 3, 2029 100,000 100,000 $100,000, 3.69%, issued in July 2016, payable on July 12, 2031 100,000 100,000 Total remaining principal 750,000 750,000 Less: Debt issuance costs (4,454 ) (3,726 ) Debt obligations $ 745,546 $ 746,274 (1) On March 29, 2018, the credit facility was amended to among other things, extend the maturity date from March 31, 2021 to March 29, 2023, favorably update the commitment fee in the corporate ratings-based pricing grid and increase the permitted combined leverage ratio to a ratio of 3:50 to 1:00. The credit facility consists of a $150 million term loan and a $500 million revolving credit facility. Borrowings generally bear interest at a spread to either LIBOR or an alternative base rate. Based on the current credit ratings of Oaktree Capital Management, L.P., the interest rate on borrowings is LIBOR plus 1.00% per annum and the commitment fee on the unused portions of the revolving credit facility is 0.10% per annum. The credit agreement contains customary financial covenants and restrictions, including ones regarding a maximum leverage ratio and a minimum required level of assets under management (as defined in the credit agreement, as amended above). As of March 31, 2018, the Company had no outstanding borrowings under the revolving credit facility. As of March 31, 2018, future scheduled principal payments of debt obligations were as follows: Last nine months of 2018 $ — 2019 — 2020 — 2021 — 2022 — Thereafter 750,000 Total $ 750,000 The Company was in compliance with all financial maintenance covenants associated with its senior notes and bank credit facility as of March 31, 2018 and December 31, 2017. The fair value of the Company’s debt obligations, which are carried at amortized cost, is a Level III valuation that is estimated based on a discounted cash-flow calculation using estimated rates that would be offered to Oaktree for debt of similar terms and maturities. The fair value of these debt obligations, gross of debt issuance costs, was $757.3 million and $762.7 million as of March 31, 2018 and December 31, 2017, respectively, utilizing an average borrowing rate of 3.8% and 3.6% , respectively. As of March 31, 2018, a 10% increase in the assumed average borrowing rate would lower the estimated fair value to $734.2 million , whereas a 10% decrease would increase the estimated fair value to $783.0 million . In July 2017, the Company agreed to guarantee a $17.5 million standby letter of credit extended to one of the investment funds that it manages, which expired in January 2018. Credit Facilities of the Consolidated Funds Certain consolidated funds may maintain revolving credit facilities that are secured by the assets of the fund or may issue senior variable rate notes to fund investments on a longer term basis, generally up to ten years. The obligations of the consolidated funds are nonrecourse to the Company. The consolidated funds had the following debt obligations outstanding: Outstanding Amount as of Facility Capacity Weighted Average Interest Rate Weighted Average Remaining Maturity (years) Commitment Fee Rate L/C Fee Credit Agreement March 31, 2018 December 31, 2017 Senior variable rate notes $ 870,098 $ 870,098 $ 870,100 3.32% 10.5 N/A N/A Less: Debt issuance costs (7,164 ) (7,697 ) Total debt obligations, net $ 862,934 $ 862,401 As of both March 31, 2018 and December 31, 2017, the consolidated funds had debt obligations with an aggregate outstanding principal balance of $870.1 million . The fair value of the senior variable rate notes is a Level III valuation and aggregated $872.9 million and $872.1 million as of March 31, 2018 and December 31, 2017, respectively, using prices obtained from pricing vendors. Financial instruments that are valued using quoted prices for the security or similar securities are generally classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. Debt Obligations of CLOs Debt obligations of CLOs represent amounts due to holders of debt securities issued by the CLOs, as well as term loans of CLOs that had not priced as of period end. Outstanding debt obligations of CLOs were as follows: As of March 31, 2018 As of December 31, 2017 Fair Value (1) Weighted Average Interest Rate Weighted Average Remaining Maturity (years) Fair Value (1) Weighted Average Interest Rate Weighted Average Remaining Maturity (years) Senior secured notes $ 3,203,723 2.36% 10.2 $ 3,107,955 2.18% 10.7 Subordinated note (2) 115,146 N/A 10.6 111,637 N/A 10.8 Total CLO debt obligations $ 3,318,869 $ 3,219,592 (1) The fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Please see notes 2 and 7 for more information. (2) The subordinated notes do not have a contractual interest rate; instead, they receive distributions from the excess cash flows generated by the CLO. The debt obligations of CLOs are nonrecourse to the Company and are backed by the investments held by the respective CLO. Assets of one CLO may not be used to satisfy the liabilities of another. As of both March 31, 2018 and December 31, 2017, the fair value of CLO assets was $3.9 billion and consisted of cash, corporate loans, corporate bonds and other securities. As of March 31, 2018, future scheduled principal or par value payments with respect to the debt obligations of CLOs were as follows: Last nine months of 2018 $ 99,729 2019 — 2020 — 2021 — 2022 — Thereafter 3,144,310 Total $ 3,244,039 |
NON-CONTROLLING REDEEMABLE INTE
NON-CONTROLLING REDEEMABLE INTERESTS IN CONSOLIDATED FUNDS | 3 Months Ended |
Mar. 31, 2018 | |
Non-Controlling Redeemable Interests in Consolidated Funds [Abstract] | |
NON-CONTROLLING REDEEMABLE INTERESTS IN CONSOLIDATED FUNDS | NON-CONTROLLING REDEEMABLE INTERESTS IN CONSOLIDATED FUNDS The following table sets forth a summary of changes in the non-controlling redeemable interests in the consolidated funds. Dividends reinvested and in-kind contributions or distributions are non-cash in nature and have been presented on a gross basis in the table below. Three Months Ended March 31, 2018 2017 Beginning balance $ 860,548 $ 344,047 Initial consolidation of a fund — 70,817 Contributions 59,745 34,786 Distributions (73,523 ) (9,173 ) Net income 10,553 9,003 Change in distributions payable 729 4,098 Foreign currency translation and other 3,812 — Ending balance $ 861,864 $ 453,578 |
UNITHOLDERS' CAPITAL
UNITHOLDERS' CAPITAL | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
UNITHOLDERS' CAPITAL | UNITHOLDERS’ CAPITAL Unitholders’ capital reflects the economic interests attributable to Class A unitholders, non-controlling interests in consolidated subsidiaries and non-controlling interests in consolidated funds. Non-controlling interests in consolidated subsidiaries represent the portion of unitholders’ capital attributable to the OCGH non-controlling interest and third parties. The OCGH non-controlling interest is determined at the Oaktree Operating Group level based on the proportionate share of Oaktree Operating Group units held by the OCGH unitholders. Certain expenses, such as income tax and related administrative expenses of Oaktree Capital Group, LLC and its Intermediate Holding Companies, are solely attributable to the Class A unitholders. As of March 31, 2018 and December 31, 2017, respectively, OCGH units represented 86,007,356 of the total 157,178,865 Oaktree Operating Group units and 90,975,687 of the total 156,285,913 Oaktree Operating Group units. Based on total allocable Oaktree Operating Group capital of $1,959,477 and $1,912,517 as of March 31, 2018 and December 31, 2017, respectively, the OCGH non-controlling interest was $1,072,211 and $1,113,314 . As of March 31, 2018 and December 31, 2017, non-controlling interests attributable to third parties was $7,375 and $7,923 , respectively. In February 2018, the Company issued and sold 5,000,000 Class A units in a public offering, resulting in $ 219.5 million in net proceeds to the Company. The Company did not retain any proceeds from the sale of Class A units in this offering. The proceeds were used to acquire interests in the Company’s business from certain of the Company’s directors, employees and other investors, including certain senior executives and other members of the Company’s senior management. The following table sets forth a summary of net income attributable to the OCGH unitholders’ non-controlling interest and to Class A unitholders: Three Months Ended March 31, 2018 2017 Weighted average Oaktree Operating Group units outstanding (in thousands): OCGH non-controlling interest 88,270 91,644 Class A unitholders 67,918 63,022 Total weighted average units outstanding 156,188 154,666 Oaktree Operating Group net income: Net income attributable to OCGH non-controlling interest $ 73,255 $ 96,598 Net income attributable to Class A unitholders 56,362 66,428 Oaktree Operating Group net income (1) $ 129,617 $ 163,026 Net income attributable to Oaktree Capital Group, LLC: Oaktree Operating Group net income attributable to Class A unitholders $ 56,362 $ 66,428 Non-Operating Group income (expense) 20 (232 ) Income tax expense of Intermediate Holding Companies (3,650 ) (11,281 ) Net income attributable to Oaktree Capital Group, LLC $ 52,732 $ 54,915 (1) Oaktree Operating Group net income does not include amounts attributable to other non-controlling interests, which amounted to $692 and $626 for the three months ended March 31, 2018 and 2017, respectively. The change in the Company’s ownership interest in the Oaktree Operating Group is set forth below: Three Months Ended March 31, 2018 2017 Net income attributable to Oaktree Capital Group, LLC $ 52,732 $ 54,915 Equity reallocation between controlling and non-controlling interests 73,830 12,061 Change from net income attributable to Oaktree Capital Group, LLC and transfers from non-controlling interests $ 126,562 $ 66,976 Please see notes 14, 15 and 16 for additional information regarding transactions that impacted unitholders’ capital. |
EARNINGS PER UNIT
EARNINGS PER UNIT | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER UNIT | EARNINGS PER UNIT The computation of net income per Class A unit is set forth below: Three Months Ended March 31, 2018 2017 Net income per Class A unit (basic and diluted): (in thousands, except per unit amounts) Net income attributable to Oaktree Capital Group, LLC $ 52,732 $ 54,915 Weighted average number of Class A units outstanding (basic and diluted) 67,918 63,022 Basic and diluted net income per Class A unit $ 0.78 $ 0.87 OCGH units may be exchanged on a one -for- one basis into Class A units, subject to certain restrictions. As of March 31, 2018, there were 86,007,356 OCGH units outstanding, which are vested or will vest through February 15, 2028, that ultimately may be exchanged into 86,007,356 Class A units. The exchange of these units would proportionally increase the Company’s interest in the Oaktree Operating Group. However, as the restrictions set forth in the exchange agreement were in place at the end of each respective reporting period, those units were not included in the computation of diluted earnings per unit for the three months ended March 31, 2018 and 2017. A deferred equity unit represents a special unit award that, when vested, will be settled with an unvested OCGH unit on a one -for- one basis. The number of deferred equity units that will vest is based on the achievement of certain performance targets through June 2021. Once a performance target has been met, the applicable number of OCGH units will be issued and begin to vest over 4.0 years. The holder of a deferred equity unit is not entitled to any distributions until the issuance of an OCGH unit in settlement of a deferred equity unit. As of March 31, 2018, no OCGH units were considered issuable under the terms of the arrangement; consequently, no contingently issuable units were included in the computation of diluted earnings per unit for the three months ended March 31, 2018. Please see note 15 for more information. Certain compensation arrangements include performance-based awards that could result in the issuance of up to 340,000 OCGH units in total, which would vest over periods of four to ten years from date of issuance. As of March 31, 2018, no OCGH units were considered issuable under the terms of these arrangements; consequently, no contingently issuable units were included in the computation of diluted earnings per unit for the three months ended March 31, 2018. In connection with the 2014 Highstar acquisition, the Company has a contingent consideration liability that is payable in a combination of cash and fully-vested OCGH units. The amount of contingent consideration, if any, is based on the achievement of certain performance targets over a period of up to seven years from the acquisition date. As of March 31, 2018 and 2017, no OCGH units were considered issuable under the terms of the contingent consideration arrangement; consequently, no contingently issuable units were included in the computation of diluted earnings per unit for the three months ended March 31, 2018 and 2017. Please see note 17 for more information. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
Share-based Compensation [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Class A and OCGH Unit Awards During the three months ended March 31, 2018, the Company granted 1,150,196 Class A units and 113,801 restricted OCGH units to its employees and directors, subject to annual vesting over a weighted average period of approximately 4.4 years . The grant date fair value of OCGH units awarded during the three months ended March 31, 2018 was determined by applying a 20% discount to the Class A unit trading price on the New York Stock Exchange as of the grant date. With respect to forfeitures, the Company has made an accounting policy election to account for forfeitures when they occur. Accordingly, no forfeitures have been assumed in the calculation of compensation expense. As of March 31, 2018, the Company expected to recognize compensation expense on its unvested Class A and OCGH unit awards of $178.1 million over a weighted average period of 4.2 years. A summary of the status of the Company’s unvested Class A and OCGH unit awards and changes for the period presented are set forth below (actual dollars per unit): Class A Units OCGH Units (1) Number of Units Weighted Average Grant Date Fair Value Number of Units Weighted Average Grant Date Fair Value Balance, December 31, 2017 2,556,316 $ 44.05 2,158,835 $ 39.79 Granted 1,150,196 39.60 113,801 31.68 Vested (863,389 ) 42.53 (282,028 ) 37.61 Forfeited (65,225 ) 39.72 — — Balance, March 31, 2018 2,777,898 $ 42.78 1,990,608 $ 39.63 (1) Excludes certain performance-based awards that could result in the issuance of up to 340,000 OCGH units, which would vest over periods of four to ten years from date of issuance. Though no units have been issued to date under these arrangements, as of March 31, 2018 the Company expected to recognize compensation expense on 120,000 unvested OCGH performance awards of $ 3.8 million over a weighted average period of 5.0 years under applicable accounting rules. Equity Value Units OCGH equity value units (“EVUs”) represent special limited partnership units in OCGH that entitle the holder the right to receive special distributions that will be settled in OCGH units, based on value created during a specified period in excess of a fixed “Base Value.” The value created will be measured on a per unit basis, based on the appreciation of the Class A units and certain components of quarterly distributions with respect to OCGH units over the period beginning on January 1, 2015 and ending on each of December 31, 2019, December 31, 2020 and December 31, 2021, with one-third of the EVUs recapitalizing on each such date. EVUs also give the holder the right, subject to service vesting and Oaktree performance relative to the accreting Base Value, to receive certain quarterly distributions from OCGH. EVUs do not entitle the holder to any voting rights. The value received under the EVUs will be reduced by (i) distributions received by the holder on 225,000 OCGH units granted to the holder on April 26, 2017, (ii) the value of the portion of profit sharing payments received by the holder attributable to the net incentive income received from certain funds, and (iii) the full value of the OCGH units granted to the holder on April 26, 2017. To the extent that the reduction relates to the value of any such OCGH units that are unvested at the time of the reduction, such OCGH units will vest at that time. Certain EVUs provide the holder with liquidity rights in respect of the special distributions, if any, that will be settled in OCGH units. The Company accounts for EVUs with liquidity rights as liability-classified awards. As of March 31, 2018, there were 1,000,000 equity-classified EVUs and 1,000,000 liability-classified EVUs outstanding. As of March 31, 2018, the Company expected to recognize $2.6 million of compensation expense on its unvested EVUs over the next 1.8 years . Equity-classified EVUs that require future service are expensed on a straight-line basis over the requisite service period. Liability-classified EVUs are remeasured at the end of each quarter. The fair value of EVUs was determined using a Monte Carlo simulation model. The fair value is affected by the Class A unit trading price and assumptions regarding certain complex and subjective variables, including the expected Class A unit trading price volatility, distributions and exercise timing, and the risk-free interest rate. Deferred Equity Units A deferred equity unit represents a special unit award that, when vested, will be settled with an unvested OCGH unit on a one -for- one basis. The number of deferred equity units that will vest is based on the achievement of certain performance targets through June 2021. Once a performance target has been met, the applicable number of OCGH units will be issued and begin to vest over 4.0 years. The holder of a deferred equity unit is not entitled to any distributions until settled by the issuance of an OCGH unit. As of March 31, 2018, there were 250,000 deferred equity units outstanding, all of which were granted in the second quarter of 2017. As of March 31, 2018, the Company expected to recognize $2.6 million of compensation expense on its unvested deferred equity units over a weighted average period of approximately 5.7 years. The fair value of the deferred equity units was determined at the grant date based on the then-prevailing Class A unit trading price and reflected a 20% lack-of-marketability discount for the OCGH units that will be issued upon vesting. |
INCOME TAXES AND RELATED PAYMEN
INCOME TAXES AND RELATED PAYMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES AND RELATED PAYMENTS | INCOME TAXES AND RELATED PAYMENTS Oaktree is a publicly traded partnership and Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc., two of its Intermediate Holding Companies, are wholly-owned corporate subsidiaries. Income earned by these corporate subsidiaries is subject to U.S. federal and state income taxation and taxed at prevailing rates. Income earned by non-corporate subsidiaries is not subject to U.S. federal corporate income tax and is allocated to the Oaktree Operating Group’s unitholders. The Company’s effective tax rate is dependent on many factors, including the estimated nature of many amounts and the mix of revenues and expenses between the subsidiaries that are or are not subject to income tax; consequently, from period to period the effective tax rate is subject to significant variation. The Company’s effective tax rate used for interim periods is based on the estimated full-year income tax rate. Certain future items that cannot be reliably estimated, such as incentive income, are excluded from the estimated annual effective tax rate. The tax expense or benefit stemming from these items is recognized in the same period as the underlying income or expense. Tax authorities currently are examining certain income tax returns of Oaktree, with certain of these examinations at an advanced stage. Over the next four quarters ending March 31, 2019, the Company believes that it is reasonably possible that one outcome of these examinations and expiring statutes of limitation on other items may be the release of up to approximately $5.3 million of previously accrued Operating Group income taxes. The Company believes that it has adequately provided for any reasonably foreseeable outcomes related to its tax examinations and that any settlements related thereto will not have a material adverse effect on the Company’s consolidated financial statements; however, there can be no assurances as to the ultimate outcomes. Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act reduced the corporate income tax rate from 35% to 21%, and included significant changes to other domestic and international corporate income tax provisions. The rate change resulted in a net reduction to net income attributable to Oaktree Capital Group, LLC of $ 33.2 million in the fourth quarter of 2017. The SEC Staff issued Staff Accounting Bulletin No. 118 in December 2017, which allows a financial statement issuer that does not have all necessary information to fully account for the income tax effect of the Tax Act to record a provisional amount in its financial statements that may be subject to adjustment during a subsequent measurement period. As of March 31, 2018, no adjustments have been made to the above provisional amounts. The Company will continue to evaluate the impact of the Tax Act with respect to certain international provisions as well as provisions that have been identified as requiring additional technical guidance. The Company expects to complete its evaluation of the provisional amounts during the second half of 2018 as technical guidance is released and as it completes its 2017 federal and state income tax returns. Exchange Agreement and Tax Receivable Agreement Subject to certain restrictions and the approval of the Company’s board of directors, each holder of OCGH units has the right to exchange his or her vested units for, at the option of the Company’s board of directors, Class A units, an equivalent amount of cash based on then-prevailing market prices and/or other consideration of equal value. Certain of the Oaktree Operating Group entities made an election under Section 754 of the U.S. Internal Revenue Code, as amended, which may result in an adjustment to the tax basis of the assets owned by the Oaktree Operating Group at the time of an exchange. These exchanges may result in increases in tax deductions and tax basis that would reduce the amount of tax that Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc. would otherwise be required to pay in the future. Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc. have entered into a tax receivable agreement with OCGH unitholders that, as amended, provides for the payment to an exchanging or selling OCGH unitholder of 85% of the amount of cash savings, if any, in U.S. federal, state, local and foreign income taxes that they actually realize (or are deemed to realize in the case of an early termination payment by Oaktree Holdings, Inc. or Oaktree AIF Holdings, Inc., or a change of control) as a result of an increase in the tax basis of the assets owned by the Oaktree Operating Group. When an exchange of OCGH units results in an increase to the tax basis of the assets owned by the Oaktree Operating Group, a deferred tax asset and an associated liability for payments to OCGH unitholders under the tax receivable agreement are recorded, subject to realizability considerations. The establishment of a deferred tax asset increases additional paid-in capital because the transactions are between Oaktree and its unitholders. Assuming no further material changes in the relevant tax law and that the Company earns sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected estimated future payments to OCGH unitholders under the tax receivable agreement, as of March 31, 2018, are set forth below: Transaction Total Future Payments Payments Through Fiscal Year 2007 Private Offering $ 17,339 2029 Initial public offering 36,767 2034 May 2013 Offering 51,122 2035 March 2014 Offering 38,557 2036 March 2015 Offering 32,498 2037 February 2018 Offering 34,288 2040 Total $ 210,571 Future estimated payments to OCGH unitholders under the tax receivable agreement are subject to increase in the event of additional exchanges of OCGH units. No amounts were paid under the tax receivable agreement during the three months ended March 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In the normal course of business, Oaktree enters into contracts that contain certain representations, warranties and indemnifications. The Company’s exposure under these arrangements would involve future claims that have not yet been asserted. Inasmuch as no such claims currently exist or are expected to arise, the Company has not accrued any liability in connection with these indemnifications. Legal Actions Oaktree, its affiliates, investment professionals, and portfolio companies are routinely involved in litigation and other legal actions in the ordinary course of their business and investing activities. In addition, Oaktree is subject to the authority of a number of U.S. and non-U.S. regulators, including the SEC and the Financial Industry Regulatory Authority, and those authorities periodically conduct examinations of Oaktree and make other inquiries that may result in the commencement of regulatory proceedings against Oaktree and its personnel. Oaktree is currently not subject to any pending actions or regulatory proceedings that either individually or in the aggregate are expected to have a material impact on its consolidated financial statements. Incentive Income In addition to the incentive income recognized by the Company, certain of its funds have amounts recorded as potentially allocable to the Company as its share of potential future incentive income, based on each fund’s net asset value. Inasmuch as this incentive income is contingent upon future investment activity and other factors, it is not recognized by the Company as revenue until it is probable that a significant reversal will not occur. As of March 31, 2018 and December 31, 2017, respectively, the aggregate of such amounts recorded at the fund level in excess of incentive income recognized by the Company was $1,770,580 and $1,918,952 , for which related direct incentive income compensation expense was estimated to be $918,696 and $1,000,232 . Contingent Liabilities The Company has a contingent consideration obligation of up to $60.0 million related to the Highstar acquisition, payable in cash and fully-vested OCGH units. The amount of contingent consideration is based on the achievement of certain performance targets over a period of up to seven years from the acquisition date of August 2014. As of March 31, 2018 and December 31, 2017, respectively, the fair value of the contingent consideration liability was $16.2 million and $18.8 million . Changes in this liability resulted in income of $2.6 million and expense of $0.6 million for the three months ended March 31, 2018 and 2017, respectively. The fair value of the contingent consideration liability is a Level III valuation, which uses a discounted cash-flow analysis based on a probability-weighted average estimate of certain performance targets, including fundraising and revenue levels. The assumptions used in the analysis are inherently subjective, and thus the ultimate amount of the contingent consideration liability may differ materially from the most recent estimate. The contingent consideration liability is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. Changes in the liability are recorded in general and administrative expense in the condensed consolidated statements of operations. In connection with the October 2017 BDC acquisition, the Company recorded a $ 56.2 million contingent liability and a $ 56.2 million indemnification asset as part of the purchase price allocation. Please see note 3 for more information. Commitments to Funds As of March 31, 2018 and December 31, 2017, the Company, generally in its capacity as general partner, had undrawn capital commitments of $360.3 million and $429.1 million , respectively, including commitments to both unconsolidated and consolidated funds. Investment Commitments of the Consolidated Funds Certain of the consolidated funds are parties to credit arrangements that provide for the issuance of letters of credit and/or revolving loans, which may require the particular fund to extend loans to investee companies. The consolidated funds use the same investment criteria in making these commitments as they do for investments that are included in the condensed consolidated statements of financial condition. The unfunded liability associated with these credit arrangements is equal to the amount by which the contractual loan commitment exceeds the sum of funded debt and cash held in escrow, if any. As of March 31, 2018 and December 31, 2017, the consolidated funds had potential aggregate commitments of $7.5 million and $6.0 million , respectively. These commitments are expected to be funded by the funds’ cash balances, proceeds from asset sales or drawdowns against existing capital commitments. A consolidated fund may agree to guarantee the repayment obligations of certain investee companies. As of March 31, 2018 and December 31, 2017, there were no guaranteed amounts under such arrangements. Certain consolidated funds are investment companies that are required to disclose financial support provided or contractually required to be provided to any of their portfolio companies. During the three months ended March 31, 2018, the consolidated funds did not provide any financial support to portfolio companies. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS The Company considers its senior executives, employees and unconsolidated Oaktree funds to be affiliates (as defined in the FASB ASC Master Glossary). Amounts due from and to affiliates are set forth below. The fair value of amounts due from and to affiliates is a Level III valuation and was valued based on a discounted cash-flow analysis. The carrying value of amounts due from affiliates approximated fair value due to their short-term nature or because their average interest rate, which ranged from 2.0% to 3.0% , approximated the Company’s cost of debt. The fair value of amounts due to affiliates approximated $108,417 and $93,772 as of March 31, 2018 and December 31, 2017, respectively, based on a discount rate of 10.0% . As of March 31, 2018 December 31, 2017 Due from affiliates: Loans $ 6,951 $ 9,239 Amounts due from unconsolidated funds 55,873 57,155 Management fees and incentive income due from unconsolidated funds 86,265 152,959 Payments made on behalf of unconsolidated entities 4,310 3,784 Non-interest bearing advances made to certain non-controlling interest holders and employees 26 87 Total due from affiliates $ 153,425 $ 223,224 Due to affiliates: Due to OCGH unitholders in connection with the tax receivable agreement (please see note 16) $ 210,571 $ 176,283 Amounts due to senior executives, certain non-controlling interest holders and employees 1,165 1,590 Total due to affiliates $ 211,736 $ 177,873 Loans Loans primarily consist of interest-bearing loans made to certain non-controlling interest holders, primarily certain employees, to meet tax obligations related to vesting of equity awards. The loans, which are generally recourse to the borrower or secured by vested equity and other collateral, typically bear interest at the Company’s cost of debt and generated interest income of $109 and $151 for the three months ended March 31, 2018 and 2017, respectively. Due From Oaktree Funds and Portfolio Companies In the normal course of business, the Company advances certain expenses on behalf of Oaktree funds. Amounts advanced on behalf of consolidated funds are eliminated in consolidation. Certain expenses paid by the Company, which typically are employee travel and other costs associated with particular portfolio company holdings, are reimbursed to the Company by the portfolio companies. Revenues Earned From Oaktree Funds Management fees and incentive income earned from unconsolidated Oaktree funds totaled $312.0 million and $260.2 million for the three months ended March 31, 2018 and 2017, respectively. Other Investment Transactions The Company’s senior executives, directors and senior professionals are permitted to invest their own capital (or the capital of family trusts or other estate planning vehicles they control) in Oaktree funds, for which they pay the particular fund’s full management fee but not its incentive allocation. To facilitate the funding of capital calls by funds in which employees are invested, the Company periodically advances on a short-term basis the capital calls on certain employees’ behalf. These advances are reimbursed generally toward the end of the calendar quarter in which the capital calls occurred. Amounts advanced by the Company are included within “non-interest bearing advances made to certain non-controlling interest holders and employees” in the above table. Aircraft Services The Company owns an aircraft for business purposes. Howard Marks, the Company’s co-chairman, may use this aircraft for personal travel and will reimburse the Company to the extent his use of the aircraft for personal travel exceeds a certain threshold pursuant to a Company policy adopted as of January 1, 2017. The Company also provides certain senior executives a personal travel allowance for private aircraft usage up to a certain threshold pursuant to the same Company policy. Additionally, the Company occasionally makes use of an aircraft owned by one of its senior executives for business purposes at a price to the Company that is based on market rates. Special Allocations Certain senior executives receive special allocations based on a percentage of profits of the Oaktree Operating Group. These special allocations, which are recorded as compensation expense, are made on a current basis for so long as they remain senior executives of the Company, with limited exceptions. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING As a global investment manager, the Company provides investment management services through funds and separate accounts. The Company earns revenues from the management fees and incentive income generated by the funds that it manages. Management uses a consolidated approach to assess performance and allocate resources. As such, the Company’s business is comprised of one segment, the investment management business. The Company conducts its investment management business primarily in the United States, where substantially all of its revenues are generated. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 26, 2018, the Company announced a distribution of $0.96 per Class A unit. This distribution, which is related to the first quarter of 2018, will be paid on May 11, 2018 to Class A unitholders of record at the close of business on May 7, 2018. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation The Company consolidates entities in which it has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. A limited partnership or similar entity is a variable interest entity (“VIE”) if the unaffiliated limited partners do not have substantive kick-out or participating rights. Most of the Oaktree funds are VIEs because they have not granted unaffiliated limited partners substantive kick-out or participating rights. The Company consolidates those VIEs in which it is the primary beneficiary. An entity is deemed to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Company holds a variable interest is a VIE and (b) whether the Company’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance-based fees), would give it a controlling financial interest. A decision maker’s fee arrangement is not considered a variable interest if (a) it is compensation for services provided, commensurate with the level of effort required to provide those services, and part of a compensation arrangement that includes only terms, conditions or amounts that are customarily present in arrangements for similar services negotiated at arm’s length (“at-market”), and (b) the decision maker does not hold any other variable interests that absorb more than an insignificant amount of the potential VIE’s expected residual returns. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Company, affiliates of the Company or third parties) or amendments to the governing documents of the respective Oaktree funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. The Company does not consolidate most of the Oaktree funds because it is not the primary beneficiary of those funds due to the fact that its fee arrangements are considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in those funds that are considered to be more than insignificant. Please see note 5 for more information regarding both consolidated and unconsolidated VIEs. For entities that are not VIEs, consolidation is evaluated through a majority voting interest model. “Consolidated funds” refers to Oaktree-managed funds and CLOs that the Company is required to consolidate. When funds or CLOs are consolidated, the Company reflects the assets, liabilities, revenues, expenses and cash flows of the funds or CLOs on a gross basis, and the majority of the economic interests in those funds or CLOs, which are held by third-party investors, are reflected as non-controlling interests in consolidated funds or debt obligations of CLOs in the condensed consolidated financial statements. All of the revenues earned by the Company as investment manager of the consolidated funds are eliminated in consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the consolidation of a fund does not impact net income or loss attributable to the Company. Certain entities in which the Company has the ability to exert significant influence, including unconsolidated Oaktree funds for which the Company acts as general partner, are accounted for under the equity method of accounting. |
Non-controlling Interests in Consolidated Funds and Subsidiaries | Non-controlling Redeemable Interests in Consolidated Funds The Company records non-controlling interests to reflect the economic interests of the unaffiliated limited partners. These interests are presented as non-controlling redeemable interests in consolidated funds within the condensed consolidated statements of financial condition, outside of the permanent capital section. Limited partners in open-end and evergreen funds generally have the right to withdraw their capital, subject to the terms of the respective limited partnership agreements, over periods ranging from one month to three years . While limited partners in consolidated closed-end funds generally have not been granted redemption rights, these limited partners do have withdrawal or redemption rights in certain limited circumstances that are beyond the control of the Company, such as instances in which retaining the limited partnership interest could cause the limited partner to violate a law, regulation or rule. The allocation of net income or loss to non-controlling redeemable interests in consolidated funds is based on the relative ownership interests of the unaffiliated limited partners after the consideration of contractual arrangements that govern allocations of income or loss. At the consolidated level, potential incentives are allocated to non-controlling redeemable interests in consolidated funds until such incentives become allocable to the Company under the substantive contractual terms of the limited partnership agreements of the funds. Non-controlling Interests in Consolidated Funds Non-controlling interests in consolidated funds represent the equity interests held by third-party investors in CLOs that had not yet priced as of the respective period end. All non-controlling interests in those CLOs are attributed a share of income or loss arising from the respective CLO based on the relative ownership interests of third-party investors after consideration of contractual arrangements that govern allocations of income or loss. Investors in those CLOs are generally unable to redeem their interests until the respective CLO liquidates, is called or otherwise terminates. Non-controlling Interests in Consolidated Subsidiaries Non-controlling interests in consolidated subsidiaries reflect the portion of unitholders’ capital attributable to OCGH unitholders (“OCGH non-controlling interest”) and third parties. All non-controlling interests in consolidated subsidiaries are attributed a share of income or loss in the respective consolidated subsidiary based on the relative economic interests of the OCGH unitholders or third parties after consideration of contractual arrangements that govern allocations of income or loss. Please see note 13 for more information. |
Acquisitions | Acquisitions The Company accounts for business combinations using the acquisition method of accounting, which requires the use of estimates and judgment to measure the fair value of identifiable tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquiree as of the acquisition date. Contingent consideration that is determined to be part of the business combination is recognized at fair value as of the acquisition date and is included in the purchase price. Transaction costs are expensed as incurred. Transactions that do not meet the definition of a business are accounted for as asset acquisitions. The cost of an asset acquisition is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Transaction costs are included in the cost of the acquisition and no goodwill is recognized. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill represents the excess of cost over the fair value of identifiable net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead is tested for impairment annually in the fourth quarter of each fiscal year, or more frequently when events or circumstances indicate that impairment may have occurred. The Company’s acquired identifiable intangible assets primarily relate to contractual rights to earn future management fees and incentive income. Finite-lived intangible assets are amortized over their estimated useful lives, which range from seven to 25 years, and are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. |
Fair Value of Financial Instruments and Fair Value Option | Fair Value of Financial Instruments GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market observability. Market price observability is affected by a number of factors, such as the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I – Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement. The types of investments in Level I include exchange-traded equities, debt and derivatives with quoted prices. • Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. The types of investments in Level II generally include corporate bonds and loans, government and agency securities, less liquid and restricted equity investments, over-the-counter traded derivatives, debt obligations of consolidated CLOs, and other investments where the fair value is based on observable inputs. • Level III – Valuations for which one or more significant inputs are unobservable. These inputs reflect the Company’s assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices of quoted securities in markets for which there are few transactions, less public information exists or prices vary among brokered market makers. The types of investments in Level III include non-publicly traded equity, debt, real estate and derivatives. In some instances, the inputs used to value an instrument may fall into multiple levels of the fair-value hierarchy. In such instances, the instrument’s level within the fair-value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair-value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. Transfers of assets into or out of each fair value hierarchy level as a result of changes in the observability of the inputs used in measuring fair value are accounted for as of the beginning of the reporting period. Transfers resulting from a specific event, such as a reorganization or restructuring, are accounted for as of the date of the event that caused the transfer. In the absence of observable market prices, the Company values Level III investments using valuation methodologies applied on a consistent basis. The quarterly valuation process for Level III investments begins with each portfolio company, property or security being valued by the investment and/or valuation teams. With the exception of open-end funds, all unquoted Level III investment values are reviewed and approved by (i) the Company’s valuation officer, who is independent of the investment teams, (ii) a designated investment professional of each strategy and (iii) for a substantial majority of unquoted Level III holdings as measured by market value, a valuation committee of the respective strategy. For open-end funds, unquoted Level III investment values are reviewed and approved by the Company’s valuation officer. For certain investments, the valuation process also includes a review by independent valuation parties, at least annually, to determine whether the fair values determined by management are reasonable. Results of the valuation process are evaluated each quarter, including an assessment of whether the underlying calculations should be adjusted or recalibrated. In connection with this process, the Company periodically evaluates changes in fair-value measurements for reasonableness, considering items such as industry trends, general economic and market conditions, and factors specific to the investment. Certain assets are valued using prices obtained from pricing vendors or brokers. The Company seeks to obtain prices from at least two pricing vendors for the subject or similar securities. In cases where vendor pricing is not reflective of fair value, a secondary vendor is unavailable, or no vendor pricing is available, a comparison value made up of quotes for the subject or similar securities received from broker dealers may be used. These investments may be classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. The Company evaluates the prices obtained from brokers or pricing vendors based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Company also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Company performs due diligence procedures surrounding pricing vendors to understand their methodology and controls to support their use in the valuation process. Fair Value Option The Company has elected the fair value option for certain corporate investments that otherwise would not have reflected unrealized gains and losses in current-period earnings. Such election is irrevocable and is applied on an investment-by-investment basis at initial recognition. Unrealized gains and losses resulting from changes in fair value are reflected as a component of investment income in the condensed consolidated statements of operations. The Company’s accounting for these investments is similar to its accounting for investments held by the consolidated funds at fair value and the valuation methods are consistent with those used to determine the fair value of the consolidated funds’ investments. The Company has elected the fair value option for the financial assets and financial liabilities of its consolidated CLOs. The assets and liabilities of CLOs are primarily reflected within the investments, at fair value and within the debt obligations of CLOs line items in the condensed consolidated statements of financial condition. The Company’s accounting for CLO assets is similar to its accounting for its funds with respect to both carrying investments held by CLOs at fair value and the valuation methods used to determine the fair value of those investments. The fair value of CLO liabilities are measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Realized gains or losses and changes in the fair value of CLO assets, respectively, are included in net realized gain on consolidated funds’ investments and net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Interest income of CLOs is included in interest and dividend income, and interest expense and other expenses, respectively, are included in interest expense and consolidated fund expenses in the condensed consolidated statements of operations. Changes in the fair value of a CLO’s financial liabilities in accordance with the CLO measurement guidance are included in net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Please see notes 7 and 11 for more information. |
Investments, at Fair Value | Investments, at Fair Value The consolidated funds include investment limited partnerships and CLOs that reflect their investments, including majority-owned and controlled investments, at fair value. The Company has retained the specialized investment company accounting guidance under GAAP for investment limited partnerships with respect to consolidated investments and has elected the fair value option for the financial assets of CLOs. Thus, the consolidated investments are reflected in the condensed consolidated statements of financial condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Non-publicly traded debt and equity securities and other securities or instruments for which reliable market quotations are not available are valued by management using valuation methodologies applied on a consistent basis. These securities may initially be valued at the acquisition price as the best indicator of fair value. The Company reviews the significant unobservable inputs, valuations of comparable investments and other similar transactions for investments valued at acquisition price to determine whether another valuation methodology should be utilized. Subsequent valuations will depend on the facts and circumstances known as of the valuation date and the application of valuation methodologies as further described below under “—Non-publicly Traded Equity and Real Estate Investments.” The fair value may also be based on a pending transaction expected to close after the valuation date. Exchange-traded Investments Securities listed on one or more national securities exchanges are valued at their last reported sales price on the date of valuation. If no sale occurred on the valuation date, the security is valued at the mean of the last “bid” and “ask” prices on the valuation date. Securities that are not readily marketable due to legal restrictions that may limit or restrict transferability are generally valued at a discount from quoted market prices. The discount would reflect the amount market participants would require due to the risk relating to the inability to access a public market for the security for the specified period and would vary depending on the nature and duration of the restriction and the perceived risk and volatility of the underlying securities. Securities with longer duration restrictions or higher volatility are generally valued at a higher discount. Such discounts are generally estimated based on put option models or an analysis of market studies. Instances where the Company has applied discounts to quoted prices of restricted listed securities have been infrequent. The impact of such discounts is not material to the Company’s condensed consolidated statements of financial condition and results of operations for all periods presented. Credit-oriented Investments (including Real Estate Loan Portfolios) Investments in corporate and government debt which are not listed or admitted to trading on any securities exchange are valued at the mean of the last bid and ask prices on the valuation date based on quotations supplied by recognized quotation services or by reputable broker-dealers. The market-yield approach is considered in the valuation of non-publicly traded debt securities, utilizing expected future cash flows and discounted using estimated current market rates. Discounted cash-flow calculations may be adjusted to reflect current market conditions and/or the perceived credit risk of the borrower. Consideration is also given to a borrower’s ability to meet principal and interest obligations; this may include an evaluation of collateral and/or the underlying value of the borrower utilizing techniques described below under “—Non-publicly Traded Equity and Real Estate Investments.” Non-publicly Traded Equity and Real Estate Investments The fair value of equity and real estate investments is determined using a cost, market or income approach. The cost approach is based on the current cost of reproducing a real estate investment less deterioration and functional and economic obsolescence. The market approach utilizes valuations of comparable public companies and transactions, and generally seeks to establish the enterprise value of the portfolio company or investment property using a market-multiple methodology. This approach takes into account the financial measure (such as EBITDA, adjusted EBITDA, free cash flow, net operating income, net income, book value or net asset value) believed to be most relevant for the given company or investment property. Consideration also may be given to factors such as acquisition price of the security or investment property, historical and projected operational and financial results for the portfolio company, the strengths and weaknesses of the portfolio company or investment property relative to its comparable companies or properties, industry trends, general economic and market conditions, and others deemed relevant. The income approach is typically a discounted cash-flow method that incorporates expected timing and level of cash flows. It incorporates assumptions in determining growth rates, income and expense projections, discount and capitalization rates, capital structure, terminal values, and other factors. The applicability and weight assigned to market and income approaches are determined based on the availability of reliable projections and comparable companies and transactions. The valuation of securities may be impacted by expectations of investors’ receptiveness to a public offering of the securities, the size of the holding of the securities and any associated control, information with respect to transactions or offers for the securities (including the transaction pursuant to which the investment was made and the elapsed time from the date of the investment to the valuation date), and applicable restrictions on the transferability of the securities. These valuation methodologies involve a significant degree of management judgment. Accordingly, valuations by the Company do not necessarily represent the amounts that eventually may be realized from sales or other dispositions of investments. Fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the condensed consolidated financial statements. |
Recent Accounting Developments | Recent Accounting Developments In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for goodwill impairments by eliminating step 2 of the goodwill impairment test. This step currently requires an entity to perform a hypothetical purchase price allocation to derive the implied fair value of goodwill. Under the new guidance, an impairment loss is recognized if the carrying value of a reporting unit exceeds its fair value. The impairment loss would equal the amount of that excess, limited to the total amount of goodwill. All other goodwill impairment guidance remains largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance is effective for the Company in the first quarter of 2020 on a prospective basis, with early adoption permitted. The Company expects that adoption of this guidance will not have a material impact on the consolidated financial statements. In August 2016, the FASB issued guidance on the classification of certain cash receipts and payments in the statement of cash flows. The amendments add to or clarify guidance on a number of cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity-method investees and beneficial interests in securitization transactions. The Company adopted this guidance in the first quarter of 2018 on a retrospective basis. The impact of adoption was not material to the Company’s consolidated financial statements. In February 2016, the FASB issued guidance that will require a lessee to recognize a lease asset and a lease liability for most of its operating leases. Under current GAAP, operating leases are not recognized by a lessee in its statements of financial position. In general, the new asset and liability will each equal the present value of lease payments. The guidance does not significantly change the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee. The Company expects to adopt the guidance in the first quarter of 2019 under the modified retrospective transition approach, which requires application of the new guidance at the beginning of the earliest comparative period presented. The Company does not expect that adoption will have a material impact on the consolidated statements of operations because all of the Company’s leases are currently classified as operating leases, which under the guidance will continue to be recognized as expense on a straight-line basis. The adoption, however, will result in a significant gross-up in total assets and total liabilities on the consolidated statements of financial position. As of March 31, 2018, the Company’s minimum lease payments under lease obligations aggregated $155.0 million . In May 2014, the FASB issued guidance on revenue recognition that superseded most existing revenue recognition guidance, including industry-specific guidance. The guidance outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, and provides a largely principles-based framework for addressing revenue recognition issues on a comprehensive basis. Under the guidance, revenue is recognized when an entity satisfies a performance obligation by transferring control of a promised good or service to a customer in an amount that reflects the consideration for which the entity expects to be entitled for that good or service. The guidance also requires qualitative and quantitative disclosures about revenue that has been recognized and revenue that is expected to be recognized in the future from existing contracts, significant judgments and changes in those judgments made by management in recognizing revenue, disaggregation of revenue, and information about contract balances. The Company adopted this guidance in the first quarter of 2018 on a modified retrospective basis. The most significant effect of the guidance for the Company relates to the recognition of incentive income. The guidance requires the Company to recognize incentive income when it concludes that it is probable that significant reversals of revenue will not occur in subsequent periods. Under legacy GAAP, the amount of incentive income recognized by the Company was generally limited to the amount not contingent on a future event. Upon adoption, the Company recorded a cumulative-effect increase to unitholders’ capital of $ 48.7 million , net of tax, as of January 1, 2018. This adjustment relates to incentive income that would have met the “probable that significant reversal will not occur” criteria as of that date. In addition, effective January 1, 2018, certain reimbursements received by the Company from the investment funds it manages are reported as revenues on a gross basis with an equal offset to expenses in the consolidated statements of operations. Please see note 4 for more information on revenues. |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregated by Fund Structure | The following schedule presents revenues disaggregated by fund structure, each of which is affected by economic factors related to the asset class composition of the holdings and the contractual terms such as the basis for calculating the management fees and investors’ ability to redeem: Three Months Ended March 31, 2018 2017 Management Fees Closed-end $ 123,387 $ 127,721 Open-end 37,552 39,945 Evergreen 24,476 13,262 Total $ 185,415 $ 180,928 Incentive Income Closed-end $ 151,906 $ 108,657 |
Contract Balances | The table below sets forth contract balances for the periods indicated: As of March 31, 2018 December 31, 2017 Receivables (1) $ 62,265 $ 98,738 Contract assets (1) 24,000 54,221 Contract liabilities (2) (23,592 ) (25,297 ) (1) The decline in balances was primarily related to payments received, net of accruals. (2) Revenue recognized in the three months ended March 31, 2018 from amounts included in the contract liability balance as of December 31, 2017 was $17.9 million . |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | The carrying value of the Company’s investments in VIEs that were not consolidated are shown below. Carrying Value as of March 31, 2018 December 31, 2017 Corporate investments $ 911,132 $ 930,699 Due from affiliates 87,482 160,257 Maximum exposure to loss $ 998,614 $ 1,090,956 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
Equity Method Investments | Summarized financial information of the Company’s equity-method investments is set forth below. As of Statements of Financial Condition March 31, 2018 December 31, 2017 Assets: Cash and cash-equivalents $ 2,495,772 $ 2,654,311 Investments, at fair value 41,915,841 41,754,054 Other assets 2,051,923 2,116,751 Total assets $ 46,463,536 $ 46,525,116 Liabilities and Capital: Debt obligations $ 8,064,952 $ 8,393,314 Other liabilities 2,184,074 2,264,579 Total liabilities 10,249,026 10,657,893 Total capital 36,214,510 35,867,223 Total liabilities and capital $ 46,463,536 $ 46,525,116 Three Months Ended March 31, Statements of Operations 2018 2017 Revenues / investment income $ 477,491 $ 520,610 Interest expense (67,230 ) (47,014 ) Other expenses (201,436 ) (211,158 ) Net realized and unrealized gain on investments 530,361 924,551 Net income $ 739,186 $ 1,186,989 Corporate investments consisted of the following: As of Corporate Investments March 31, 2018 December 31, 2017 Equity-method investments: Funds $ 910,479 $ 916,559 Companies 35,345 42,294 Other investments, at fair value 56,377 50,778 Total corporate investments $ 1,002,201 $ 1,009,631 |
Investment Income | The components of investment income are set forth below: Three Months Ended March 31, Investment Income 2018 2017 Equity-method investments: Funds $ 27,266 $ 32,921 Companies 18,138 15,894 Other investments, at fair value (10,841 ) 1,636 Total investment income $ 34,563 $ 50,451 |
Investments, at Fair Value | Investments held and securities sold short by the consolidated funds are summarized below: Fair Value as of Fair Value as a Percentage of Investments of Consolidated Funds as of Investments March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 United States: Debt securities: Consumer discretionary $ 796,820 $ 796,681 13.9 % 14.0 % Consumer staples 114,094 100,863 2.0 1.8 Energy 126,046 106,414 2.2 1.9 Financials 153,572 161,807 2.7 2.9 Government 1,534 3,033 0.0 0.1 Health care 400,027 416,779 7.0 7.4 Industrials 415,020 441,440 7.3 7.8 Information technology 474,554 431,010 8.3 7.6 Materials 364,346 384,310 6.4 6.8 Real estate 131,746 146,836 2.3 2.6 Telecommunication services 161,496 178,984 2.8 3.2 Utilities 95,167 117,805 1.7 2.1 Total debt securities (cost: $3,210,058 and $3,284,346 as of March 31, 2018 and December 31, 2017, respectively) 3,234,422 3,285,962 56.6 58.2 Equity securities: Consumer discretionary 1,397 1,778 0.1 0.0 Energy 554 649 0.0 0.0 Financials 725 3,061 0.0 0.1 Health care 1,364 527 0.0 0.0 Industrials 175 316 0.0 0.0 Telecommunication services — 305 — 0.0 Utilities 1,107 1,192 0.0 0.0 Total equity securities (cost: $6,199 and $8,102 as of March 31, 2018 and December 31, 2017, respectively) 5,322 7,828 0.1 0.1 Real estate: Real estate — 121,588 — 2.1 Total real estate securities (cost: $0 and $121,582 as of March 31, 2018 and December 31, 2017, respectively) — 121,588 — 2.1 Fair Value as of Fair Value as a Percentage of Investments of Consolidated Funds as of Investments March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Europe: Debt securities: Consumer discretionary $ 659,689 $ 573,270 11.5 % 10.1 % Consumer staples 155,063 121,636 2.7 2.1 Energy 8,919 5,929 0.2 0.1 Financials 40,008 40,130 0.7 0.7 Health care 368,119 333,693 6.4 5.9 Industrials 194,467 163,972 3.4 2.9 Information technology 121,296 95,409 2.1 1.7 Materials 279,123 267,252 4.9 4.7 Real estate 13,562 12,528 0.2 0.2 Telecommunication services 285,254 278,358 5.0 4.9 Utilities 3,014 8,949 0.1 0.2 Total debt securities (cost: $2,130,240 and $1,894,727 as of March 31, 2018 and December 31, 2017, respectively) 2,128,514 1,901,126 37.2 33.5 Equity securities: Consumer staples 1,057 1,449 0.0 0.0 Energy 4,377 3,827 0.1 0.1 Financials 5,536 7,410 0.1 0.1 Health care 858 601 0.0 0.0 Materials 1,089 1,622 0.0 0.0 Total equity securities (cost: $9,632 and $12,787 as of March 31, 2018 and December 31, 2017, respectively) 12,917 14,909 0.2 0.2 Asia and other: Debt securities: Consumer discretionary 16,020 30,332 0.3 0.5 Consumer staples 3,850 748 0.1 0.0 Energy 9,635 10,175 0.2 0.2 Financials 31,607 20,362 0.5 0.4 Health care 6,337 13,806 0.1 0.2 Industrials 42,317 22,935 0.7 0.4 Information technology 233 536 0.0 0.0 Materials 10,622 8,515 0.2 0.2 Real estate 6,270 6,272 0.1 0.1 Telecommunication services 15,543 8,104 0.3 0.1 Utilities 1,057 769 0.0 0.0 Total debt securities (cost: $145,078 and $124,723 as of March 31, 2018 and December 31, 2017, respectively) 143,491 122,554 2.5 2.1 Fair Value as of Fair Value as a Percentage of Investments of Consolidated Funds as of Investments March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Asia and other: Equity securities: Consumer discretionary $ 22,577 $ 29,026 0.4 % 0.5 % Consumer staples 9,462 7,279 0.2 0.1 Energy 6,670 5,551 0.1 0.1 Financials 56,818 58,632 1.1 1.2 Industrials 31,445 34,019 0.6 0.7 Information technology 19,897 23,900 0.3 0.4 Materials 18,923 28,590 0.3 0.5 Real estate 17,303 15,339 0.3 0.3 Telecommunication services 2,148 1,735 0.0 0.0 Utilities 7,739 2,502 0.1 0.0 Total equity securities (cost: $189,517 and $185,164 as of March 31, 2018 and December 31, 2017, respectively) 192,982 206,573 3.4 3.8 Total debt securities 5,506,427 5,309,642 96.3 93.8 Total equity securities 211,221 229,310 3.7 4.1 Total real estate securities — 121,588 — 2.1 Total investments, at fair value $ 5,717,648 $ 5,660,540 100.0 % 100.0 % Securities Sold Short Equity securities (proceeds: $66,783 and $82,502 as of March 31, 2018 and December 31, 2017, respectively) $ (69,808 ) $ (86,467 ) The following table summarizes net gains (losses) attributable to the Company’s other investments: Three Months Ended March 31, 2018 2017 Realized gain (loss) $ 796 $ 1,496 Net change in unrealized gain (loss) (11,637 ) 140 Total gain (loss) $ (10,841 ) $ 1,636 |
Net Gains (Losses) from Investment Activities of Consolidated Funds | The following table summarizes net gains (losses) from investment activities: Three Months Ended March 31, 2018 2017 Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Investments and other financial instruments $ 11,322 $ (30,588 ) $ 739 $ 3,736 CLO liabilities (1) — 18,072 — 19,831 Foreign-currency forward contracts (2) 1,439 (711 ) 179 (314 ) Total-return and interest-rate swaps (2) 20 (86 ) (746 ) 1,235 Options and futures (2) 1,818 (1,073 ) (2,044 ) 190 Total $ 14,599 $ (14,386 ) $ (1,872 ) $ 24,678 (1) Represents the net change in the fair value of CLO liabilities based on the more observable fair value of CLO assets, as measured under the CLO measurement guidance. Please see note 2 for more information. (2) Please see note 8 for additional information. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The Company’s other financial assets and financial liabilities by fair-value hierarchy level are set forth below. Please see notes 11 and 18 for the fair value of the Company’s outstanding debt obligations and amounts due from/to affiliates, respectively. As of March 31, 2018 As of December 31, 2017 Level I Level II Level III Total Level I Level II Level III Total Assets U.S. Treasury and other securities (1) $ 229,274 $ — $ — $ 229,274 $ 176,602 $ — $ — $ 176,602 Corporate investments — 4,255 53,095 57,350 — 1,833 50,902 52,735 Foreign-currency forward contracts (2) — 8,659 — 8,659 — 5,020 — 5,020 Total assets $ 229,274 $ 12,914 $ 53,095 $ 295,283 $ 176,602 $ 6,853 $ 50,902 $ 234,357 Liabilities Contingent consideration (3) $ — $ — $ (16,203 ) $ (16,203 ) $ — $ — $ (18,778 ) $ (18,778 ) Foreign-currency forward contracts (4) — (15,153 ) — (15,153 ) — (13,154 ) — (13,154 ) Cross-currency swap (3) — (19,768 ) — (19,768 ) — (7,479 ) — (7,479 ) Total liabilities $ — $ (34,921 ) $ (16,203 ) $ (51,124 ) $ — $ (20,633 ) $ (18,778 ) $ (39,411 ) (1) Carrying value approximates fair value due to the short-term nature. (2) Amounts are included in other assets in the condensed consolidated statements of financial condition. (3) Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. (4) Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition, except for $973 and $1,957 as of March 31, 2018 and December 31, 2017, respectively, which are included within corporate investments in the condensed consolidated statements of financial condition. |
Summary of Changes in Fair Value of Level III Investments | The table below sets forth a summary of changes in the fair value of Level III financial instruments: Three Months Ended March 31, 2018 2017 Corporate Investments Contingent Consideration Liability Corporate Investments Contingent Consideration Liability Beginning balance $ 50,902 $ (18,778 ) $ 74,663 $ (23,567 ) Contributions or additions 1,293 — 156 — Distributions (815 ) — (3,135 ) — Net gain (loss) included in earnings 1,715 2,575 3,757 (601 ) Ending balance $ 53,095 $ (16,203 ) $ 75,441 $ (24,168 ) Net change in unrealized gains (losses) attributable to financial instruments still held at end of period $ 919 $ 2,575 $ 2,261 $ (601 ) |
Summary of Changes in Fair Value of Level III Investments | The following tables set forth a summary of changes in the fair value of Level III investments: Corporate Debt – Bank Debt Corporate Debt – All Other Equities – Common Stock Equities – Preferred Stock Real Estate Total Three Months Ended March 31, 2018 Beginning balance $ 86,999 $ 75,388 $ 3,427 $ — $ 121,588 $ 287,402 Deconsolidation of funds — — — — (121,087 ) (121,087 ) Transfers into Level III 25,164 607 490 — — 26,261 Transfers out of Level III (7,289 ) (490 ) (57 ) — — (7,836 ) Purchases 4,816 31,123 56 236 — 36,231 Sales (17,472 ) (19,110 ) (311 ) — (501 ) (37,394 ) Realized gains (losses), net 328 86 — — — 414 Unrealized appreciation (depreciation), net 1,949 (203 ) 98 375 — 2,219 Ending balance $ 94,495 $ 87,401 $ 3,703 $ 611 $ — $ 186,210 Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period $ 1,965 $ (185 ) $ 96 $ 375 $ — $ 2,251 Three Months Ended March 31, 2017 Beginning balance $ 208,868 $ 28,793 $ 6,693 $ — $ — $ 244,354 Transfers into Level III 19,844 — — — — 19,844 Transfers out of Level III (41,469 ) — — — — (41,469 ) Purchases 15,008 16,199 — — — 31,207 Sales (24,134 ) (6,416 ) (116 ) — — (30,666 ) Realized gains (losses), net 104 195 87 — — 386 Unrealized appreciation (depreciation), net 859 162 (19 ) — — 1,002 Ending balance $ 179,080 $ 38,933 $ 6,645 $ — $ — $ 224,658 Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period $ 447 $ 162 $ (19 ) $ — $ — $ 590 The table below sets forth a summary of changes in the fair value of Level III financial instruments: Three Months Ended March 31, 2018 2017 Corporate Investments Contingent Consideration Liability Corporate Investments Contingent Consideration Liability Beginning balance $ 50,902 $ (18,778 ) $ 74,663 $ (23,567 ) Contributions or additions 1,293 — 156 — Distributions (815 ) — (3,135 ) — Net gain (loss) included in earnings 1,715 2,575 3,757 (601 ) Ending balance $ 53,095 $ (16,203 ) $ 75,441 $ (24,168 ) Net change in unrealized gains (losses) attributable to financial instruments still held at end of period $ 919 $ 2,575 $ 2,261 $ (601 ) |
Summary of Valuation Techniques and Quantitative Information | The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of March 31, 2018: Investment Type Fair Value Valuation Technique Significant Unobservable (1)(2) Range Weighted Average (3) Credit-oriented investments: Consumer $ 1,819 Discounted cash flow (4) Discount rate 11% – 20% 17% 18,085 Recent market information (5) Quoted prices Not applicable Not applicable 6,201 Recent transaction price (8) Not applicable Not applicable Not applicable Financials: 66,963 Recent market information (5) Quoted prices Not applicable Not applicable Industrials: 7,173 Discounted cash flow (4) Discount rate 6% – 11% 9% 11,842 Recent market information (5) Quoted prices Not applicable Not applicable Information 5,421 Discounted cash flow (4) Discount rate 12% – 13% 13% 10,574 Recent market information (5) Quoted prices Not applicable Not applicable Real estate: 2,764 Discounted cash flow (4) Discount rate 11% – 13% 12% 21,477 Recent market information (5) Quoted prices Not applicable Not applicable Other: 11,683 Discounted cash flow (4) Discount rate 8% – 16% 13% 17,894 Recent market information (5) Quoted prices Not applicable Not applicable Equity investments: 1,253 Discounted cash flow (4) Discount rate 9% – 30% 11% 1,386 Market approach (6) Earnings multiple (7) 4x – 10x 8x 1,675 Recent market information (5) Quoted prices Not applicable Not applicable Total Level III $ 186,210 The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of December 31, 2017: Investment Type Fair Value Valuation Technique Significant Unobservable (1)(2) Range Weighted Average (3) Credit-oriented investments: Financials: $ 53,732 Recent market information (5) Quoted prices Not applicable Not applicable Industrials: 14,563 Discounted cash flow (4) Discount rate 6% – 11% 7% 3,782 Recent market information (5) Quoted prices Not applicable Not applicable Information 5,331 Discounted cash flow (4) Discount rate 11% – 13% 12% 13,965 Recent market information (5) Quoted prices Not applicable Not applicable Real estate: 2,897 Discounted cash flow (4) Discount rate 11% – 13% 12% 22,297 Recent market information (5) Quoted prices Not applicable Not applicable 327 Recent transaction price (8) Not applicable Not applicable Not applicable Other: 15,881 Discounted cash flow (4) Discount rate 8% – 20% 12% 660 Market approach (6) Earnings multiple (7) 8x – 10x 9x 29,452 Recent market information (5) Quoted prices Not applicable Not applicable Equity investments: 378 Market approach (6) Earnings multiple (7) 9x – 11x 10x 1,343 Discounted cash flow (4) Discount rate 11% – 30% 13% 1,707 Recent market information (5) Quoted prices Not applicable Not applicable Real estate investments: Real estate: 121,087 Recent transaction price (8) Not applicable Not applicable Not applicable Total Level III $ 287,402 (1) The discount rate is the significant unobservable input used in the fair-value measurement of performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments and real estate loan portfolios. An increase (decrease) in the discount rate would result in a lower (higher) fair-value measurement. (2) Multiple of either earnings or underlying assets is the significant unobservable input used in the market approach for the fair-value measurement of distressed credit-oriented investments, credit-oriented investments in which the consolidated funds have a controlling interest in the underlying issuer, equity investments and certain real estate-oriented investments. An increase (decrease) in the multiple would result in a higher (lower) fair-value measurement. (3) The weighted average is based on the fair value of the investments included in the range. (4) A discounted cash-flow method is generally used to value performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments, real estate-oriented investments and real estate loan portfolios. (5) Certain investments are valued using vendor prices or broker quotes for the subject or similar securities. Generally, investments valued in this manner are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. (6) A market approach is generally used to value distressed investments and investments in which the consolidated funds have a controlling interest in the underlying issuer. (7) Earnings multiples are based on comparable public companies and transactions with comparable companies. The Company typically utilizes multiples of EBITDA; however, in certain cases the Company may use other earnings multiples believed to be most relevant to the investment. The Company typically applies the multiple to trailing twelve-months’ EBITDA. However, in certain cases other earnings measures, such as pro forma EBITDA, may be utilized if deemed to be more relevant. (8) Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date. The table below sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the Company’s Level III financial instruments: Fair Value as of Significant Unobservable Input Financial Instrument March 31, 2018 December 31, 2017 Valuation Technique Range Weighted Average Corporate investment – Limited partnership interests $ 53,095 $ 50,902 Market approach Not applicable Not applicable Not applicable Contingent consideration liability (16,203 ) (18,778 ) Discounted cash flow Assumed % of total potential contingent payments 0% – 100% 34% |
Valuation of Investments and Other Financial Instruments | The table below summarizes the investments and other financial instruments of the consolidated funds by fair-value hierarchy level: As of March 31, 2018 As of December 31, 2017 Level I Level II Level III Total Level I Level II Level III Total Assets Investments: Corporate debt – bank debt $ — $ 4,570,896 $ 94,495 $ 4,665,391 $ — $ 4,340,860 $ 86,999 $ 4,427,859 Corporate debt – all other 1,158 752,477 87,401 841,036 736 805,659 75,388 881,783 Equities – common stock 206,139 34 3,703 209,876 222,439 65 3,427 225,931 Equities – preferred stock 645 89 611 1,345 3,041 338 — 3,379 Real estate — — — — — — 121,588 121,588 Total investments 207,942 5,323,496 186,210 5,717,648 226,216 5,146,922 287,402 5,660,540 Derivatives: Foreign-currency forward contracts — 227 — 227 — 590 — 590 Swaps — 30 — 30 — 49 — 49 Options and futures 89 — — 89 92 — — 92 Total derivatives 89 257 — 346 92 639 — 731 Total assets $ 208,031 $ 5,323,753 $ 186,210 $ 5,717,994 $ 226,308 $ 5,147,561 $ 287,402 $ 5,661,271 Liabilities CLO debt obligations: Senior secured notes (1) $ — $ (3,203,723 ) $ — $ (3,203,723 ) $ — $ (3,107,955 ) $ — $ (3,107,955 ) Subordinated notes (1) — (115,146 ) — (115,146 ) — (111,637 ) — (111,637 ) Total CLO debt obligations — (3,318,869 ) — (3,318,869 ) — (3,219,592 ) — (3,219,592 ) Securities sold short: Equity securities (69,808 ) — — (69,808 ) (86,467 ) — — (86,467 ) Derivatives: Foreign-currency forward contracts — (911 ) — (911 ) — (817 ) — (817 ) Swaps — (203 ) — (203 ) — (136 ) — (136 ) Options and futures (1,077 ) — — (1,077 ) — — — — Total derivatives (1,077 ) (1,114 ) — (2,191 ) — (953 ) — (953 ) Total liabilities $ (70,885 ) $ (3,319,983 ) $ — $ (3,390,868 ) $ (86,467 ) $ (3,220,545 ) $ — $ (3,307,012 ) (1) The fair value of CLO liabilities is classified based on the more observable fair value of CLO assets. Please see notes 2 and 11 for more information. |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Net Forward Currency Sell Contracts Under Freestanding Derivatives | The fair value of freestanding derivatives consisted of the following: Assets Liabilities Notional Fair Value Notional Fair Value As of March 31, 2018 Foreign-currency forward contracts $ 220,186 $ 8,659 $ (254,708 ) $ (15,153 ) Cross-currency swap — — (261,548 ) (19,768 ) Total $ 220,186 $ 8,659 $ (516,256 ) $ (34,921 ) As of December 31, 2017 Foreign-currency forward contracts $ 288,451 $ 5,020 $ (242,972 ) $ (13,154 ) Cross-currency swap — — (255,210 ) (7,479 ) Total $ 288,451 $ 5,020 $ (498,182 ) $ (20,633 ) |
Summary of Impact of Freestanding Derivative Instruments on Condensed Consolidated Statement of Operations | Realized and unrealized gains and losses arising from freestanding derivatives were recorded in the condensed consolidated statements of operations as follows: Three Months Ended March 31, 2018 2017 Investment income $ (12,373 ) $ (873 ) General and administrative expense (1) (3,072 ) (2,683 ) Total $ (15,445 ) $ (3,556 ) (1) To the extent that the Company’s freestanding derivatives are utilized to hedge its foreign-currency exposure to investment income and management fees earned from consolidated funds, the related hedged items are eliminated in consolidation, with the derivative impact (a positive number reflects a reduction in expenses) reflected in consolidated general and administrative expense. Three Months Ended March 31, 2018 2017 Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investments Foreign-currency forward contracts 1,439 (711 ) 179 (314 ) Total-return and interest-rate swaps 20 (86 ) (746 ) 1,235 Options and futures 1,818 (1,073 ) (2,044 ) 190 Total $ 3,277 $ (1,870 ) $ (2,611 ) $ 1,111 |
Balance Sheet Offsetting Assets | The table below sets forth the setoff rights and related arrangements associated with derivatives held by the Company. The “gross amounts not offset in statements of financial condition” columns represent derivatives that management has elected not to offset in the consolidated statements of financial condition even though they are eligible to be offset in accordance with applicable accounting guidance. Gross and Net Amounts of Assets (Liabilities) Presented Gross Amounts Not Offset in Statements of Financial Condition Net Amount As of March 31, 2018 Derivative Assets (Liabilities) Cash Collateral Received (Pledged) Derivative Assets: Foreign-currency forward contracts $ 8,659 $ 8,659 $ — $ — Derivative assets of consolidated funds: Foreign-currency forward contracts 227 111 — 116 Total-return and interest-rate swaps 30 30 — — Options and futures 89 — — 89 Subtotal 346 141 — 205 Total $ 9,005 $ 8,800 $ — $ 205 Derivative Liabilities: Foreign-currency forward contracts $ (15,153 ) $ (8,659 ) $ — $ (6,494 ) Cross-currency swap (19,768 ) — — (19,768 ) Subtotal (34,921 ) (8,659 ) — (26,262 ) Derivative liabilities of consolidated funds: Foreign-currency forward contracts (911 ) (111 ) — (800 ) Total-return and interest-rate swaps (203 ) (30 ) — (173 ) Options and futures (1,077 ) — (1,077 ) — Subtotal (2,191 ) (141 ) (1,077 ) (973 ) Total $ (37,112 ) $ (8,800 ) $ (1,077 ) $ (27,235 ) Gross and Net Amounts of Assets (Liabilities) Presented Gross Amounts Not Offset in Statements of Financial Condition Net Amount As of December 31, 2017 Derivative Assets (Liabilities) Cash Collateral Received (Pledged) Derivative Assets: Foreign-currency forward contracts $ 5,020 $ 5,020 $ — $ — Derivative assets of consolidated funds: Foreign-currency forward contracts 590 115 — 475 Total-return and interest-rate swaps 49 49 — — Options and futures 92 — — 92 Subtotal 731 164 — 567 Total $ 5,751 $ 5,184 $ — $ 567 Derivative Liabilities: Foreign-currency forward contracts $ (13,154 ) $ (5,020 ) $ — $ (8,134 ) Cross-currency swap (7,479 ) — — (7,479 ) Subtotal (20,633 ) (5,020 ) — (15,613 ) Derivative liabilities of consolidated funds: Foreign-currency forward contracts (817 ) (115 ) — (702 ) Total-return and interest-rate swaps (136 ) (49 ) (87 ) — Subtotal (953 ) (164 ) (87 ) (702 ) Total $ (21,586 ) $ (5,184 ) $ (87 ) $ (16,315 ) |
Balance Sheet Offsetting Liabilities | The table below sets forth the setoff rights and related arrangements associated with derivatives held by the Company. The “gross amounts not offset in statements of financial condition” columns represent derivatives that management has elected not to offset in the consolidated statements of financial condition even though they are eligible to be offset in accordance with applicable accounting guidance. Gross and Net Amounts of Assets (Liabilities) Presented Gross Amounts Not Offset in Statements of Financial Condition Net Amount As of March 31, 2018 Derivative Assets (Liabilities) Cash Collateral Received (Pledged) Derivative Assets: Foreign-currency forward contracts $ 8,659 $ 8,659 $ — $ — Derivative assets of consolidated funds: Foreign-currency forward contracts 227 111 — 116 Total-return and interest-rate swaps 30 30 — — Options and futures 89 — — 89 Subtotal 346 141 — 205 Total $ 9,005 $ 8,800 $ — $ 205 Derivative Liabilities: Foreign-currency forward contracts $ (15,153 ) $ (8,659 ) $ — $ (6,494 ) Cross-currency swap (19,768 ) — — (19,768 ) Subtotal (34,921 ) (8,659 ) — (26,262 ) Derivative liabilities of consolidated funds: Foreign-currency forward contracts (911 ) (111 ) — (800 ) Total-return and interest-rate swaps (203 ) (30 ) — (173 ) Options and futures (1,077 ) — (1,077 ) — Subtotal (2,191 ) (141 ) (1,077 ) (973 ) Total $ (37,112 ) $ (8,800 ) $ (1,077 ) $ (27,235 ) Gross and Net Amounts of Assets (Liabilities) Presented Gross Amounts Not Offset in Statements of Financial Condition Net Amount As of December 31, 2017 Derivative Assets (Liabilities) Cash Collateral Received (Pledged) Derivative Assets: Foreign-currency forward contracts $ 5,020 $ 5,020 $ — $ — Derivative assets of consolidated funds: Foreign-currency forward contracts 590 115 — 475 Total-return and interest-rate swaps 49 49 — — Options and futures 92 — — 92 Subtotal 731 164 — 567 Total $ 5,751 $ 5,184 $ — $ 567 Derivative Liabilities: Foreign-currency forward contracts $ (13,154 ) $ (5,020 ) $ — $ (8,134 ) Cross-currency swap (7,479 ) — — (7,479 ) Subtotal (20,633 ) (5,020 ) — (15,613 ) Derivative liabilities of consolidated funds: Foreign-currency forward contracts (817 ) (115 ) — (702 ) Total-return and interest-rate swaps (136 ) (49 ) (87 ) — Subtotal (953 ) (164 ) (87 ) (702 ) Total $ (21,586 ) $ (5,184 ) $ (87 ) $ (16,315 ) |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | The following table sets forth the Company’s fixed assets and accumulated depreciation: As of March 31, 2018 December 31, 2017 Furniture, equipment and capitalized software $ 25,994 $ 25,618 Leasehold improvements 67,913 66,940 Corporate aircraft 66,120 66,120 Other 5,309 5,229 Fixed assets 165,336 163,907 Accumulated depreciation (56,618 ) (53,744 ) Fixed assets, net $ 108,718 $ 110,163 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | The following table summarizes the carrying value of intangible assets: As of March 31, 2018 December 31, 2017 Contractual rights $ 347,452 $ 347,452 Accumulated amortization (20,448 ) (16,301 ) Intangible assets, net $ 327,004 $ 331,151 |
DEBT OBLIGATIONS AND CREDIT F36
DEBT OBLIGATIONS AND CREDIT FACILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Obligations | The Company’s debt obligations are set forth below: As of March 31, 2018 December 31, 2017 $250,000, 3.78%, issued in December 2017, payable on December 18, 2032 $ 250,000 $ 250,000 $250,000, variable-rate term loan, issued in March 2014, payable on March 29, 2023 (1) 150,000 150,000 $50,000, 3.91%, issued in September 2014, payable on September 3, 2024 50,000 50,000 $100,000, 4.01%, issued in September 2014, payable on September 3, 2026 100,000 100,000 $100,000, 4.21%, issued in September 2014, payable on September 3, 2029 100,000 100,000 $100,000, 3.69%, issued in July 2016, payable on July 12, 2031 100,000 100,000 Total remaining principal 750,000 750,000 Less: Debt issuance costs (4,454 ) (3,726 ) Debt obligations $ 745,546 $ 746,274 (1) On March 29, 2018, the credit facility was amended to among other things, extend the maturity date from March 31, 2021 to March 29, 2023, favorably update the commitment fee in the corporate ratings-based pricing grid and increase the permitted combined leverage ratio to a ratio of 3:50 to 1:00. The credit facility consists of a $150 million term loan and a $500 million revolving credit facility. Borrowings generally bear interest at a spread to either LIBOR or an alternative base rate. Based on the current credit ratings of Oaktree Capital Management, L.P., the interest rate on borrowings is LIBOR plus 1.00% per annum and the commitment fee on the unused portions of the revolving credit facility is 0.10% per annum. The credit agreement contains customary financial covenants and restrictions, including ones regarding a maximum leverage ratio and a minimum required level of assets under management (as defined in the credit agreement, as amended above). As of March 31, 2018, the Company had no outstanding borrowings under the revolving credit facility. |
Future Principal Payments of Debt Obligations | As of March 31, 2018, future scheduled principal or par value payments with respect to the debt obligations of CLOs were as follows: Last nine months of 2018 $ 99,729 2019 — 2020 — 2021 — 2022 — Thereafter 3,144,310 Total $ 3,244,039 As of March 31, 2018, future scheduled principal payments of debt obligations were as follows: Last nine months of 2018 $ — 2019 — 2020 — 2021 — 2022 — Thereafter 750,000 Total $ 750,000 |
Schedule of Collateralized Loan Obligation | Outstanding debt obligations of CLOs were as follows: As of March 31, 2018 As of December 31, 2017 Fair Value (1) Weighted Average Interest Rate Weighted Average Remaining Maturity (years) Fair Value (1) Weighted Average Interest Rate Weighted Average Remaining Maturity (years) Senior secured notes $ 3,203,723 2.36% 10.2 $ 3,107,955 2.18% 10.7 Subordinated note (2) 115,146 N/A 10.6 111,637 N/A 10.8 Total CLO debt obligations $ 3,318,869 $ 3,219,592 (1) The fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Please see notes 2 and 7 for more information. (2) The subordinated notes do not have a contractual interest rate; instead, they receive distributions from the excess cash flows generated by the CLO. The consolidated funds had the following debt obligations outstanding: Outstanding Amount as of Facility Capacity Weighted Average Interest Rate Weighted Average Remaining Maturity (years) Commitment Fee Rate L/C Fee Credit Agreement March 31, 2018 December 31, 2017 Senior variable rate notes $ 870,098 $ 870,098 $ 870,100 3.32% 10.5 N/A N/A Less: Debt issuance costs (7,164 ) (7,697 ) Total debt obligations, net $ 862,934 $ 862,401 |
NON-CONTROLLING REDEEMABLE IN37
NON-CONTROLLING REDEEMABLE INTERESTS IN CONSOLIDATED FUNDS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Non-Controlling Redeemable Interests in Consolidated Funds [Abstract] | |
Summary of Changes in Non-controlling Redeemable Interests in Consolidated Funds | The following table sets forth a summary of changes in the non-controlling redeemable interests in the consolidated funds. Dividends reinvested and in-kind contributions or distributions are non-cash in nature and have been presented on a gross basis in the table below. Three Months Ended March 31, 2018 2017 Beginning balance $ 860,548 $ 344,047 Initial consolidation of a fund — 70,817 Contributions 59,745 34,786 Distributions (73,523 ) (9,173 ) Net income 10,553 9,003 Change in distributions payable 729 4,098 Foreign currency translation and other 3,812 — Ending balance $ 861,864 $ 453,578 |
UNITHOLDERS' CAPITAL (Tables)
UNITHOLDERS' CAPITAL (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Summary of Net Income (Loss) | The following table sets forth a summary of net income attributable to the OCGH unitholders’ non-controlling interest and to Class A unitholders: Three Months Ended March 31, 2018 2017 Weighted average Oaktree Operating Group units outstanding (in thousands): OCGH non-controlling interest 88,270 91,644 Class A unitholders 67,918 63,022 Total weighted average units outstanding 156,188 154,666 Oaktree Operating Group net income: Net income attributable to OCGH non-controlling interest $ 73,255 $ 96,598 Net income attributable to Class A unitholders 56,362 66,428 Oaktree Operating Group net income (1) $ 129,617 $ 163,026 Net income attributable to Oaktree Capital Group, LLC: Oaktree Operating Group net income attributable to Class A unitholders $ 56,362 $ 66,428 Non-Operating Group income (expense) 20 (232 ) Income tax expense of Intermediate Holding Companies (3,650 ) (11,281 ) Net income attributable to Oaktree Capital Group, LLC $ 52,732 $ 54,915 (1) Oaktree Operating Group net income does not include amounts attributable to other non-controlling interests, which amounted to $692 and $626 for the three months ended March 31, 2018 and 2017, respectively. |
Changes in Company Ownership Interest | The change in the Company’s ownership interest in the Oaktree Operating Group is set forth below: Three Months Ended March 31, 2018 2017 Net income attributable to Oaktree Capital Group, LLC $ 52,732 $ 54,915 Equity reallocation between controlling and non-controlling interests 73,830 12,061 Change from net income attributable to Oaktree Capital Group, LLC and transfers from non-controlling interests $ 126,562 $ 66,976 |
EARNINGS PER UNIT (Tables)
EARNINGS PER UNIT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computations of Net Income (Loss) Per Unit | The computation of net income per Class A unit is set forth below: Three Months Ended March 31, 2018 2017 Net income per Class A unit (basic and diluted): (in thousands, except per unit amounts) Net income attributable to Oaktree Capital Group, LLC $ 52,732 $ 54,915 Weighted average number of Class A units outstanding (basic and diluted) 67,918 63,022 Basic and diluted net income per Class A unit $ 0.78 $ 0.87 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share-based Compensation [Abstract] | |
Summary of Unvested Equity-Based Awards and Changes | A summary of the status of the Company’s unvested Class A and OCGH unit awards and changes for the period presented are set forth below (actual dollars per unit): Class A Units OCGH Units (1) Number of Units Weighted Average Grant Date Fair Value Number of Units Weighted Average Grant Date Fair Value Balance, December 31, 2017 2,556,316 $ 44.05 2,158,835 $ 39.79 Granted 1,150,196 39.60 113,801 31.68 Vested (863,389 ) 42.53 (282,028 ) 37.61 Forfeited (65,225 ) 39.72 — — Balance, March 31, 2018 2,777,898 $ 42.78 1,990,608 $ 39.63 (1) Excludes certain performance-based awards that could result in the issuance of up to 340,000 OCGH units, which would vest over periods of four to ten years from date of issuance. Though no units have been issued to date under these arrangements, as of March 31, 2018 the Company expected to recognize compensation expense on 120,000 unvested OCGH performance awards of $ 3.8 million over a weighted average period of 5.0 years under applicable accounting rules. |
INCOME TAXES AND RELATED PAYM41
INCOME TAXES AND RELATED PAYMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Expected Estimated Future Payments to OCGH Agreements | Assuming no further material changes in the relevant tax law and that the Company earns sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected estimated future payments to OCGH unitholders under the tax receivable agreement, as of March 31, 2018, are set forth below: Transaction Total Future Payments Payments Through Fiscal Year 2007 Private Offering $ 17,339 2029 Initial public offering 36,767 2034 May 2013 Offering 51,122 2035 March 2014 Offering 38,557 2036 March 2015 Offering 32,498 2037 February 2018 Offering 34,288 2040 Total $ 210,571 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Amounts Due from and Due to Affiliates | The fair value of amounts due to affiliates approximated $108,417 and $93,772 as of March 31, 2018 and December 31, 2017, respectively, based on a discount rate of 10.0% . As of March 31, 2018 December 31, 2017 Due from affiliates: Loans $ 6,951 $ 9,239 Amounts due from unconsolidated funds 55,873 57,155 Management fees and incentive income due from unconsolidated funds 86,265 152,959 Payments made on behalf of unconsolidated entities 4,310 3,784 Non-interest bearing advances made to certain non-controlling interest holders and employees 26 87 Total due from affiliates $ 153,425 $ 223,224 Due to affiliates: Due to OCGH unitholders in connection with the tax receivable agreement (please see note 16) $ 210,571 $ 176,283 Amounts due to senior executives, certain non-controlling interest holders and employees 1,165 1,590 Total due to affiliates $ 211,736 $ 177,873 |
ORGANIZATION AND BASIS OF PRE43
ORGANIZATION AND BASIS OF PRESENTATION (Details) | 3 Months Ended |
Mar. 31, 2018partnership_interestvote | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Limited liability company (LLC) ownership interest | 100.00% |
Number of partnership interests | partnership_interest | 1 |
Number of votes per class A unit | 1 |
Number of votes per class B unit | 10 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Aggregate minimum lease payments under lease obligations | $ 155,000 | ||
Unitholders' capital | $ 99,789 | $ 80,128 | |
Minimum | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Withdrawal period | 1 month | ||
Maximum | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Withdrawal period | 3 years | ||
Contractual Rights to Earn Future Fee Income | Minimum | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Useful lives | 7 years | ||
Contractual Rights to Earn Future Fee Income | Maximum | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Useful lives | 25 years | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Unitholders' capital | $ 48,700 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - Fifth Street Management LLC $ in Millions | Oct. 17, 2017USD ($)company |
Asset Acquisitions [Line Items] | |
Number of companies acquired | company | 2 |
Cash purchase price | $ 320 |
Net purchase price | 319.4 |
Finite-lived contractual rights | 319.4 |
Indemnification assets | 56.2 |
Contingent liabilities | $ 56.2 |
REVENUES - Additional Informati
REVENUES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Unitholders' capital | $ 99,789 | $ 80,128 | ||
Management fees | 185,415 | $ 180,928 | ||
Incentive income | $ 151,906 | $ 108,657 | ||
Closed-end Incentive Income | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percentage of fund profits | 20.00% | |||
Preferred return | 8.00% | |||
Evergreen Incentive Income | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percentage of fund profits | 20.00% | |||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Unitholders' capital | $ 48,700 | |||
Management fees | $ 4,200 | |||
Incentive income | $ (47,000) |
REVENUES - Revenues Disaggrega
REVENUES - Revenues Disaggregated by Fund Structure (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Closed-end Management Fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 123,387 | $ 127,721 |
Open-end Management Fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 37,552 | 39,945 |
Evergreen Management Fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 24,476 | 13,262 |
Management Fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 185,415 | 180,928 |
Closed-end Incentive Income | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 151,906 | $ 108,657 |
REVENUES - Contract Balances (D
REVENUES - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 62,265 | $ 98,738 |
Contract assets | 24,000 | 54,221 |
Contract liabilities | (23,592) | $ (25,297) |
Revenue recognized from amounts included in contract liability balance | $ 17,900 |
VARIABLE INTEREST ENTITIES - Ad
VARIABLE INTEREST ENTITIES - Additional Information (Details) - Consolidated VIEs $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)entity | Dec. 31, 2017entity | |
Variable Interest Entity | ||
Number of VIE's consolidated (in entity) | 20 | 21 |
VIE consolidated assets | $ | $ 6,000 | |
VIE consolidated liabilities | $ | 4,700 | |
Maximum loss exposure | $ | $ 485.1 | |
Funds Managed by Oaktree | ||
Variable Interest Entity | ||
Number of VIE's consolidated (in entity) | 11 | |
CLO's for Which Oaktree Acts as Collateral Manager | ||
Variable Interest Entity | ||
Number of VIE's consolidated (in entity) | 8 | |
Consolidated Funds Formed to Satisfy Risk Retention Requirements | ||
Variable Interest Entity | ||
Number of VIE's consolidated (in entity) | 2 | |
CLO not Priced | ||
Variable Interest Entity | ||
Number of VIE's consolidated (in entity) | 1 | |
Remaining Variable Interest Entities | ||
Variable Interest Entity | ||
Number of VIE's consolidated (in entity) | 19 |
VARIABLE INTEREST ENTITIES - VI
VARIABLE INTEREST ENTITIES - VIEs Not Consolidated (Details) - Unconsolidated VIEs - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity | ||
Maximum exposure to loss | $ 998,614 | $ 1,090,956 |
Corporate investments | ||
Variable Interest Entity | ||
Assets and liabilities, net | 911,132 | 930,699 |
Due from affiliates | ||
Variable Interest Entity | ||
Assets and liabilities, net | $ 87,482 | $ 160,257 |
INVESTMENTS - Corporate investm
INVESTMENTS - Corporate investments (Details) - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Other investments, at fair value | $ 56,377 | $ 50,778 |
Total corporate investments | 1,002,201 | 1,009,631 |
Funds | ||
Investment [Line Items] | ||
Equity-method investments | 910,479 | 916,559 |
Companies | ||
Investment [Line Items] | ||
Equity-method investments | $ 35,345 | $ 42,294 |
INVESTMENTS - Investment income
INVESTMENTS - Investment income (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Other investments, at fair value | $ (10,841) | $ 1,636 |
Total investment income | 34,563 | 50,451 |
Funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity-method investments | 27,266 | 32,921 |
Companies | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity-method investments | $ 18,138 | $ 15,894 |
INVESTMENTS - Additional Inform
INVESTMENTS - Additional Information (Details) | Mar. 31, 2018 |
Maximum | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 2.50% |
INVESTMENTS - Equity-method Inv
INVESTMENTS - Equity-method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Assets: | |||
Cash and cash-equivalents | $ 2,495,772 | $ 2,654,311 | |
Investments, at fair value | 41,915,841 | 41,754,054 | |
Other assets | 2,051,923 | 2,116,751 | |
Total assets | 46,463,536 | 46,525,116 | |
Liabilities and Capital: | |||
Debt obligations | 8,064,952 | 8,393,314 | |
Other liabilities | 2,184,074 | 2,264,579 | |
Total liabilities | 10,249,026 | 10,657,893 | |
Total capital | 36,214,510 | 35,867,223 | |
Total liabilities and capital | 46,463,536 | $ 46,525,116 | |
Statements of Operations | |||
Revenues / investment income | 477,491 | $ 520,610 | |
Interest expense | (67,230) | (47,014) | |
Other expenses | (201,436) | (211,158) | |
Net realized and unrealized gain on investments | 530,361 | 924,551 | |
Net income | $ 739,186 | $ 1,186,989 |
INVESTMENTS - Other Investments
INVESTMENTS - Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investment [Line Items] | ||
Realized gain (loss) | $ 14,599 | $ (1,872) |
Net change in unrealized gain (loss) | (14,386) | 24,678 |
Total gain (loss) | 213 | 22,806 |
Other Investments at Fair Value | ||
Investment [Line Items] | ||
Realized gain (loss) | 796 | 1,496 |
Net change in unrealized gain (loss) | (11,637) | 140 |
Total gain (loss) | $ (10,841) | $ 1,636 |
INVESTMENTS - Fair Value (Detai
INVESTMENTS - Fair Value (Details) - Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 5,506,427 | $ 5,309,642 |
Equity securities | 211,221 | 229,310 |
Real estate securities | $ 0 | $ 121,588 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 96.30% | 93.80% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 3.70% | 4.10% |
Real estate securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 2.10% |
Investments, at fair value | $ 5,717,648 | $ 5,660,540 |
Investments, at fair value, Fair Value as a Percentage of Investments of Consolidated Funds | 100.00% | 100.00% |
Total securities sold short, at fair value | $ (69,808) | $ (86,467) |
United States | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | 3,234,422 | 3,285,962 |
Equity securities | 5,322 | 7,828 |
Real estate securities | $ 0 | $ 121,588 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 56.60% | 58.20% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.10% |
Real estate securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 2.10% |
United States | Consumer discretionary | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 796,820 | $ 796,681 |
Equity securities | $ 1,397 | $ 1,778 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 13.90% | 14.00% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.00% |
United States | Consumer staples | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 114,094 | $ 100,863 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.00% | 1.80% |
United States | Energy | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 126,046 | $ 106,414 |
Equity securities | $ 554 | $ 649 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.20% | 1.90% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
United States | Financials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 153,572 | $ 161,807 |
Equity securities | $ 725 | $ 3,061 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.70% | 2.90% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.10% |
United States | Government | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 1,534 | $ 3,033 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.10% |
United States | Health care | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 400,027 | $ 416,779 |
Equity securities | $ 1,364 | $ 527 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 7.00% | 7.40% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
United States | Industrials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 415,020 | $ 441,440 |
Equity securities | $ 175 | $ 316 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 7.30% | 7.80% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
United States | Information technology | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 474,554 | $ 431,010 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 8.30% | 7.60% |
United States | Materials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 364,346 | $ 384,310 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 6.40% | 6.80% |
United States | Real estate | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 131,746 | $ 146,836 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.30% | 2.60% |
United States | Telecommunication services | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 161,496 | $ 178,984 |
Equity securities | $ 0 | $ 305 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.80% | 3.20% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
United States | Utilities | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 95,167 | $ 117,805 |
Equity securities | $ 1,107 | $ 1,192 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 1.70% | 2.10% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Europe | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 2,128,514 | $ 1,901,126 |
Equity securities | $ 12,917 | $ 14,909 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 37.20% | 33.50% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.20% | 0.20% |
Europe | Consumer discretionary | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 659,689 | $ 573,270 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 11.50% | 10.10% |
Europe | Consumer staples | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 155,063 | $ 121,636 |
Equity securities | $ 1,057 | $ 1,449 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.70% | 2.10% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Europe | Energy | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 8,919 | $ 5,929 |
Equity securities | $ 4,377 | $ 3,827 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.20% | 0.10% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.10% |
Europe | Financials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 40,008 | $ 40,130 |
Equity securities | $ 5,536 | $ 7,410 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.70% | 0.70% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.10% |
Europe | Health care | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 368,119 | $ 333,693 |
Equity securities | $ 858 | $ 601 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 6.40% | 5.90% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Europe | Industrials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 194,467 | $ 163,972 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 3.40% | 2.90% |
Europe | Information technology | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 121,296 | $ 95,409 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.10% | 1.70% |
Europe | Materials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 279,123 | $ 267,252 |
Equity securities | $ 1,089 | $ 1,622 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 4.90% | 4.70% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Europe | Real estate | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 13,562 | $ 12,528 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.20% | 0.20% |
Europe | Telecommunication services | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 285,254 | $ 278,358 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 5.00% | 4.90% |
Europe | Utilities | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 3,014 | $ 8,949 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.20% |
Asia and other | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 143,491 | $ 122,554 |
Equity securities | $ 192,982 | $ 206,573 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 2.50% | 2.10% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 3.40% | 3.80% |
Asia and other | Consumer discretionary | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 16,020 | $ 30,332 |
Equity securities | $ 22,577 | $ 29,026 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.30% | 0.50% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.40% | 0.50% |
Asia and other | Consumer staples | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 3,850 | $ 748 |
Equity securities | $ 9,462 | $ 7,279 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.00% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.20% | 0.10% |
Asia and other | Energy | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 9,635 | $ 10,175 |
Equity securities | $ 6,670 | $ 5,551 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.20% | 0.20% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.10% |
Asia and other | Financials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 31,607 | $ 20,362 |
Equity securities | $ 56,818 | $ 58,632 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.50% | 0.40% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 1.10% | 1.20% |
Asia and other | Health care | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 6,337 | $ 13,806 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.20% |
Asia and other | Industrials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 42,317 | $ 22,935 |
Equity securities | $ 31,445 | $ 34,019 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.70% | 0.40% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.60% | 0.70% |
Asia and other | Information technology | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 233 | $ 536 |
Equity securities | $ 19,897 | $ 23,900 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.30% | 0.40% |
Asia and other | Materials | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 10,622 | $ 8,515 |
Equity securities | $ 18,923 | $ 28,590 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.20% | 0.20% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.30% | 0.50% |
Asia and other | Real estate | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 6,270 | $ 6,272 |
Equity securities | $ 17,303 | $ 15,339 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.10% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.30% | 0.30% |
Asia and other | Telecommunication services | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 15,543 | $ 8,104 |
Equity securities | $ 2,148 | $ 1,735 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.30% | 0.10% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Asia and other | Utilities | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Debt securities | $ 1,057 | $ 769 |
Equity securities | $ 7,739 | $ 2,502 |
Debt securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.00% | 0.00% |
Equity securities, Fair Value as a Percentage of Investments of Consolidated Funds | 0.10% | 0.00% |
INVESTMENTS - Fair Value, Addit
INVESTMENTS - Fair Value, Additional Information (Details) - Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Investments In Marketable Securities [Line Items] | ||
Securities sold short, proceeds | $ 66,783 | $ 82,502 |
United States | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Total debt securities, cost | 3,210,058 | 3,284,346 |
Total equity securities, cost | 6,199 | 8,102 |
Real Estate Estate Securities, Excluding Debt Securities, Cost | 0 | 121,582 |
Europe | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Total debt securities, cost | 2,130,240 | 1,894,727 |
Total equity securities, cost | 9,632 | 12,787 |
Asia and other | ||
Schedule Of Investments In Marketable Securities [Line Items] | ||
Total debt securities, cost | 145,078 | 124,723 |
Total equity securities, cost | $ 189,517 | $ 185,164 |
INVESTMENTS - Net Gains (Losses
INVESTMENTS - Net Gains (Losses) from Investment Activities of Consolidated Funds (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gain (Loss) on Investments [Line Items] | ||
Net realized gain (loss) on consolidated funds’ investments | $ 14,599 | $ (1,872) |
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments | (14,386) | 24,678 |
Consolidated Funds | Not Designated as Hedging Instrument | ||
Gain (Loss) on Investments [Line Items] | ||
Net realized gain (loss) on consolidated funds’ investments | 14,599 | (1,872) |
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments | (14,386) | 24,678 |
Net Realized Gain (Loss) on Investments | 3,277 | (2,611) |
Net Change in Unrealized Appreciation (Depreciation) on Investments | (1,870) | 1,111 |
Consolidated Funds | Investments and other financial instruments | Not Designated as Hedging Instrument | ||
Gain (Loss) on Investments [Line Items] | ||
Net realized gain (loss) on consolidated funds’ investments | 11,322 | 739 |
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments | (30,588) | 3,736 |
Consolidated Funds | CLO Liabilities | Not Designated as Hedging Instrument | ||
Gain (Loss) on Investments [Line Items] | ||
Net realized gain (loss) on consolidated funds’ investments | 0 | 0 |
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments | 18,072 | 19,831 |
Consolidated Funds | Foreign-currency forward contracts | Not Designated as Hedging Instrument | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gain (Loss) on Investments | 1,439 | 179 |
Net Change in Unrealized Appreciation (Depreciation) on Investments | (711) | (314) |
Consolidated Funds | Total-return and interest-rate swaps | Not Designated as Hedging Instrument | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gain (Loss) on Investments | 20 | (746) |
Net Change in Unrealized Appreciation (Depreciation) on Investments | (86) | 1,235 |
Consolidated Funds | Options and futures | Not Designated as Hedging Instrument | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gain (Loss) on Investments | 1,818 | (2,044) |
Net Change in Unrealized Appreciation (Depreciation) on Investments | $ (1,073) | $ 190 |
FAIR VALUE - Financial Instrume
FAIR VALUE - Financial Instruments by Fair-value Hierarchy Level (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 9,005 | $ 5,751 |
Derivative liabilities | (37,112) | (21,586) |
Oaktree Capital Group Excluding Consolidated Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and other securities | 229,274 | 176,602 |
Corporate investments | 1,002,201 | 1,009,631 |
Derivative liabilities | (34,921) | (20,633) |
Oaktree Capital Group Excluding Consolidated Funds | Cross-currency swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | (19,768) | (7,479) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 295,283 | 234,357 |
Total liabilities | (51,124) | (39,411) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Contingent consideration liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | (16,203) | (18,778) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Foreign-currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 8,659 | 5,020 |
Derivative liabilities | (15,153) | (13,154) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Cross-currency swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | (19,768) | (7,479) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | U.S. Treasury and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and other securities | 229,274 | 176,602 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Corporate investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate investments | 57,350 | 52,735 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 229,274 | 176,602 |
Total liabilities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Contingent consideration liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Foreign-currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Cross-currency swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level I | U.S. Treasury and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and other securities | 229,274 | 176,602 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Corporate investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate investments | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 12,914 | 6,853 |
Total liabilities | (34,921) | (20,633) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Contingent consideration liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Foreign-currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 8,659 | 5,020 |
Derivative liabilities | (15,153) | (13,154) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Foreign-currency forward contracts | Corporate investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | (973) | (1,957) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Cross-currency swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | (19,768) | (7,479) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | U.S. Treasury and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and other securities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Corporate investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate investments | 4,255 | 1,833 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 53,095 | 50,902 |
Total liabilities | (16,203) | (18,778) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Contingent consideration liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | (16,203) | (18,778) |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Foreign-currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Cross-currency swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level III | U.S. Treasury and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and other securities | 0 | 0 |
Oaktree Capital Group Excluding Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Corporate investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate investments | $ 53,095 | $ 50,902 |
FAIR VALUE - Changes in Fair Va
FAIR VALUE - Changes in Fair Value (Details) - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Corporate Investments | ||
Beginning balance | $ 50,902 | $ 74,663 |
Contributions or additions | 1,293 | 156 |
Distributions | (815) | (3,135) |
Net gain (loss) included in earnings | 1,715 | 3,757 |
Ending balance | 53,095 | 75,441 |
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period | 919 | 2,261 |
Contingent Consideration Liability | ||
Beginning balance | (18,778) | (23,567) |
Contributions or additions | 0 | 0 |
Distributions | 0 | 0 |
Net gain (loss) included in earnings | 2,575 | (601) |
Ending balance | (16,203) | (24,168) |
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period | $ 2,575 | $ (601) |
FAIR VALUE - Valuation Techniqu
FAIR VALUE - Valuation Techniques (Details) - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | $ 56,377 | $ 50,778 |
Corporate investment – Limited partnership interests | Market approach (value of underlying assets) | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 53,095 | 50,902 |
Contingent consideration liability | Discounted cash flow | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Contingent consideration liability | $ (16,203) | $ (18,778) |
Minimum | Contingent consideration liability | Discounted cash flow | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount rate | 0.00% | |
Maximum | Contingent consideration liability | Discounted cash flow | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount rate | 100.00% | |
Weighted Average | Contingent consideration liability | Discounted cash flow | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount rate | 34.00% |
FAIR VALUE - Consolidated Funds
FAIR VALUE - Consolidated Funds Valuation of Investments and Other Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | $ 9,005 | $ 5,751 |
Total CLO debt obligations | (3,219,592) | |
Total derivatives | (37,112) | (21,586) |
Consolidated Funds | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 5,717,648 | 5,660,540 |
Total derivatives | 346 | 731 |
Total CLO debt obligations | (3,318,869) | |
Equity securities | (69,808) | (86,467) |
Total derivatives | (2,191) | (953) |
Consolidated Funds | Options and futures | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 89 | 92 |
Total derivatives | (1,077) | |
Consolidated Funds | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 186,210 | 287,402 |
Consolidated Funds | Fair Value, Measurements, Recurring | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 5,717,648 | 5,660,540 |
Total derivatives | 346 | 731 |
Total assets | 5,717,994 | 5,661,271 |
Total derivatives | (2,191) | (953) |
Total liabilities | (3,390,868) | (3,307,012) |
Consolidated Funds | Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Equity securities | (69,808) | (86,467) |
Consolidated Funds | Fair Value, Measurements, Recurring | CLO Debt Obligations | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | (3,318,869) | (3,219,592) |
Consolidated Funds | Fair Value, Measurements, Recurring | CLO Debt Obligations | Senior secured notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | (3,203,723) | (3,107,955) |
Consolidated Funds | Fair Value, Measurements, Recurring | CLO Debt Obligations | Subordinated notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | (115,146) | (111,637) |
Consolidated Funds | Fair Value, Measurements, Recurring | Foreign-currency forward contracts | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 227 | 590 |
Total derivatives | (911) | (817) |
Consolidated Funds | Fair Value, Measurements, Recurring | Swaps | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 30 | 49 |
Total derivatives | (203) | (136) |
Consolidated Funds | Fair Value, Measurements, Recurring | Options and futures | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 89 | 92 |
Total derivatives | (1,077) | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 0 | 121,588 |
Consolidated Funds | Fair Value, Measurements, Recurring | Corporate debt – bank debt | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 4,665,391 | 4,427,859 |
Consolidated Funds | Fair Value, Measurements, Recurring | Corporate debt – all other | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 841,036 | 881,783 |
Consolidated Funds | Fair Value, Measurements, Recurring | Equities – common stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 209,876 | 225,931 |
Consolidated Funds | Fair Value, Measurements, Recurring | Equities – preferred stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 1,345 | 3,379 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 207,942 | 226,216 |
Total derivatives | 89 | 92 |
Total assets | 208,031 | 226,308 |
Total derivatives | (1,077) | 0 |
Total liabilities | (70,885) | (86,467) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Equity securities | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Equity securities | (69,808) | (86,467) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | CLO Debt Obligations | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | CLO Debt Obligations | Senior secured notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | CLO Debt Obligations | Subordinated notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Foreign-currency forward contracts | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 0 | 0 |
Total derivatives | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Swaps | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 0 | 0 |
Total derivatives | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Options and futures | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 89 | 92 |
Total derivatives | (1,077) | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Corporate debt – bank debt | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Corporate debt – all other | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 1,158 | 736 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Equities – common stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 206,139 | 222,439 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level I | Equities – preferred stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 645 | 3,041 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 5,323,496 | 5,146,922 |
Total derivatives | 257 | 639 |
Total assets | 5,323,753 | 5,147,561 |
Total derivatives | (1,114) | (953) |
Total liabilities | (3,319,983) | (3,220,545) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Equity securities | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Equity securities | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | CLO Debt Obligations | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | (3,318,869) | (3,219,592) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | CLO Debt Obligations | Senior secured notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | (3,203,723) | (3,107,955) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | CLO Debt Obligations | Subordinated notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | (115,146) | (111,637) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Foreign-currency forward contracts | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 227 | 590 |
Total derivatives | (911) | (817) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Swaps | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 30 | 49 |
Total derivatives | (203) | (136) |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Options and futures | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 0 | 0 |
Total derivatives | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Corporate debt – bank debt | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 4,570,896 | 4,340,860 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Corporate debt – all other | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 752,477 | 805,659 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Equities – common stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 34 | 65 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level II | Equities – preferred stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 89 | 338 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 186,210 | 287,402 |
Total derivatives | 0 | 0 |
Total assets | 186,210 | 287,402 |
Total derivatives | 0 | 0 |
Total liabilities | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Equity securities | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Equity securities | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | CLO Debt Obligations | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | CLO Debt Obligations | Senior secured notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | CLO Debt Obligations | Subordinated notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total CLO debt obligations | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Foreign-currency forward contracts | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 0 | 0 |
Total derivatives | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Swaps | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 0 | 0 |
Total derivatives | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Options and futures | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total derivatives | 0 | 0 |
Total derivatives | 0 | 0 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 0 | 121,588 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Corporate debt – bank debt | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 94,495 | 86,999 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Corporate debt – all other | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 87,401 | 75,388 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Equities – common stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | 3,703 | 3,427 |
Consolidated Funds | Fair Value, Measurements, Recurring | Level III | Equities – preferred stock | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total investments | $ 611 | $ 0 |
FAIR VALUE - Consolidated Fun63
FAIR VALUE - Consolidated Funds Summary of Changes in Fair Value of Level III Investments (Details) - Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 287,402 | $ 244,354 |
Deconsolidation of funds | (121,087) | |
Transfers into Level III | 26,261 | 19,844 |
Transfers out of Level III | (7,836) | (41,469) |
Purchases | 36,231 | 31,207 |
Sales | (37,394) | (30,666) |
Realized gains (losses), net | 414 | 386 |
Unrealized appreciation (depreciation), net | 2,219 | 1,002 |
Ending balance | 186,210 | 224,658 |
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period | 2,251 | 590 |
Corporate debt – bank debt | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 86,999 | 208,868 |
Transfers into Level III | 25,164 | 19,844 |
Transfers out of Level III | (7,289) | (41,469) |
Purchases | 4,816 | 15,008 |
Sales | (17,472) | (24,134) |
Realized gains (losses), net | 328 | 104 |
Unrealized appreciation (depreciation), net | 1,949 | 859 |
Ending balance | 94,495 | 179,080 |
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period | 1,965 | 447 |
Corporate debt – all other | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 75,388 | 28,793 |
Deconsolidation of funds | 0 | |
Transfers into Level III | 607 | 0 |
Transfers out of Level III | (490) | 0 |
Purchases | 31,123 | 16,199 |
Sales | (19,110) | (6,416) |
Realized gains (losses), net | 86 | 195 |
Unrealized appreciation (depreciation), net | (203) | 162 |
Ending balance | 87,401 | 38,933 |
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period | (185) | 162 |
Equities – common stock | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 3,427 | 6,693 |
Deconsolidation of funds | 0 | |
Transfers into Level III | 490 | 0 |
Transfers out of Level III | (57) | 0 |
Purchases | 56 | 0 |
Sales | (311) | (116) |
Realized gains (losses), net | 87 | |
Unrealized appreciation (depreciation), net | 98 | (19) |
Ending balance | 3,703 | 6,645 |
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period | 96 | (19) |
Equities – Preferred Stock | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | 0 |
Deconsolidation of funds | 0 | |
Transfers into Level III | 0 | 0 |
Transfers out of Level III | 0 | 0 |
Purchases | 236 | 0 |
Sales | 0 | |
Realized gains (losses), net | 0 | |
Unrealized appreciation (depreciation), net | 375 | 0 |
Ending balance | 611 | 0 |
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period | 375 | 0 |
Real estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 121,588 | 0 |
Deconsolidation of funds | (121,087) | |
Transfers into Level III | 0 | 0 |
Transfers out of Level III | 0 | 0 |
Purchases | 0 | 0 |
Sales | (501) | 0 |
Realized gains (losses), net | 0 | |
Unrealized appreciation (depreciation), net | 0 | |
Ending balance | 0 | 0 |
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period | $ 0 | $ 0 |
FAIR VALUE - Consolidated Fun64
FAIR VALUE - Consolidated Funds Additional Information (Details) - Consolidated Funds $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)investment | Mar. 31, 2017USD ($)investment | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfer of investments from Level I to Level II | $ | $ 0.7 | $ 0.4 |
Number of investments that changed valuation technique | investment | 0 | 0 |
FAIR VALUE - Consolidated Fun65
FAIR VALUE - Consolidated Funds Summary of Valuation Techniques and Quantitative Information (Details) - Consolidated Funds $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 5,717,648 | $ 5,660,540 |
Level III | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | 186,210 | 287,402 |
Level III | Credit-oriented investments | Consumer discretionary | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 1,819 | |
Level III | Credit-oriented investments | Consumer discretionary | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 11.00% | |
Level III | Credit-oriented investments | Consumer discretionary | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 20.00% | |
Level III | Credit-oriented investments | Consumer discretionary | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 17.00% | |
Level III | Credit-oriented investments | Consumer discretionary | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 18,085 | |
Level III | Credit-oriented investments | Consumer discretionary | Recent transaction price | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | 6,201 | |
Level III | Credit-oriented investments | Financials | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | 66,963 | 53,732 |
Level III | Credit-oriented investments | Industrials | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 7,173 | $ 14,563 |
Level III | Credit-oriented investments | Industrials | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 6.00% | 6.00% |
Level III | Credit-oriented investments | Industrials | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 11.00% | 11.00% |
Level III | Credit-oriented investments | Industrials | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 9.00% | 7.00% |
Level III | Credit-oriented investments | Industrials | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 11,842 | $ 3,782 |
Level III | Credit-oriented investments | Information technology | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 5,421 | $ 5,331 |
Level III | Credit-oriented investments | Information technology | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 12.00% | 11.00% |
Level III | Credit-oriented investments | Information technology | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 13.00% | 13.00% |
Level III | Credit-oriented investments | Information technology | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 13.00% | 12.00% |
Level III | Credit-oriented investments | Information technology | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 10,574 | $ 13,965 |
Level III | Credit-oriented investments | Real estate | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 2,764 | $ 2,897 |
Level III | Credit-oriented investments | Real estate | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 11.00% | 11.00% |
Level III | Credit-oriented investments | Real estate | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 13.00% | 13.00% |
Level III | Credit-oriented investments | Real estate | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 12.00% | 12.00% |
Level III | Credit-oriented investments | Real estate | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 21,477 | $ 22,297 |
Level III | Credit-oriented investments | Real estate | Recent transaction price | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | 327 | |
Level III | Credit-oriented investments | Other | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 11,683 | $ 15,881 |
Level III | Credit-oriented investments | Other | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 8.00% | 8.00% |
Level III | Credit-oriented investments | Other | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 16.00% | 20.00% |
Level III | Credit-oriented investments | Other | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 13.00% | 12.00% |
Level III | Credit-oriented investments | Other | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 17,894 | $ 29,452 |
Level III | Credit-oriented investments | Other | Market approach (comparable companies) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 660 | |
Level III | Credit-oriented investments | Other | Market approach (comparable companies) | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Earnings multiple | 8 | |
Level III | Credit-oriented investments | Other | Market approach (comparable companies) | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Earnings multiple | 10 | |
Level III | Credit-oriented investments | Other | Market approach (comparable companies) | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Earnings multiple | 9 | |
Level III | Equity investments | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 1,253 | $ 1,343 |
Level III | Equity investments | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 9.00% | 11.00% |
Level III | Equity investments | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 30.00% | 30.00% |
Level III | Equity investments | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 11.00% | 13.00% |
Level III | Equity investments | Recent market information | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 1,675 | $ 1,707 |
Level III | Equity investments | Market approach (comparable companies) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 1,386 | $ 378 |
Level III | Equity investments | Market approach (comparable companies) | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Earnings multiple | 4 | 9 |
Level III | Equity investments | Market approach (comparable companies) | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Earnings multiple | 10 | 11 |
Level III | Equity investments | Market approach (comparable companies) | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Earnings multiple | 8 | 10 |
Level III | Real estate | Recent transaction price | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Investments, at fair value | $ 121,087 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Freestanding Derivatives (Details) - Not Designated as Hedging Instrument - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Assets, Notional | $ 220,186 | $ 288,451 |
Assets, Fair Value | 8,659 | 5,020 |
Liabilities, Notional | (516,256) | (498,182) |
Liabilities, Fair Value | (34,921) | (20,633) |
Foreign-currency forward contracts | ||
Derivative [Line Items] | ||
Assets, Notional | 220,186 | 288,451 |
Assets, Fair Value | 8,659 | 5,020 |
Liabilities, Notional | (254,708) | (242,972) |
Liabilities, Fair Value | (15,153) | (13,154) |
Cross-currency swap | ||
Derivative [Line Items] | ||
Assets, Notional | 0 | 0 |
Assets, Fair Value | 0 | 0 |
Liabilities, Notional | (261,548) | (255,210) |
Liabilities, Fair Value | $ (19,768) | $ (7,479) |
DERIVATIVES AND HEDGING - Summa
DERIVATIVES AND HEDGING - Summary of Freestanding Derivative Instruments on Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains and losses from freestanding derivative instruments | $ (15,445) | $ (3,556) |
Investment income | Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains and losses from freestanding derivative instruments | (12,373) | (873) |
General and administrative expense | Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains and losses from freestanding derivative instruments | $ (3,072) | $ (2,683) |
DERIVATIVES AND HEDGING - Impac
DERIVATIVES AND HEDGING - Impact of Derivatives Held by Consolidated Funds on Income (Details) - Not Designated as Hedging Instrument - Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives, Fair Value [Line Items] | ||
Net Realized Gain (Loss) on Investments | $ 3,277 | $ (2,611) |
Net Change in Unrealized Appreciation (Depreciation) on Investments | (1,870) | 1,111 |
Foreign-currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Net Realized Gain (Loss) on Investments | 1,439 | 179 |
Net Change in Unrealized Appreciation (Depreciation) on Investments | (711) | (314) |
Total-return and interest-rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Net Realized Gain (Loss) on Investments | 20 | (746) |
Net Change in Unrealized Appreciation (Depreciation) on Investments | (86) | 1,235 |
Options and futures | ||
Derivatives, Fair Value [Line Items] | ||
Net Realized Gain (Loss) on Investments | 1,818 | (2,044) |
Net Change in Unrealized Appreciation (Depreciation) on Investments | $ (1,073) | $ 190 |
DERIVATIVES AND HEDGING - Balan
DERIVATIVES AND HEDGING - Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Assets: | ||
Derivative assets | $ 9,005 | $ 5,751 |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Assets | 8,800 | 5,184 |
Cash Collateral Received | 0 | 0 |
Net Amount | 205 | 567 |
Derivative Liabilities: | ||
Derivative liabilities | (37,112) | (21,586) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | (8,800) | (5,184) |
Cash Collateral Pledged | (1,077) | (87) |
Net Amount | (27,235) | (16,315) |
Consolidated Funds | ||
Derivative Assets: | ||
Derivative assets | 346 | 731 |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Assets | 141 | 164 |
Cash Collateral Received | 0 | 0 |
Net Amount | 205 | 567 |
Derivative Liabilities: | ||
Derivative liabilities | (2,191) | (953) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | (141) | (164) |
Cash Collateral Pledged | (1,077) | (87) |
Net Amount | (973) | (702) |
Consolidated Funds | Foreign-currency forward contracts | ||
Derivative Assets: | ||
Derivative assets | 227 | 590 |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Assets | 111 | 115 |
Cash Collateral Received | 0 | 0 |
Net Amount | 116 | 475 |
Derivative Liabilities: | ||
Derivative liabilities | (911) | (817) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | (111) | (115) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | (800) | (702) |
Consolidated Funds | Total-return and interest-rate swaps | ||
Derivative Assets: | ||
Derivative assets | 30 | 49 |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Assets | 30 | 49 |
Cash Collateral Received | 0 | 0 |
Net Amount | 0 | 0 |
Derivative Liabilities: | ||
Derivative liabilities | (203) | (136) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | (30) | (49) |
Cash Collateral Pledged | 0 | (87) |
Net Amount | (173) | 0 |
Consolidated Funds | Options and futures | ||
Derivative Assets: | ||
Derivative assets | 89 | 92 |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Assets | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | 89 | 92 |
Derivative Liabilities: | ||
Derivative liabilities | (1,077) | |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | 0 | |
Cash Collateral Pledged | (1,077) | |
Net Amount | 0 | |
Oaktree Capital Group Excluding Consolidated Funds | ||
Derivative Liabilities: | ||
Derivative liabilities | (34,921) | (20,633) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | (8,659) | (5,020) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | (26,262) | (15,613) |
Oaktree Capital Group Excluding Consolidated Funds | Foreign-currency forward contracts | ||
Derivative Assets: | ||
Derivative assets | 8,659 | 5,020 |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Assets | 8,659 | 5,020 |
Cash Collateral Received | 0 | 0 |
Net Amount | 0 | 0 |
Derivative Liabilities: | ||
Derivative liabilities | (15,153) | (13,154) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | (8,659) | (5,020) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | (6,494) | (8,134) |
Oaktree Capital Group Excluding Consolidated Funds | Cross-currency swap | ||
Derivative Liabilities: | ||
Derivative liabilities | (19,768) | (7,479) |
Gross Amounts Not Offset in Statements of Financial Condition | ||
Derivative Liabilities | 0 | 0 |
Cash Collateral Pledged | 0 | 0 |
Net Amount | $ (19,768) | $ (7,479) |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment | ||
Fixed assets | $ 165,336 | $ 163,907 |
Accumulated depreciation | (56,618) | (53,744) |
Fixed assets, net | 108,718 | 110,163 |
Furniture, equipment and capitalized software | ||
Property, Plant and Equipment | ||
Fixed assets | 25,994 | 25,618 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Fixed assets | 67,913 | 66,940 |
Corporate aircraft | ||
Property, Plant and Equipment | ||
Fixed assets | 66,120 | 66,120 |
Other | ||
Property, Plant and Equipment | ||
Fixed assets | $ 5,309 | $ 5,229 |
GOODWILL AND INTANGIBLES (Detai
GOODWILL AND INTANGIBLES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 69,300 | $ 69,300 | |
Carrying Value of Intangible Assets | |||
Contractual rights | 347,452 | 347,452 | |
Accumulated amortization | (20,448) | (16,301) | |
Intangible assets, net | 327,004 | $ 331,151 | |
Amortization | 4,200 | $ 1,000 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Remainder of 2018 | 12,600 | ||
2,019 | 16,800 | ||
2,020 | 16,800 | ||
2,021 | 15,100 | ||
2,022 | $ 12,800 |
DEBT OBLIGATIONS AND CREDIT F72
DEBT OBLIGATIONS AND CREDIT FACILITIES - Debt Obligations (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Less: Debt issuance costs | $ (7,164,000) | $ (7,697,000) |
Debt obligations | 862,934,000 | 862,401,000 |
Oaktree Capital Group Excluding Consolidated Funds | ||
Debt Instrument [Line Items] | ||
Total remaining principal | 750,000,000 | 750,000,000 |
Less: Debt issuance costs | (4,454,000) | (3,726,000) |
Debt obligations | 745,546,000 | 746,274,000 |
Oaktree Capital Group Excluding Consolidated Funds | Senior secured notes | $250,000, 3.78%, issued in December 2017, payable on December 18, 2032 | ||
Debt Instrument [Line Items] | ||
Total remaining principal | 250,000,000 | 250,000,000 |
Face amount | $ 250,000,000 | |
Stated percentage | 3.78% | |
Oaktree Capital Group Excluding Consolidated Funds | Senior secured notes | $50,000, 3.91%, issued in September 2014, payable on September 3, 2024 | ||
Debt Instrument [Line Items] | ||
Total remaining principal | $ 50,000,000 | 50,000,000 |
Face amount | $ 50,000,000 | |
Stated percentage | 3.91% | |
Oaktree Capital Group Excluding Consolidated Funds | Senior secured notes | $100,000, 4.01%, issued in September 2014, payable on September 3, 2026 | ||
Debt Instrument [Line Items] | ||
Total remaining principal | $ 100,000,000 | 100,000,000 |
Face amount | $ 100,000,000 | |
Stated percentage | 4.01% | |
Oaktree Capital Group Excluding Consolidated Funds | Senior secured notes | $100,000, 4.21%, issued in September 2014, payable on September 3, 2029 | ||
Debt Instrument [Line Items] | ||
Total remaining principal | $ 100,000,000 | 100,000,000 |
Face amount | $ 100,000,000 | |
Stated percentage | 4.21% | |
Oaktree Capital Group Excluding Consolidated Funds | Senior secured notes | $100,000, 3.69%, issued in July 2016, payable on July 12, 2031 | ||
Debt Instrument [Line Items] | ||
Total remaining principal | $ 100,000,000 | 100,000,000 |
Face amount | $ 100,000,000 | |
Stated percentage | 3.69% | |
Oaktree Capital Group Excluding Consolidated Funds | Credit Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Total remaining principal | $ 150,000,000 | $ 150,000,000 |
Face amount | $ 250,000,000 | |
Leverage ratio | 3.50 | |
Unused commitment fee | 1.00% | |
Oaktree Capital Group Excluding Consolidated Funds | Credit Agreement | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 500,000,000 | |
Unused commitment fee | 0.10% | |
Borrowings under credit facilities | $ 0 |
DEBT OBLIGATIONS AND CREDIT F73
DEBT OBLIGATIONS AND CREDIT FACILITIES - Future Principal Payments of Debt Obligations (Details) - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Last nine months of 2018 | $ 0 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
2,022 | 0 | |
Thereafter | 750,000 | |
Total | $ 750,000 | $ 750,000 |
DEBT OBLIGATIONS AND CREDIT F74
DEBT OBLIGATIONS AND CREDIT FACILITIES - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2017 | |
Debt Instrument [Line Items] | |||
Fair value of debt obligations | $ 3,219,592,000 | ||
Consolidated Funds | |||
Debt Instrument [Line Items] | |||
Fair value of debt obligations | $ 3,318,869,000 | ||
Total remaining principal | 3,244,039,000 | ||
Securities owned and pledged as collateral | 3,900,000,000 | 3,900,000,000 | |
Oaktree Capital Group Excluding Consolidated Funds | |||
Debt Instrument [Line Items] | |||
Total remaining principal | 750,000,000 | 750,000,000 | |
Oaktree Capital Group Excluding Consolidated Funds | Level III | |||
Debt Instrument [Line Items] | |||
Fair value of debt obligations | $ 757,300,000 | $ 762,700,000 | |
Weighted Average Interest Rate | 3.80% | 3.60% | |
Percentage increase in average borrowing rate assumption that would decrease fair value of debt obligation | 10.00% | ||
Fair value of debt obligation decrease in value due to increase in average borrowing rate | $ 734,200,000 | ||
Percentage decrease in average borrowing rate assumption that would increase fair value of debt obligation | 10.00% | ||
Fair value of debt obligation increase in value due to decrease in average borrowing rate | $ 783,000,000 | ||
Credit Agreement | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Letter of credit guarantee | $ 17,500,000 | ||
Credit Agreement | Senior secured notes | |||
Debt Instrument [Line Items] | |||
Weighted Average Interest Rate | 3.32% | ||
Total remaining principal | $ 870,098,000 | $ 870,098,000 | |
Credit Agreement | Consolidated Funds | |||
Debt Instrument [Line Items] | |||
Total remaining principal | 870,100,000 | 870,100,000 | |
Credit Agreement | Consolidated Funds | Level III | |||
Debt Instrument [Line Items] | |||
Fair value of debt | $ 872,900,000 | $ 872,100,000 | |
Credit Agreement | Maximum | Consolidated Funds | Senior secured notes | |||
Debt Instrument [Line Items] | |||
Term (in years) | 10 years |
DEBT OBLIGATIONS AND CREDIT F75
DEBT OBLIGATIONS AND CREDIT FACILITIES - Credit Facilities of Consolidated Funds (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Less: Debt issuance costs | $ (7,164,000) | $ (7,697,000) |
Debt obligations | 862,934,000 | 862,401,000 |
Credit Agreement | Senior variable rate notes | ||
Debt Instrument [Line Items] | ||
Senior variable rate notes | 870,098,000 | 870,098,000 |
Facility Capacity | $ 870,100,000 | |
Weighted Average Interest Rate | 3.32% | |
Weighted Average Remaining Maturity (years) | 10 years 6 months | |
Consolidated Funds | ||
Debt Instrument [Line Items] | ||
Senior variable rate notes | $ 3,244,039,000 | |
Debt obligations | 3,318,869,000 | 3,219,592,000 |
Consolidated Funds | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Senior variable rate notes | $ 870,100,000 | $ 870,100,000 |
DEBT OBLIGATIONS AND CREDIT F76
DEBT OBLIGATIONS AND CREDIT FACILITIES - Debt Obligations of CLOs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Fair Value | $ 3,219,592 | |
Consolidated Funds | ||
Debt Instrument [Line Items] | ||
Fair Value | $ 3,318,869 | |
Consolidated Funds | Senior secured notes | ||
Debt Instrument [Line Items] | ||
Fair Value | $ 3,203,723 | $ 3,107,955 |
Weighted Average Interest Rate | 2.36% | 2.18% |
Weighted Average Remaining Maturity (years) | 10 years 2 months 12 days | 10 years 8 months 12 days |
Consolidated Funds | Subordinated note | ||
Debt Instrument [Line Items] | ||
Fair Value | $ 115,146 | $ 111,637 |
Weighted Average Remaining Maturity (years) | 10 years 7 months 6 days | 10 years 9 months 18 days |
DEBT OBLIGATIONS AND CREDIT F77
DEBT OBLIGATIONS AND CREDIT FACILITIES - Future Principal Payments with Respect to the CLO Loans Payable (Details) - Consolidated Funds $ in Thousands | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Last nine months of 2018 | $ 99,729 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 3,144,310 |
Total | $ 3,244,039 |
NON-CONTROLLING REDEEMABLE IN78
NON-CONTROLLING REDEEMABLE INTERESTS IN CONSOLIDATED FUNDS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Non-Controlling Redeemable Interests in Consolidated Funds | ||
Beginning balance | $ 860,548 | $ 344,047 |
Initial consolidation of a fund | 0 | 70,817 |
Contributions | 59,745 | 34,786 |
Distributions | (73,523) | (9,173) |
Net income | 10,553 | 9,003 |
Change in distributions payable | 729 | 4,098 |
Foreign currency translation and other | 3,812 | 0 |
Ending balance | $ 861,864 | $ 453,578 |
UNITHOLDERS' CAPITAL - Addition
UNITHOLDERS' CAPITAL - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Feb. 28, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | |||||
Total unitholders’ capital | $ 2,057,076 | $ 2,020,617 | $ 1,923,462 | $ 1,885,171 | |
OCGH | |||||
Class of Stock [Line Items] | |||||
Unitholders' capital (in shares) | 86,007,356 | 90,975,687 | |||
Total unitholders’ capital | $ 1,072,211 | $ 1,113,314 | |||
Oaktree Operating Group | |||||
Class of Stock [Line Items] | |||||
Total Oaktree Operating Group units (in shares) | 157,178,865 | 156,285,913 | |||
Total unitholders’ capital | $ 1,959,477 | $ 1,912,517 | |||
Equity Held by Third Parties | |||||
Class of Stock [Line Items] | |||||
Total unitholders’ capital | $ 7,375 | $ 7,923 | |||
Public Offering | |||||
Class of Stock [Line Items] | |||||
Number of units issued and sold (in shares) | 5,000,000 | ||||
Net proceeds from units sold | $ 219,500 |
UNITHOLDERS' CAPITAL - Summary
UNITHOLDERS' CAPITAL - Summary of Net Income (Loss) (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Weighted average Oaktree Operating Group units outstanding (in thousands): | ||
Weighted average number of outstanding (in shares) | 67,918 | 63,022 |
Oaktree Operating Group net income: | ||
Oaktree Operating Group net income | $ 137,401 | $ 161,831 |
Net income attributable to Oaktree Capital Group, LLC: | ||
Non-Operating Group income (expense) | 697 | 4,663 |
Income tax expense of Intermediate Holding Companies | (6,397) | (12,302) |
Net income attributable to Oaktree Capital Group, LLC | $ 52,732 | $ 54,915 |
OCGH non-controlling interest | ||
Weighted average Oaktree Operating Group units outstanding (in thousands): | ||
Weighted average number of outstanding (in shares) | 88,270 | 91,644 |
Oaktree Operating Group net income: | ||
Oaktree Operating Group net income | $ 73,255 | $ 96,598 |
Class A unitholders | ||
Weighted average Oaktree Operating Group units outstanding (in thousands): | ||
Weighted average number of outstanding (in shares) | 67,918 | 63,022 |
Oaktree Operating Group net income: | ||
Oaktree Operating Group net income | $ 56,362 | $ 66,428 |
Oaktree Operating Group | ||
Weighted average Oaktree Operating Group units outstanding (in thousands): | ||
Weighted average number of outstanding (in shares) | 156,188 | 154,666 |
Oaktree Operating Group net income: | ||
Oaktree Operating Group net income | $ 129,617 | $ 163,026 |
Net income attributable to Oaktree Capital Group, LLC: | ||
OCGH non-controlling interest | 692 | 626 |
Oaktree Capital Group, LLC | ||
Net income attributable to Oaktree Capital Group, LLC: | ||
Oaktree Operating Group net income attributable to Class A unitholders | 56,362 | 66,428 |
Non-Operating Group income (expense) | 20 | (232) |
Income tax expense of Intermediate Holding Companies | (3,650) | (11,281) |
Net income attributable to Oaktree Capital Group, LLC | $ 52,732 | $ 54,915 |
UNITHOLDERS' CAPITAL - Changes
UNITHOLDERS' CAPITAL - Changes in Company Ownership Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | ||
Net income attributable to Oaktree Capital Group, LLC | $ 52,732 | $ 54,915 |
Equity reallocation between controlling and non-controlling interests | 73,830 | 12,061 |
Change from net income attributable to Oaktree Capital Group, LLC and transfers from non-controlling interests | $ 126,562 | $ 66,976 |
EARNINGS PER UNIT - Computation
EARNINGS PER UNIT - Computations of Net Income (Loss) Per Unit (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Oaktree Capital Group, LLC | $ 52,732 | $ 54,915 |
Weighted average number of Class A units outstanding (in shares) | 67,918 | 63,022 |
Basic and diluted net income per Class A unit (in dollars per share) | $ 0.78 | $ 0.87 |
EARNINGS PER UNIT - Computati83
EARNINGS PER UNIT - Computations of Net Income (Loss) Per Unit (Additional Information) (Details) | 3 Months Ended |
Mar. 31, 2018shares | |
Highstar Capital | |
Earnings Per Share [Line Items] | |
Performance period (in years) | 7 years |
Deferred Equity Units | |
Earnings Per Share [Line Items] | |
Antidilutive securities excluded from earnings per share computation (in shares) | 0 |
Deferred Equity Units | |
Earnings Per Share [Line Items] | |
Vesting period | 4 years |
OCGH Units | |
Earnings Per Share [Line Items] | |
Exchange ratio | 1 |
OCGH Issued (in shares) | 86,007,356 |
OCGH Units | Deferred Equity Units | |
Earnings Per Share [Line Items] | |
Maximum number of awards issuable (in shares) | 340,000 |
Class A Units | |
Earnings Per Share [Line Items] | |
Exchange ratio | 1 |
Antidilutive securities excluded from earnings per share computation (in shares) | 86,007,356 |
Minimum | OCGH Units | Deferred Equity Units | |
Earnings Per Share [Line Items] | |
Vesting period | 4 years |
Maximum | OCGH Units | Deferred Equity Units | |
Earnings Per Share [Line Items] | |
Vesting period | 10 years |
EQUITY-BASED COMPENSATION - Cla
EQUITY-BASED COMPENSATION - Class A and OCGH Unit Awards (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Discount from market price | 20.00% |
Unrecognized compensation expense on non-vested equity-based awards | $ | $ 178.1 |
Weighted average period of recognition non-vested equity-based awards | 4 years 2 months 12 days |
Restricted Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years 4 months 24 days |
Class A Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units granted (in shares) | 1,150,196 |
Class A Units | Restricted Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units granted (in shares) | 1,150,196 |
OCGH Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units granted (in shares) | 113,801 |
OCGH Units | Restricted Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units granted (in shares) | 113,801 |
EQUITY-BASED COMPENSATION - Sum
EQUITY-BASED COMPENSATION - Summary of Unvested Equity-Based Awards and Changes (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value | |
Weighted average period of recognition non-vested equity-based awards | 4 years 2 months 12 days |
Class A Units | |
Number of Units | |
Beginning balance (in shares) | 2,556,316 |
Granted (in shares) | 1,150,196 |
Vested (in shares) | (863,389) |
Forfeited (in shares) | (65,225) |
Ending balance (in shares) | 2,777,898 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 44.05 |
Granted (in dollars per share) | $ / shares | 39.60 |
Vested (in dollars per share) | $ / shares | 42.53 |
Forfeited (in dollars per share) | $ / shares | 39.72 |
Ending balance (in dollars per share) | $ / shares | $ 42.78 |
OCGH Units | |
Number of Units | |
Beginning balance (in shares) | 2,158,835 |
Granted (in shares) | 113,801 |
Vested (in shares) | (282,028) |
Forfeited (in shares) | 0 |
Ending balance (in shares) | 1,990,608 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 39.79 |
Granted (in dollars per share) | $ / shares | 31.68 |
Vested (in dollars per share) | $ / shares | 37.61 |
Forfeited (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 39.63 |
Performance Awards | |
Number of Units | |
Ending balance (in shares) | 250,000 |
Weighted Average Grant Date Fair Value | |
Vesting period | 4 years |
Unrecognized compensation cost | $ | $ 2.6 |
Weighted average period of recognition non-vested equity-based awards | 5 years 8 months 12 days |
Performance Awards | OCGH Units | |
Weighted Average Grant Date Fair Value | |
Maximum number of awards issuable (in shares) | 340,000 |
Awards where compensation expense is expected to be recognized | 120,000 |
Unrecognized compensation cost | $ | $ 3.8 |
Weighted average period of recognition non-vested equity-based awards | 5 years |
Minimum | Performance Awards | OCGH Units | |
Weighted Average Grant Date Fair Value | |
Vesting period | 4 years |
Maximum | Performance Awards | OCGH Units | |
Weighted Average Grant Date Fair Value | |
Vesting period | 10 years |
EQUITY-BASED COMPENSATION - Equ
EQUITY-BASED COMPENSATION - Equity Value Units (Details) - USD ($) $ in Millions | Apr. 26, 2017 | Mar. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense on non-vested equity-based awards | $ 178.1 | |
Equity Value Units, Equity Settled | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of units outstanding (in shares) | 1,000,000 | |
Equity Value Units, Cash Settled | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of units outstanding (in shares) | 1,000,000 | |
Number of units granted (in shares) | 225,000 | |
Equity Value Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Recapitalization percentage | 33.33% | |
Unrecognized compensation expense on non-vested equity-based awards | $ 2.6 | |
Weighted average remaining service term | 1 year 9 months |
EQUITY-BASED COMPENSATION - Def
EQUITY-BASED COMPENSATION - Deferred Equity Units (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)shares | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average period of recognition non-vested equity-based awards | 4 years 2 months 12 days | |
Deferred Equity Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Nonvested units outstanding (in shares) | shares | 250,000 | |
Unrecognized compensation cost | $ | $ 2.6 | |
Weighted average period of recognition non-vested equity-based awards | 5 years 8 months 12 days | |
Lack-of-marketability discount | 20.00% | |
OCGH Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exchange ratio | 1 | |
Nonvested units outstanding (in shares) | shares | 1,990,608 | 2,158,835 |
OCGH Units | Deferred Equity Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ | $ 3.8 | |
Weighted average period of recognition non-vested equity-based awards | 5 years |
INCOME TAXES AND RELATED PAYM88
INCOME TAXES AND RELATED PAYMENTS (Details) | 3 Months Ended | |||||||
Mar. 31, 2018USD ($)company | Dec. 31, 2017USD ($) | Dec. 31, 2040USD ($) | Dec. 31, 2037USD ($) | Dec. 31, 2036USD ($) | Dec. 31, 2035USD ($) | Dec. 31, 2034USD ($) | Dec. 31, 2029USD ($) | |
Income Tax Disclosure [Abstract] | ||||||||
Number of wholly-owned subsidiaries | company | 2 | |||||||
Decreases resulting from settlements with taxing authorities | $ 5,300,000 | |||||||
Net reduction in net income related to Tax Act | $ 33,200,000 | |||||||
Percentage of cash savings | 85.00% | |||||||
Tax Receivable Agreement | ||||||||
Payments to unitholders under tax receivable agreement | $ 0 | |||||||
Forecast | ||||||||
Tax Receivable Agreement | ||||||||
Expected payments to unitholders under tax receivable agreement | $ 210,571,000 | |||||||
2007 Private Offering | Forecast | ||||||||
Tax Receivable Agreement | ||||||||
Expected payments to unitholders under tax receivable agreement | $ 17,339,000 | |||||||
Initial public offering | Forecast | ||||||||
Tax Receivable Agreement | ||||||||
Expected payments to unitholders under tax receivable agreement | $ 36,767,000 | |||||||
Offering | Forecast | ||||||||
Tax Receivable Agreement | ||||||||
Expected payments to unitholders under tax receivable agreement | $ 34,288,000 | $ 32,498,000 | $ 38,557,000 | $ 51,122,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Oct. 17, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Contingencies And Commitments [Line Items] | ||||
Accrued incentives (fund level) | $ 1,770,580,000 | $ 1,918,952,000 | ||
Compensation expense related to accrued incentives (fund level) | 918,696,000 | 1,000,232,000 | ||
Capital commitments | 360,300,000 | 429,100,000 | ||
Consolidated Funds | ||||
Contingencies And Commitments [Line Items] | ||||
Aggregate potential credit and investment commitments | 7,500,000 | 6,000,000 | ||
BDC Acquisition | ||||
Contingencies And Commitments [Line Items] | ||||
Contingent liabilities | $ 56,200,000 | |||
Indemnification asset | $ 56,200,000 | |||
Highstar Capital | ||||
Contingencies And Commitments [Line Items] | ||||
Contingent consideration | $ 60,000,000 | |||
Performance period (in years) | 7 years | |||
Contingent consideration | $ 16,200,000 | $ 18,800,000 | ||
Contingent consideration income | $ 2,600,000 | $ (600,000) |
RELATED-PARTY TRANSACTIONS - Ad
RELATED-PARTY TRANSACTIONS - Additional Information (Details) - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest income | $ 109 | $ 151 | |
Level III | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Due to affiliates | 108,417 | $ 93,772 | |
Affiliates | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Management fees and incentive income | $ 312,000 | $ 260,200 | |
Discounted cash flow | Affiliates | Level III | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Discount rate | 10.00% | ||
Minimum | Discounted cash flow | Affiliates | Level III | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Average interest rate | 2.00% | ||
Maximum | Discounted cash flow | Affiliates | Level III | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Average interest rate | 3.00% |
RELATED-PARTY TRANSACTIONS - Am
RELATED-PARTY TRANSACTIONS - Amounts Due from and Due to Affiliates (Details) - Oaktree Capital Group Excluding Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Due from affiliates: | ||
Loans | $ 6,951 | $ 9,239 |
Amounts due from unconsolidated funds | 55,873 | 57,155 |
Management fees and incentive income due from unconsolidated funds | 86,265 | 152,959 |
Payments made on behalf of unconsolidated entities | 4,310 | 3,784 |
Non-interest bearing advances made to certain non-controlling interest holders and employees | 26 | 87 |
Total due from affiliates | 153,425 | 223,224 |
Due to affiliates: | ||
Due to OCGH unitholders in connection with the tax receivable agreement (please see note 16) | 210,571 | 176,283 |
Amounts due to senior executives, certain non-controlling interest holders and employees | 1,165 | 1,590 |
Total due to affiliates | $ 211,736 | $ 177,873 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of segments | 1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 26, 2018$ / shares |
Subsequent Event | Class A Units | |
Class of Stock [Line Items] | |
Dividend declared (in dollars per share) | $ 0.96 |