Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 27, 2019 | Jun. 30, 2018 | |
Document Information [Line Items] | |||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Registrant Name | MEDLEY LLC | ||
Entity Central Index Key | 0001536577 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Trading Symbol | mdlq | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 29,217,299 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | ||
Cash and cash equivalents | $ 16,970 | $ 36,215 |
Investments, at fair value | 36,425 | 56,632 |
Management fees receivable | 10,274 | 14,714 |
Performance fees receivable | 0 | 2,987 |
Other assets | 14,145 | 15,493 |
Total Assets | 77,814 | 126,041 |
Liabilities, Redeemable Non-controlling Interests and Members' Deficit | ||
Senior unsecured debt, net | 117,618 | 116,892 |
Loans payable, net | 9,892 | 9,233 |
Accrued Liabilities | 2,412 | 1,597 |
Contract with Customer, Liability | 11,402 | 0 |
Accounts payable, accrued expenses and other liabilities | 26,444 | 24,415 |
Total Liabilities | 165,356 | 150,540 |
Commitments and Contingencies (Note 11) | ||
Redeemable Non-controlling Interests | 23,186 | 53,741 |
Members' Deficit | ||
Accumulated other comprehensive loss | 0 | (10,968) |
Members' deficit | (109,981) | (65,570) |
Total members' deficit | (110,728) | (78,240) |
Total Liabilities, Redeemable Non-controlling Interests and Members' Deficit | 77,814 | 126,041 |
Consolidated Subsidiaries [Member] | ||
Members' Deficit | ||
Non-controlling interests in Medley LLC | $ (747) | (1,702) |
Medley LLC [Member] | ||
Members' Deficit | ||
Non-controlling interests in Medley LLC | $ (65,570) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued (in shares) | 6,448,078 | 6,235,332 |
Common stock, shares outstanding (in shares) | 5,693,814 | 5,481,068 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 100 | 100 |
Common stock, shares outstanding (in shares) | 100 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Revenues | |
Performance Fees | $ 2,443 |
Fees and Commissions, Other | 8,111 |
Management Fees Revenue | 65,496 |
Investment income (loss): | |
Other investment loss | (87) |
Total Revenues | 75,941 |
Expenses | |
Compensation and benefits | 27,800 |
Performance fee compensation | (319) |
General, administrative and other expenses | 28,540 |
Total Expenses | 56,021 |
Other Income (Expense) | |
Dividend income | 1,304 |
Interest expense | (9,226) |
Other (expense) income, net | (983) |
Total expense, net | (8,905) |
(Loss) income before income taxes | 11,015 |
(Benefit from) provision for income taxes | 464 |
Net (Loss) Income | 10,551 |
Net income (loss) attributable to non-controlling interests | (16) |
Net (Loss) Income Attributable to Medley LLC | 8,002 |
Consolidated Subsidiaries [Member] | |
Other Income (Expense) | |
Net income (loss) attributable to non-controlling interests | 2,549 |
Carried Interest [Member] | |
Revenues | |
Total revenues from contracts with customers | $ (22) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (unaudited) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Incentive fees | $ 0 | $ 4,874 | $ 21,487 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net (Loss) Income | $ (20,968) | $ 18,667 | $ 10,551 |
Other Comprehensive Income (Loss): | |||
Change in fair value of available-for-sale securities (net of income tax benefit of $0.3 million for the year ended December 31, 2017) | 0 | (11,162) | 194 |
Total Comprehensive (Loss) Income | (20,968) | 7,505 | 10,745 |
Comprehensive (Loss) Income Attributable to Medley LLC | (9,885) | 815 | 8,168 |
Consolidated Subsidiaries [Member] | |||
Other Comprehensive Income (Loss): | |||
Comprehensive income (loss) attributable to non-controlling interests | $ (11,083) | $ 6,690 | $ 2,577 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Available-for-sale securities, tax, Medley Management | $ 0.2 | $ 0.3 | $ 0.2 | $ 0.4 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Changes in Equity (unaudited) - USD ($) $ in Thousands | Total | Consolidated Subsidiaries [Member] | Medley LLC [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Non-controlling Interests [Member]Consolidated Subsidiaries [Member] | Restricted Stock Units (RSUs), LLC [Member] | Parent [Member] |
Retained Earnings (Accumulated Deficit) | $ (47,441) | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 166 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ (1,717) | |||||||
Stock Repurchased During Period, Value | (3,590) | |||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 16 | 6,718 | ||||||
Balance at Dec. 31, 2016 | (48,992) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 18,667 | $ 32 | $ 0 | |||||
Net income (loss) | 11,965 | |||||||
Available-for-sale Securities, Change in Net Unrealized Holding Gain (Loss), Net of Tax | (11,134) | |||||||
Issuance of Class A common stock related to vesting of restricted stock units, net of tax withholdings | (668) | |||||||
Distributions | (29,960) | $ (29,959) | ||||||
Contributions | 2,771 | (1) | ||||||
Balance at Dec. 31, 2017 | (78,240) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | 32 | |||||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | 0 | |||||||
Net Income (Loss) Attributable to Parent | 11,949 | 11,949 | ||||||
Retained Earnings (Accumulated Deficit) | (65,570) | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (10,968) | (10,968) | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | (1,702) | $ (65,570) | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 279 | (11,082) | ||||||
Net income (loss) | (20,968) | |||||||
Net income (loss) | (9,607) | |||||||
Issuance of Class A common stock related to vesting of restricted stock units, net of tax withholdings | 98 | |||||||
Reclass of cumulative dividends on forfeited restricted stock units to compensation and benefits expense | 98 | |||||||
Distributions | (26,425) | |||||||
Contributions | 5,406 | 2 | $ 5,404 | |||||
Issuance of non-controlling interests in consolidated subsidiaries, at fair value | 674 | $ 674 | ||||||
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC (Note 15) | 965 | |||||||
Balance at Dec. 31, 2018 | (110,728) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income (Loss) Attributable to Parent | (9,886) | |||||||
Retained Earnings (Accumulated Deficit) | (109,981) | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 0 | 0 | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ (747) | |||||||
Cumulative effect of accounting change | ASC 606 [Member] | (3,599) | (3,599) | ||||||
Cumulative effect of accounting change | ASU 2016-01 and 2018-02 [Member] | $ 0 | $ 10,968 | $ (10,968) |
Condensed Consolidated Statem_6
Condensed Consolidated Statement of Changes in Equity (unaudited) (Parenthetical) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Common Class A [Member] | |
Dividends (in dollars per share) | $ 0.20 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (unaudited) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Restricted Cash Equivalents | $ 0 | $ 0 | $ 4,897 | ||
Interest Paid | 9,396 | 8,664 | |||
Income Taxes Paid, Net | 358 | 933 | |||
Cash flows from operating activities | |||||
Net (Loss) Income | $ (20,968) | $ 18,667 | 10,551 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Stock-based compensation | 5,404 | 2,771 | 3,811 | ||
Amortization of debt issuance costs | 741 | 1,579 | 1,018 | ||
Accretion of debt discount | 667 | 1,126 | 958 | ||
Benefit from deferred taxes | (1,162) | (85) | (480) | ||
Depreciation and amortization | 1,076 | 911 | 913 | ||
Net change in unrealized depreciation on investments | 20,900 | 554 | (27) | ||
Income (loss) from equity method investments | 6 | (274) | (425) | ||
Cost-method Investments, Other than Temporary Impairment | 90 | 0 | 518 | ||
Reclassification of cumulative dividends paid on forfeited restricted stock units to compensation and benefits expense | (98) | 668 | 0 | ||
Other non-cash amounts | 56 | (13) | 169 | ||
Changes in operating assets and liabilities: | |||||
Management fees receivable | 4,440 | (2,084) | 3,542 | ||
Performance fees receivable | 0 | 1,974 | (2,443) | ||
Distributions of income received from equity method investments | 691 | 629 | 1,475 | ||
Purchase of investments | (1,861) | (2,005) | 0 | ||
Sale of investments | 1,920 | 0 | 0 | ||
Other assets | 794 | 1,037 | (1,378) | ||
Accounts payable, accrued expenses and other liabilities | 2,061 | (12,652) | (1,236) | ||
Net cash provided by operating activities | 15,572 | 12,803 | |||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | 16,966 | ||||
Cash flows from investing activities | |||||
Purchases of fixed assets | (56) | (73) | (1,935) | ||
Distributions received from equity method investments | 0 | 172 | 203 | ||
Capital contributions to equity method investments | (1,538) | (322) | (279) | ||
Purchases of investments | 0 | (34,980) | (16,815) | ||
Net cash used in investing activities | (1,594) | (35,203) | |||
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | (18,826) | ||||
Cash flows from financing activities | |||||
Repayments of loans payable | 0 | (44,800) | (50,513) | ||
Proceeds from issuance of senior unsecured debt | 0 | 69,108 | 52,588 | ||
Capital contributions from non-controlling interests | 2 | 23,000 | 17,022 | ||
Distributions to members, non-controlling interests and redeemable non-controlling interests | (32,378) | (36,698) | (29,960) | ||
Debt issuance costs | 0 | (2,868) | (2,916) | ||
Repurchases of LLC Units | 0 | (3,590) | (1,198) | ||
Net cash (used in) provided by financing activities | (33,223) | 4,152 | |||
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | (14,977) | ||||
Net (decrease) in cash and cash equivalents | (19,245) | (18,248) | (16,837) | ||
Cash, cash equivalents and restricted cash equivalents, beginning of period | 36,215 | 54,463 | 36,215 | 54,463 | 71,300 |
Cash, cash equivalents and restricted cash equivalents, end of period | 16,970 | 36,215 | 16,970 | 36,215 | 54,463 |
Supplemental cash flow information | |||||
Deferred tax asset impact on cumulative effect of accounting change due to the adoption of ASU | $ 3,144 | $ 1,926 | |||
Reclassification of redeemable non-controlling interest in SIC Advisors LLC, including fair value adjustment of $965 for the year ending December 31, 2018 (Note 15) | (12,275) | 0 | |||
ASC 606 [Member] | |||||
Supplemental cash flow information | |||||
Deferred tax asset impact on cumulative effect of accounting change due to the adoption of ASU | (89) | 0 | |||
ASU 2016-01 [Member] | |||||
Supplemental cash flow information | |||||
Deferred tax asset impact on cumulative effect of accounting change due to the adoption of ASU | 336 | ||||
ASU 2016-09 [Member] | |||||
Supplemental cash flow information | |||||
Deferred tax asset impact on cumulative effect of accounting change due to the adoption of ASU | $ 0 | $ 32 | $ 0 |
Condensed Consolidated Statem_8
Condensed Consolidated Statements of Cash Flows (unaudited) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value adjustment | $ 965 | $ (12,196) | |
Nonredeemable Noncontrolling Interest [Member] | |||
Fair value adjustment | $ 965 | $ 0 | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ORGANIZATION AND BASIS OF PRESENTATION Medley LLC is an alternative asset management firm offering yield solutions to retail and institutional investors. The Company's national direct origination franchise provides capital to the middle market in the United States of America. Medley LLC provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts and serves as the general partner to the private funds, which are generally organized as pass-through entities. Medley LLC is headquartered in New York City. The Company’s business is currently comprised of only one reportable segment, the investment management segment, and substantially all of the Company operations are conducted through this segment. The investment management segment provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts. The Company conducts its investment management business in the U.S., where substantially all its revenues are generated. Registered Public Offering of Medley LLC Notes On August 9, 2016, Medley LLC completed a registered public offering of $25.0 million of an aggregate principal amount of 6.875% senior notes due 2026 (the "2026 Notes") at a public offering price of 100% of the principal amount. On October 18, 2016, Medley LLC completed a public offering of an additional $28.6 million in aggregate principal amount of the 2026 Notes at a public offering price of $24.45 for each $25.00 principal amount of notes. The notes mature on August 15, 2026 and interest is payable quarterly. The notes will be redeemable in whole or in part at Medley's option on or after August 15, 2019 at a redemption price of 100% of the aggregate principal amount plus accrued and unpaid interest payments. The Company used the net proceeds from the offering to repay a portion of the outstanding indebtedness under the Company's Term Loan Facility. The 2026 Notes are listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLX.” On January 18, 2017, Medley LLC completed a registered public offering of $34.5 million of an aggregate principal amount of 7.25% senior notes due 2024 (the “2024 Notes”) at a public offering price of 100% of the principal amount. On February 22, 2017, Medley LLC completed a public offering of an additional $34.5 million in aggregate principal amount of the 2024 Notes at a public offering price of $25.25 for each $25.00 principal amount of notes. The 2024 Notes mature on January 30, 2024 and interest is payable quarterly commencing on April 30, 2017. The notes will be redeemable in whole or in part at Medley's option on or after January 30, 2020 at a redemption price of 100% of the aggregate principal amount plus accrued and unpaid interest payments. The Company used the net proceeds from the offering to repay the remaining outstanding indebtedness under the Term Loan Facility and for general corporate purposes. The 2024 Notes are listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLQ.” Medley LLC Reorganization In connection with the IPO of Medley Management Inc., Medley LLC amended and restated its limited liability agreement to modify its capital structure by reclassifying the 23,333,333 interests held by the pre-IPO members into a single new class of units (“LLC Units”). The pre-IPO members also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right, subject to the terms of an exchange agreement, to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis , subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. In addition, pursuant to the amended and restated limited liability agreement, Medley Management Inc. became the sole managing member of Medley LLC. The pre-IPO owners were, subject to limited exceptions, prohibited from transferring any LLC Units held by them or any shares of Class A common stock received upon exchange of such LLC Units, until September 29, 2017, which was the third anniversary of the date of the closing of the IPO, without the Company’s consent. Thereafter and prior to the fourth and fifth anniversaries of the closing of the IPO, such holders may not transfer more than 33 1/3% and 66 2/3%, respectively, of the number of LLC Units held by them, together with the number of any shares of Class A common stock received by them upon exchange therefore, without the Company’s consent. Agreement and Plan of Merger On August 9, 2018 MDLY entered into a definitive Agreement and Plan of Merger with Sierra Income Corporation ("Sierra" or "SIC"), pursuant to which MDLY will merge with and into Sierra Management Inc., a newly formed Delaware corporation (“Merger Sub”), and MDLY’s existing asset management business will continue to operate as a wholly owned subsidiary of Sierra. MDLY's Class A stockholders will receive 0.3836 shares of Sierra’s common stock, $3.44 per share of cash consideration and $0.65 per share in special cash dividends for each share of Class A common stock held by them. Medley LLC unitholders will convert their units into shares of Class A common stock and will receive 0.3836 shares of Sierra’s common stock, $3.44 per share of cash consideration and $0.35 per share in a special cash dividend for each share of Class A common stock held by them. Simultaneously, pursuant to the Agreement and Plan of Merger by and between Medley Capital Corporation ("MCC") and Sierra, MCC will merge with and into SIC, with SIC as the surviving entity. MCC shareholders will receive 0.805 shares of the Sierra’s common stock for each share of MCC common stock they hold. As a condition to closing, Sierra’s common stock will be listed to trade on the New York Stock Exchange. The mergers are cross conditioned upon each other and are subject to approval by the shareholders of MDLY, MCC and Sierra, regulators, including the SEC, other customary closing conditions and third party consents. While there can be no assurances as to the exact timing, or that the merger will be completed at all, the Company expects the merger to be completed as early as the first half of 2019. Transaction expenses, primarily consisting of professional fees, related to the pending merger are included in general, administrative and other expenses and were approximately $3.8 million for the year ended December 31, 2018. Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Medley LLC and its consolidated subsidiaries (collectively, “Medley” or the “Company”). Intercompany balances and transactions have been eliminated in consolidation. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation , the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. For legal entities evaluated for consolidation, the Company must determine whether the interests that it holds and fees paid to it qualify as a variable interest in an entity. This includes an evaluation of the management fees and performance fees paid to the Company when acting as a decision maker or service provider to the entity being evaluated. If fees received by the Company are customary and commensurate with the level of services provided, and the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, the interest that the Company holds would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if fees are considered a variable interest. An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk have the right to direct the activities of the entity that most significantly impact the legal entity’s economic performance, (c) the voting rights of some investors are disproportionate to their obligation to absorb losses or rights to receive returns from a legal entity. For limited partnerships and other similar entities, non-controlling investors must have substantive rights to either dissolve the fund or remove the general partner (“kick-out rights”) in order to not qualify as a VIE. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company is generally deemed to have a controlling financial interest if it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances. However, quantitative information may also be considered in the analysis, as appropriate. These assessments require judgment. Each entity is assessed for consolidation on a case-by-case basis. For those entities evaluated under the voting interest model, the Company consolidates the entity if it has a controlling financial interest. The Company has a controlling financial interest in a voting interest entity (“VOE”) if it owns a majority voting interest in the entity. Consolidated Variable Interest Entities As of December 31, 2018 , Medley LLC had three majority owned subsidiaries, Medley Seed Funding I LLC, Medley Seed Funding II LLC and STRF Advisors LLC, which are consolidated VIEs. Each of these entities were organized as a limited liability company and was legally formed to either manage a designated fund or to strategically invest capital as well as isolate business risk. As of December 31, 2018 , total assets and total liabilities, after eliminating entries, of these VIEs reflected in the consolidated balance sheets were $22.2 million and less than $0.1 million , respectively. As of December 31, 2017, Medley LLC had four majority owned subsidiaries, Medley Seed Funding I LLC, Medley Seed Funding II LLC, STRF Advisors LLC and SIC Advisors LLC, which are consolidated VIEs. As of December 31, 2017 , total assets and total liabilities, after eliminating entries, of these VIEs reflected in the consolidated balance sheets were $63.3 million and $13.0 million , respectively. Except to the extent of the assets of these VIEs that are consolidated, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company. Seed Investments The Company accounts for seed investments through the application of the voting interest model under ASC 810-10-25-1 through 25-14 and consolidates a seed investment when the investment advisor holds a controlling interest, which is, in general, 50% or more of the equity in such investment. For seed investments in which the Company does not hold a controlling interest, the Company accounts for such seed investment under the equity method of accounting, at its ownership percentage of such seed investment’s net asset value. The Company seed funded $2.1 million to Sierra Total Return Fund ("STRF"), which commenced investment operations in June 2017. Since its inception through December 31, 2018 , the Company owned 100% of the equity of STRF and, as such, consolidates STRF in its consolidated financial statements. The balance sheet of STRF as of December 31, 2018 and 2017 is presented in the table below. As of December 31, 2018 2017 Assets (in thousands) Cash and cash equivalents $ 274 $ 164 Investments, at fair value 1,952 2,005 Other assets 248 1,698 Total assets $ 2,474 $ 3,867 Liabilities and Equity Accrued expenses and other liabilities $ 330 $ 1,744 Equity 2,144 2,123 Total liabilities and equity $ 2,474 $ 3,867 As of December 31, 2018 , the Company's consolidated balance sheet reflects the elimination of $0.2 million of other assets, $0.1 million of accrued expenses and other liabilities and $2.1 million of equity as a result of the consolidation of STRF. As of December 31, 2017, the Company's consolidated balance sheet reflects the elimination of $1.0 million of other assets, $1.5 million of accrued expenses and other liabilities and $2.1 million of equity as a result of the consolidation of STRF. During the years ended December 31, 2018 and 2017, STRF did not generate any significant income or losses from operations. Non-Consolidated Variable Interest Entities The Company holds interests in certain VIEs that are not consolidated because the Company is not deemed the primary beneficiary. The Company's interest in these entities is in the form of insignificant equity interests and fee arrangements. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. As of December 31, 2018 , the Company recorded investments, at fair value, attributed to these non-consolidated VIEs of $4.2 million , receivables of $1.8 million included as a component of other assets and a clawback obligation of $7.2 million included as a component of accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. The clawback obligation assumes a hypothetical liquidation of a fund’s investments, at their then current fair values, and a portion of tax distributions relating to performance fees which would need to be returned. As of December 31, 2017 , the Company recorded investments, at fair value, attributed to non-consolidated VIEs of $4.8 million , receivables of $2.4 million included as a component of other assets and a clawback obligation of $7.2 million included as a component of accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. As of December 31, 2018 , the Company’s maximum exposure to losses from these entities is $5.9 million . Concentration of Credit and Market Risk In the normal course of business, the Company's underlying funds encounter significant credit and market risk. Credit risk is the risk of default on investments in debt securities, loans and derivatives that result from a borrower's or derivative counterparty's inability or unwillingness to make required or expected payments. Credit risk is increased in situations where the Company's underlying funds are investing in distressed assets or unsecured or subordinate loans or in securities that are a material part of its respective business. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors. The Company's underlying funds may make investments outside of the United States. These non-U.S. investments are subject to the same risks associated with U.S. investments, as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing the investments, potentially adverse tax consequences, and the burden of complying with a wide variety of foreign laws. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Significant estimates and assumptions by management affect the carrying value of investments, certain accrued liabilities and the issuance of non-controlling interests at fair value. Actual results could differ from these estimates, and such differences could be material. Indemnification In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has not experienced any prior claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote. Non-Controlling Interests in Consolidated Subsidiaries Non-controlling interests in consolidated subsidiaries represent the component of equity in such consolidated entities held by third-parties or the Company's employees. These interests are adjusted for contributions to and distributions from the respective entities and are allocated income or loss based on their underlying ownership percentages. Redeemable Non-Controlling Interests Redeemable non-controlling interests represents interests of certain third parties that are not mandatorily redeemable but redeemable for cash or other assets at a fixed or determinable price or a fixed or determinable date, at the option of the holder or upon the occurrence of an event that is not solely within the control of the Company. These interests are classified in the mezzanine section on the Company's consolidated balance sheets. Cash and Cash Equivalents Cash and cash equivalents include liquid investments in money market funds and demand deposits. The Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits during the years ended December 31, 2018 and 2017. The Company monitors the credit standing of these financial institutions and has not experienced, and has no expectations of experiencing, any losses with respect to such balances. Investments Investments include equity method investments that are not consolidated but over which the Company exerts significant influence. The Company measures the carrying value of its public non-traded equity method investment at Net Asset Value ("NAV") per share. The Company measures the carrying value of its privately-held equity method investments by recording its share of the underlying income or loss of these entities. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investments is reflected as a component of investment income in the consolidated statements of operations along with the income and expense allocations from such investments. The carrying amounts of equity method investments are reflected in Investments, at fair value in the consolidated balance sheets. As the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Company’s equity method investments in such entities approximates fair value. The Company evaluates its equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. For presentation in its consolidated statements of cash flows, the Company treats distributions received from certain equity method investments using the cumulative earnings approach. Under the cumulative earnings approach, an investor would compare the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings would be considered a return on investment and classified in operating activities. Any distributions in excess of cumulative equity earnings would be considered a return of investment and classified in investing activities. Investments also include publicly traded common stock. The Company measures the fair value of its publicly traded common stock at the quoted market price on the primary market or exchange on which they trade. Any realized gains (losses) from the sale of investments and unrealized appreciation (depreciation) resulting from changes in fair value are recorded in other income (expenses), net. In connection with the adoption of the new revenue recognition guidance, ASC 606, Revenue from Contracts, on January 1, 2018, the Company reassessed its accounting policy for performance fees earned during the period which represent a capital allocation to the general partner or investment manager. As a result of this reassessment the Company has determined that it should account for such performance fees within the scope of ASC 323, Investments - Equity Method and Joint Ventures. Accordingly, these performance fees are now classified as carried interest within investment income on the Company's consolidated statements of operations and balances due for such fees are included as a part of equity method investments within Investments, at fair value on the Company's consolidated balance sheets. The Company has applied this change in accounting principle on a full retrospective basis, and prior periods presented have been reclassified to conform to the current period's presentation. Investments also include the Company's investment in CK Pearl Fund, L.P. which is measured at cost less impairment. The Company performs a quantitative and qualitative assessment at each reporting date to determine whether the investment is impaired and an impairment loss equal to the difference between the carrying value and fair value is recorded within other income (expenses), net on the Company's consolidated statement of operations if an impairment has been determined. Investments of Consolidated Fund In accordance with ASC 820, Fair Value Measurements and Disclosures , the consolidated fund has categorized its investments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 5. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. The consolidated fund weighs the use of third-party broker quotations, if any, in determining fair value based on management's understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by the consolidated fund’s board of trustees based upon input from management and third party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time. Fixed Assets Fixed assets consist primarily of furniture and fixtures, computer equipment, and leasehold improvements and are recorded at cost, less accumulated depreciation and amortization. The Company calculates depreciation expense for furniture and fixtures, and computer equipment using the straight-line method over the estimated useful life used for the respective assets, which generally ranges from three to seven years. Amortization of leasehold improvements is provided on a straight-line basis over the shorter of the remaining term of the underlying lease or estimated useful life of the improvement. Useful lives of leasehold improvements range from three to eight years. Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gain or loss is reflected in Other income (expense), net in the consolidated statements of operations. Debt Issuance Costs Debt issuance costs represent direct costs incurred in obtaining financing and are amortized over the term of the underlying debt using the effective interest method. Debt issuance costs associated with the Company’s revolving credit facility are presented as a deferred charge and are included as a component of other assets on the Company's consolidated balance sheets. Debt issuance costs associated with the Company’s senior unsecured debt are presented as a direct reduction in the carrying value of such debt, consistent with the presentation of debt discount. Amortization of debt issuance costs is included as a component of interest expense in the Company's consolidated statement of operations. Revenues As further described under Recently Issued Accounting Pronouncements Adopted as of January 1, 2018 , the Company adopted new revenue recognition guidance for revenue from contracts with customers , effective January 1, 2018 using the modified retrospective approach. The adoption of this new guidance did not have an impact on the Company's accounting for management fees, administrative fees and loan administration and transaction fees. Management Fees Medley provides investment management services to both public and private investment vehicles. Management fees include base management fees, other management fees, and Part I incentive fees, as described below. Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) NAV or (v) lower of cost or market value of a fund’s portfolio investments. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided. Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the funds' and/or separately managed accounts' underlying portfolio companies. These fees are recognized when the Company becomes entitled to such fees. Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net investment income (excluding gains and losses) above a hurdle rate. As it relates to MCC, these fees are subject to netting against realized and unrealized losses. Part I incentive fees are paid quarterly and are recognized as earned in the period the services are provided. Performance Fees Performance fees are contractual fees which do not represent a capital allocation of income to the general partner or investment manager that are earned based on the performance of certain funds, typically, the Company’s separately managed accounts. Performance fees are earned based on the fund performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Prior to the adoption of ASC 606, effective January 1, 2018, the Company accounted for performance fees under Method 2 of ASC 605, Revenue Recognition , for revenue based on a formula. Under this method, performance fees for any period were based upon an assumed liquidation of the underlying fund's net assets on the reporting date and were subject to reversal to the extent that cumulative previously recognized performance fees exceeded the amount due to the general partner or investment manager based on a fund's cumulative investment returns. Upon the adoption of ASC 606, the Company accounts for performance fees in accordance with this new standard, and will only recognize performance fees when it is probable that a significant reversal of such fees will not occur in the future. During the years ended December 31, 2018 and 2016, the Company did no t record any reversals of previously recognized performance fees. During the year ended December 31, 2017, the Company recorded a reversal of $2.6 million of previously recognized performance fees under the previous revenue recognition standard. Other Revenues and Fees Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective underlying agreements. These fees are recognized as revenue in the period administrative services are rendered. Medley also acts as the administrative agent on certain deals for which Medley may earn loan administration fees and transaction fees. Medley may also earn consulting fees for providing non-advisory services related to our managed funds. These fees are recognized as revenue over the period to which the fees directly relate. Carried Interest Carried interest are performance based fees that represent a capital allocation of income to the general partner or investment manager. Carried interest are allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s governing documents. Prior to January 1, 2018, the Company accounted for carried interest under Method 2 of ASC 605, as previously described above. Upon adoption of ASC 606, the Company reassessed its accounting policy for carried interest and determined that carried interest is within the scope of the accounting for equity method investments, ASC 323, Investments-Equity Method and Joint Ventures, and, as such, is not within the scope of ASC 606. Under ASC 323, the Company records carried interest in a consistent manner as it historically had which is based upon an assumed liquidation of that fund's net assets as of the reporting date, regardless of whether such amounts have been realized. For any given period, carried interest on the Company's consolidated statements of operations may include reversals of previously recognized carried interest due to a decrease in the value of a particular fund that results in a decrease of cumulative fees earned to date. Since fund return hurdles are cumulative, previously recognized carried interest also may be reversed in a period of appreciation that is lower than the particular fund's hurdle rate. Carried interest received in prior peri ods may be required to be returned by the Company in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, carried interest can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments, at their then current fair values, previously recognized and distributed carried interest would be required to be returned, a liability is established for the potential clawback obligation. As of December 31, 2018 , the Company had not received any carried interest distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of carried interest. Pursuant to the organizational documents of each respective fund, a portion of these tax distributions may be subject to clawback. As of December 31, 2018 and 2017, the Company had accrued $7.2 million for clawback obligations that would need to be paid if the funds were liquidated at fair value as of the end of the reporting period. The Company’s actual obligation, however, would not become payable or realized until the end of a fund’s life. Other Investment Income (loss) Other investment income is comprised of unrealized appreciation (depreciation) resulting from changes in fair value of the Company's equity method investments in addition to the income and expense allocations from such investments. Performance Fee Compensation Performance fee compensation relates to compensation expense arising from either the issuance of profit interests or equity interests in certain subsidiaries to select employees. Such subsidiaries were either setup for the object and purpose of receiving carried interest or as the general partner to certain of our long dated funds. Profit-sharing arrangements are accounted for under ASC 710, Compensation - General , which requires compensation expense to be measured at fair value at the grant date and expensed over the vesting period, which is usually the period over which the service is provided. The fair value of the profit interests are re-measured at each balance sheet date and adjusted for changes in estimates of cash flows and vesting percentages. The impact of such changes is recorded in the consolidated statements of operations as an increase or decrease to performance fee compensation. The issuance of equity awards are accounted for under ASC 718, Compensation - Stock Compensation , which requires expense to be measured at fair value at the grant date and expensed over the vesting period. Once vested the Company accounts for such equity awards as non-controlling interests in consolidated subsidiaries on its consolidated financial statements. Stock-based Compensation Stock-based compensation expense relating to equity based awards are measured at fair value as of the grant date, reduced for actual forfeitures in the period they occur, and expensed over the requisite service period on a straight-line basis as a component of compensation and benefits on the Company's consolidated statements of operations. Prior to January 1, 2017, the fair value of equity based awards were amortized on a straight line basis over the requisite service period as stock based compensation expense and was reduced for the impact of estimated forfeitures. The Company estimated forfeitures based on its historical experience and revised its estimate if actual forfeitures differed from its initial estimates. Effective January 1, 2017, the Company adopted a change in accounting policy as a result of the adoption of ASU 2016-09 to account for forfeitures as they occur. As such, stock based compensation expense relating to equity based awards are measured at fair value as of the grant date, reduced for actual forfeitures in the period they occur, and expensed over the requisite service period on a straightline basis as a component of compensation and benefits on the Company's consolidated statements of operations. Income Taxes The Company is treated as a partnership for income tax purposes and is therefore not subject to U.S. federal, state and local income taxes since all income, gains and losses are passed through to its members. However, a portion of taxable income from Medley LLC and its subsidiaries are subject to New York City’s unincorporated business tax, which is included in the Company’s provision for income taxes. The Company accounts for income taxes using the asset and liability approach, which requires the recognition of tax benefits or expenses for temporary differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to recognize interest and penalties on uncertain tax positions and other tax matters as a component of provision for income taxes. For interim periods, the Company accounts for income taxes based on its estimate of the effective tax rate for the year. Discrete items and changes in its estimate of the annual effective tax rate are recorded in the period they occur. Reclassification of Prior Period Presentation On January 1, 2018, the Company elected a change in accounting policy to account for performance fees earned which represent a capital allocation to the general partner or investment manager under ASC 323, Investments - Equity Method and Joint Ventures. As a result of this change in accounting policy, certain prior year amounts have been reclassified for consistency with the current period presentation. Performance fees earned which represent a capital allocation to the general partner or investment manager were reclassified from performance fee revenue to investment income along with capital-based allocations of income and losses from the Company's equity method investments, which were previously classified within other income (expense), net on its consolidated statements of operations. On the Company's consolidated balance sheets, receivable amounts related to such performance fees were reclassified from performance fees receivable to investments, at fair value. There were no changes to the income allocations from the Company's equity method investments, which are included within investments, at fair value. These reclassifications had no net effect on the reported consolidated statements of operations or consolidated balance sheets for any period. Additionally, the Company has reclassified $0.2 million of cash and cash equivalents of its consolidated fund as of December 31, 2017 to cash and cash equivalents on the Company's consolidated balance sheets to conform to the current year's presentation. Leases Certain lease agreements contain escalating payments and rent holiday periods. The related rent expense is recorded on a straight-line basis over the length of the lease term. The difference between rent expense and rent paid is recorded as deferred rent. Leasehold improvements made by the lessee and funded by landlord allowances or other incentives are also recorded as deferred rent and are amortized as a reduction in rent expense over the term of the lease. Deferred rent is included as a component of accounts payable, |
REVENUES FROM CONTRACTS WITH CU
REVENUES FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | REVENUES FROM CONTRACTS WITH CUSTOMERS The majority of the Company's revenues are derived from investment management and advisory contracts that are accounted for in accordance with the new revenue recognition standard, ASC 606. Performance Obligations Performance obligations are the unit of account under the new revenue recognition standard and represent the distinct goods or services that are promised to the customer. The majority of the Company's contracts have a single performance obligation to provide asset management, advisory and other related services to permanent capital vehicles, long-dated private funds and separately managed accounts. The Company also has a separate performance obligation to act as an agent for certain third party lenders and provide loan administration services to certain borrowers. These loan administration services also represent a single performance obligation. The Company primarily provides investment management services to a fund by managing the fund’s investments and maximizing returns on those investments. The Company’s asset management, advisory and other related services are transferred over time to the customer on a day-to-day basis. The contracts with each fund create a distinct performance obligation for each quarter the Company provides the promised services to the customer, from which the customer can benefit from each individual quarter of service. Furthermore, each quarter of the promised services is considered separately identifiable because there is no integration of the promised services between quarters, each quarter does not modify services provided prior to that quarter, and the services provided are not interdependent or interrelated. Most services provided to these funds are provided continuously over the contract period, so the services in the contract generally represents a single performance obligation comprising a series of distinct service periods. A contract’s transaction price is allocated to the series of distinct services that constitute a single performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The management fees earned by the Company are largely dependent on fluctuations in the market and, thus, the determination of such fees is highly susceptible to factors outside the Company's influence. Management fees typically have a large number and broad range of possible consideration amounts and historical experience is generally not indicative of future performance of the market. Hence, the Company is applying the exemption provided under the new revenue recognition guidance as the Company is unable to estimate the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied and the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. The new revenue recognition standard also revises the criteria for determining if an entity is acting as a principal or agent in certain arrangements. Depending on whether the Company is acting as the principal or as an agent, certain reimbursable expenses that were previously recorded net are now presented as an expense on a gross basis on the Company's consolidated statement of operations. Significant Judgments The Company's contracts with customers generally include a single performance obligation to provide asset management, advisory and other related services on a quarterly basis. Revenues are recognized as such performance obligation is satisfied and the constraint on the management fees is lifted on a quarterly basis, hence, the Company does not need to exercise significant judgments in regards to management fees. Consideration for management fees is received on a quarterly basis as the performance obligations is satisfied. With respect to performance fees based on the economic performance of its SMAs, significant judgment is required when determining recognition of revenues. Such judgments include: • whether the fund is near final liquidation • whether the fair value of the remaining assets in the fund is significantly in excess of the threshold at which the Company would earn an incentive fee • the probability of significant fluctuations in the fair value of the remaining assets • the SMA’s remaining investments are under contract for sale with contractual purchase prices that would result in no clawback and it is highly likely that the contracts will be consummated As such, the Company will consider the above factors at each reporting period to determine whether there is an amount of the SMA performance fees which should be recognized as revenue because it is probable that there will not be a significant future revenue reversal, hence, the “constraint” on the performance fees has been lifted. The Company accounts for performance fees which represent capital allocations to the general partner or investment manager pursuant to accounting rules relating to investments accounted for under the equity method of accounting. As such, these types of performance fees are not within the scope of the new revenue recognition standard and the above significant judgments and constraints do not apply to them. Refer to Note 2 “ Summary of Significant Accounting Policies ” and Note 4 " Investments " for additional information. Revenue by Category The following tables present the Company's revenue from contracts with customers disaggregated by type of customer for the year ended December 31, 2018. Permanent Long-dated SMAs Other Total (in thousands) Management fees $ 32,471 $ 8,122 $ 6,492 $ — $ 47,085 Performance fees — — — — — Other revenues and fees 6,896 — — 3,607 10,503 Total revenues from contracts with customers $ 39,367 $ 8,122 $ 6,492 $ 3,607 $ 57,588 Other revenues and fees primarily consist of revenues earned by Medley while providing administrative services to certain affiliated funds. The Other category above includes revenues earned by Medley while serving as loan administrative agent on certain deals, including loan administration and transaction fees. Additionally, this balance includes reimbursable origination and deal expenses, reimbursable entity formation and organizational expenses and consulting fees. The Company's asset management, advisory and other related services are transferred over time and the Company recognizes these revenues over time as well. Contract Balances For certain customers, the Company has a performance obligation to provide loan administration services. The timing of revenue recognition may differ from the timing of invoicing to such customers or receiving consideration. For the majority of these services cash deposits are received prior to the performance obligation being met. The performance obligation of acting as a loan administrator is satisfied over time, therefore, the Company defers any payments received upfront as deferred revenue and recognizes revenue on a pro-rata basis over time as the loan administrative services are performed. These contract liabilities are reported as deferred revenue within accounts payable, accrued expenses and other liabilities on the consolidated balance sheets and amounted to $0.3 million as of December 31, 2018 . During the year ended December 31, 2018 , the company recognized revenue from amounts included in deferred revenue of $0.7 million and received cash deposits of $0.8 million . The Company did not have any contract assets as of December 31, 2018 . Comparative Tables As the Company adopted the new revenue guidance (ASC 606) under the modified retrospective method, the Company is required to present what the Company's revenues would have been under the previous revenue guidance (ASC 605). The following tables present the reconciliation between the financial statement line items reported on the consolidated balance sheet as of December 31, 2018 under ASC 606 to what would have been reported under the previous guidance ASC 605. As of December 31, 2018 As Reported under ASC 606 Adjustments to reported balances Balances under ASC 605 Assets (in thousands) Performance fees receivable $ — $ 1,346 $ 1,346 Other assets 14,145 789 14,934 Liabilities Accounts payable, accrued expenses and other liabilities 26,444 89 26,533 Members' Deficit Members' deficit (109,981 ) 2,046 (107,935 ) The following tables present the reconciliation between the Company's reported consolidated statement of operations for the year ended December 31, 2018 under ASC 606 to what would have been reported under the previous revenue recognition guidance, ASC 605. For the year ended December 31, 2018 As Reported under ASC 606 Adjustments to reported balances Balances under ASC 605 Revenues (in thousands) Management fees $ 47,085 $ — $ 47,085 Performance fees — (1,641 ) (1,641 ) Other revenues and fees 10,503 (1,889 ) 8,614 Investment income (loss): Carried interest 142 — 142 Other investment loss (1,221 ) — (1,221 ) Total Revenues 56,509 (3,530 ) 52,979 Expenses Compensation and benefits 31,159 — 31,159 Performance fee compensation 507 — 507 General, administrative and other expenses 19,366 (1,906 ) 17,460 Total Expenses 51,032 (1,906 ) 49,126 Other Income (Expense) Dividend income 4,311 — 4,311 Interest expense (10,806 ) — (10,806 ) Other expense, net (20,250 ) — (20,250 ) Total Other Expense, Net (26,745 ) — (26,745 ) Loss before provision for income taxes (21,268 ) (1,624 ) (22,892 ) Benefit from income taxes (300 ) (23 ) (323 ) Net Loss (20,968 ) (1,601 ) (22,569 ) Net loss attributable to redeemable non-controlling interests in consolidated subsidiaries (11,082 ) — (11,082 ) Net Loss Attributable to Medley LLC $ (9,886 ) $ (1,601 ) $ (11,487 ) Assets Recognized for the Costs to Obtain or Fulfill a Contract As part of providing investment management services to a fund, the Company might incur certain placement fees to third parties for obtaining new investors for the fund. The Company determined that placement fees which are paid in cash over time, as fees are earned, do not relate to a new contract at the time the payment is made. These costs do not represent a cost to obtain a new contract but rather a cost to fulfill an existing contract. The Company does not recognize any assets for the incremental costs of obtaining or fulfilling a contract with a customer and expenses placement fees as incurred. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs to the valuation of the investment as of the measurement date. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy: • Level I – Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date. • Level II – Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non- active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities. • Level III – Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s assessment of the assumptions that market participants would use in pricing the assets and liabilities. These investments include debt and equity investments in private companies or assets valued using the Market or Income Approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence. The following tables summarize the fair value hierarchy of the Company's financial assets measured at fair value: As of December 31, 2018 Level I Level II Level III Total Assets (in thousands) Investments of consolidated fund $ 258 $ — $ 1,694 $ 1,952 Investment in shares of MCC 20,633 — — 20,633 Total Assets $ 20,891 $ — $ 1,694 $ 22,585 As of December 31, 2017 Level I Level II Level III Total Assets (in thousands) Investments of consolidated fund $ 435 $ — $ 1,570 $ 2,005 Investment in shares of MCC 40,491 — — 40,491 Total Assets $ 40,926 $ — $ 1,570 $ 42,496 Included in investments of consolidated fund as of December 31, 2018 are Level I assets of $0.3 million in equity investments and Level III assets of $1.7 million , which consists of senior secured loans and equity investments. Included in investments of consolidated fund as of December 31, 2017 are Level I assets of $0.4 million in equity investments and Level III assets of $1.6 million , which consists of senior secured loans and preferred equity investments. The significant unobservable inputs used in the fair value measurement of Level III assets of the consolidated fund's investments in senior secured loans include market yields. Significant increases or decreases in market yields in isolation would result in a significantly higher or lower fair value measurement. There were no significant unrealized gains or losses related to the investments of consolidated fund for the years ended December 31, 2018 and 2017. The following is a summary of changes in fair value of the Company's financial assets that have been categorized within Level III of the fair value hierarchy (in thousands): Level III Financial Assets as of December 31, 2018 Balance at December 31, 2017 Purchases Transfers In or (Out) of Level III Unrealized Depreciation Sale of Level III Assets Balance at December 31, 2018 Investments of consolidated fund $ 1,570 583 — (3 ) (456 ) $ 1,694 A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting all levels of the fair value hierarchy are reported as transfers in or out of Level I, II or III category as of the beginning of the quarter during which the reclassifications occur. There were no transfers between levels in the fair value hierarchy during the year ended December 31, 2018. When determining the fair value of publicly traded equity securities, the Company uses the quoted closing market price as of the valuation date on the primary market or exchange on which they trade. Our equity method investments for which fair value is measured at NAV per share, or its equivalent, using the practical expedient, are not categorized in the fair value hierarchy. The Company's investments of consolidated fund are treated as investments at fair value and any realized and unrealized gains and losses from those investments are recorded through the consolidated statement of operations. The Company's treatment is consistent with that of STRF, which is considered an investment company under ASC 946, Financial Services - Investment Companies, for standalone reporting purposes. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Investments [Abstract] | |
Investments | INVESTMENTS Investments consist of the following: As of December 31, 2018 2017 (in thousands) Equity method investments, at fair value $ 13,422 $ 14,136 Investment in shares of MCC, at fair value 20,633 40,491 Investment held at cost 418 — Investments of consolidated fund 1,952 2,005 Total investments, at fair value $ 36,425 $ 56,632 Equity Method Investments Medley measures the carrying value of its public non-traded equity method investment at NAV per share. Unrealized appreciation (depreciation) resulting from changes in NAV per share is reflected as a component of other investment loss on the Company's consolidated statements of operations. The carrying value of the Company’s privately-held equity method investments is determined based on the amounts invested by the Company plus the equity in earnings or losses of the investee allocated based on the respective underlying agreements, less distributions received. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. There were no impairment losses recorded during the year ended December 31, 2018, 2017 or 2016. As of December 31, 2018 and 2017, the Company’s carrying value of its equity method investments was $ 13.4 million and $ 14.1 million , respectively. The Company's equity method investment in shares of Sierra Income Corporation (“SIC” or "Sierra"), a related party, were $7.4 million and $8.5 million as of December 31, 2018 and 2017, respectively. The remaining balance as of December 31, 2018 and 2017 relates primarily to the Company’s investments in Medley Opportunity Fund II, LP ("MOF II"), Medley Opportunity Fund III LP (“MOF III”), Medley Opportunity Fund Offshore III LP (“MOF III Offshore”) and Aspect-Medley Investment Platform B LP ("Aspect B"). For performance fees earned which represent a capital allocation to the general partner or investment manager, the Company elected a change in accounting policy and, as of January 1, 2018, accounts for such fees under the equity method of accounting . As such, commencing on January 1, 2018, performance fees due to the Company are included as a component of equity method investments within investments, at fair value rather than as a component of performance fees receivable on the Company's consolidated balance sheets. As of December 31, 2018 and 2017, the balance due to the Company for such performance fees was $0.4 million and $0.2 million , respectively. Revenues associated with these performance fees are classified as carried interest within investment income on the Company's consolidated statements of operations. The entities in which the Company's investments are accounted for under the equity method are considered to be related parties. Investments in shares of MCC, at fair value As of December 31, 2018 and 2017, the Company held 7,756,938 shares of MCC which are carried at fair value based upon the quoted market price on the exchange on which the shares trade. During the year ended December 31, 2018 , the Company recognized unrealized losses of $19.9 million , which were included as a component of other income (expense), net on the Company’s consolidated statements of operations. Of that amount, $16.3 million was allocated to net loss attributable to redeemable non-controlling interest in consolidated subsidiaries and $3.6 million to net loss attributable to Medley LLC. Prior to the adoption of ASU 2016-01 on January 1, 2018, the Company's investment in shares of MCC were classified as available-for-sale securities, with cumulative unrealized gains (losses) recorded in other comprehensive income (loss). During the year ended December 31, 2017, the Company recorded unrealized losses of $11.1 million , respectively, as a component of other comprehensive income. Investment Held at Cost Effective January 1, 2018, the Company elected to use the measurement alternative provided under ASC 321, Investments- Equity Securities and measure its investment in CK Pearl at cost less impairment, adjusted for observable price changes for an identical or similar investment of the same issuer. The carrying amount of this investment was $0.4 million as of December 31, 2018 and $0.5 million as of December 31, 2017. During the years ended December 31, 2018 and 2016, the Company recorded a $0.1 million and a $0.5 million impairment loss on its investment in CK Pearl Fund, respectively, which is included as a component of other income (expense), net on the consolidated statements of operations. There was no impairment losses recorded during the year ended December 31, 2017. Prior to January 1, 2018, the Company's investment in CK Pearl was accounted for under the equity method. The carrying value of the Company's investment in CK Pearl was determined based on the financial information provided to the Company by the fund manager and the likelihood of recovering the Company's investment in the fund. Investments of consolidated fund Medley measures the carrying value of investments held by its consolidated fund at fair value. As of December 31, 2018 , investments of consolidated fund consisted of $0.4 million of equity investments and $1.6 million of senior secured loans. As of December 31, 2017, investments of consolidated fund consisted of $0.4 million of equity investments and $1.6 million of senior secured loans. Refer to Note 5 " Fair Value Measurements " for additional information. Significant equity method investments In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, the Company must assess whether any of its equity method investments are significant equity method investments. In evaluating the significance of these investments, the Company performed the income test, the investment test and the asset test described in S-X 3-05 and S-X 1-02(w). Rule 3-09 of Regulation S-X requires separate audited financial statements of an equity method investee in an annual report if either the income or investment test exceeds 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information in an annual report if any of the three tests exceeds 10%, or 20% in the case of smaller reporting companies. Under the asset test, the Company’s proportionate share of its equity method investees' aggregated assets exceeded the applicable threshold of 20% for smaller reporting companies, and the Company has determined to hold significant equity method investments and is required to provide summarized financial information for these investees for all periods presented in this Form 10-K. The Company believes that the financial captions below are the most meaningful given that the investees are investment companies. The following tables provides summarized balance sheet information for the Company's equity method investees, as of December 31, 2018 and 2017 . As of December 31, 2018 2017 Balance Sheet Data (in thousands) Investments, at fair value $ 1,417,176 $ 1,641,373 Cash 97,889 88,084 Other assets 57,677 74,969 Total assets $ 1,572,742 $ 1,804,426 Debt $ 367,424 $ 440,759 Other liabilities 20,686 22,365 Total liabilities 388,110 463,124 Net assets $ 1,184,632 $ 1,341,302 The following table provides summarized income statement information for the Company's equity method investees, for the years ended December 31, 2018, 2017 and 2016. Years Ended December 31, 2018 2017 2016 Summary of Operations (in thousands) Total revenues $ 142,431 $ 162,386 $ 161,475 Total expenses 64,339 64,517 50,548 Net realized and unrealized gain / (loss) on investments (131,554 ) (89,508 ) (1,865 ) Net income (loss) $ (53,462 ) $ 8,361 $ 109,062 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | OTHER ASSETS Other assets consist of the following: As of December 31, 2018 2017 (in thousands) Fixed assets, net of accumulated depreciation and amortization of $3,446 and $2,370, respectively $ 3,140 $ 4,160 Security deposits 1,975 1,975 Administrative fees receivable (Note 12) 1,645 1,903 Deferred tax assets (Note 13) 3,144 1,926 Due from affiliates (Note 12) 2,215 2,979 Prepaid expenses and taxes 761 1,085 Other assets 1,265 1,465 Total other assets $ 14,145 $ 15,493 |
DUE TO FORMER MINORITY INTEREST
DUE TO FORMER MINORITY INTEREST HOLDER | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Due to Former Minority Interest Holder | DUE TO FORMER MINORITY INTEREST HOLDER As of December 31, 2018 2017 (in thousands) Due to former minority interest holder, net of unamortized discount of $2,598 $ 11,402 $ — Total amount due to former minority interest holder $ 11,402 $ — In January 2016, the Company executed an amendment to SIC Advisors' operating agreement which provided the Company with the right to redeem membership units owned by the minority interest holder, Strategic Capital Advisory Services, LLC. The Company’s redemption right was triggered by the termination of the dealer manager agreement between SIC and SC Distributors LLC ("DMA Termination"), an affiliate of the minority interest holder. As a result of this redemption feature, the Company reclassified the non-controlling interest in SIC Advisors from the equity section of its consolidated balance sheet to redeemable non-controlling interests in the mezzanine section of its consolidated balance sheet based on its fair value as of the amendment date. On July 31, 2018, a DMA Termination event occurred and, as a result, the Company reclassified the redeemable non-controlling interest in SIC Advisors from redeemable non-controlling in the mezzanine section of its consolidated balance sheet to due to former minority interest holder, a component of total liabilities on the Company's consolidated balance sheet, based on its fair value as of that date (See Note 15). In December, 2018, Medley LLC entered into a Letter Agreement with Strategic Capital Advisory Services, LLC, whereby consideration of $14.0 million was agreed upon for the satisfaction in full of all amounts owed by Medley under the LLC Agreement. The amount due will be paid in sixteen equal installments through August 5, 2022. The Company evaluated this agreement under ASC 470-50, Debt - Modifications and Extinguishments , to determine if modification or extinguishment treatment was necessary. After performing this analysis under ASC 470-50, the Company determined modification treatment was appropriate and a new effective interest rate was established on the modification date. As of December 31, 2018 future payments due to former minority interest holder are as follows (in thousands): 2019 $ 4,375 2020 3,500 2021 3,500 2022 2,625 Total $ 14,000 For the year ending December 31, 2018, amortization of the note discount was less than $0.1 million . |
LOANS PAYABLE
LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Loans Payable | SENIOR UNSECURED DEBT The carrying value of the Company’s senior unsecured debt consists of the following: As of December 31, 2018 2017 (in thousands) 2026 Notes, net of unamortized discount and debt issuance costs of $2,946 and $3,266, respectively $ 50,649 $ 50,329 2024 Notes, net of unamortized premium and debt issuance costs of $2,031 and $2,437, respectively 66,969 66,563 Total senior unsecured debt $ 117,618 $ 116,892 2026 Notes On August 9, 2016 and October 18, 2016, the Company issued debt consisting of $53.6 million in aggregate principal amount of senior unsecured notes due 2026 at a stated coupon rate of 6.875% (the "2026 Notes"). The net proceeds from these offerings were used to pay down a portion of the Company's outstanding indebtedness under its Term Loan Facility. Interest is payable quarterly and interest payments commenced on November 15, 2016. The 2026 Notes are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after August 15, 2019 at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments. The 2026 notes were recorded net of discount and direct issuance costs of $3.8 million which are being amortized over the term of the notes using the effective interest rate method. The 2026 Notes are listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLX.” The fair value of the 2026 Notes based on their underlying quoted market price was $43.4 million as of December 31, 2018 . Interest expense on the 2026 Notes, including accretion of note discount and amortization of debt issuance costs, was $4.0 million for each of the years ended December 31, 2018 and 2017 and $1.2 million for the year ended December 31, 2016. 2024 Notes On January 18, 2017 and February 22, 2017, the Company issued $69.0 million in aggregate principal amount of senior unsecured notes due 2024 at a stated coupon rate of 7.25% (the "2024 Notes"). The net proceeds from these offerings were used to pay down the remaining portion of the Company's outstanding indebtedness under its Term Loan Facility with the remaining to be used for general corporate purposes. Interest is payable quarterly and interest payments commenced on April 30, 2017. The 2024 Notes are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after January 30, 2020 at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments. The 2024 notes were recorded net of premium and direct issuance costs of $2.8 million which are being amortized over the term of the notes using the effective interest rate method. The 2024 Notes are listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLQ.” The fair value of the 2024 Notes based on their underlying quoted market price was $61.1 million as of December 31, 2018 . Interest expense on the 2024 Notes, including amortization of debt premium and debt issuance costs, was $5.4 million and $4.9 million for the years ended December 31, 2018 and 2017, respectively. LOANS PAYABLE Loans payable consist of the following: As of December 31, 2018 2017 (in thousands) Non-recourse promissory notes, net of unamortized discount of $108 and $767, respectively $ 9,892 $ 9,233 Total loans payable $ 9,892 $ 9,233 CNB Credit Agreement On August 19, 2014 , the Company entered into a $15.0 million senior secured revolving credit facility with City National Bank (as amended, the “Revolving Credit Facility”). The most recent amendment dated September 22, 2017 extended the Revolving Credit Facility maturity date to March 31, 2020 and provides for an incremental facility in an amount up to $10.0 million upon the fulfillment of certain customary conditions, as well as other changes. The Company intends to use any proceeds from borrowings under the Revolving Credit Facility for general corporate purposes, including funding of its working capital needs. Borrowings under the Revolving Credit Facility bear interest, at the option of the Company, either (i) at an Alternate Base Rate, as defined, plus an applicable margin not to exceed 0.25% or (ii) at an Adjusted LIBOR plus an applicable margin not to exceed 2.5% . As of the year ended December 31, 2018, there were no amounts drawn under the Revolving Credit Facility. The capitalized terms below are defined in the Revolving Credit Facility, where applicable. The Revolving Credit Facility also contains financial covenants that require the Company to maintain a Maximum Net Leverage Ratio, as defined, of not greater than 5.0 to 1.0 , a Total Leverage Ratio, as defined, of not greater than 7.0 to 1.0 and Core EBITDA, as defined, of not less than $15.0 million . These ratios are calculated on a trailing twelve months basis and are calculated using the Company’s financial results and include adjustments made to calculate Core EBITDA. Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default. The Revolving Credit Facility also contains customary negative covenants and other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. As of December 31, 2018 , the Company was not in compliance with its financial covenants due to the impact of the costs associated with its pending merger on Core EBITDA. On March 28, 2019, the Company entered into Amendment Number Four to Credit Agreement and Waiver ("Amendment Four") with City National Bank ("CNB"). Amendment Four limits the aggregate amount of borrowings at any one time outstanding not to exceed the lesser of (a) the Maximum Revolver Amount, as defined, and (b) Core EBITDA calculated for the twelve month period ending on the last day of the month that is 30 days prior to the date of borrowing; provided, that at no time shall the amount of such lender’s aggregate loans exceed such lender’s revolving credit facility commitment. Also pursuant to Amendment Four, CNB agreed to waive the financial covenants relating to Total Leverage Ratio and Core EBITDA with respect to the period ending December 31, 2018. The Company is currently in discussions with City National Bank to further amend the covenants under the Revolving Credit Facility which would be effective for the second quarter of 2019 through the Revolving Credit Facility's maturity date. There were no amounts drawn under the Revolving Credit Facility since its inception through December 31, 2018 . Amortization of deferred issuance costs associated with the Revolving Credit Facility were $0.1 million for the years ended December 31, 2018, 2017 and 2016. Credit Suisse Term Loan Facility On August 14, 2014 , the Company entered into a $110.0 million senior secured term loan credit facility (as amended, “Term Loan Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent thereunder, Credit Suisse Securities (USA) LLC, as bookrunner and lead arranger, and the lenders from time-to-time party thereto, which had an original maturity date of June 15, 2019 . In February 2017, borrowings under this facility were paid off using the proceeds from the issuance of senior unsecured debt and the Term Loan Facility was terminated. During the years ending December 31, 2017 and 2016, interest expense under the Term Loan Facility, including accretion of the note discount and amortization of debt issuance costs were $1.5 million and $6.5 million , respectively. Non-Recourse Promissory Notes In April 2012, the Company borrowed $10.0 million under two non-recourse promissory notes. Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations. Interest on the notes is paid monthly and is equal to the dividends received by the Company related to the pledged shares. The Company may prepay the notes in whole or in part at any time without penalty and the lenders may call the notes if certain conditions are met. The Company extended the maturity date from March 1, 2019 to June 30, 2019. The proceeds from the notes were recorded net of issuance costs of $3.8 million and are being accreted, using the effective interest method, over the term of the non-recourse promissory notes. Total interest expense under these notes, including accretion of the notes discount, was $1.4 million for each of the years ended December 31, 2018 , 2017 and 2016. The fair value of the outstanding balance of the notes was $10.0 million as of December 31, 2018 and $10.1 million as of December 31, 2017. On January 31, 2019. the Company entered into a termination agreement with the lenders which will become effective upon the closing of the Company's pending merger with SIC. In accordance with the provisions of the termination agreement, the Company will be required to pay the lenders $6.5 million on or prior to the merger closing date, reimburse the lenders for their out of pocket legal fees and enter into a new $6.5 million promissory note ("New Promissory Note"). The New Promissory Note will bear interest at LIBOR plus 7.0% and maturity will be six months after the closing date. Such consideration would be for the full satisfaction of the two aforementioned non-recourse promissory notes and related agreements, including the Company's revenue share payable, as further described in Note 11. Contractual Maturities of Loans Payable As further described above, upon closing of the Company's pending merger with SIC, the Company's two non-recourse promissory and revenue sharing arrangement would be settled for payment of $6.5 million on or prior to the merger closing date and delivery of the New Promissory Note. If the pending merger does not close, $10.0 million of future principal payments will be due, relating to loans payable, during the year ended December 31, 2019. |
SENIOR UNSECURED DEBT
SENIOR UNSECURED DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Senior Unsecured Debt | SENIOR UNSECURED DEBT The carrying value of the Company’s senior unsecured debt consists of the following: As of December 31, 2018 2017 (in thousands) 2026 Notes, net of unamortized discount and debt issuance costs of $2,946 and $3,266, respectively $ 50,649 $ 50,329 2024 Notes, net of unamortized premium and debt issuance costs of $2,031 and $2,437, respectively 66,969 66,563 Total senior unsecured debt $ 117,618 $ 116,892 2026 Notes On August 9, 2016 and October 18, 2016, the Company issued debt consisting of $53.6 million in aggregate principal amount of senior unsecured notes due 2026 at a stated coupon rate of 6.875% (the "2026 Notes"). The net proceeds from these offerings were used to pay down a portion of the Company's outstanding indebtedness under its Term Loan Facility. Interest is payable quarterly and interest payments commenced on November 15, 2016. The 2026 Notes are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after August 15, 2019 at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments. The 2026 notes were recorded net of discount and direct issuance costs of $3.8 million which are being amortized over the term of the notes using the effective interest rate method. The 2026 Notes are listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLX.” The fair value of the 2026 Notes based on their underlying quoted market price was $43.4 million as of December 31, 2018 . Interest expense on the 2026 Notes, including accretion of note discount and amortization of debt issuance costs, was $4.0 million for each of the years ended December 31, 2018 and 2017 and $1.2 million for the year ended December 31, 2016. 2024 Notes On January 18, 2017 and February 22, 2017, the Company issued $69.0 million in aggregate principal amount of senior unsecured notes due 2024 at a stated coupon rate of 7.25% (the "2024 Notes"). The net proceeds from these offerings were used to pay down the remaining portion of the Company's outstanding indebtedness under its Term Loan Facility with the remaining to be used for general corporate purposes. Interest is payable quarterly and interest payments commenced on April 30, 2017. The 2024 Notes are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after January 30, 2020 at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments. The 2024 notes were recorded net of premium and direct issuance costs of $2.8 million which are being amortized over the term of the notes using the effective interest rate method. The 2024 Notes are listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLQ.” The fair value of the 2024 Notes based on their underlying quoted market price was $61.1 million as of December 31, 2018 . Interest expense on the 2024 Notes, including amortization of debt premium and debt issuance costs, was $5.4 million and $4.9 million for the years ended December 31, 2018 and 2017, respectively. LOANS PAYABLE Loans payable consist of the following: As of December 31, 2018 2017 (in thousands) Non-recourse promissory notes, net of unamortized discount of $108 and $767, respectively $ 9,892 $ 9,233 Total loans payable $ 9,892 $ 9,233 CNB Credit Agreement On August 19, 2014 , the Company entered into a $15.0 million senior secured revolving credit facility with City National Bank (as amended, the “Revolving Credit Facility”). The most recent amendment dated September 22, 2017 extended the Revolving Credit Facility maturity date to March 31, 2020 and provides for an incremental facility in an amount up to $10.0 million upon the fulfillment of certain customary conditions, as well as other changes. The Company intends to use any proceeds from borrowings under the Revolving Credit Facility for general corporate purposes, including funding of its working capital needs. Borrowings under the Revolving Credit Facility bear interest, at the option of the Company, either (i) at an Alternate Base Rate, as defined, plus an applicable margin not to exceed 0.25% or (ii) at an Adjusted LIBOR plus an applicable margin not to exceed 2.5% . As of the year ended December 31, 2018, there were no amounts drawn under the Revolving Credit Facility. The capitalized terms below are defined in the Revolving Credit Facility, where applicable. The Revolving Credit Facility also contains financial covenants that require the Company to maintain a Maximum Net Leverage Ratio, as defined, of not greater than 5.0 to 1.0 , a Total Leverage Ratio, as defined, of not greater than 7.0 to 1.0 and Core EBITDA, as defined, of not less than $15.0 million . These ratios are calculated on a trailing twelve months basis and are calculated using the Company’s financial results and include adjustments made to calculate Core EBITDA. Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default. The Revolving Credit Facility also contains customary negative covenants and other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. As of December 31, 2018 , the Company was not in compliance with its financial covenants due to the impact of the costs associated with its pending merger on Core EBITDA. On March 28, 2019, the Company entered into Amendment Number Four to Credit Agreement and Waiver ("Amendment Four") with City National Bank ("CNB"). Amendment Four limits the aggregate amount of borrowings at any one time outstanding not to exceed the lesser of (a) the Maximum Revolver Amount, as defined, and (b) Core EBITDA calculated for the twelve month period ending on the last day of the month that is 30 days prior to the date of borrowing; provided, that at no time shall the amount of such lender’s aggregate loans exceed such lender’s revolving credit facility commitment. Also pursuant to Amendment Four, CNB agreed to waive the financial covenants relating to Total Leverage Ratio and Core EBITDA with respect to the period ending December 31, 2018. The Company is currently in discussions with City National Bank to further amend the covenants under the Revolving Credit Facility which would be effective for the second quarter of 2019 through the Revolving Credit Facility's maturity date. There were no amounts drawn under the Revolving Credit Facility since its inception through December 31, 2018 . Amortization of deferred issuance costs associated with the Revolving Credit Facility were $0.1 million for the years ended December 31, 2018, 2017 and 2016. Credit Suisse Term Loan Facility On August 14, 2014 , the Company entered into a $110.0 million senior secured term loan credit facility (as amended, “Term Loan Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent thereunder, Credit Suisse Securities (USA) LLC, as bookrunner and lead arranger, and the lenders from time-to-time party thereto, which had an original maturity date of June 15, 2019 . In February 2017, borrowings under this facility were paid off using the proceeds from the issuance of senior unsecured debt and the Term Loan Facility was terminated. During the years ending December 31, 2017 and 2016, interest expense under the Term Loan Facility, including accretion of the note discount and amortization of debt issuance costs were $1.5 million and $6.5 million , respectively. Non-Recourse Promissory Notes In April 2012, the Company borrowed $10.0 million under two non-recourse promissory notes. Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations. Interest on the notes is paid monthly and is equal to the dividends received by the Company related to the pledged shares. The Company may prepay the notes in whole or in part at any time without penalty and the lenders may call the notes if certain conditions are met. The Company extended the maturity date from March 1, 2019 to June 30, 2019. The proceeds from the notes were recorded net of issuance costs of $3.8 million and are being accreted, using the effective interest method, over the term of the non-recourse promissory notes. Total interest expense under these notes, including accretion of the notes discount, was $1.4 million for each of the years ended December 31, 2018 , 2017 and 2016. The fair value of the outstanding balance of the notes was $10.0 million as of December 31, 2018 and $10.1 million as of December 31, 2017. On January 31, 2019. the Company entered into a termination agreement with the lenders which will become effective upon the closing of the Company's pending merger with SIC. In accordance with the provisions of the termination agreement, the Company will be required to pay the lenders $6.5 million on or prior to the merger closing date, reimburse the lenders for their out of pocket legal fees and enter into a new $6.5 million promissory note ("New Promissory Note"). The New Promissory Note will bear interest at LIBOR plus 7.0% and maturity will be six months after the closing date. Such consideration would be for the full satisfaction of the two aforementioned non-recourse promissory notes and related agreements, including the Company's revenue share payable, as further described in Note 11. Contractual Maturities of Loans Payable As further described above, upon closing of the Company's pending merger with SIC, the Company's two non-recourse promissory and revenue sharing arrangement would be settled for payment of $6.5 million on or prior to the merger closing date and delivery of the New Promissory Note. If the pending merger does not close, $10.0 million of future principal payments will be due, relating to loans payable, during the year ended December 31, 2019. |
ACCOUNTS PAYABLE, ACCRUED EXPEN
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Liabilities | ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES Accounts payable, accrued expenses and other liabilities consist of the following: As of December 31, 2018 2017 (in thousands) Accrued compensation and benefits $ 7,438 $ 6,835 Due to affiliates (Note 12) 7,635 7,314 Revenue share payable (Note 11) 2,976 3,841 Accrued interest 1,294 1,294 Professional fees 2,594 825 Deferred rent 2,035 2,506 Deferred tax liabilities (Note 13) 60 92 Performance fee compensation payable — 111 Accounts payable and other accrued expenses 2,412 1,597 Total accounts payable, accrued expenses and other liabilities $ 26,444 $ 24,415 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating Leases Medley leases office space in New York City and San Francisco under non-cancelable lease agreements that expire at various times through September 2023 . Rent expense amounted to $2.3 million , $2.4 million and $2.5 million for each of the years ending December 31, 2018 , 2017 and 2016. As of December 31, 2018 future minimum rental payments under non-cancelable lease agreements are as follows (in thousands): 2019 $ 2,710 2020 2,833 2021 2,470 2022 2,431 Thereafter 1,823 Total future minimum lease payments $ 12,267 On July 21 2018, the Company entered into a sublease agreement with a third party for the sublease of its San Fransisco office. The term of the sublease commenced on August 31, 2018 and expires on January 31, 2021. Sublease income for the year ended December 31, 2018 was $0.1 million and is excluded from the rent expense amounts above. Minimum sublease income for each of the years ended December 31, 2019 and 2020 will be $0.4 million . Minimum sublease income for the year ended December 31, 2021 will be less than $0.1 million . Consolidation of Business Activities During the first quarter of 2018, the Company initiated the consolidation of its business activities to its New York office. The Company believes this will enhance operations by consolidating origination, underwriting and asset management operations and personnel in a single location. During year ended December 31, 2018, the Company recorded $2.7 million in severance costs related to the consolidation of its business activities to its New York office. In addition, the company incurred a $0.2 million loss from subleasing its San Francisco office during the year ended December 31, 2018. Capital Commitments to Funds As of December 31, 2018 and 2017, the Company had aggregate unfunded commitments of $0.3 million to certain long-dated private funds. Other Commitments In April 2012, the Company entered into an obligation to pay to a third party a fixed percentage of management and incentive fees received by the Company from SIC. The agreement was entered into contemporaneously with the $10.0 million non-recourse promissory notes that were issued to the same parties (Note 8). The two transactions were deemed to be related freestanding contracts and the $10.0 million of loan proceeds were allocated to the contracts using their relative fair values. At inception, the Company recognized an obligation of $4.4 million representing the present value of the future cash flows expected to be paid under this agreement. As of December 31, 2018 and 2017, this obligation amounted to $3.0 million and $3.8 million , respectively, and is recorded as revenue share payable, a component of accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. The change in the estimated cash flows for this obligation is recorded in other income (expense), net on the consolidated statements of operations. On January 31, 2019, the Company entered into a termination agreement with the lenders which would become effective upon the closing of the Company's pending merger with SIC. In accordance with the provisions of the termination agreement, the Company would pay the lenders $6.5 million on or prior to the merger closing date, reimburse the lenders for their out of pocket legal fees and enter into a six month $6.5 million promissory note. The promissory note would bear interest at seven percentage points over the LIBOR Rate, as defined in the termination agreement. Such consideration would be for the full satisfaction of the two non-recourse promissory notes disclosed in Note 8 as well as the Company's obligation above. Legal Proceedings From time to time, the Company is involved in various legal proceedings, lawsuits and claims incidental to the conduct of its business. Its business is also subject to extensive regulation, which may result in regulatory proceedings against it. Except as described below, the Company is not currently party to any material legal proceedings. One of the Company's subsidiaries, MCC Advisors LLC, was named as a defendant in a lawsuit on May 29, 2015, by Moshe Barkat and Modern VideoFilm Holdings, LLC (“MVF Holdings”) against MCC, MOF II, MCC Advisors LLC, Deloitte Transactions and Business Analytics LLP A/K/A Deloitte ERG (“Deloitte”), Scott Avila (“Avila”), Charles Sweet, and Modern VideoFilm, Inc. (“MVF”). The lawsuit is pending in the California Superior Court, Los Angeles County, Central District, as Case No. BC 583437. The lawsuit was filed after MCC, as agent for the lender group, exercised remedies following a series of defaults by MVF and MVF Holdings on a secured loan with an outstanding balance at the time in excess of $65 million . The lawsuit sought damages in excess of $100 million . Deloitte and Avila have settled the claims against them in exchange for payment of $1.5 million . On June 6, 2016, the court granted the Medley defendants’ demurrers on several counts and dismissed Mr. Barkat’s claims with prejudice except with respect to his claim for intentional interference with contract. On March 18, 2018, the court granted the Medley defendants’ motion for summary adjudication with respect to Mr. Barkat’s sole remaining claim against the Medley Defendants for intentional interference. Now that the trial court has ruled in favor of the Medley defendants on all counts, the only remaining claims in the Barkat litigation are MCC and MOF II’s affirmative counterclaims against Mr. Barkat and MVF Holdings, which MCC and MOF II are diligently prosecuting. On August 29, 2016, MVF Holdings filed another lawsuit in the California Superior Court, Los Angeles County, Central District, as Case No. BC 631888 (the “Derivative Action”), naming MCC Advisors LLC and certain of Medley’s employees as defendants, among others. The plaintiff in the Derivative Action, asserts claims against the defendants for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unfair competition, breach of the implied covenant of good faith and fair dealing, interference with prospective economic advantage, fraud, and declaratory relief. MCC Advisors LLC and the other defendants believe the causes of action asserted in the Derivative Action are without merit and all defendants intend to continue to assert a vigorous defense. All proceedings in the Derivative Action have been stayed as a result of the chapter 11 bankruptcy proceedings of MVF, which were commenced on May 16, 2018. Medley LLC, Medley Capital Corporation, Medley Opportunity Fund II LP, Medley Management Inc., Medley Group, LLC, Brook Taube, and Seth Taube were named as defendants, along with other various parties, in a putative class action lawsuit captioned as Royce Solomon, Jodi Belleci, Michael Littlejohn, and Giulianna Lomaglio v. American Web Loan, Inc., AWL, Inc., Mark Curry, MacFarlane Group, Inc., Sol Partners, Medley Opportunity Fund, II, LP, Medley LLC, Medley Capital Corporation, Medley Management Inc., Medley Group, LLC, Brook Taube, Seth Taube, DHI Computing Service, Inc., Middlemarch Partners, and John Does 1-100, filed on December 15, 2017 and amended on March 9, 2018, in the United States District Court for the Eastern District of Virginia, Newport News Division, as Case No. 4:17-cv-145 (hereinafter, “Class Action 1”). Medley Opportunity Fund II LP and Medley Capital Corporation were also named as defendants, along with various other parties, in a putative class action lawsuit captioned George Hengle and Lula Williams v. Mark Curry, American Web Loan, Inc., AWL, Inc., Red Stone, Inc., Medley Opportunity Fund II LP, and Medley Capital Corporation, filed February 13, 2018, in the United States District Court, Eastern District of Virginia, Richmond Division, as Case No. 3:18-cv-100 (“Class Action 2”). Medley Opportunity Fund II LP and Medley Capital Corporation were also named as defendants, along with various other parties, in a putative class action lawsuit captioned John Glatt, Sonji Grandy, Heather Ball, Dashawn Hunter, and Michael Corona v. Mark Curry, American Web Loan, Inc., AWL, Inc., Red Stone, Inc., Medley Opportunity Fund II LP, and Medley Capital Corporation, filed August 9, 2018 in the United States District Court, Eastern District of Virginia, Newport News Division, as Case No. 4:18-cv-101 (“Class Action 3”) (together with Class Action 1 and Class Action 2, the “Virginia Class Actions”). Medley Opportunity Fund II LP was also named as a defendant, along with various other parties, in a putative class action lawsuit captioned Christina Williams and Michael Stermel v. Red Stone, Inc. (as successor in interest to MacFarlane Group, Inc.), Medley Opportunity Fund II LP, Mark Curry, Brian McGowan, Vincent Ney, and John Doe entities and individuals, filed June 29, 2018 and amended July 26, 2018, in the United States District Court for the Eastern District of Pennsylvania, as Case No. 2:18-cv-2747 (the “Pennsylvania Class Action”) (together with the Virginia Class Actions, the “Class Action Complaints”). The plaintiffs in the Class Action Complaints filed their putative class actions alleging claims under the Racketeer Influenced and Corrupt Organizations Act, and various other claims arising out of the alleged payday lending activities of American Web Loan. The claims against Medley Opportunity Fund II LP, Medley LLC, Medley Capital Corporation, Medley Management Inc., Medley Group, LLC, Brook Taube, and Seth Taube (in Class Action 1, as amended); Medley Opportunity Fund II LP and Medley Capital Corporation (in Class Action 2 and Class Action 3); and Medley Opportunity Fund II LP (in the Pennsylvania Class Action), allege that those defendants in each respective action exercised control over, or improperly derived income from, and/or obtained an improper interest in, American Web Loan’s payday lending activities as a result of a loan to American Web Loan. The loan was made by Medley Opportunity Fund II LP in 2011. American Web Loan repaid the loan from Medley Opportunity Fund II LP in full in February of 2015, more than 1 year and 10 months prior to any of the loans allegedly made by American Web Loan to the alleged class plaintiff representatives in Class Action 1. In Class Action 2, the alleged class plaintiff representatives have not alleged when they received any loans from American Web Loan. In Class Action 3, the alleged class plaintiff representatives claim to have received loans from American Web Loan at various times from February 2015 through April 2018. In the Pennsylvania Class Action, the alleged class plaintiff representatives claim to have received loans from American Web Loan in 2017. By orders dated August 7, 2018 and September 17, 2018, the Court presiding over the Virginia Class Actions consolidated those cases for all purposes. On October 12, 2018, Plaintiffs in Class Action 3 filed a notice of voluntary dismissal of their claims, without prejudice, against Medley Opportunity Fund II, LP and Medley Capital Corporation. On October 22, 2018, the parties to Class Action 2 settled. On October 29, 2018, the plaintiffs in Class Action 2 stipulated to the dismissal of their claims against all defendants in Class Action 2 (including Medley Opportunity Fund II LP and Medley Capital Corporation), with prejudice. Medley LLC, Medley Capital Corporation, Medley Management, Inc., Medley Group, LLC, Brook Taube, and Seth Taube never made any loans or provided financing to, or had any other relationship with, American Web Loan. Medley Opportunity Fund II LP, Medley LLC, Medley Capital Corporation, Medley Management Inc., Medley Group, LLC, Brook Taube, Seth Taube are seeking indemnification from American Web Loan, various affiliates, and other parties with respect to the claims in the Class Action Complaints. Medley Opportunity Fund II LP, Medley LLC, Medley Capital Corporation, Medley Management, Inc., Medley Group, LLC, Brook Taube, and Seth Taube believe the alleged claims in the Class Action Complaints are without merit and they intend to defend these lawsuits vigorously. On January 25, 2019, two purported class actions were commenced in the Supreme Court of the State of New York, County of New York, by alleged stockholders of Medley Capital Corporation, captioned, respectively, Helene Lax v. Brook Taube, et al., Index No. 650503/2019, and Richard Dicristino, et al. v. Brook Taube, et al., Index No. 650510/2019 (together with the Lax Action, the “New York Actions”). Named as defendants in each complaint are Brook Taube, Seth Taube, Jeffrey Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, John E. Mack, Mark Lerdal, Richard T. Allorto, Jr., Medley Capital Corporation (“MCC”), Medley Management Inc., Sierra Income Corporation, and Sierra Management, Inc. (“Sierra”). The complaints in each of the New York Actions allege that the individuals named as defendants breached their fiduciary duties in connection with the proposed merger of MCC with and into Sierra, and that the other defendants aided and abetted those alleged breaches of fiduciary duties. Compensatory damages in unspecified amounts are sought. The defendants believe the claims asserted in the New York Actions are without merit and they intend to defend these lawsuits vigorously. On February 11, 2019, a purported stockholder class action was commenced in the Court of Chancery of the State of Delaware by FrontFour Capital Group LLC and FrontFour Master Fund, Ltd., captioned FrontFour Capital Group LLC, et al. v. Brooke Taub, et al., Case No. 2019-0100 (the “Delaware Action”). Named as defendants in the complaint are Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, Medley Management Inc. (“Medley Management”), Sierra Income Corporation (“Sierra”), and Medley Capital Corporation (“MCC”). The complaint alleges that the individuals named as defendants breached their fiduciary duties to MCC stockholders in connection with the proposed merger of MCC with and into Sierra, and that Medley Management and Sierra aided and abetted those alleged breaches of fiduciary duties. The complaint seeks to enjoin the March 8, 2019 vote of MCC stockholders on the proposed merger and enjoin enforcement of certain provisions of the Agreement and Plan of Merger, dated as of August 9, 2018, by and between MCC and Sierra. The plaintiffs filed a motion to expedite simultaneously with their complaint, seeking an expedited trial prior to the March 8, 2019 stockholder vote or, in the alternative, a preliminary injunction hearing followed by an expedited trial as soon as the court’s schedule permits. The defendants believe the claims asserted in the Delaware Action are without merit and they intend to defend this lawsuit vigorously. On January 25, 2019, two purported class actions were commenced in the Supreme Court of the State of New York, County of New York, by alleged stockholders of Medley Capital Corporation, captioned, respectively, Helene Lax v. Brook Taube, et al., Index No. 650503/2019, and Richard Dicristino, et al. v. Brook Taube, et al., Index No. 650510/2019 (together with the Lax Action, the “New York Actions”). Named as defendants in each complaint are Brook Taube, Seth Taube, Jeffrey Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, John E. Mack, Mark Lerdal, Richard T. Allorto, Jr., Medley Capital Corporation, Medley Management Inc., Sierra Income Corporation, and Sierra Management, Inc. The complaints in each of the New York Actions allege that the individuals named as defendants breached their fiduciary duties in connection with the proposed merger of MCC with and into Sierra, and that the other defendants aided and abetted those alleged breaches of fiduciary duties. Compensatory damages in unspecified amounts are sought. On February 27, 2019, the Court entered a stipulated scheduling order requiring that defendants respond to the complaints 45 days following the later of (a) the stockholder vote on the proposed merger and (b) plaintiffs’ filing of a consolidated, amended complaint. A preliminary conference is scheduled to take place on April 16, 2019. The defendants believe the claims asserted in the New York Actions are without merit and they intend to defend these lawsuits vigorously. At this time, we are unable to determine whether an unfavorable outcome from these matters is probable or remote or to estimate the amount or range of potential loss, if any. MARILYN S. ADLER, v. MEDLEY CAPITAL LLC et. al. (Supreme Court of New York, March 2019). Marilyn Adler, a former employee who served as a Managing Director of Medley Capital LLC, has filed suit in the New York Supreme Court, Commercial Part, against Medley Capital LLC, MCC Advisors, Medley SBIC GP, LLC, Medley Capital Corporation, Medley Management Inc., as well as Brook Taube, and Seth Taube, individually. Ms. Adler alleges that she is due in excess of $6.5 million in compensation based upon her role with Medley’s SBIC Fund. Her claims are for breach of contract, unjust enrichment, conversion, tortious interference, as well as a claim for an accounting of funds maintained by the defendants. The lawsuit was filed on March 1, 2019 and is in its very initial stages. The Company believes the claims are without merit, intends to vigorously defend them, and is contemplating counterclaims against Ms. Adler. While management currently believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s consolidated financial position or overall trends in consolidated results of operations, litigation is subject to inherent uncertainties. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis. The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. Employment Agreements In connection with the Company's pending merger with SIC, the pre-IPO owners entered into employment agreements which would become effective upon the successful completion of the merger. Each employment agreement sets forth a base salary, which is subject to change at the discretion of the Board or compensation committee of the post merged entity. The initial term of the employment agreements range from 24 to 30 months. The combined initial base salaries of the pre-IPO members would be $3.0 million. Under the employment agreements, each pre-IPO owner is eligible to receive each year a short-term incentive paid in cash and a long-term incentive in the form of an equity award, each paid after the end of the year. Each employment agreement provides that the post merged entity's Board or compensation committee will establish a target annual bonus for each year of no less than a specified percentage of each pre-IPO owner's base salary and will establish performance and other objectives for the year for such annual bonus, in consultation with management. During their first year of employment, the combined target annual bonuses could amount up to $12.6 million of which $4.7 million would consist of cash and $7.9 million in the form of restricted stock units which would vest over a three year period. The employment agreements also set forth bonuses for 2018 which the Board or the compensation committee of the post merger company may increase in recognition of performance in excess of performance objectives. The aggregate 2018 bonuses to the pre-IPO owners amount to $12.6 million of which $4.7 million would be payable in cash and $7.9 million in the form of restricted stock units which would vest over a three year period. As the 2018 bonus amounts per the employment agreements are not effective until the closing of the merger they were not accrued for as of December 31, 2018. Actual bonuses to the pre-IPO owners accrued for as of December 31, 2018 were $0.7 million. The long-term equity incentive will be made in the form of a RSU award, vesting in three equal annual installments. The cash and equity award portions of the annual bonuses paid under the employment agreements will be subject to recoupment by the Combined Company to the extent required by applicable law (including without limitation Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Act) and/or the rules and regulations of the NYSE. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Substantially all of Medley’s revenue is earned through agreements with its non-consolidated funds for which it collects management and performance fees for providing asset management, advisory and other related services. Expense Support and Reimbursement Agreement From June 2012 through December 2016, Medley was party to an Expense Support and Reimbursement Agreement (“ESA”) with SIC. During the term of the ESA, which expired on December 31, 2016, Medley agreed to pay up to 100% of SIC's operating expenses in order for SIC to achieve a reasonable level of expenses relative to its investment income. Pursuant to the ESA, SIC had a conditional obligation to reimburse Medley for any amounts they funded under the ESA if, within three years of the date on which Medley funded such amounts, SIC met certain financial levels. ESA expenses are recorded within general, administrative, and other expense on the consolidated statements of operations. There was no outstanding balance due to SIC under the ESA agreement as of December 31, 2018 and 2017. During the year ended December 31, 2016 , Medley recorded $16.1 million of ESA expenses under this agreement. Administration Agreements In January 2011 and April 2012, Medley entered into administration agreements with MCC (the “MCC Admin Agreement”) and SIC (the “SIC Admin Agreement”), respectively, whereby, as part of its performance obligation to provide asset management, advisory and other related services, Medley agreed to provide administrative services necessary for the operations of MCC and SIC. MCC and SIC agreed to pay Medley for the costs and expenses incurred in providing such administrative services, including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of MCC and SIC’s officers and their respective staffs. Additionally, Medley has entered into administration agreements with other entities that it manages (the “Fund Admin Agreements”), whereby Medley agreed to provide administrative services necessary for the operations of these other vehicles. These other entities agreed to pay Medley for the costs and expenses incurred in providing such administrative services, including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of these other vehicles' officers and their respective staffs. Medley records these administrative fees as revenue in the period when the performance obligation of providing such administrative services is satisfied and are included in other revenues and fees on the consolidated statements of operations. Amounts due from these agreements are included as a component of other assets on the Company's consolidated balance sheets. Total revenues recorded under these agreements for the years ended December 31, 2018, 2017 and 2016 are reflected in the table below: For the Years Ended December 31, 2018 2017 2016 (Dollars in thousands) MCC Admin Agreement $ 3,382 $ 3,799 $ 3,935 SIC Admin Agreement 2,538 3,031 2,848 Fund Admin Agreements 976 1,264 893 Total administrative fees from related parties $ 6,896 $ 8,094 $ 7,676 Amounts due from related parties under these agreements are reflected in the table below and are included as a component of other assets on the Company's consolidated balance sheet: As of December 31, 2018 2017 (Dollars in thousands) Amounts due from MCC under the MCC Admin Agreement $ 804 $ 867 Amounts due from SIC under the SIC Admin Agreement 619 696 Amounts due from entities under the Funds Admin Agreements 222 340 Total administrative fees receivable $ 1,645 $ 1,903 Management fee Waiver During the first quarter of 2018, the Company voluntarily waived $0.4 million in management fees for MCC. Reimbursement Agreement In connection with the amended and restated limited liability agreement of Medley LLC, Medley LLC agreed to, at the sole discretion of the managing member, reimburse Medley Management Inc. for all expenses incurred, other than expenses incurred in connection with its income tax obligations. From time to time, the company may also advance funds to Medley Management Inc. to cover its operating needs. For the years ended December 31, 2018, 2017 and 2016, the Company recorded reimbursable expenses of $3.9 million , $1.9 million and $1.7 million , respectively, which were recorded as a component of general, administrative and other expenses on the consolidated statements of operations. As of December 31, 2018, amounts due from Medley Management Inc. were $0.8 million . As of December 31, 2017, amounts due to Medley Management Inc. were $0.6 million , and were recorded as a component of accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. Organization Agreement Pursuant to the organization agreement between Medley Management Inc. and Medley LLC, Medley Management Inc. may from time to time make grants of restricted stock units or other awards providing the holder with the contractual right to receive cash payments pursuant to an equity plan to employees, advisors or other persons, as defined, in respect of Medley LLC and its subsidiaries. These awards may entitle the holder thereof to receive dividends paid with respect to the shares of Class A common stock underlying such awards as if such holder were a holder of record of the underlying shares of Class A common stock. Medley LLC has agreed that it assumes any obligation to pay such dividend equivalent amounts to the holders of the respective awards. Additionally, pursuant to this agreement, the number of LLC Units held by Medley Management Inc., shall, at all times, equal the number of shares of Class A common stock outstanding and Medley LLC has agreed to issue additional LLC units equal to the number of shares of Medley Management Inc. issued pursuant to its equity plan. Investments Refer to Note 4 " Investments " for more information related to the Company's investments in related parties. Exchange Agreement Prior to the completion of the Medley Management Inc.'s IPO, Medley LLC's limited liability agreement was restated among other things, to modify its capital structure by reclassifying the interests held by its existing owners (i.e. the members of Medley prior to the IPO) into the LLC Units. Medley’s existing owners also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right (subject to the terms of the exchange agreement as described therein), to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis at fair value, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. |
EARNINGS PER CLASS A SHARE
EARNINGS PER CLASS A SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Class A Share | EARNINGS PER CLASS A SHARE The table below presents basic and diluted net (loss) income per share of Class A common stock using the two-class method for the three and nine months ending December 31, 2018 and 2017 , respectively: For the Years Ended December 31, 2018 2017 2016 (Amounts in thousands, except share and per share amounts) Basic and diluted net (loss) income per share: Numerator Net (loss) income attributable to Medley Management Inc. $ (9,886 ) $ 11,949 $ 3,111 Less: Allocation to participating securities (898 ) (451 ) (353 ) Net (loss) income available to Class A common stockholders $ (10,784 ) $ 11,498 $ 2,758 Denominator Weighted average shares of Class A common stock outstanding 5,539,804 5,578,003 6,002,422 Net (loss) income per Class A share $ (1.95 ) $ 2.06 $ 0.46 The allocation to participating securities above generally represents dividends paid to holders of unvested restricted stock units which reduces net income available to common stockholders. The weighted average shares of Class A common stock is the same for both basic and diluted earnings per share as the diluted amount excludes the assumed conversion of 24,639,302 and 23,653,333 LLC Units and restricted LLC Units as of September 30, 2018 and 2017, respectively, to shares of Class A common stock, the impact of which would be antidilutive. The following table reflects the per share dividend amounts that the Company declared on its common stock during the three and nine months ended September 30, 2018 and 2017. Declaration Dates Record Date Payment Dates Per Share August 8, 2017 August 23, 2017 September 6, 2017 $ 0.20 May 10, 2017 May 22, 2017 May 31, 2017 $ 0.20 February 9, 2017 February 23, 2017 March 6, 2017 $ 0.20 August 7, 2018 August 23, 2018 September 6, 2018 $ 0.20 May 10, 2018 May 24, 2018 June 1, 2018 $ 0.20 February 7, 2018 February 22, 2018 March 7, 2018 $ 0.20 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company is treated as a partnership for income tax purposes and is therefore not subject to U.S. federal, state and local income taxes. The Company is subject to New York City unincorporated business tax attributable to the Company's taxable income apportioned to New York City. The (benefit from) provision for income taxes consist of the following: For the Year Ended December 31, 2018 2017 2016 (Amounts in thousands) Current tax provision $ 862 $ 681 $ 944 Deferred tax provision (1,162 ) (85 ) (480 ) (Benefit from) provision for income taxes $ (300 ) $ 596 $ 464 Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount on the Company’s consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. The significant components of the Company's deferred tax assets and liabilities included on its consolidated balance sheet are as follows: As of December 31, 2018 2017 Deferred tax assets (in thousands) Tax goodwill $ 565 $ 557 New York City unincorporated business tax 1,234 701 Unrealized losses 581 337 Stock-based compensation 216 173 Interest expense carryforward 223 — Pending merger related costs 101 — Other items 224 158 Total deferred tax assets $ 3,144 $ 1,926 Deferred tax liability Accrued fee income $ — $ 88 Other items 60 4 Total deferred tax liability 60 92 Net deferred tax asset $ 3,084 $ 1,834 The Company’s effective tax rate includes a rate benefit attributable to the fact that the Company and its subsidiaries operate as limited liability companies, which are not subject to federal or state income tax. A reconciliation of the federal statutory tax rate to the effective tax rates for the years ended December 31, 2018, 2017 and 2016 are as follow: For the Year Ended December 31, 2018 2017 2016 Federal statutory rate 34.0 % 34.0 % 34.0 % Rate benefit from U.S. partnership operations (34.0 )% (34.0 )% (34.0 )% Partnership unincorporated business tax 1.4 % 3.1 % 4.2 % Effective tax rate 1.4 % 3.1 % 4.2 % Interest expense and penalties related to income tax matters are recognized as a component of the provision for income taxes and were not significant during the years ended December 31, 2018, 2017 and 2016. As of and during the years ended December 31, 2018, 2017 and 2016, there were no uncertain tax positions taken that were not more likely than not to be sustained. The primary jurisdictions in which the Company operates in are the United States, New York, New York City, and California. |
COMPENSATION EXPENSE
COMPENSATION EXPENSE | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Compensation Expense | COMPENSATION EXPENSE Compensation generally includes salaries, bonuses, equity and profit sharing awards. Bonuses, equity and profit sharing awards are accrued over the service period to which they relate. Guaranteed payments made to our senior professionals who are members of Medley LLC are recognized as compensation expense. The guaranteed payments to the Company’s Co-Chief Executive Officers are performance based and are periodically set subject to maximums based on the Company’s total assets under management. Such maximums aggregated to $5.0 million for each of the years ended December 31, 2018, 2017 and 2016. During the years ended December 31, 2018 , 2017 and 2016, neither of the Company’s Co-Chief Executive Officers received any guaranteed payments. Performance Fee Compensation In October 2010 and January 2014, the Company granted shares of vested profit interests in certain subsidiaries to select employees. These awards are viewed as a profit-sharing arrangement and are accounted for under ASC 710, Compensation - General , which requires compensation expense to be recognized over the vesting period, which is usually the period over which service is provided. The shares were vested at grant date, subject to a divestiture percentage based on percentage of service completed from the award grant date to the employee’s termination date. The Company adjusts the related liability quarterly based on changes in estimated cash flows for the profit interests. In February 2015 and March 2016, the Company granted incentive cash bonus awards to select employees. These awards entitle employees to receive cash compensation based on distributed carried interest received by the Company from certain institutional funds. Eligibility to receive payments pursuant to these incentive awards is based on continued employment and ceases automatically upon termination of employment. Performance compensation expense is recorded based on the fair value of the incentive awards at the date of grant and is recognized on a straight-line basis over the expected requisite service period. The performance compensation liability is subject to re-measurement at the end of each reporting period and any changes in the liability are recognized in such reporting period. On November 12, 2018, the Company's board of directors approved the Medley Tactical Opportunities Carried Interest Allocation Plan (the “CI Plan”), pursuant to which certain key employees involved in and instrumental to the success of the Company’s Tactical Opportunities transactions, were awarded interests in certain subsidiaries that were formed for the object and purpose of receiving carried interest earned on third party capital in connection with each of the Company's four respective Tactical Opportunities funds. Interests awarded under this plan are viewed as equity awards and are accounted for under ASC 718, Compensation-Stock Compensation , which requires compensation expense to be recognized over the vesting period, which is usually the period over which service is provided. Once vested the equity awards are than accounted for as non-controlling interests in consolidated subsidiaries on the Company's consolidated financial statements. The fair value of the awards on the date of grant was determined to be $0.6 million and was immediately recognized as performance compensation as the awards were fully vested when issued. Total performance fee compensation relating to the profit sharing and equity awards for the year ended December 31, 2018 , was $0.5 million . For the years ended December 31, 2017 and 2016, the Company recorded a reversal of performance fee compensation expense of $0.9 million and $0.3 million , respectively. As of December 31, 2017, total performance fee compensation payable for the awards accounted for under ASC 710 was $0.1 million , and was included as a component of accounts payable, accrued expenses and other liabilities on the Company's consolidated balance sheets. There was no performance fee compensation payable for the year ended December 31, 2018. Retirement Plan The Company sponsors a defined-contribution 401(k) retirement plan that covers all employees. Employees are eligible to participate in the plan immediately, and participants are 100% vested from the date of eligibility. The Company makes contributions to the plan of 3% of an employee’s eligible wages, up to a maximum limit as determined by the Internal Revenue Service. The Company also pays all administrative fees related to the plan. The Company's contributions to the plan were $0.5 million , $0.5 million and $0.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018 and 2017 the Company's outstanding liability to the plan as of each of those dates was $0.5 million . Stock-Based Compensation In connection with the IPO of Medley Management Inc.. Medley Management Inc. and Medley LLC adopted the Medley Management Inc. 2014 Omnibus Incentive Plan (the “Plan”). The purpose of the Plan is to provide a means through which the Company may attract and retain key personnel and to provide a means whereby directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of the Company can acquire and maintain an equity interest in the Company, Medley Management Inc., or be paid incentive compensation, including incentive compensation measured by reference to the value of Medley Management Inc.’s Class A common stock or Medley LLC’s unit interests, thereby strengthening their commitment to the welfare of the Company and aligning their interests with those of the Medley Management Inc.'s stockholders. The Plan provides for the issuance of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), restricted LLC Units, stock bonuses, other stock-based awards and cash awards. As the grant of these awards are primarily for the benefit of the employees of Medley LLC, stock compensation is recognized in Medley LLC’s separate consolidated financial statements through a corresponding credit to members’ equity (deficit), representing a capital contribution by Medley Management Inc. Stock-based compensation was $5.4 million , $ 2.8 million , and $3.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Non-controlling Interests | REDEEMABLE NON-CONTROLLING INTERESTS Changes in redeemable non-controlling interests during the years ended December 31, 2018, 2017 and 2016 are reflected in the table below: For the Year Ended December 31, 2018 2017 2016 (in thousands) Beginning balance $ 53,741 $ 30,805 $ — Net (loss) income attributable to redeemable non-controlling interests in consolidated subsidiaries (11,362 ) 6,702 2,565 Contributions — 23,000 17,010 Distributions (5,953 ) (6,738 ) (994 ) Change in fair value of available-for-sale securities — (28 ) 28 Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC (965 ) — — Reclassification of redeemable non-controlling interest in SIC Advisors LLC, including fair value adjustment of $965 for the year ending December 31, 2018. (12,275 ) — 12,196 Ending balance $ 23,186 $ 53,741 $ 30,805 In January 2016, the Company executed an amendment to SIC Advisors' operating agreement which provided the Company with the right to redeem membership units owned by the minority interest holder. The Company’s redemption right is triggered by the termination of the dealer manager agreement between SIC and SC Distributors LLC ("DMA Termination"), an affiliate of the minority interest holder. As a result of this redemption feature, the Company reclassified the non-controlling interest in SIC Advisors from the equity section to redeemable non-controlling interests in the mezzanine section of the consolidated balance sheet based on its fair value as of the amendment date. The fair value of the non-controlling interest was determined to be $12.2 million on the date of the amendment and was adjusted through a charge to members equity. On July 31, 2018, a DMA Termination event occurred and the membership units owned by the minority interest holder were redeemed by Medley. In connection with the DMA Termination, the Company reclassified SIC Advisors' minority interest balance from redeemable non-controlling interests in the mezzanine section of its consolidated balance sheet to due to former minority interest holder, a component of total liabilities, at its then fair value. The fair value was determined to be $12.3 million on the DMA Termination date and was adjusted through a $1.0 million charge to members equity (refer to Note 9 for further information). During the year ended December 31, 2018 profits allocated to this non-controlling interest was $2.1 million and distributions paid were $2.3 million , respectively. During the year ended December 31, 2017, profits allocated to this non-controlling interest were $4.4 million and distributions paid were $4.3 million . As of December 31, 2018 , there was no balance of redeemable non-controlling interest in SIC Advisors LLC. As of December 31, 2017, the balance of the redeemable non-controlling interest in SIC Advisors LLC was $13.5 million . On June 3, 2016, the Company entered into a Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC (the ‘‘Investors’’) to invest up to $50.0 million in new and existing Medley managed funds (the ‘‘Joint Venture’’). The Company agreed to contribute up to $10.0 million and an interest in STRF Advisors LLC, the investment advisor to Sierra Total Return Fund, in exchange for common equity interests in the Joint Venture. On June 6, 2017, the Company entered into an amendment to its Master Investment Agreement with the Investors, which provided for, among other things, an increase in the Company’s capital contribution to up to $13.8 million and extended the term of the Joint Venture from seven to ten years. The Investors agreed to invest up to $40.0 million in exchange for preferred equity interests in the Joint Venture. As of December 31, 2017, the Company and the Investors had fully satisfied their capital contributions. On account of the preferred equity interests, the Investors will receive an 8% preferred distribution, 15% of the Joint Venture’s profits, and all of the profits from the contributed interest in STRF Advisors LLC. Medley has the option, subject to certain conditions, to cause the Joint Venture to redeem the Investors’ interest in exchange for repayment of the outstanding investment amount at the time of redemption, plus certain other considerations. The Investors have the right, after ten years , to redeem their interests in the Joint Venture. As such, the Investors’ interest in the Joint Venture is included as a component of redeemable non-controlling interests on the Company’s consolidated balance sheets and amounted to $23.9 million and $ 40.6 million as of December 31, 2018 and 2017, respectively. Total contributions to the Joint Venture amounted to $53.8 million through December 31, 2018 and 2017, and were used to purchase $51.8 million of MCC shares on the open market and seed fund $2.0 million to STRF. During the year ended December 31, 2018, losses allocated to this non-controlling interest were $13.1 million . During the year ended December 31, 2017 and 2016, profits allocated to this non-controlling interest were $2.7 million and $0.4 million , respectively. Distributions paid during the years ended December 31, 2018 and 2017 were $3.7 million and $2.4 million , respectively. There were no distributions paid during the year ended December 31, 2016. In October 2016, the Company executed an operating agreement for STRF Advisors LLC which provided the Company with the right to redeem membership units owned by the minority interest holder. The Company’s redemption right is triggered by the termination of the dealer manager agreement between STRF and SC Distributors LLC, an affiliate of the minority interest holder. As a result of this redemption feature, the non-controlling interest in STRF Advisors LLC is classified as in redeemable non-controlling interests in the mezzanine section of the balance sheet. During the years ended December 31, 2018 and 2017, net losses allocated to this redeemable non-controlling interest was $0.3 million and $0.4 million , respectively. As of December 31, 2018 and 2017, the balance of the redeemable non-controlling interest in STRF Advisors LLC was $(0.7) million and $(0.4) million , respectively. |
MARKET AND OTHER RISK FACTORS
MARKET AND OTHER RISK FACTORS | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Market and Other Risk Factors | MARKET AND OTHER RISK FACTORS Due to the nature of the Medley funds’ investment strategy, their portfolio of investments has significant market and credit risk. As a result, the Company is subject to market and other risk factors, including, but not limited to the following: Market Risk The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions that are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Credit Risk There are no restrictions on the credit quality of the investments the Company intends to make. Investments may be deemed by nationally recognized rating agencies to have substantial vulnerability to default in payment of interest and/or principal. Some investments may have low-quality ratings or be unrated. Lower rated and unrated investments have major risk exposure to adverse conditions and are considered to be predominantly speculative. Generally, such investments offer a higher return potential than higher rated investments, but involve greater volatility of price and greater risk of loss of income and principal. In general, the ratings of nationally recognized rating organizations represent the opinions of agencies as to the quality of the securities they rate. Such ratings, however, are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of the relevant securities. It is also possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events. The Company may use these ratings as initial criteria for the selection of portfolio assets for the Company but is not required to utilize them. Limited Liquidity of Investments The funds managed by the Company invest and intend to continue to invest in investments that may not be readily marketable. Illiquid investments may trade at a discount from comparable, more liquid investments and, at times there may be no market at all for such investments. Subordinate investments may be less marketable, or in some instances illiquid, because of the absence of registration under federal securities laws, contractual restrictions on transfer, the small size of the market or the small size of the issue (relative to issues of comparable interests). As a result, the funds managed by the Company may encounter difficulty in selling its investments or may, if required to liquidate investments to satisfy redemption requests of its investors or debt service obligations, be compelled to sell such investments at less than fair value. Counterparty Risk Some of the markets in which the Company, on behalf of its underlying funds, may affect its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight, unlike members of exchange-based markets. This exposes the Company to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the applicable contract (whether or not such dispute is bona fide) or because of a credit or liquidity problem, causing the Company to suffer loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Company has concentrated its transactions with a single or small group of counterparties. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2018, except as disclosed below. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Medley LLC and its consolidated subsidiaries (collectively, “Medley” or the “Company”). Intercompany balances and transactions have been eliminated in consolidation. |
Principles of Consolidation | Principles of Consolidation In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation , the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. For legal entities evaluated for consolidation, the Company must determine whether the interests that it holds and fees paid to it qualify as a variable interest in an entity. This includes an evaluation of the management fees and performance fees paid to the Company when acting as a decision maker or service provider to the entity being evaluated. If fees received by the Company are customary and commensurate with the level of services provided, and the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, the interest that the Company holds would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if fees are considered a variable interest. An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk have the right to direct the activities of the entity that most significantly impact the legal entity’s economic performance, (c) the voting rights of some investors are disproportionate to their obligation to absorb losses or rights to receive returns from a legal entity. For limited partnerships and other similar entities, non-controlling investors must have substantive rights to either dissolve the fund or remove the general partner (“kick-out rights”) in order to not qualify as a VIE. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company is generally deemed to have a controlling financial interest if it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances. However, quantitative information may also be considered in the analysis, as appropriate. These assessments require judgment. Each entity is assessed for consolidation on a case-by-case basis. For those entities evaluated under the voting interest model, the Company consolidates the entity if it has a controlling financial interest. The Company has a controlling financial interest in a voting interest entity (“VOE”) if it owns a majority voting interest in the entity. |
Consolidated and Non-Consolidated Variable Interest Entities | Non-Consolidated Variable Interest Entities The Company holds interests in certain VIEs that are not consolidated because the Company is not deemed the primary beneficiary. The Company's interest in these entities is in the form of insignificant equity interests and fee arrangements. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Consolidated Variable Interest Entities As of December 31, 2018 , Medley LLC had three majority owned subsidiaries, Medley Seed Funding I LLC, Medley Seed Funding II LLC and STRF Advisors LLC, which are consolidated VIEs. Each of these entities were organized as a limited liability company and was legally formed to either manage a designated fund or to strategically invest capital as well as isolate business risk. As of December 31, 2018 , total assets and total liabilities, after eliminating entries, of these VIEs reflected in the consolidated balance sheets were $22.2 million and less than $0.1 million , respectively. As of December 31, 2017, Medley LLC had four majority owned subsidiaries, Medley Seed Funding I LLC, Medley Seed Funding II LLC, STRF Advisors LLC and SIC Advisors LLC, which are consolidated VIEs. As of December 31, 2017 , total assets and total liabilities, after eliminating entries, of these VIEs reflected in the consolidated balance sheets were $63.3 million and $13.0 million , respectively. Except to the extent of the assets of these VIEs that are consolidated, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company. |
Seed Investments | Seed Investments The Company accounts for seed investments through the application of the voting interest model under ASC 810-10-25-1 through 25-14 and consolidates a seed investment when the investment advisor holds a controlling interest, which is, in general, 50% or more of the equity in such investment. For seed investments in which the Company does not hold a controlling interest, the Company accounts for such seed investment under the equity method of accounting, at its ownership percentage of such seed investment’s net asset value. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Significant estimates and assumptions by management affect the carrying value of investments, certain accrued liabilities and the issuance of non-controlling interests at fair value. Actual results could differ from these estimates, and such differences could be material. |
Non-Controlling Interests in Consolidated Subsidiaries and Redeemable Non-Controlling Interests | Non-Controlling Interests in Consolidated Subsidiaries Non-controlling interests in consolidated subsidiaries represent the component of equity in such consolidated entities held by third-parties or the Company's employees. These interests are adjusted for contributions to and distributions from the respective entities and are allocated income or loss based on their underlying ownership percentages. Redeemable Non-Controlling Interests Redeemable non-controlling interests represents interests of certain third parties that are not mandatorily redeemable but redeemable for cash or other assets at a fixed or determinable price or a fixed or determinable date, at the option of the holder or upon the occurrence of an event that is not solely within the control of the Company. These interests are classified in the mezzanine section on the Company's consolidated balance sheets. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include liquid investments in money market funds and demand deposits. The Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits during the years ended December 31, 2018 and 2017. The Company monitors the credit standing of these financial institutions and has not experienced, and has no expectations of experiencing, any losses with respect to such balances. |
Investments | Investments Investments include equity method investments that are not consolidated but over which the Company exerts significant influence. The Company measures the carrying value of its public non-traded equity method investment at Net Asset Value ("NAV") per share. The Company measures the carrying value of its privately-held equity method investments by recording its share of the underlying income or loss of these entities. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investments is reflected as a component of investment income in the consolidated statements of operations along with the income and expense allocations from such investments. The carrying amounts of equity method investments are reflected in Investments, at fair value in the consolidated balance sheets. As the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Company’s equity method investments in such entities approximates fair value. The Company evaluates its equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. For presentation in its consolidated statements of cash flows, the Company treats distributions received from certain equity method investments using the cumulative earnings approach. Under the cumulative earnings approach, an investor would compare the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings would be considered a return on investment and classified in operating activities. Any distributions in excess of cumulative equity earnings would be considered a return of investment and classified in investing activities. Investments also include publicly traded common stock. The Company measures the fair value of its publicly traded common stock at the quoted market price on the primary market or exchange on which they trade. Any realized gains (losses) from the sale of investments and unrealized appreciation (depreciation) resulting from changes in fair value are recorded in other income (expenses), net. In connection with the adoption of the new revenue recognition guidance, ASC 606, Revenue from Contracts, on January 1, 2018, the Company reassessed its accounting policy for performance fees earned during the period which represent a capital allocation to the general partner or investment manager. As a result of this reassessment the Company has determined that it should account for such performance fees within the scope of ASC 323, Investments - Equity Method and Joint Ventures. Accordingly, these performance fees are now classified as carried interest within investment income on the Company's consolidated statements of operations and balances due for such fees are included as a part of equity method investments within Investments, at fair value on the Company's consolidated balance sheets. The Company has applied this change in accounting principle on a full retrospective basis, and prior periods presented have been reclassified to conform to the current period's presentation. Investments also include the Company's investment in CK Pearl Fund, L.P. which is measured at cost less impairment. The Company performs a quantitative and qualitative assessment at each reporting date to determine whether the investment is impaired and an impairment loss equal to the difference between the carrying value and fair value is recorded within other income (expenses), net on the Company's consolidated statement of operations if an impairment has been determined. |
Revenues | Revenues As further described under Recently Issued Accounting Pronouncements Adopted as of January 1, 2018 , the Company adopted new revenue recognition guidance for revenue from contracts with customers , effective January 1, 2018 using the modified retrospective approach. The adoption of this new guidance did not have an impact on the Company's accounting for management fees, administrative fees and loan administration and transaction fees. Management Fees Medley provides investment management services to both public and private investment vehicles. Management fees include base management fees, other management fees, and Part I incentive fees, as described below. Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) NAV or (v) lower of cost or market value of a fund’s portfolio investments. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided. Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the funds' and/or separately managed accounts' underlying portfolio companies. These fees are recognized when the Company becomes entitled to such fees. Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net investment income (excluding gains and losses) above a hurdle rate. As it relates to MCC, these fees are subject to netting against realized and unrealized losses. Part I incentive fees are paid quarterly and are recognized as earned in the period the services are provided. Performance Fees Performance fees are contractual fees which do not represent a capital allocation of income to the general partner or investment manager that are earned based on the performance of certain funds, typically, the Company’s separately managed accounts. Performance fees are earned based on the fund performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Prior to the adoption of ASC 606, effective January 1, 2018, the Company accounted for performance fees under Method 2 of ASC 605, Revenue Recognition , for revenue based on a formula. Under this method, performance fees for any period were based upon an assumed liquidation of the underlying fund's net assets on the reporting date and were subject to reversal to the extent that cumulative previously recognized performance fees exceeded the amount due to the general partner or investment manager based on a fund's cumulative investment returns. Upon the adoption of ASC 606, the Company accounts for performance fees in accordance with this new standard, and will only recognize performance fees when it is probable that a significant reversal of such fees will not occur in the future. During the years ended December 31, 2018 and 2016, the Company did no t record any reversals of previously recognized performance fees. During the year ended December 31, 2017, the Company recorded a reversal of $2.6 million of previously recognized performance fees under the previous revenue recognition standard. Other Revenues and Fees Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective underlying agreements. These fees are recognized as revenue in the period administrative services are rendered. Medley also acts as the administrative agent on certain deals for which Medley may earn loan administration fees and transaction fees. Medley may also earn consulting fees for providing non-advisory services related to our managed funds. These fees are recognized as revenue over the period to which the fees directly relate. Carried Interest Carried interest are performance based fees that represent a capital allocation of income to the general partner or investment manager. Carried interest are allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s governing documents. Prior to January 1, 2018, the Company accounted for carried interest under Method 2 of ASC 605, as previously described above. Upon adoption of ASC 606, the Company reassessed its accounting policy for carried interest and determined that carried interest is within the scope of the accounting for equity method investments, ASC 323, Investments-Equity Method and Joint Ventures, and, as such, is not within the scope of ASC 606. Under ASC 323, the Company records carried interest in a consistent manner as it historically had which is based upon an assumed liquidation of that fund's net assets as of the reporting date, regardless of whether such amounts have been realized. For any given period, carried interest on the Company's consolidated statements of operations may include reversals of previously recognized carried interest due to a decrease in the value of a particular fund that results in a decrease of cumulative fees earned to date. Since fund return hurdles are cumulative, previously recognized carried interest also may be reversed in a period of appreciation that is lower than the particular fund's hurdle rate. Carried interest received in prior peri ods may be required to be returned by the Company in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, carried interest can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments, at their then current fair values, previously recognized and distributed carried interest would be required to be returned, a liability is established for the potential clawback obligation. As of December 31, 2018 , the Company had not received any carried interest distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of carried interest. Pursuant to the organizational documents of each respective fund, a portion of these tax distributions may be subject to clawback. As of December 31, 2018 and 2017, the Company had accrued $7.2 million for clawback obligations that would need to be paid if the funds were liquidated at fair value as of the end of the reporting period. The Company’s actual obligation, however, would not become payable or realized until the end of a fund’s life. Other Investment Income (loss) Other investment income is comprised of unrealized appreciation (depreciation) resulting from changes in fair value of the Company's equity method investments in addition to the income and expense allocations from such investments. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense relating to equity based awards are measured at fair value as of the grant date, reduced for actual forfeitures in the period they occur, and expensed over the requisite service period on a straight-line basis as a component of compensation and benefits on the Company's consolidated statements of operations. |
Income Taxes | Income Taxes The Company is treated as a partnership for income tax purposes and is therefore not subject to U.S. federal, state and local income taxes since all income, gains and losses are passed through to its members. However, a portion of taxable income from Medley LLC and its subsidiaries are subject to New York City’s unincorporated business tax, which is included in the Company’s provision for income taxes. |
Class A Earnings per Share | . |
Reclassification of Prior Period Presentation | Reclassification of Prior Period Presentation On January 1, 2018, the Company elected a change in accounting policy to account for performance fees earned which represent a capital allocation to the general partner or investment manager under ASC 323, Investments - Equity Method and Joint Ventures. As a result of this change in accounting policy, certain prior year amounts have been reclassified for consistency with the current period presentation. Performance fees earned which represent a capital allocation to the general partner or investment manager were reclassified from performance fee revenue to investment income along with capital-based allocations of income and losses from the Company's equity method investments, which were previously classified within other income (expense), net on its consolidated statements of operations. On the Company's consolidated balance sheets, receivable amounts related to such performance fees were reclassified from performance fees receivable to investments, at fair value. There were no changes to the income allocations from the Company's equity method investments, which are included within investments, at fair value. These reclassifications had no net effect on the reported consolidated statements of operations or consolidated balance sheets for any period. Additionally, the Company has reclassified $0.2 million of cash and cash equivalents of its consolidated fund as of December 31, 2017 to cash and cash equivalents on the Company's consolidated balance sheets to conform to the current year's presentation. |
Recently Issued Accounting Pronouncements Adopted and Not Yet Adopted | Recently Issued Accounting Pronouncements Adopted as of January 1, 2018 In May 2014, the FASB issued accounting standards update ("ASU") 2014-09, Revenue from Contracts with Customers (ASC 606) , and since then, has issued several amendments intended to provide interpretive clarifications and to reduce the cost and complexity of applying the new revenue recognition standard, both at transition and on an ongoing basis. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. To achieve this, entities will apply a five step approach: (1) identify the contract(s) with a customer, (2) identify the performance obligations within the contract, (3) determine the transaction price, (4) allocate the transaction price to the separate performance obligations and (5) recognize revenue when, or as, each performance obligation is satisfied. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. ASC 606 became effective for the Company beginning on January 1, 2018 and entities had the option of adopting this guidance using either a full retrospective or a modified retrospective approach. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective method. Under this method, the Company recognized the cumulative-effect of adoption of this guidance as an adjustment to equity as of January 1, 2018, as further described below, but did not restate prior periods presented in its consolidated financial statements. Effective January 1, 2018, the Company’s current policy of recognizing performance fees earned from certain funds and separately managed accounts, which do not represent a capital allocation to the general partner or investment manager changed. Previously such fees were recognized on a hypothetical liquidation basis as of each reporting date (Method 2 of ASC 605, Revenue Recognition , for revenue based on a formula). Effective January 1, 2018, the Company will not be able to recognize such fees until such time that it is probable that a significant reversal in cumulative performance fees will not occur in the future. For performance fees earned which represent a capital allocation to the general partner or investment manager, the Company effected a change in accounting policy and now accounts for them under ASC 323, Investments - Equity Method and Joint Ventures. As such, these types of performance fees are not in the scope of the new revenue recognition standard. The Company expects that the pattern and amount of recognition under this new policy will not differ materially from the Company’s historical recognition of such fees, however the presentation and disclosure of such fees and the income from capital allocations related to these fees were altered. This change in accounting policy for performance fees earned which represent a capital allocation to the general partner or investment manager was retrospectively applied. Additionally, as of January 1, 2018, the Company no longer defers reimbursable organizational, offering and other pre-launch costs associated with a fund’s formation. Effective January 1, 2018, the Company began expensing such costs as incurred until the respective fund commences operations and receives third party committed capital. Reimbursements for these costs will be recognized as a component of other revenues in the Company’s consolidated statements of operations when the respective fund commences operations and receives third party committed capital. As a result of the adoption of the new revenue recognition guidance, the Company recorded a cumulative effect decrease to equity of $3.6 million , net of benefit from income taxes of $0.1 million , as of January 1, 2018, which relates to (1) certain performance fee revenue that would not have met the “probable that significant reversal will not occur” criteria of $3.0 million and (2) the reversal of reimbursable fund formation costs which were deferred on the Company’s consolidated balance sheet of $0.7 million . Also, certain reimbursable costs incurred on behalf of the Company's funds that were previously presented net in the Company's consolidated statements of operations are now presented on a gross basis beginning January 1, 2018. There were no changes from the way the Company previously recognized management fees, administrative fees and loan administration and transaction fees as the result of its adoption of ASU 2014-09 or its change in accounting policy for performance fees earned which represent a capital allocation to the general partner or investment manager. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which requires that all investments in equity securities (except those accounted for under the equity method of accounting) be measured at fair value with changes in fair value recognized in net income. This guidance eliminates the available-for-sale classification for equity securities with readily determinable fair values. However, companies may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company adopted this guidance effective January 1, 2018. Under this new guidance, changes in the fair value of available-for-sale securities will no longer be classified in the Company's consolidated statements of comprehensive income but rather as a component of other income (expense), net in its consolidated statements of operations. As a result of the adoption of this ASU, on January 1, 2018, the Company reclassified $11.0 million of cumulative unrealized losses, net of income tax benefit, from accumulated other comprehensive (loss) income to members' deficit on the Company's consolidated balance sheet. Also, on the adoption date, the Company elected the measurement alternative provided under ASC 321, Investments - Equity Securities and will now account for its investment in CK Pearl Fund, L.P. at cost less impairment, adjusted for observable price changes for an identical or similar investment of the same issuer. The adoption of this guidance may have a significant impact to the consolidated statements of operations going forward as any changes to the fair value of the Company's publicly traded securities that were previously accounted for as available-for-sale securities will now be reflected within other income (expense) on the Company's consolidated statements of operations. Recently Issued Accounting Pronouncements Adopted as of July 1, 2018 In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2018-03 clarifies certain aspects of the guidance issued in ASU 2016-01. The clarifications in this accounting standards update relate to three classes of financial instruments: (1) equity securities without a readily determinable fair value, (2) financial liabilities for which the fair value option is elected and (3) forward contracts and purchase options on equity securities without a readily determinable fair value for which the measurement alternative is expected to be applied. This new guidance became effective for the Company on July 1, 2018 and the Company adopted such guidance as of that date. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) to increase the transparency and comparability among organizations as it relates to lease assets and lease liabilities. This new guidance became effective for the Company on January 1, 2019. The Company adopted this guidance using a modified retrospective approach which was required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. The Company has elected to use the practical expedients which would allow the Company to treat lease and non-lease components of its leases as a single component, have the ability to use hindsight in determining the lease term and assessing impairment of right-of-use assets, not to reassess lease classification or whether an arrangement is or contains a lease and not to reassess its initial accounting for direct lease costs. The Company has evaluated all of its leases and determined that there will not be a material impact on the amount or timing of recording lease expense as a result of adopting ASC 842. The adoption of ASC 842 will, however, result in the establishment of a right-of-use asset and a lease liability on the Company's consolidated balance sheet. The Company currently anticipates that the right-of-use asset and lease liability recognized upon adoption will be approximately $8.2 million and $10.2 million , respectively. The Company does not anticipate that the adoption of ASC 842 will result in significant changes to its internal processes, including its internal control over financial reporting. Additionally, it does not anticipate that the adoption will impact any covenants associated with its financial obligations. The Company adopted this guidance using the transition method that allows it to initially apply Topic 842 at the adoption date of January 1, 2019. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This guidance eliminates certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This new guidance is effective beginning on January 1, 2020, with early adoption permitted. Certain disclosures in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. The Company is currently evaluating the impact of the new guidance and it is not expected to have a material impact on the Company’s consolidated financial statements. The Company does not believe any other recently issued, but not yet effective, revisions to authoritative guidance will have a material effect on its consolidated balance sheets, results of operations or cash flows. |
Fair Value Measurements | Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs to the valuation of the investment as of the measurement date. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy: • Level I – Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date. • Level II – Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non- active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities. • Level III – Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s assessment of the assumptions that market participants would use in pricing the assets and liabilities. These investments include debt and equity investments in private companies or assets valued using the Market or Income Approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Condensed Balance Sheet of STRF | The balance sheet of STRF as of December 31, 2018 and 2017 is presented in the table below. As of December 31, 2018 2017 Assets (in thousands) Cash and cash equivalents $ 274 $ 164 Investments, at fair value 1,952 2,005 Other assets 248 1,698 Total assets $ 2,474 $ 3,867 Liabilities and Equity Accrued expenses and other liabilities $ 330 $ 1,744 Equity 2,144 2,123 Total liabilities and equity $ 2,474 $ 3,867 |
REVENUES FROM CONTRACTS WITH _2
REVENUES FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by Category | The following tables present the Company's revenue from contracts with customers disaggregated by type of customer for the year ended December 31, 2018. Permanent Long-dated SMAs Other Total (in thousands) Management fees $ 32,471 $ 8,122 $ 6,492 $ — $ 47,085 Performance fees — — — — — Other revenues and fees 6,896 — — 3,607 10,503 Total revenues from contracts with customers $ 39,367 $ 8,122 $ 6,492 $ 3,607 $ 57,588 |
Comparative Tables | The following tables present the reconciliation between the financial statement line items reported on the consolidated balance sheet as of December 31, 2018 under ASC 606 to what would have been reported under the previous guidance ASC 605. As of December 31, 2018 As Reported under ASC 606 Adjustments to reported balances Balances under ASC 605 Assets (in thousands) Performance fees receivable $ — $ 1,346 $ 1,346 Other assets 14,145 789 14,934 Liabilities Accounts payable, accrued expenses and other liabilities 26,444 89 26,533 Members' Deficit Members' deficit (109,981 ) 2,046 (107,935 ) The following tables present the reconciliation between the Company's reported consolidated statement of operations for the year ended December 31, 2018 under ASC 606 to what would have been reported under the previous revenue recognition guidance, ASC 605. For the year ended December 31, 2018 As Reported under ASC 606 Adjustments to reported balances Balances under ASC 605 Revenues (in thousands) Management fees $ 47,085 $ — $ 47,085 Performance fees — (1,641 ) (1,641 ) Other revenues and fees 10,503 (1,889 ) 8,614 Investment income (loss): Carried interest 142 — 142 Other investment loss (1,221 ) — (1,221 ) Total Revenues 56,509 (3,530 ) 52,979 Expenses Compensation and benefits 31,159 — 31,159 Performance fee compensation 507 — 507 General, administrative and other expenses 19,366 (1,906 ) 17,460 Total Expenses 51,032 (1,906 ) 49,126 Other Income (Expense) Dividend income 4,311 — 4,311 Interest expense (10,806 ) — (10,806 ) Other expense, net (20,250 ) — (20,250 ) Total Other Expense, Net (26,745 ) — (26,745 ) Loss before provision for income taxes (21,268 ) (1,624 ) (22,892 ) Benefit from income taxes (300 ) (23 ) (323 ) Net Loss (20,968 ) (1,601 ) (22,569 ) Net loss attributable to redeemable non-controlling interests in consolidated subsidiaries (11,082 ) — (11,082 ) Net Loss Attributable to Medley LLC $ (9,886 ) $ (1,601 ) $ (11,487 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets | The following tables summarize the fair value hierarchy of the Company's financial assets measured at fair value: As of December 31, 2018 Level I Level II Level III Total Assets (in thousands) Investments of consolidated fund $ 258 $ — $ 1,694 $ 1,952 Investment in shares of MCC 20,633 — — 20,633 Total Assets $ 20,891 $ — $ 1,694 $ 22,585 As of December 31, 2017 Level I Level II Level III Total Assets (in thousands) Investments of consolidated fund $ 435 $ — $ 1,570 $ 2,005 Investment in shares of MCC 40,491 — — 40,491 Total Assets $ 40,926 $ — $ 1,570 $ 42,496 |
Changes in Fair Value of Financial Assets Categorized within Level 3 | The following is a summary of changes in fair value of the Company's financial assets that have been categorized within Level III of the fair value hierarchy (in thousands): Level III Financial Assets as of December 31, 2018 Balance at December 31, 2017 Purchases Transfers In or (Out) of Level III Unrealized Depreciation Sale of Level III Assets Balance at December 31, 2018 Investments of consolidated fund $ 1,570 583 — (3 ) (456 ) $ 1,694 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Investments [Abstract] | |
Composition of Investments | Investments consist of the following: As of December 31, 2018 2017 (in thousands) Equity method investments, at fair value $ 13,422 $ 14,136 Investment in shares of MCC, at fair value 20,633 40,491 Investment held at cost 418 — Investments of consolidated fund 1,952 2,005 Total investments, at fair value $ 36,425 $ 56,632 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Other Assets | Other assets consist of the following: As of December 31, 2018 2017 (in thousands) Fixed assets, net of accumulated depreciation and amortization of $3,446 and $2,370, respectively $ 3,140 $ 4,160 Security deposits 1,975 1,975 Administrative fees receivable (Note 12) 1,645 1,903 Deferred tax assets (Note 13) 3,144 1,926 Due from affiliates (Note 12) 2,215 2,979 Prepaid expenses and taxes 761 1,085 Other assets 1,265 1,465 Total other assets $ 14,145 $ 15,493 |
DUE TO FORMER MINORITY INTERE_2
DUE TO FORMER MINORITY INTEREST HOLDER (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule Of Former Minority Interest Holder | As of December 31, 2018 2017 (in thousands) Due to former minority interest holder, net of unamortized discount of $2,598 $ 11,402 $ — Total amount due to former minority interest holder $ 11,402 $ — |
LOANS PAYABLE (Tables)
LOANS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The carrying value of the Company’s senior unsecured debt consists of the following: As of December 31, 2018 2017 (in thousands) 2026 Notes, net of unamortized discount and debt issuance costs of $2,946 and $3,266, respectively $ 50,649 $ 50,329 2024 Notes, net of unamortized premium and debt issuance costs of $2,031 and $2,437, respectively 66,969 66,563 Total senior unsecured debt $ 117,618 $ 116,892 Loans payable consist of the following: As of December 31, 2018 2017 (in thousands) Non-recourse promissory notes, net of unamortized discount of $108 and $767, respectively $ 9,892 $ 9,233 Total loans payable $ 9,892 $ 9,233 |
SENIOR UNSECURED DEBT (Tables)
SENIOR UNSECURED DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Unsecured Debt | The carrying value of the Company’s senior unsecured debt consists of the following: As of December 31, 2018 2017 (in thousands) 2026 Notes, net of unamortized discount and debt issuance costs of $2,946 and $3,266, respectively $ 50,649 $ 50,329 2024 Notes, net of unamortized premium and debt issuance costs of $2,031 and $2,437, respectively 66,969 66,563 Total senior unsecured debt $ 117,618 $ 116,892 Loans payable consist of the following: As of December 31, 2018 2017 (in thousands) Non-recourse promissory notes, net of unamortized discount of $108 and $767, respectively $ 9,892 $ 9,233 Total loans payable $ 9,892 $ 9,233 |
ACCOUNTS PAYABLE, ACCRUED EXP_2
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Components of Accounts Payable, Accrued Expenses, and Other Liabilities | Accounts payable, accrued expenses and other liabilities consist of the following: As of December 31, 2018 2017 (in thousands) Accrued compensation and benefits $ 7,438 $ 6,835 Due to affiliates (Note 12) 7,635 7,314 Revenue share payable (Note 11) 2,976 3,841 Accrued interest 1,294 1,294 Professional fees 2,594 825 Deferred rent 2,035 2,506 Deferred tax liabilities (Note 13) 60 92 Performance fee compensation payable — 111 Accounts payable and other accrued expenses 2,412 1,597 Total accounts payable, accrued expenses and other liabilities $ 26,444 $ 24,415 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments | As of December 31, 2018 future minimum rental payments under non-cancelable lease agreements are as follows (in thousands): 2019 $ 2,710 2020 2,833 2021 2,470 2022 2,431 Thereafter 1,823 Total future minimum lease payments $ 12,267 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Total revenues recorded under these agreements for the years ended December 31, 2018, 2017 and 2016 are reflected in the table below: For the Years Ended December 31, 2018 2017 2016 (Dollars in thousands) MCC Admin Agreement $ 3,382 $ 3,799 $ 3,935 SIC Admin Agreement 2,538 3,031 2,848 Fund Admin Agreements 976 1,264 893 Total administrative fees from related parties $ 6,896 $ 8,094 $ 7,676 Amounts due from related parties under these agreements are reflected in the table below and are included as a component of other assets on the Company's consolidated balance sheet: As of December 31, 2018 2017 (Dollars in thousands) Amounts due from MCC under the MCC Admin Agreement $ 804 $ 867 Amounts due from SIC under the SIC Admin Agreement 619 696 Amounts due from entities under the Funds Admin Agreements 222 340 Total administrative fees receivable $ 1,645 $ 1,903 |
EARNINGS PER CLASS A SHARE (Tab
EARNINGS PER CLASS A SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income per Class A Share | The table below presents basic and diluted net (loss) income per share of Class A common stock using the two-class method for the three and nine months ending December 31, 2018 and 2017 , respectively: For the Years Ended December 31, 2018 2017 2016 (Amounts in thousands, except share and per share amounts) Basic and diluted net (loss) income per share: Numerator Net (loss) income attributable to Medley Management Inc. $ (9,886 ) $ 11,949 $ 3,111 Less: Allocation to participating securities (898 ) (451 ) (353 ) Net (loss) income available to Class A common stockholders $ (10,784 ) $ 11,498 $ 2,758 Denominator Weighted average shares of Class A common stock outstanding 5,539,804 5,578,003 6,002,422 Net (loss) income per Class A share $ (1.95 ) $ 2.06 $ 0.46 |
Dividends Declared | The following table reflects the per share dividend amounts that the Company declared on its common stock during the three and nine months ended September 30, 2018 and 2017. Declaration Dates Record Date Payment Dates Per Share August 8, 2017 August 23, 2017 September 6, 2017 $ 0.20 May 10, 2017 May 22, 2017 May 31, 2017 $ 0.20 February 9, 2017 February 23, 2017 March 6, 2017 $ 0.20 August 7, 2018 August 23, 2018 September 6, 2018 $ 0.20 May 10, 2018 May 24, 2018 June 1, 2018 $ 0.20 February 7, 2018 February 22, 2018 March 7, 2018 $ 0.20 |
COMPENSATION EXPENSE (Tables)
COMPENSATION EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Nonvested RSU Activity | . |
REDEEMABLE NON-CONTROLLING IN_2
REDEEMABLE NON-CONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Redeemable Noncontrolling Interest | Changes in redeemable non-controlling interests during the years ended December 31, 2018, 2017 and 2016 are reflected in the table below: For the Year Ended December 31, 2018 2017 2016 (in thousands) Beginning balance $ 53,741 $ 30,805 $ — Net (loss) income attributable to redeemable non-controlling interests in consolidated subsidiaries (11,362 ) 6,702 2,565 Contributions — 23,000 17,010 Distributions (5,953 ) (6,738 ) (994 ) Change in fair value of available-for-sale securities — (28 ) 28 Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC (965 ) — — Reclassification of redeemable non-controlling interest in SIC Advisors LLC, including fair value adjustment of $965 for the year ending December 31, 2018. (12,275 ) — 12,196 Ending balance $ 23,186 $ 53,741 $ 30,805 |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Initial Public Offering) (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2018segment | Sep. 30, 2016USD ($) | |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Senior Notes | $ 34,500,000 | $ 28,600,000 | $ 25,000,000 | |
Debt Instrument Offering Price | $ / shares | $ 25.25 | $ 24.45 | ||
Debt Instrument, Face Amount | $ 25 | $ 25 |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION (Medley LLC Reorganization) (Details) | Sep. 29, 2014shares | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Transfer of units to common stock, prior to fourth anniversary | 33.33% | |
Transfer of units to common stock, prior to fifth anniversary | 66.66% | |
Common Class A [Member] | ||
Class of Stock [Line Items] | ||
Common stock exchange ratio | 1 | |
Medley LLC [Member] | ||
Class of Stock [Line Items] | ||
Conversion of pre-IPO interests to LLC Units (in shares) | 23,333,333 | |
Basis of exchange of LLC Units for Class A shares | exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION (Agreement and Plan of Merger) (Details) $ / shares in Units, $ in Millions | Aug. 09, 2018$ / shares | Aug. 07, 2018$ / shares | May 10, 2018$ / shares | Feb. 07, 2018$ / shares | May 10, 2017$ / shares | Feb. 09, 2017$ / shares | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||||
Special cash dividends (USD per share) | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | ||
Transaction expenses | $ | $ 3.8 | ||||||
Sierra [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration (USD per share) | $ 3.44 | ||||||
Sierra [Member] | MCC Advisors LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Exchange ratio | 0.805 | ||||||
Sierra [Member] | Medley LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Exchange ratio | 0.3836 | ||||||
Sierra [Member] | Common Class A [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Exchange ratio | 0.3836 | ||||||
Special cash dividends (USD per share) | $ 0.65 | ||||||
Sierra [Member] | Common Class A [Member] | Medley LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration (USD per share) | 3.44 | ||||||
Special cash dividends (USD per share) | $ 0.35 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Consolidated and Non-Consolidated Variable Interest Entities Narrative) (Details) $ in Millions | Dec. 31, 2018USD ($)subsidiary | Dec. 31, 2017USD ($) |
Variable Interest Entity [Line Items] | ||
Total assets of consolidated variable interest entity | $ 22.2 | $ 63.3 |
Total liabilities of consolidated variable interest entity, less than | 0.1 | 13 |
Fair value of investments in non-consolidated VIEs | 4.2 | 4.8 |
Receivables included as a component of other assets and clawback obligation | 1.8 | 2.4 |
Accrued clawback obligations | 7.2 | $ 7.2 |
Maximum loss exposure | $ 5.9 | |
Medley LLC [Member] | ||
Variable Interest Entity [Line Items] | ||
Number of majority owned subsidiaries | subsidiary | 3 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Seed Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | |||||
Cash and cash equivalents | $ 16,970 | $ 16,970 | $ 36,215 | $ 36,215 | $ 49,566 |
Investments, at fair value | 36,425 | 56,632 | |||
Other assets | 14,145 | 15,493 | |||
Total Assets | 77,814 | 126,041 | |||
Liabilities, Redeemable Non-controlling Interests and Members' Deficit | |||||
Accrued expenses and other liabilities | 26,444 | 24,415 | |||
Total Liabilities, Redeemable Non-controlling Interests and Members' Deficit | 77,814 | 126,041 | |||
STRF [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Amount funded | 2,100 | ||||
Assets | |||||
Cash and cash equivalents | 274 | 164 | |||
Investments, at fair value | 1,952 | 2,005 | |||
Other assets | 248 | 1,698 | |||
Total Assets | 2,474 | 3,867 | |||
Liabilities, Redeemable Non-controlling Interests and Members' Deficit | |||||
Accrued expenses and other liabilities | 330 | 1,744 | |||
Equity | 2,144 | 2,123 | |||
Total Liabilities, Redeemable Non-controlling Interests and Members' Deficit | 2,474 | 3,867 | |||
Other assets eliminated | 200 | 1,000 | |||
Accrued expense and other liabilities eliminated (less than) | 100 | 1,500 | |||
Equity eliminated | $ 2,100 | $ 2,100 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenues Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Reversal of performance fee | $ 0 | $ 0 | $ 2,600,000 |
Accrued clawback obligations | $ 7,200,000 | $ 7,200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reclassification of Prior Period Presentation and Recently Issued Accounting Pronouncements Adopted Narrative) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Decrease in equity | $ 109,981 | $ 65,570 | $ 47,441 | $ 18,311 | |
Provision for income taxes | 300 | (596) | $ (464) | ||
Performance fees | 57,588 | ||||
ASC 606 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Decrease in equity | $ 3,600 | ||||
Provision for income taxes | 100 | ||||
Cost of reimbursable fund | 700 | ||||
ASU 2016-01 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Decrease in equity | 11,000 | ||||
ASU 2018-02 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Reclassification of the income tax impact of the Tax Cuts and Jobs Act on items within accumulated other comprehensive loss to retained earnings due to the early adoption of accounting standards update 2018-02 (Note 2) | 200 | ||||
Performance Fees [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Performance fees | $ 0 | (1,974) | |||
Performance Fees [Member] | ASC 606 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Performance fees | $ 3,000 | ||||
Cash and Cash Equivalents [Member] | Consolidated Subsidiaries [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cash and cash equivalents | $ 200 |
REVENUES FROM CONTRACTS WITH _3
REVENUES FROM CONTRACTS WITH CUSTOMERS (Revenue by Category) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Equity method investments, at fair value | $ 13,400 | $ 14,136 | |
Total revenues from contracts with customers | 57,588 | ||
Management Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 47,085 | 58,104 | |
Part I Incentive Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | $ 0 | ||
Performance Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | (1,974) | |
Other Revenues and Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 10,503 | $ 9,201 | |
Permanent Capital Vehicles [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 39,367 | ||
Permanent Capital Vehicles [Member] | Management Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 32,471 | ||
Permanent Capital Vehicles [Member] | Part I Incentive Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | ||
Permanent Capital Vehicles [Member] | Other Revenues and Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 6,896 | ||
Long-dated Private Funds [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 8,122 | ||
Long-dated Private Funds [Member] | Management Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 8,122 | ||
Long-dated Private Funds [Member] | Part I Incentive Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | ||
Long-dated Private Funds [Member] | Other Revenues and Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | ||
SMAs [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 6,492 | ||
SMAs [Member] | Management Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 6,492 | ||
SMAs [Member] | Part I Incentive Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | ||
SMAs [Member] | Other Revenues and Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | ||
Corporate Segment [Member] | Part I Incentive Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | $ 0 | ||
Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 3,607 | ||
Other [Member] | Management Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | ||
Other [Member] | Other Revenues and Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | $ 3,607 |
REVENUES FROM CONTRACTS WITH _4
REVENUES FROM CONTRACTS WITH CUSTOMERS (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities | $ 0.3 |
Deferred revenue | 0.7 |
Cash deposits | $ 0.8 |
REVENUES FROM CONTRACTS WITH _5
REVENUES FROM CONTRACTS WITH CUSTOMERS (Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 |
Assets | |||||
Performance fees receivable | $ 0 | $ 2,987 | |||
Other assets | 14,145 | 15,493 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 26,444 | 24,415 | |||
Members' Deficit | |||||
Members' deficit | (109,981) | (65,570) | $ (47,441) | $ (18,311) | |
ASU 2014-09 [Member] | |||||
Members' Deficit | |||||
Members' deficit | $ (3,600) | ||||
Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||
Assets | |||||
Performance fees receivable | 1,346 | ||||
Other assets | 789 | ||||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 89 | ||||
Members' Deficit | |||||
Members' deficit | 2,046 | ||||
Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||
Assets | |||||
Performance fees receivable | 1,346 | ||||
Other assets | 14,934 | ||||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 26,533 | ||||
Members' Deficit | |||||
Members' deficit | $ (107,935) | ||||
Medley LLC [Member] | |||||
Members' Deficit | |||||
Non-controlling interests in Medley LLC | $ (65,570) |
REVENUES FROM CONTRACTS WITH _6
REVENUES FROM CONTRACTS WITH CUSTOMERS (Statement of Operations) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | $ 57,588 | ||||||||||||
Investment income (loss): | |||||||||||||
Other investment loss | (1,221) | $ (528) | $ (87) | ||||||||||
Total Revenues | $ 12,565 | $ 14,397 | $ 15,151 | $ 14,396 | $ 18,041 | $ 16,562 | $ 16,434 | $ 13,996 | 56,509 | 65,033 | 75,941 | ||
Expenses | |||||||||||||
Compensation and benefits | 31,159 | 27,432 | 27,800 | ||||||||||
Performance fee compensation | 619 | (14) | 507 | (874) | (319) | ||||||||
General, administrative and other expenses | 19,366 | 13,045 | 28,540 | ||||||||||
Total Expenses | 14,058 | 12,485 | 11,649 | 12,840 | 13,635 | 9,878 | 8,509 | 7,581 | 51,032 | 39,603 | 56,021 | ||
Other Income (Expense) | |||||||||||||
Dividend income | 4,311 | 4,327 | 1,304 | ||||||||||
Interest expense | (10,806) | (11,855) | (9,226) | ||||||||||
Other (expense) income, net | (20,250) | 1,361 | (983) | ||||||||||
Total expense, net | (10,928) | 956 | (5,766) | (11,007) | (1,331) | (1,482) | (2,002) | (1,352) | (26,745) | (6,167) | (8,905) | ||
(Loss) income before income taxes | (12,421) | 2,868 | (2,264) | (9,451) | 3,075 | 5,202 | 5,923 | 5,063 | (21,268) | 19,263 | 11,015 | ||
(Benefit from) provision for income taxes | (300) | 596 | 464 | ||||||||||
Net (Loss) Income | $ (12,031) | $ 2,676 | $ (2,292) | $ (9,321) | $ 3,009 | $ 4,939 | $ 5,783 | $ 4,936 | (20,968) | 18,667 | 10,551 | ||
Net income (loss) attributable to non-controlling interests | 279 | 16 | (16) | ||||||||||
Net (Loss) Income Attributable to Medley LLC | $ 3,111 | 11,949 | 8,002 | ||||||||||
ASU 2014-09 [Member] | |||||||||||||
Other Income (Expense) | |||||||||||||
(Benefit from) provision for income taxes | $ (100) | ||||||||||||
Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||||||||||
Investment income (loss): | |||||||||||||
Other investment loss | 0 | ||||||||||||
Total Revenues | (3,530) | ||||||||||||
Expenses | |||||||||||||
Compensation and benefits | 0 | ||||||||||||
Performance fee compensation | 0 | ||||||||||||
General, administrative and other expenses | (1,906) | ||||||||||||
Total Expenses | (1,906) | ||||||||||||
Other Income (Expense) | |||||||||||||
Dividend income | 0 | ||||||||||||
Interest expense | 0 | ||||||||||||
Other (expense) income, net | 0 | ||||||||||||
Total expense, net | 0 | ||||||||||||
(Loss) income before income taxes | (1,624) | ||||||||||||
(Benefit from) provision for income taxes | (23) | ||||||||||||
Net (Loss) Income | (1,601) | ||||||||||||
Net (Loss) Income Attributable to Medley LLC | (1,601) | ||||||||||||
Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||||||||||
Investment income (loss): | |||||||||||||
Other investment loss | (1,221) | ||||||||||||
Total Revenues | 52,979 | ||||||||||||
Expenses | |||||||||||||
Compensation and benefits | 31,159 | ||||||||||||
Performance fee compensation | 507 | ||||||||||||
General, administrative and other expenses | 17,460 | ||||||||||||
Total Expenses | 49,126 | ||||||||||||
Other Income (Expense) | |||||||||||||
Dividend income | 4,311 | ||||||||||||
Interest expense | (10,806) | ||||||||||||
Other (expense) income, net | (20,250) | ||||||||||||
Total expense, net | (26,745) | ||||||||||||
(Loss) income before income taxes | (22,892) | ||||||||||||
(Benefit from) provision for income taxes | (323) | ||||||||||||
Net (Loss) Income | (22,569) | ||||||||||||
Net (Loss) Income Attributable to Medley LLC | (11,487) | ||||||||||||
Consolidated Subsidiaries [Member] | |||||||||||||
Other Income (Expense) | |||||||||||||
Net income (loss) attributable to non-controlling interests | (11,082) | 6,718 | 2,549 | ||||||||||
Consolidated Subsidiaries [Member] | Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||||||||||
Other Income (Expense) | |||||||||||||
Net income (loss) attributable to non-controlling interests | 0 | ||||||||||||
Consolidated Subsidiaries [Member] | Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||||||||||
Other Income (Expense) | |||||||||||||
Net income (loss) attributable to non-controlling interests | (11,082) | ||||||||||||
Management Fees [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 47,085 | 58,104 | |||||||||||
Management Fees [Member] | Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 0 | ||||||||||||
Management Fees [Member] | Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 47,085 | ||||||||||||
Performance Fees [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 0 | (1,974) | |||||||||||
Performance Fees [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | $ 3,000 | ||||||||||||
Performance Fees [Member] | Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | (1,641) | ||||||||||||
Performance Fees [Member] | Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | (1,641) | ||||||||||||
Other Revenues and Fees [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 10,503 | 9,201 | |||||||||||
Other Revenues and Fees [Member] | Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | (1,889) | ||||||||||||
Other Revenues and Fees [Member] | Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 8,614 | ||||||||||||
Carried Interest [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 142 | $ 230 | $ (22) | ||||||||||
Carried Interest [Member] | Adjustments to reported balances [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | 0 | ||||||||||||
Carried Interest [Member] | Balances under ASC 605 [Member] | ASU 2014-09 [Member] | |||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||
Total revenues from contracts with customers | $ 142 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, at fair value | $ 36,425 | $ 56,632 |
Equity method investments, at fair value | 13,400 | 14,136 |
Level III [Member] | Consolidated Subsidiaries [Member] | Investments [Member] | ||
Level III Financial Assets as of December 31, 2017 | ||
Beginning balance | 1,570 | |
Purchases | 583 | |
Transfers In or (Out) of Level III | 0 | |
Unrealized Depreciation | (3) | |
Sale of Level III Assets | (456) | |
Ending balance | 1,694 | |
Reported Value Measurement [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity method investments, at fair value | 400 | 400 |
Reported Value Measurement [Member] | Senior Notes [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 1,600 | 1,600 |
Reported Value Measurement [Member] | Level I [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity method investments, at fair value | 400 | |
Reported Value Measurement [Member] | Level III [Member] | Senior Notes [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 1,600 | |
Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in shares of MCC | 20,633 | 40,491 |
Total Assets | 22,585 | 42,496 |
Nonrecurring [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, at fair value | 1,952 | 2,005 |
Nonrecurring [Member] | Reported Value Measurement [Member] | Level I [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in shares of MCC | 20,633 | 40,491 |
Total Assets | 20,891 | 40,926 |
Nonrecurring [Member] | Reported Value Measurement [Member] | Level I [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, at fair value | 258 | 435 |
Nonrecurring [Member] | Reported Value Measurement [Member] | Level II [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in shares of MCC | 0 | 0 |
Total Assets | 0 | 0 |
Nonrecurring [Member] | Reported Value Measurement [Member] | Level II [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, at fair value | 0 | 0 |
Nonrecurring [Member] | Reported Value Measurement [Member] | Level III [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in shares of MCC | 0 | 0 |
Total Assets | 1,694 | 1,570 |
Nonrecurring [Member] | Reported Value Measurement [Member] | Level III [Member] | Consolidated Subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, at fair value | $ 1,694 | $ 1,570 |
INVESTMENTS (Composition of Inv
INVESTMENTS (Composition of Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Equity method investments, at fair value | $ 13,400 | $ 14,136 |
Investment held at cost | 418 | 0 |
Investments of consolidated fund | 1,952 | 2,005 |
Total investments, at fair value | 36,425 | 56,632 |
MCC Member] | ||
Investment [Line Items] | ||
Investment in shares of MCC, at fair value | $ 20,633 | $ 40,491 |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Investments [Line Items] | ||||||
Loss from other than temporary impairment equity investments | $ 0 | $ 0 | $ 0 | $ 100,000 | $ 0 | $ 500,000 |
Equity method investments, at fair value | 13,400,000 | 14,136,000 | ||||
Performance fees | 400,000 | 200,000 | ||||
Consolidated Subsidiaries [Member] | Reported Value Measurement [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Equity method investments, at fair value | 400,000 | 400,000 | ||||
Consolidated Subsidiaries [Member] | Senior Notes [Member] | Reported Value Measurement [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Investments of consolidated fund | 1,600,000 | 1,600,000 | ||||
Sierra Income Corporation [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Equity method investments, at fair value | $ 7,400,000 | $ 8,500,000 | ||||
MCC Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Shares in MCC (in shares) | 7,756,938 | 7,756,938 | ||||
Cumulative unrealized gains (losses) | $ (19,900,000) | |||||
Unrealized loss | $ 11,100,000 | |||||
CK Pearl Fund [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Investment held at cost less impairment | $ 400,000 | $ 500,000 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Fixed assets, net of accumulated depreciation and amortization of $3,446 and $2,370, respectively | $ 3,140 | $ 4,160 | |
Security deposits | 1,975 | 1,975 | |
Administrative fees receivable (Note 12) | 1,645 | 1,903 | |
Deferred tax asset | 3,144 | 1,926 | |
Due from affiliates (Note 12) | 2,215 | 2,979 | |
Prepaid expenses and taxes | 761 | 1,085 | |
Other assets | 1,265 | 1,465 | |
Total other assets | $ 14,145 | 15,493 | |
Accumulated depreciation | $ 3,265 | $ 2,370 | |
Valuation allowance | $ 742 |
DUE TO FORMER MINORITY INTERE_3
DUE TO FORMER MINORITY INTEREST HOLDER (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2018 | |
Investment [Line Items] | |||
Contract with Customer, Liability | $ 11,402 | $ 0 | |
Due to Former Minority Interest Holder, Gross [Table Text Block] | 14.0 | ||
Amortization of Debt Discount (Premium) | $ 100 | ||
SIC Advisors LLC [Member] | Nonredeemable Noncontrolling Interest [Member] | |||
Investment [Line Items] | |||
Redeemable Noncontrolling Interest, Equity, Other, Fair Value | $ 12,300 |
LOANS PAYABLE (Schedule of Debt
LOANS PAYABLE (Schedule of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 9,892 | $ 9,233 | ||||
Credit Suisse Term Loan Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest Expense, Debt | 1,500 | $ 6,500 | ||||
Non-recourse Promissory Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest Expense, Debt | $ 300 | $ 100 | 1,400 | |||
Long-term debt | $ 9,892 | 9,233 | ||||
Unamortized discount | $ 767 | $ 274 |
LOANS PAYABLE (Narrative) (Deta
LOANS PAYABLE (Narrative) (Details) | Aug. 19, 2014USD ($) | Aug. 14, 2014USD ($) | Apr. 30, 2012USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 25 | $ 25 | ||||||||
Credit Suisse Term Loan Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 110,000,000 | |||||||||
Issuance date | Aug. 14, 2014 | |||||||||
Maturity date | Jun. 15, 2019 | |||||||||
Interest expense | $ 1,500,000 | $ 6,500,000 | ||||||||
Non-recourse Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 10,000,000 | |||||||||
Maturity date | Mar. 1, 2019 | |||||||||
Interest expense | $ 300,000 | $ 100,000 | $ 1,400,000 | |||||||
Number of shares of common stock purchased (in shares) | shares | 1,108,033 | |||||||||
Unamortized debt issuance expense | $ 3,800,000 | |||||||||
Notes payable, fair value disclosure | 10,000,000 | $ 10,100,000 | ||||||||
Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Initiation date | Aug. 19, 2014 | |||||||||
Debt instrument, face amount | $ 15,000,000 | |||||||||
Amount drawn under credit facility | $ 0 | 0 | ||||||||
Net Leverage Ratio | 1 | |||||||||
Total Leverage Ratio | 1 | |||||||||
Core EBITDA | $ 15,000,000 | |||||||||
Revolving Credit Facility [Member] | Alternate Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on interest rate | 0.25% | |||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on interest rate | 2.50% | |||||||||
Revolving Credit Facility [Member] | Amended Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 10,000,000 | |||||||||
Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Net Leverage Ratio | 5 | |||||||||
Total Leverage Ratio | 7 |
SENIOR UNSECURED DEBT (Schedule
SENIOR UNSECURED DEBT (Schedule of Senior Unsecured Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Feb. 22, 2017 | Oct. 18, 2016 |
Debt Instrument [Line Items] | |||||
Senior unsecured debt, net | $ 117,618 | $ 116,892 | |||
Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured debt, net | 117,618 | 116,892 | |||
Senior Notes [Member] | Senior Notes Due 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured debt, net | 50,649 | 50,329 | |||
Debt instrument, unamortized discount (premium) and debt issuance costs | $ 3,035 | 3,266 | $ 3,800 | ||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured debt, net | $ 66,969 | 66,563 | |||
Debt instrument, unamortized discount (premium) and debt issuance costs | $ 2,132 | $ 2,437 | $ 2,800 |
SENIOR UNSECURED DEBT (Narrativ
SENIOR UNSECURED DEBT (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Mar. 31, 2017 | Feb. 22, 2017 | Oct. 18, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 25 | $ 25 | ||||||||
Senior Notes [Member] | Senior Notes Due 2026 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 53,600,000 | |||||||||
Stated interest rate | 7.25% | 6.875% | 6.875% | |||||||
Discount (premium) and direct issuance costs | $ 3,266,000 | $ 3,035,000 | $ 3,800,000 | |||||||
Notes payable, fair value disclosure | $ 43,400,000 | |||||||||
Interest expense, including amortization of discount and debt issuance costs | $ 1,000,000 | $ 3,000,000 | $ 4,000,000 | $ 1,200,000 | ||||||
Senior Notes [Member] | Senior Notes Due 2026 [Member] | On or after August 15, 2019 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption percentage | 100.00% | |||||||||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 69,000,000 | |||||||||
Stated interest rate | 7.25% | |||||||||
Discount (premium) and direct issuance costs | 2,437,000 | $ 2,132,000 | $ 2,800,000 | |||||||
Notes payable, fair value disclosure | $ 61,100,000 | |||||||||
Interest expense, including amortization of discount and debt issuance costs | $ 5,400,000 | $ 4,900,000 | ||||||||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | On or after January 30, 2020 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption percentage | 100.00% |
ACCOUNTS PAYABLE, ACCRUED EXP_3
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Payables and Accruals [Abstract] | ||
Amortization of Debt Discount (Premium) | $ 100 | |
Accrued compensation and benefits | 7,438 | $ 6,835 |
Due to affiliates (Note 12) | 7,635 | 7,314 |
Revenue share payable (Note 11) | 2,976 | 3,841 |
Accrued interest | 1,294 | 1,294 |
Professional fees | 2,594 | 825 |
Deferred rent | 2,035 | 2,506 |
Deferred tax liabilities (Note 13) | 60 | 92 |
Performance fee compensation payable | $ 0 | $ 111 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions | May 29, 2015 | Feb. 28, 2015 | Apr. 30, 2012 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||||||||
Lease expiration period | various times through September 2023 | |||||||
Rent expense | $ 0.6 | $ 1.8 | $ 2.3 | $ 2.4 | $ 2.5 | |||
Severance costs | 2.7 | |||||||
Loss from sublease | 0.2 | |||||||
American Web Loan [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Repayment of loan | 1 year 10 months | |||||||
Non-recourse Promissory Notes [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Proceeds from issuance of debt | $ 10 | |||||||
Present value of future cash flows expected to be paid | $ 4.4 | |||||||
Contractual obligation | 3 | 3.8 | ||||||
Consolidated Funds [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Unfunded capital commitments | $ 0.3 | $ 0.3 | ||||||
MCC Member] | Moshe Barkat and MVF Holdings [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Debt default | $ 65 | |||||||
Damages sought | 100 | |||||||
Settlement amount | $ 1.5 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Future Minimum Rental Payments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 2,710 |
2020 | 2,833 |
2021 | 2,470 |
2022 | 2,431 |
Thereafter | 1,823 |
Total future minimum lease payments | $ 12,267 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||||
Total revenues from contracts with customers | $ 57,588 | |||
Administrative Services Revenue | $ 7,676 | |||
Total administrative fees receivable | 1,645 | $ 1,903 | ||
Expense support and reimbursement agreement expenses | 3,900 | 1,900 | 1,700 | |
Due from Affiliate, Current | 800 | |||
Due to Affiliate | 7,635 | 7,314 | ||
Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from contracts with customers | 6,896 | 8,094 | ||
MCC Advisors LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Management fees waived | $ 400 | |||
Management [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Affiliate | 600 | |||
MCC Admin Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Administrative Services Revenue | 3,935 | |||
Total administrative fees receivable | 804 | 867 | ||
MCC Admin Agreement [Member] | Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from contracts with customers | 3,382 | 3,799 | ||
SIC Admin Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Administrative Services Revenue | 2,848 | |||
Total administrative fees receivable | 619 | 696 | ||
SIC Admin Agreement [Member] | Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from contracts with customers | 2,538 | 3,031 | ||
Funds Admin Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Administrative Services Revenue | 893 | |||
Total administrative fees receivable | 222 | 340 | ||
Funds Admin Agreement [Member] | Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from contracts with customers | $ 976 | $ 1,264 | ||
Sierra Income Corporation [Member] | Expense Support And Reimbursement Agreement [Member] | Equity Method Investee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expense support and reimbursement agreement expenses | $ 16,100 |
EARNINGS PER CLASS A SHARE (Bas
EARNINGS PER CLASS A SHARE (Basic and Diluted Income per Class A Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator | |||||
Net (loss) income attributable to Medley Management Inc. | $ 3,111 | $ 11,949 | $ 8,002 | ||
Participating Securities [Member] | |||||
Numerator | |||||
Less: Allocation to participating securities | $ (898) | $ (451) | (353) | ||
Common Class A [Member] | |||||
Numerator | |||||
Net (loss) income available to Class A common stockholders | $ (10,784) | $ 11,498 | $ 2,758 | ||
Denominator | |||||
Weighted average shares of Class A common stock outstanding (in shares) | 6,002,422 | ||||
Net income (loss) per Class A share (in dollars per share) | $ (1.95) | $ 2.06 | $ 0.46 |
EARNINGS PER CLASS A SHARE (Nar
EARNINGS PER CLASS A SHARE (Narrative) (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 24,639,302 | 23,653,333 |
EARNINGS PER CLASS A SHARE (Div
EARNINGS PER CLASS A SHARE (Dividends Declared) (Details) - $ / shares | Sep. 06, 2018 | Aug. 07, 2018 | Jun. 01, 2018 | May 10, 2018 | Mar. 07, 2018 | Feb. 07, 2018 | Sep. 06, 2017 | May 31, 2017 | May 10, 2017 | Mar. 06, 2017 | Feb. 09, 2017 |
Earnings Per Share [Abstract] | |||||||||||
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | ||||||
Dividends paid per Class A common stock (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Deferred tax asset | $ 3,144,000 | $ 1,926,000 | |||
Valuation allowance | $ 742,000 | ||||
Deferred tax liabilities, less than | $ 100,000 | ||||
Effective tax rate | 1.40% | 3.10% | 4.20% | ||
Uncertain tax positions | $ 0 |
INCOME TAXES (Provision for Inc
INCOME TAXES (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | |||
Total current provision | $ 862 | $ 681 | $ 944 |
Deferred | |||
Provision for Income Taxes | $ (300) | $ 596 | $ 464 |
INCOME TAXES (Summary of Deferr
INCOME TAXES (Summary of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current Income Tax Expense (Benefit) | $ 862 | $ 681 | $ 944 |
Deferred Tax Liabilities, Net | 100 | ||
Deferred tax assets | |||
Tax goodwill | 565 | 557 | |
Unrealized losses | 1,234 | 701 | |
Stock-based compensation | 581 | 337 | |
New York City unincorporated business tax credit carryforward | 216 | 173 | |
Other items | 224 | 158 | |
Total deferred tax assets | 3,144 | 1,926 | |
Deferred tax liabilities | |||
Accrued fee income | 0 | 88 | |
Other items | 60 | 4 | |
Total deferred tax liabilities | 60 | 92 | |
Net deferred tax assets | $ 3,084 | $ 1,834 |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Statutory to Effective Tax Rates) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Deferred Tax Liabilities, Gross | $ 60 | $ 92 | |
Federal statutory rate | 34.00% | 34.00% | 34.00% |
Income allocated to non-controlling interests | (34.00%) | (34.00%) | 34.00% |
Partnership unincorporated business tax | 1.40% | 3.10% | 4.20% |
Effective tax rate | 1.40% | 3.10% | 4.20% |
COMPENSATION EXPENSE (Performan
COMPENSATION EXPENSE (Performance Fee Compensation Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance fee compensation | $ 619 | $ (14) | $ 507 | $ (874) | $ (319) | |
Performance fee compensation payable | 0 | $ 111 | ||||
Chief Executive Officer [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum aggregate compensation | $ 1,300 | $ 3,800 | $ 5,000 |
COMPENSATION EXPENSE (Retiremen
COMPENSATION EXPENSE (Retirement Plan Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Percentage vested from participants eligibility date | 100.00% | ||
Contributions as a percent of employee eligible wages | 3.00% | ||
Accrued contributions | $ 0.5 | $ 0.6 | |
Retirement plan liability | $ 0.5 | $ 0.5 |
COMPENSATION EXPENSE (Stock-Bas
COMPENSATION EXPENSE (Stock-Based Compensation Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 5,404 | $ 2,771 | $ 3,811 |
REDEEMABLE NON-CONTROLLING IN_3
REDEEMABLE NON-CONTROLLING INTERESTS (Schedule of Redeemable Non-controlling Interest) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Beginning balance | $ 53,741 | $ 53,741 | ||
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC | (965) | $ 12,196 | ||
Ending balance | 23,186 | $ 53,741 | ||
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC | (965) | 12,196 | ||
Nonredeemable Noncontrolling Interest [Member] | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Beginning balance | 53,741 | 53,741 | 30,805 | 0 |
Net (loss) income attributable to redeemable non-controlling interests in consolidated subsidiaries | (11,362) | 6,702 | 2,565 | |
Contributions | 0 | 23,000 | 17,010 | |
Distributions | (5,953) | (6,738) | (994) | |
Change in fair value of available-for-sale securities | 0 | (28) | 28 | |
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC | (965) | 0 | 0 | |
Reclassification of redeemable non-controlling interest in SIC Advisors LLC, including fair value adjustment of $965 for the year ending December 31, 2018. | (12,275) | 0 | 12,196 | |
Ending balance | 23,186 | 53,741 | 30,805 | |
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC | $ (965) | $ 0 | $ 0 | |
Nonredeemable Noncontrolling Interest [Member] | Accounts Payable, Accrued Expenses and Other Liabilities [Member] | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC | (965) | |||
Fair value adjustment to redeemable non-controlling interest in SIC Advisors LLC | $ (965) |
REDEEMABLE NON-CONTROLLING IN_4
REDEEMABLE NON-CONTROLLING INTERESTS (Narrative) (Details) - USD ($) | Jun. 06, 2017 | Jun. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2015 |
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Distributions to members and redeemable non-controlling interests | $ 32,378,000 | $ 36,698,000 | $ 29,960,000 | |||||
Balance of redeemable non-controlling interest | 23,186,000 | 53,741,000 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 13,100,000 | |||||||
Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Distributions to members and redeemable non-controlling interests | 3,700,000 | 2,400,000 | ||||||
Investments and contributions | $ 13,800,000 | $ 10,000,000 | ||||||
Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | Minimum [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Investment period | 7 years | |||||||
Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | Maximum [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Investment period | 10 years | |||||||
Medley and ''Investors'' [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Investments and contributions | $ 50,000,000 | |||||||
Contributions to the joint venture | 53,800,000 | |||||||
Medley and ''Investors'' [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | MCC Advisors LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Purchases of available for sale securities | $ 51,800,000 | |||||||
Investors [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Percent of preferred distributions given to Investors | 8.00% | |||||||
Investors [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Investments and contributions | $ 40,000,000 | |||||||
Percent of Joint Venture profits given to Investors | 15.00% | |||||||
Period before Investors can redeem their interests | 10 years | |||||||
STRF [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Net income allocated to non-controlling interest | 300,000 | 400,000 | ||||||
Balance of redeemable non-controlling interest | (700,000) | (400,000) | ||||||
Seed investment | 2,100,000 | |||||||
STRF [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Seed investment | 2,000,000 | |||||||
Nonredeemable Noncontrolling Interest [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Balance of redeemable non-controlling interest | 23,186,000 | 53,741,000 | 30,805,000 | $ 0 | ||||
Nonredeemable Noncontrolling Interest [Member] | SIC Advisors LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Fair value of non-controlling interest | 12,200,000 | |||||||
Redeemable Noncontrolling Interest, Equity, Other, Fair Value | $ 12,300,000 | |||||||
Net income allocated to non-controlling interest | 2,100,000 | 4,400,000 | ||||||
Distributions to members and redeemable non-controlling interests | 2,300,000 | 4,300,000 | ||||||
Balance of redeemable non-controlling interest | 0 | 13,500,000 | ||||||
Non-controlling Interests [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Net income allocated to non-controlling interest | 2,700,000 | $ 400,000 | ||||||
Non-controlling Interests [Member] | Investors [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | ||||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||||
Balance of redeemable non-controlling interest | $ 23,900,000 | $ 40,600,000 |
QUARTERLY FINANCIAL DATA (unaud
QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effect of Fourth Quarter Events [Line Items] | ||||||||||||
Revenues | $ 12,565 | $ 14,397 | $ 15,151 | $ 14,396 | $ 18,041 | $ 16,562 | $ 16,434 | $ 13,996 | $ 56,509 | $ 65,033 | $ 75,941 | |
Expenses | 14,058 | 12,485 | 11,649 | 12,840 | 13,635 | 9,878 | 8,509 | 7,581 | 51,032 | 39,603 | 56,021 | |
Other income (expense), net | (10,928) | 956 | (5,766) | (11,007) | (1,331) | (1,482) | (2,002) | (1,352) | (26,745) | (6,167) | (8,905) | |
(Loss) income before income taxes | (12,421) | 2,868 | (2,264) | (9,451) | 3,075 | 5,202 | 5,923 | 5,063 | (21,268) | 19,263 | 11,015 | |
Net (Loss) Income | (12,031) | 2,676 | (2,292) | (9,321) | 3,009 | 4,939 | 5,783 | 4,936 | (20,968) | 18,667 | 10,551 | |
Net income attributable to non-controlling interests | $ 279 | 16 | (16) | |||||||||
Net (loss) income attributable to Medley Management Inc. | $ 3,111 | $ 11,949 | $ 8,002 | |||||||||
Consolidated Subsidiaries [Member] | ||||||||||||
Effect of Fourth Quarter Events [Line Items] | ||||||||||||
Net income attributable to non-controlling interests | (7,970) | 3,866 | (2,464) | (4,514) | 2,009 | 1,917 | 1,304 | 1,488 | ||||
Medley LLC [Member] | ||||||||||||
Effect of Fourth Quarter Events [Line Items] | ||||||||||||
Net income attributable to non-controlling interests | $ (4,061) | $ (1,190) | $ 172 | $ (4,807) | $ 1,000 | $ 3,022 | $ 4,479 | $ 3,448 |
Uncategorized Items - mdly-2018
Label | Element | Value |
Stock Repurchased During Period, Value | us-gaap_StockRepurchasedDuringPeriodValue | $ 1,198,000 |
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 21,000 |
Noncontrolling Interest, Portion Recognized at Fair Value | mdly_NoncontrollingInterestPortionRecognizedAtFairValue | (142,000) |
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | us-gaap_NetIncomeLossIncludingPortionAttributableToNonredeemableNoncontrollingInterest | 7,986,000 |
Partners' Capital Account, Distributions | us-gaap_PartnersCapitalAccountDistributions | 28,966,000 |
Partners' Capital Account, Contributions | us-gaap_PartnersCapitalAccountContributions | 3,823,000 |
Interest Paid | us-gaap_InterestPaid | 7,992,000 |
Income Taxes Paid, Net | us-gaap_IncomeTaxesPaidNet | 2,085,000 |
MOF II LP [Member] | ||
Noncontrolling Interest, Decrease from Deconsolidation | us-gaap_NoncontrollingInterestDecreaseFromDeconsolidation | 166,000 |
Retained Earnings [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 21,000 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 8,002,000 |
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax | 0 |
Noncontrolling Interest [Member] | ||
Partners' Capital Account, Distributions | us-gaap_PartnersCapitalAccountDistributions | 1,547,000 |
Parent [Member] | ||
Partners' Capital Account, Distributions | us-gaap_PartnersCapitalAccountDistributions | 27,419,000 |
Partners' Capital Account, Contributions | us-gaap_PartnersCapitalAccountContributions | 3,811,000 |
Subsidiary of Managing Member [Member] | Noncontrolling Interest [Member] | ||
Noncontrolling Interest, Portion Recognized at Fair Value | mdly_NoncontrollingInterestPortionRecognizedAtFairValue | 192,000 |
Reclassification from Permanent to Temporary Equity | mdly_ReclassificationFromPermanentToTemporaryEquity | (12,155,000) |
Other Subsidiaries [Member] | Noncontrolling Interest [Member] | ||
Noncontrolling Interest, Portion Recognized at Fair Value | mdly_NoncontrollingInterestPortionRecognizedAtFairValue | (334,000) |
Partners' Capital Account, Contributions | us-gaap_PartnersCapitalAccountContributions | 12,000 |
Reclassification from Permanent to Temporary Equity | mdly_ReclassificationFromPermanentToTemporaryEquity | $ (41,000) |