x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
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26-0174894
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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PART I – FINANCIAL INFORMATION
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||
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Condensed Consolidated Statements of Operations for the Three
and Six Months Ended June 30, 2016 and 2015
|
|
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Condensed Consolidated Statements of Comprehensive Income
(Loss) for the Three and Six Months Ended June 30, 2016 and 2015
|
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Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2016 and 2015
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Condensed Consolidated Statements of Changes in Unitholders’ Capital for the
Six Months Ended June 30, 2016 and 2015
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•
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“management fee-generating assets under management,” or “management fee-generating AUM,” is a forward-looking metric and reflects the beginning AUM on which we will earn management fees in the following quarter, as more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment and Operating Metrics—Assets Under Management—Management Fee-generating Assets Under Management.”
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•
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“incentive-creating assets under management,” or “incentive-creating AUM,” refers to the AUM that may eventually produce incentive income, as more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment and Operating Metrics—Assets Under Management—Incentive-creating Assets Under Management.”
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•
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our U.S. High Yield Bond strategy, to the Citigroup U.S. High Yield Cash-Pay Capped Index;
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•
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our Global High Yield Bond strategy, to an Oaktree custom global high yield index that represents 60% BofA Merrill Lynch High Yield Master II Constrained Index and 40% BofA Merrill Lynch Global Non-Financial High Yield European Issuers 3% Constrained, ex-Russia Index – USD Hedged from inception
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•
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our European High Yield Bond strategy, to the BofA Merrill Lynch Global Non-Financial High Yield European Issuers excluding Russia 3% Constrained Index (USD Hedged);
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•
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our U.S. Senior Loan strategy (with the exception of the closed-end funds), to the Credit Suisse Leveraged Loan Index;
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•
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our European Senior Loan strategy, to the Credit Suisse Western European Leveraged Loan Index (EUR Hedged);
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•
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our U.S. Convertible Securities strategy, to an Oaktree custom convertible index that represents the Credit Suisse Convertible Securities Index from inception through December 31, 1999, the Goldman Sachs/Bloomberg Convertible 100 Index from January 1, 2000 through June 30, 2004, and the BofA Merrill Lynch All U.S. Convertibles Index thereafter;
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•
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our non-U.S. Convertible Securities strategy, to an Oaktree custom non-U.S. convertible index that represents the JACI Global ex-U.S. (Local) Index from inception through December 31, 2014 and the Thomson Reuters Global Focus ex-U.S. (USD hedged) Index thereafter;
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•
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our High Income Convertible Securities strategy, to the Citigroup U.S. High Yield Market Index; and
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•
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our Emerging Markets Equities strategy, to the Morgan Stanley Capital International Emerging Markets Index (Net).
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As of
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||||||
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June 30,
2016 |
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December 31,
2015 |
||||
Assets
|
|
|
|
||||
Cash and cash-equivalents
|
$
|
403,417
|
|
|
$
|
480,590
|
|
U.S. Treasury securities
|
684,224
|
|
|
661,116
|
|
||
Corporate investments (includes $100,616 and $67,626 measured at fair value as of June 30, 2016 and December 31,2015, respectively)
|
1,036,238
|
|
|
213,988
|
|
||
Due from affiliates
|
117,863
|
|
|
35,899
|
|
||
Deferred tax assets
|
426,119
|
|
|
425,798
|
|
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Other assets
|
186,826
|
|
|
254,267
|
|
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Assets of consolidated funds:
|
|
|
|
||||
Cash and cash-equivalents
|
227,737
|
|
|
2,850,512
|
|
||
Investments, at fair value
|
3,302,188
|
|
|
45,179,906
|
|
||
Dividends and interest receivable
|
13,666
|
|
|
189,693
|
|
||
Due from brokers
|
135,677
|
|
|
706,708
|
|
||
Receivable for securities sold
|
88,815
|
|
|
163,799
|
|
||
Derivative assets, at fair value
|
420
|
|
|
198,351
|
|
||
Other assets
|
1,685
|
|
|
402,104
|
|
||
Total assets
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$
|
6,624,875
|
|
|
$
|
51,762,731
|
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Liabilities and Unitholders’ Capital
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accrued compensation expense
|
$
|
169,344
|
|
|
$
|
319,834
|
|
Accounts payable, accrued expenses and other liabilities
|
141,361
|
|
|
121,934
|
|
||
Due to affiliates
|
358,716
|
|
|
356,851
|
|
||
Debt obligations
|
795,958
|
|
|
846,354
|
|
||
Liabilities of consolidated funds:
|
|
|
|
||||
Accounts payable, accrued expenses and other liabilities
|
20,691
|
|
|
128,774
|
|
||
Payables for securities purchased
|
331,841
|
|
|
478,437
|
|
||
Securities sold short, at fair value
|
61,838
|
|
|
91,246
|
|
||
Derivative liabilities, at fair value
|
1,375
|
|
|
300,208
|
|
||
Distributions payable
|
5,802
|
|
|
364,773
|
|
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Borrowings under credit facilities
|
65,700
|
|
|
6,442,742
|
|
||
Debt obligations of CLOs
|
2,678,566
|
|
|
2,330,359
|
|
||
Total liabilities
|
4,631,192
|
|
|
11,781,512
|
|
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Commitments and contingencies (Note 15)
|
|
|
|
|
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Non-controlling redeemable interests in consolidated funds
|
249,257
|
|
|
38,173,125
|
|
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Unitholders’ capital:
|
|
|
|
||||
Class A units, no par value, unlimited units authorized, 62,602,795 and 61,969,860 units issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
|
—
|
|
|
—
|
|
||
Class B units, no par value, unlimited units authorized, 92,340,656 and 91,937,873 units issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
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—
|
|
|
—
|
|
||
Paid-in capital
|
730,396
|
|
|
735,166
|
|
||
Retained earnings
|
14,928
|
|
|
—
|
|
||
Accumulated other comprehensive income (loss)
|
309
|
|
|
(1,216
|
)
|
||
Class A unitholders’ capital
|
745,633
|
|
|
733,950
|
|
||
Non-controlling interests in consolidated subsidiaries
|
969,872
|
|
|
1,043,930
|
|
||
Non-controlling interests in consolidated funds
|
28,921
|
|
|
30,214
|
|
||
Total unitholders’ capital
|
1,744,426
|
|
|
1,808,094
|
|
||
Total liabilities and unitholders’ capital
|
$
|
6,624,875
|
|
|
$
|
51,762,731
|
|
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
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||||||||||||
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2016
|
|
2015
|
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2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Management fees
|
$
|
195,015
|
|
|
$
|
50,923
|
|
|
$
|
393,568
|
|
|
$
|
101,742
|
|
Incentive income
|
87,701
|
|
|
564
|
|
|
143,638
|
|
|
564
|
|
||||
Total revenues
|
282,716
|
|
|
51,487
|
|
|
537,206
|
|
|
102,306
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
(103,002
|
)
|
|
(107,750
|
)
|
|
(211,407
|
)
|
|
(217,893
|
)
|
||||
Equity-based compensation
|
(14,726
|
)
|
|
(16,083
|
)
|
|
(28,622
|
)
|
|
(27,789
|
)
|
||||
Incentive income compensation
|
(35,461
|
)
|
|
(35,211
|
)
|
|
(45,268
|
)
|
|
(102,103
|
)
|
||||
Total compensation and benefits expense
|
(153,189
|
)
|
|
(159,044
|
)
|
|
(285,297
|
)
|
|
(347,785
|
)
|
||||
General and administrative
|
(32,949
|
)
|
|
(33,488
|
)
|
|
(80,780
|
)
|
|
(40,068
|
)
|
||||
Depreciation and amortization
|
(4,048
|
)
|
|
(3,107
|
)
|
|
(8,209
|
)
|
|
(5,999
|
)
|
||||
Consolidated fund expenses
|
(1,462
|
)
|
|
(50,290
|
)
|
|
(2,546
|
)
|
|
(88,051
|
)
|
||||
Total expenses
|
(191,648
|
)
|
|
(245,929
|
)
|
|
(376,832
|
)
|
|
(481,903
|
)
|
||||
Other income (loss):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(26,730
|
)
|
|
(52,742
|
)
|
|
(54,435
|
)
|
|
(99,311
|
)
|
||||
Interest and dividend income
|
37,138
|
|
|
478,311
|
|
|
73,408
|
|
|
1,001,240
|
|
||||
Net realized gain on consolidated funds’ investments
|
6,682
|
|
|
857,548
|
|
|
10,083
|
|
|
1,332,378
|
|
||||
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments
|
(5,301
|
)
|
|
(1,418,385
|
)
|
|
(25,973
|
)
|
|
(910,902
|
)
|
||||
Investment income
|
41,000
|
|
|
15,694
|
|
|
70,447
|
|
|
28,376
|
|
||||
Other income (expense), net
|
5,548
|
|
|
2,863
|
|
|
11,349
|
|
|
7,557
|
|
||||
Total other income (loss)
|
58,337
|
|
|
(116,711
|
)
|
|
84,879
|
|
|
1,359,338
|
|
||||
Income (loss) before income taxes
|
149,405
|
|
|
(311,153
|
)
|
|
245,253
|
|
|
979,741
|
|
||||
Income taxes
|
(8,571
|
)
|
|
(5,485
|
)
|
|
(21,251
|
)
|
|
(13,360
|
)
|
||||
Net income (loss)
|
140,834
|
|
|
(316,638
|
)
|
|
224,002
|
|
|
966,381
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Net (income) loss attributable to non-controlling interests in consolidated funds
|
(7,319
|
)
|
|
391,961
|
|
|
(2,375
|
)
|
|
(744,704
|
)
|
||||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
(84,468
|
)
|
|
(55,509
|
)
|
|
(144,502
|
)
|
|
(163,610
|
)
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
Distributions declared per Class A unit
|
$
|
0.55
|
|
|
$
|
0.64
|
|
|
$
|
1.02
|
|
|
$
|
1.20
|
|
Net income per unit (basic and diluted):
|
|
|
|
|
|
|
|
||||||||
Net income per Class A unit
|
$
|
0.78
|
|
|
$
|
0.41
|
|
|
$
|
1.24
|
|
|
$
|
1.24
|
|
Weighted average number of Class A units outstanding
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
Three Months Ended June 30, 2016
|
|
Oaktree Capital Group, LLC
|
|
Non-controlling Interests in Consolidated Subsidiaries
|
|
Non-controlling Interests in Consolidated Funds
|
|
Total
|
||||||||
Net income
|
$
|
49,047
|
|
|
$
|
84,468
|
|
|
$
|
7,319
|
|
|
$
|
140,834
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
1,004
|
|
|
1,484
|
|
|
—
|
|
|
2,488
|
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
87
|
|
|
128
|
|
|
—
|
|
|
215
|
|
|||||
Other comprehensive income, net of tax
|
1,091
|
|
|
1,612
|
|
|
—
|
|
|
2,703
|
|
|||||
Total comprehensive income
|
50,138
|
|
|
86,080
|
|
|
7,319
|
|
|
143,537
|
|
|||||
Less: Comprehensive income attributable to non-controlling interests
|
—
|
|
|
(86,080
|
)
|
|
(7,319
|
)
|
|
(93,399
|
)
|
|||||
Comprehensive income attributable to Oaktree Capital
Group, LLC
|
$
|
50,138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,138
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
19,814
|
|
|
$
|
55,509
|
|
|
$
|
(391,961
|
)
|
|
$
|
(316,638
|
)
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
603
|
|
|
1,316
|
|
|
—
|
|
|
1,919
|
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
130
|
|
|
284
|
|
|
—
|
|
|
414
|
|
|||||
Other comprehensive income, net of tax
|
733
|
|
|
1,600
|
|
|
—
|
|
|
2,333
|
|
|||||
Total comprehensive income (loss)
|
20,547
|
|
|
57,109
|
|
|
(391,961
|
)
|
|
(314,305
|
)
|
|||||
Less: Comprehensive (income) loss attributable to non-controlling interests
|
—
|
|
|
(57,109
|
)
|
|
391,961
|
|
|
334,852
|
|
|||||
Comprehensive income attributable to Oaktree Capital
Group, LLC
|
$
|
20,547
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,547
|
|
Six Months Ended June 30, 2016
|
|
Oaktree Capital Group, LLC
|
|
Non-controlling Interests in Consolidated Subsidiaries
|
|
Non-controlling Interests in Consolidated Funds
|
|
Total
|
||||||||
Net income
|
$
|
77,125
|
|
|
$
|
144,502
|
|
|
$
|
2,375
|
|
|
$
|
224,002
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
1,446
|
|
|
2,135
|
|
|
—
|
|
|
3,581
|
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
79
|
|
|
116
|
|
|
—
|
|
|
195
|
|
|||||
Other comprehensive income, net of tax
|
1,525
|
|
|
2,251
|
|
|
—
|
|
|
3,776
|
|
|||||
Total comprehensive income
|
78,650
|
|
|
146,753
|
|
|
2,375
|
|
|
227,778
|
|
|||||
Less: Comprehensive income attributable to non-controlling interests
|
—
|
|
|
(146,753
|
)
|
|
(2,375
|
)
|
|
(149,128
|
)
|
|||||
Comprehensive income attributable to Oaktree Capital
Group, LLC
|
$
|
78,650
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78,650
|
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
58,067
|
|
|
$
|
163,610
|
|
|
$
|
744,704
|
|
|
$
|
966,381
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
(294
|
)
|
|
(834
|
)
|
|
—
|
|
|
(1,128
|
)
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
91
|
|
|
192
|
|
|
—
|
|
|
283
|
|
|||||
Other comprehensive loss, net of tax
|
(203
|
)
|
|
(642
|
)
|
|
—
|
|
|
(845
|
)
|
|||||
Total comprehensive income
|
57,864
|
|
|
162,968
|
|
|
744,704
|
|
|
965,536
|
|
|||||
Less: Comprehensive income attributable to non-controlling interests
|
—
|
|
|
(162,968
|
)
|
|
(744,704
|
)
|
|
(907,672
|
)
|
|||||
Comprehensive income attributable to Oaktree Capital
Group, LLC
|
$
|
57,864
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,864
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
224,002
|
|
|
$
|
966,381
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Investment income
|
(70,447
|
)
|
|
(28,376
|
)
|
||
Depreciation and amortization
|
8,209
|
|
|
5,999
|
|
||
Equity-based compensation
|
28,622
|
|
|
27,789
|
|
||
Net realized and unrealized (gain) loss from consolidated funds’ investments
|
15,890
|
|
|
(421,476
|
)
|
||
Amortization (accretion) of original issue and market discount of consolidated funds’ investments, net
|
(4,860
|
)
|
|
(10,122
|
)
|
||
Income distributions from corporate investments in funds and companies
|
52,154
|
|
|
36,281
|
|
||
Amortization or write-down of debt issuance costs
|
608
|
|
|
5,718
|
|
||
Cash flows due to changes in operating assets and liabilities:
|
|
|
|
||||
Decrease in other assets
|
20,175
|
|
|
31,597
|
|
||
Increase in net due to affiliates
|
116
|
|
|
4,727
|
|
||
Decrease in accrued compensation expense
|
(150,490
|
)
|
|
(114,253
|
)
|
||
Increase (decrease) in accounts payable, accrued expenses and other liabilities
|
25,590
|
|
|
(24,285
|
)
|
||
Cash flows due to changes in operating assets and liabilities of consolidated funds:
|
|
|
|
||||
Increase in dividends and interest receivable
|
(1,622
|
)
|
|
(2,412
|
)
|
||
(Increase) decrease in due from brokers
|
20,693
|
|
|
(257,939
|
)
|
||
Increase in receivables for securities sold
|
(75,113
|
)
|
|
(190,740
|
)
|
||
Increase in other assets
|
(1,346
|
)
|
|
(52,222
|
)
|
||
Increase in accounts payable, accrued expenses and other liabilities
|
5,479
|
|
|
47,638
|
|
||
Increase in payables for securities purchased
|
184,080
|
|
|
321,221
|
|
||
Purchases of securities
|
(1,570,440
|
)
|
|
(9,840,256
|
)
|
||
Proceeds from maturities and sales of securities
|
1,048,193
|
|
|
8,220,736
|
|
||
Net cash used in operating activities
|
(240,507
|
)
|
|
(1,273,994
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of U.S. Treasury securities
|
(473,115
|
)
|
|
(265,722
|
)
|
||
Proceeds from maturities and sales of U.S. Treasury securities
|
450,007
|
|
|
240,054
|
|
||
Corporate investments in funds and companies
|
(37,228
|
)
|
|
(40,398
|
)
|
||
Distributions and proceeds from corporate investments in funds and companies
|
132,159
|
|
|
43,778
|
|
||
Purchases of fixed assets
|
(4,159
|
)
|
|
(16,991
|
)
|
||
Net cash provided by (used in) investing activities
|
67,664
|
|
|
(39,279
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Payment of debt issuance costs
|
$
|
(801
|
)
|
|
$
|
—
|
|
Repayment of debt obligations
|
(50,000
|
)
|
|
—
|
|
||
Proceeds from issuance of Class A units
|
—
|
|
|
237,820
|
|
||
Purchase of OCGH units
|
—
|
|
|
(237,820
|
)
|
||
Repurchase and cancellation of units
|
(10,315
|
)
|
|
(4,290
|
)
|
||
Distributions to Class A unitholders
|
(63,547
|
)
|
|
(55,466
|
)
|
||
Distributions to OCGH unitholders
|
(116,193
|
)
|
|
(155,391
|
)
|
||
Contributions from non-controlling interests
|
—
|
|
|
4,000
|
|
||
Distributions to non-controlling interests
|
(3,515
|
)
|
|
(3,096
|
)
|
||
Cash flows from financing activities of consolidated funds:
|
|
|
|
||||
Contributions from non-controlling interests
|
64,321
|
|
|
3,035,701
|
|
||
Distributions to non-controlling interests
|
(23,598
|
)
|
|
(3,436,558
|
)
|
||
Proceeds from debt obligations issued by CLOs
|
426,292
|
|
|
401,372
|
|
||
Payment of debt issuance costs
|
(7,974
|
)
|
|
(9,108
|
)
|
||
Borrowings on credit facilities
|
129,885
|
|
|
3,527,603
|
|
||
Repayments on credit facilities
|
(165,849
|
)
|
|
(2,580,453
|
)
|
||
Net cash provided by financing activities
|
178,706
|
|
|
724,314
|
|
||
Effect of exchange rate changes on cash
|
6,379
|
|
|
(25,239
|
)
|
||
Net decrease in cash and cash-equivalents
|
12,242
|
|
|
(614,198
|
)
|
||
Cash and cash-equivalents, beginning balance
|
3,331,102
|
|
|
3,348,494
|
|
||
Change in cash and cash-equivalents from adoption of accounting guidance
|
(2,712,190
|
)
|
|
—
|
|
||
Cash and cash-equivalents, ending balance
|
$
|
631,154
|
|
|
$
|
2,734,296
|
|
|
|
|
|
|
Oaktree Capital Group, LLC
|
|
Non-controlling Interests in Consolidated Subsidiaries
|
|
Non-controlling Interests in Consolidated Funds
|
|
Total Unitholders’ Capital
|
||||||||||||||||||||||
|
Class A Units
|
|
Class B Units
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|||||||||||||||||||
Unitholders’ capital as of December 31, 2015
|
61,970
|
|
|
91,938
|
|
|
$
|
735,166
|
|
|
$
|
—
|
|
|
$
|
(1,216
|
)
|
|
$
|
1,043,930
|
|
|
$
|
30,214
|
|
|
$
|
1,808,094
|
|
Activity for the six months ended June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative-effect adjustment from adoption of accounting guidance
|
—
|
|
|
—
|
|
|
(12,912
|
)
|
|
—
|
|
|
—
|
|
|
(109,709
|
)
|
|
—
|
|
|
(122,621
|
)
|
||||||
Issuance of Class A units
|
897
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of Class B units
|
—
|
|
|
630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units associated with forfeitures
|
(41
|
)
|
|
(111
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units
|
(223
|
)
|
|
(116
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase and cancellation of units
|
—
|
|
|
—
|
|
|
(10,089
|
)
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
|
—
|
|
|
(10,315
|
)
|
||||||
Equity reallocation between controlling and non-controlling interests
|
—
|
|
|
—
|
|
|
8,126
|
|
|
—
|
|
|
—
|
|
|
(8,126
|
)
|
|
—
|
|
|
—
|
|
||||||
Capital increase related to equity-based compensation
|
—
|
|
|
—
|
|
|
11,455
|
|
|
—
|
|
|
—
|
|
|
16,958
|
|
|
—
|
|
|
28,413
|
|
||||||
Distributions declared
|
—
|
|
|
—
|
|
|
(1,350
|
)
|
|
(62,197
|
)
|
|
—
|
|
|
(119,708
|
)
|
|
(1,679
|
)
|
|
(184,934
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
77,125
|
|
|
—
|
|
|
144,502
|
|
|
386
|
|
|
222,013
|
|
||||||
Foreign currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,446
|
|
|
2,135
|
|
|
—
|
|
|
3,581
|
|
||||||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
116
|
|
|
—
|
|
|
195
|
|
||||||
Unitholders’ capital as of June 30, 2016
|
62,603
|
|
|
92,341
|
|
|
$
|
730,396
|
|
|
$
|
14,928
|
|
|
$
|
309
|
|
|
$
|
969,872
|
|
|
$
|
28,921
|
|
|
$
|
1,744,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Unitholders’ capital as of December 31, 2014
|
43,764
|
|
|
109,089
|
|
|
$
|
536,431
|
|
|
$
|
11,378
|
|
|
$
|
(1,070
|
)
|
|
$
|
1,265,961
|
|
|
$
|
27,430
|
|
|
$
|
1,840,130
|
|
Activity for the six months ended June 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Issuance of Class A units
|
4,608
|
|
|
—
|
|
|
237,820
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237,820
|
|
||||||
Issuance of Class B units
|
—
|
|
|
1,151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units associated with forfeitures
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units
|
—
|
|
|
(4,702
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of OCGH units from OCGH unitholders
|
—
|
|
|
—
|
|
|
(237,820
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(237,820
|
)
|
||||||
Deferred tax effect resulting from the purchase of OCGH units
|
—
|
|
|
—
|
|
|
11,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,025
|
|
||||||
Repurchase and cancellation of units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,290
|
)
|
|
—
|
|
|
(4,290
|
)
|
||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
|
2,880
|
|
|
6,880
|
|
||||||
Equity reallocation between controlling and non-controlling interests
|
—
|
|
|
—
|
|
|
45,202
|
|
|
—
|
|
|
—
|
|
|
(45,202
|
)
|
|
—
|
|
|
—
|
|
||||||
Capital increase related to equity-based compensation
|
—
|
|
|
—
|
|
|
8,155
|
|
|
—
|
|
|
—
|
|
|
18,503
|
|
|
—
|
|
|
26,658
|
|
||||||
Distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,466
|
)
|
|
—
|
|
|
(158,487
|
)
|
|
(1,326
|
)
|
|
(215,279
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
58,067
|
|
|
—
|
|
|
163,610
|
|
|
2,096
|
|
|
223,773
|
|
||||||
Foreign currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(294
|
)
|
|
(834
|
)
|
|
—
|
|
|
(1,128
|
)
|
||||||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
192
|
|
|
—
|
|
|
283
|
|
||||||
Unitholders’ capital as of June 30, 2015
|
48,372
|
|
|
105,460
|
|
|
$
|
600,813
|
|
|
$
|
13,979
|
|
|
$
|
(1,273
|
)
|
|
$
|
1,243,453
|
|
|
$
|
31,080
|
|
|
$
|
1,888,052
|
|
•
|
Level I –
Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement. The types of investments in Level I include exchange-traded equities, debt and derivatives with quoted prices.
|
•
|
Level II –
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. The types of investments in Level II generally include corporate bonds and loans, government and agency securities, less liquid and restricted equity investments, over-the-counter traded derivatives, and other investments where the fair value is based on observable inputs.
|
•
|
Level III –
Valuations for which one or more significant inputs are unobservable. These inputs reflect the Company’s assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices of quoted securities in markets for which there are few transactions, less public information exists or prices vary among brokered market makers. The types of investments in Level III include non-publicly traded equity, debt, real estate and derivatives.
|
|
As of
|
||||||
Corporate Investments:
|
June 30,
2016
|
|
December 31,
2015
|
||||
|
|
|
|
||||
Equity-method Investments:
|
|
|
|
||||
Oaktree funds
|
$
|
915,942
|
|
|
$
|
51,899
|
|
Non-Oaktree funds
|
59
|
|
|
65,901
|
|
||
Companies
|
19,621
|
|
|
28,562
|
|
||
Other investments, at fair value
|
100,616
|
|
|
67,626
|
|
||
Total corporate investments
|
$
|
1,036,238
|
|
|
$
|
213,988
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Investment Income (Loss):
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Equity-method Investments:
|
|
|
|
|
|
|
|
||||||||
Oaktree funds
|
$
|
10,245
|
|
|
$
|
1,075
|
|
|
$
|
28,901
|
|
|
$
|
327
|
|
Non-Oaktree funds
|
14
|
|
|
2,140
|
|
|
318
|
|
|
4,733
|
|
||||
Companies
|
16,682
|
|
|
12,358
|
|
|
31,789
|
|
|
22,322
|
|
||||
Other investments, at fair value
|
14,059
|
|
|
121
|
|
|
9,439
|
|
|
994
|
|
||||
Total investment income
|
$
|
41,000
|
|
|
$
|
15,694
|
|
|
$
|
70,447
|
|
|
$
|
28,376
|
|
Statement of Financial Condition
:
|
As of June 30, 2016
|
||
Assets:
|
|
||
Cash and cash-equivalents
|
$
|
3,285,360
|
|
Investments, at fair value
|
40,995,952
|
|
|
Other assets
|
2,220,264
|
|
|
Total assets
|
$
|
46,501,576
|
|
Liabilities and Capital:
|
|
||
Debt obligations
|
$
|
7,014,441
|
|
Other liabilities
|
2,285,463
|
|
|
Total liabilities
|
9,299,904
|
|
|
Total capital
|
37,201,672
|
|
|
Total liabilities and capital
|
$
|
46,501,576
|
|
Statements of Operations
:
|
Three Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2016
|
||||
Revenues / investment income
|
$
|
482,265
|
|
|
$
|
1,025,099
|
|
Interest expense
|
(41,640
|
)
|
|
(80,169
|
)
|
||
Other expenses
|
(217,303
|
)
|
|
(437,739
|
)
|
||
Net realized and unrealized gain on investments
|
550,657
|
|
|
838,724
|
|
||
Net income
|
$
|
773,979
|
|
|
$
|
1,345,915
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Realized gain (loss)
|
$
|
105
|
|
|
$
|
58
|
|
|
$
|
(2,389
|
)
|
|
$
|
58
|
|
Net change in unrealized gain (loss)
|
13,954
|
|
|
63
|
|
|
11,828
|
|
|
936
|
|
||||
Total
|
$
|
14,059
|
|
|
$
|
121
|
|
|
$
|
9,439
|
|
|
$
|
994
|
|
|
Fair Value as of
|
|
Fair Value as a Percentage of Investments of Consolidated Funds as of
|
||||||||||
Investments
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
||||||
United States:
|
|
|
|
|
|
|
|
||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||
Consumer discretionary
|
$
|
550,122
|
|
|
$
|
3,387,072
|
|
|
16.7
|
%
|
|
7.5
|
%
|
Consumer staples
|
153,994
|
|
|
686,071
|
|
|
4.7
|
|
|
1.5
|
|
||
Energy
|
50,760
|
|
|
854,220
|
|
|
1.5
|
|
|
1.9
|
|
||
Financials
|
124,291
|
|
|
1,293,508
|
|
|
3.8
|
|
|
2.9
|
|
||
Government
|
—
|
|
|
95,508
|
|
|
—
|
|
|
0.2
|
|
||
Health care
|
292,452
|
|
|
1,135,799
|
|
|
8.9
|
|
|
2.5
|
|
||
Industrials
|
352,038
|
|
|
1,710,706
|
|
|
10.7
|
|
|
3.8
|
|
||
Information technology
|
251,870
|
|
|
1,293,815
|
|
|
7.6
|
|
|
2.9
|
|
||
Materials
|
197,230
|
|
|
1,393,521
|
|
|
6.0
|
|
|
3.1
|
|
||
Telecommunication services
|
65,559
|
|
|
471,711
|
|
|
2.0
|
|
|
1.0
|
|
||
Utilities
|
44,249
|
|
|
686,126
|
|
|
1.3
|
|
|
1.5
|
|
||
Total debt securities (cost: $2,130,737 and $15,304,870 as of June 30, 2016 and December 31, 2015, respectively)
|
2,082,565
|
|
|
13,008,057
|
|
|
63.2
|
|
|
28.8
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||
Consumer discretionary
|
634
|
|
|
1,813,832
|
|
|
0.0
|
|
|
4.0
|
|
||
Consumer staples
|
—
|
|
|
872,472
|
|
|
—
|
|
|
1.9
|
|
||
Energy
|
—
|
|
|
1,810,290
|
|
|
—
|
|
|
4.0
|
|
||
Financials
|
3,018
|
|
|
7,639,790
|
|
|
0.1
|
|
|
16.9
|
|
||
Health care
|
112
|
|
|
92,866
|
|
|
0.0
|
|
|
0.2
|
|
||
Industrials
|
—
|
|
|
1,728,086
|
|
|
—
|
|
|
3.8
|
|
||
Information technology
|
—
|
|
|
67,253
|
|
|
—
|
|
|
0.2
|
|
||
Materials
|
—
|
|
|
882,366
|
|
|
—
|
|
|
2.0
|
|
||
Telecommunication services
|
—
|
|
|
16,471
|
|
|
—
|
|
|
0.0
|
|
||
Utilities
|
—
|
|
|
156,865
|
|
|
—
|
|
|
0.3
|
|
||
Total equity securities (cost: $2,213 and $13,290,699 as of June 30, 2016 and December 31, 2015, respectively)
|
3,764
|
|
|
15,080,291
|
|
|
0.1
|
|
|
33.3
|
|
|
Fair Value as of
|
|
Fair Value as a Percentage of Investments of Consolidated Funds as of
|
||||||||||
Investments
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
||||||
Europe:
|
|
|
|
|
|
|
|
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
||||||
Consumer discretionary
|
$
|
304,868
|
|
|
$
|
1,329,387
|
|
|
9.2
|
%
|
|
2.9
|
%
|
Consumer staples
|
81,685
|
|
|
222,789
|
|
|
2.5
|
|
|
0.5
|
|
||
Energy
|
13,712
|
|
|
144,742
|
|
|
0.4
|
|
|
0.3
|
|
||
Financials
|
16,367
|
|
|
808,568
|
|
|
0.5
|
|
|
1.8
|
|
||
Government
|
1,260
|
|
|
46,946
|
|
|
0.0
|
|
|
0.1
|
|
||
Health care
|
139,437
|
|
|
197,569
|
|
|
4.2
|
|
|
0.5
|
|
||
Industrials
|
56,557
|
|
|
291,950
|
|
|
1.7
|
|
|
0.7
|
|
||
Information technology
|
26,818
|
|
|
71,168
|
|
|
0.8
|
|
|
0.2
|
|
||
Materials
|
198,828
|
|
|
377,460
|
|
|
6.0
|
|
|
0.8
|
|
||
Telecommunication services
|
158,004
|
|
|
200,610
|
|
|
4.8
|
|
|
0.4
|
|
||
Utilities
|
—
|
|
|
18,028
|
|
|
—
|
|
|
0.0
|
|
||
Total debt securities (cost: $1,008,521 and $4,207,531 as of June 30, 2016 and December 31, 2015, respectively)
|
997,536
|
|
|
3,709,217
|
|
|
30.1
|
|
|
8.2
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||
Consumer discretionary
|
452
|
|
|
270,370
|
|
|
0.0
|
|
|
0.6
|
|
||
Consumer staples
|
—
|
|
|
145,108
|
|
|
—
|
|
|
0.3
|
|
||
Energy
|
—
|
|
|
21,791
|
|
|
—
|
|
|
0.0
|
|
||
Financials
|
245
|
|
|
6,239,424
|
|
|
0.0
|
|
|
13.8
|
|
||
Government
|
—
|
|
|
40,290
|
|
|
—
|
|
|
0.1
|
|
||
Health care
|
—
|
|
|
79,582
|
|
|
—
|
|
|
0.2
|
|
||
Industrials
|
—
|
|
|
1,499,142
|
|
|
—
|
|
|
3.3
|
|
||
Information technology
|
—
|
|
|
1,646
|
|
|
—
|
|
|
0.0
|
|
||
Materials
|
—
|
|
|
475,306
|
|
|
—
|
|
|
1.1
|
|
||
Telecommunication services
|
—
|
|
|
4,834
|
|
|
—
|
|
|
0.0
|
|
||
Utilities
|
—
|
|
|
344,736
|
|
|
—
|
|
|
0.8
|
|
||
Total equity securities (cost: $701 and $7,627,245 as of June 30, 2016 and December 31, 2015, respectively)
|
697
|
|
|
9,122,229
|
|
|
0.0
|
|
|
20.2
|
|
||
Asia and other:
|
|
|
|
|
|
|
|
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||
Consumer discretionary
|
9,651
|
|
|
102,531
|
|
|
0.3
|
|
|
0.2
|
|
||
Consumer staples
|
12,851
|
|
|
33,061
|
|
|
0.4
|
|
|
0.1
|
|
||
Energy
|
11,755
|
|
|
193,645
|
|
|
0.4
|
|
|
0.4
|
|
||
Financials
|
1,087
|
|
|
27,413
|
|
|
0.0
|
|
|
0.1
|
|
||
Government
|
560
|
|
|
6,974
|
|
|
0.0
|
|
|
0.0
|
|
||
Health care
|
122
|
|
|
47,010
|
|
|
0.0
|
|
|
0.1
|
|
||
Industrials
|
2,867
|
|
|
268,710
|
|
|
0.1
|
|
|
0.6
|
|
||
Information technology
|
142
|
|
|
31,983
|
|
|
0.0
|
|
|
0.1
|
|
||
Materials
|
10,290
|
|
|
248,830
|
|
|
0.3
|
|
|
0.6
|
|
||
Utilities
|
—
|
|
|
2,713
|
|
|
—
|
|
|
0.0
|
|
||
Total debt securities (cost: $55,151 and $1,090,867 as of June 30, 2016 and December 31, 2015, respectively)
|
49,325
|
|
|
962,870
|
|
|
1.5
|
|
|
2.2
|
|
|
Fair Value as of
|
|
Fair Value as a Percentage of Investments of Consolidated Funds as of
|
||||||||||
Investments
|
June 30,
2016 |
|
December 31,
2015
|
|
June 30,
2016 |
|
December 31,
2015
|
||||||
Asia and other:
|
|
|
|
|
|
|
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|||||
Consumer discretionary
|
$
|
25,043
|
|
|
$
|
506,761
|
|
|
0.8
|
%
|
|
1.1
|
%
|
Consumer staples
|
17,393
|
|
|
29,863
|
|
|
0.5
|
|
|
0.1
|
|
||
Energy
|
11,026
|
|
|
192,844
|
|
|
0.3
|
|
|
0.4
|
|
||
Financials
|
46,510
|
|
|
986,753
|
|
|
1.4
|
|
|
2.2
|
|
||
Health care
|
1,471
|
|
|
18,535
|
|
|
0.0
|
|
|
0.1
|
|
||
Industrials
|
25,865
|
|
|
1,032,225
|
|
|
0.8
|
|
|
2.3
|
|
||
Information technology
|
20,858
|
|
|
244,433
|
|
|
0.6
|
|
|
0.5
|
|
||
Materials
|
15,397
|
|
|
96,326
|
|
|
0.5
|
|
|
0.2
|
|
||
Telecommunication services
|
2,446
|
|
|
34,678
|
|
|
0.1
|
|
|
0.1
|
|
||
Utilities
|
2,292
|
|
|
154,824
|
|
|
0.1
|
|
|
0.3
|
|
||
Total equity securities (cost: $163,082 and $3,370,406 as of June 30, 2016 and December 31, 2015, respectively)
|
168,301
|
|
|
3,297,242
|
|
|
5.1
|
|
|
7.3
|
|
||
Total debt securities
|
3,129,426
|
|
|
17,680,144
|
|
|
94.8
|
|
|
39.2
|
|
||
Total equity securities
|
172,762
|
|
|
27,499,762
|
|
|
5.2
|
|
|
60.8
|
|
||
Total investments, at fair value
|
$
|
3,302,188
|
|
|
$
|
45,179,906
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Securities Sold Short
|
|
|
|
|
|
|
|
|
|||||
Equity securities (proceeds: $68,170 and $102,236 as of June 30, 2016 and December 31, 2015, respectively)
|
$
|
(61,838
|
)
|
|
$
|
(91,246
|
)
|
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Investments and other financial instruments
|
$
|
8,651
|
|
|
$
|
17,740
|
|
|
$
|
707,427
|
|
|
$
|
(1,018,970
|
)
|
Measurement alternative guidance for CLO liabilities
(1)
|
—
|
|
|
(24,172
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign-currency forward contracts
(2)
|
(298
|
)
|
|
849
|
|
|
175,334
|
|
|
(339,448
|
)
|
||||
Total-return and interest-rate swaps
(2)
|
(907
|
)
|
|
222
|
|
|
(2,248
|
)
|
|
(56,008
|
)
|
||||
Options and futures
(2)
|
(764
|
)
|
|
60
|
|
|
(21,778
|
)
|
|
(5,150
|
)
|
||||
Swaptions
(2)(3)
|
—
|
|
|
—
|
|
|
(1,187
|
)
|
|
1,191
|
|
||||
Total
|
$
|
6,682
|
|
|
$
|
(5,301
|
)
|
|
$
|
857,548
|
|
|
$
|
(1,418,385
|
)
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Investments and other financial instruments
|
$
|
12,322
|
|
|
$
|
27,423
|
|
|
$
|
875,226
|
|
|
$
|
(461,655
|
)
|
Measurement alternative guidance for CLO liabilities
(1)
|
—
|
|
|
(52,374
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign-currency forward contracts
(2)
|
(500
|
)
|
|
457
|
|
|
471,310
|
|
|
(319,064
|
)
|
||||
Total-return and interest-rate swaps
(2)
|
(890
|
)
|
|
(1,396
|
)
|
|
(7,174
|
)
|
|
(116,226
|
)
|
||||
Options and futures
(2)
|
(849
|
)
|
|
(83
|
)
|
|
(3,977
|
)
|
|
(16,299
|
)
|
||||
Swaptions
(2)(3)
|
—
|
|
|
—
|
|
|
(3,007
|
)
|
|
2,342
|
|
||||
Total
|
$
|
10,083
|
|
|
$
|
(25,973
|
)
|
|
$
|
1,332,378
|
|
|
$
|
(910,902
|
)
|
|
|
|
|
|
(1)
|
Represents the net change in the fair value of CLO liabilities based on the more observable fair value of CLO assets, as measured under the measurement alternative guidance for CLOs. Please see note 2 for more information.
|
(2)
|
Please see note 6 for additional information.
|
(3)
|
A swaption is an option granting the buyer the right but not the obligation to enter into a swap agreement on a specified future date.
|
|
As of June 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury securities
(1)
|
$
|
684,224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
684,224
|
|
|
$
|
661,116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
661,116
|
|
Corporate investments
|
—
|
|
|
74,035
|
|
|
26,581
|
|
|
100,616
|
|
|
—
|
|
|
41,876
|
|
|
25,750
|
|
|
67,626
|
|
||||||||
Foreign-currency forward contracts
(2)
|
—
|
|
|
4,649
|
|
|
—
|
|
|
4,649
|
|
|
—
|
|
|
5,875
|
|
|
—
|
|
|
5,875
|
|
||||||||
Total assets
|
$
|
684,224
|
|
|
$
|
78,684
|
|
|
$
|
26,581
|
|
|
$
|
789,489
|
|
|
$
|
661,116
|
|
|
$
|
47,751
|
|
|
$
|
25,750
|
|
|
$
|
734,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration
(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(24,995
|
)
|
|
$
|
(24,995
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28,494
|
)
|
|
$
|
(28,494
|
)
|
Foreign-currency forward contracts
(3)
|
—
|
|
|
(14,916
|
)
|
|
—
|
|
|
(14,916
|
)
|
|
—
|
|
|
(3,286
|
)
|
|
—
|
|
|
(3,286
|
)
|
||||||||
Interest-rate swaps
(3)
|
—
|
|
|
(712
|
)
|
|
—
|
|
|
(712
|
)
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
|
(943
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
(15,628
|
)
|
|
$
|
(24,995
|
)
|
|
$
|
(40,623
|
)
|
|
$
|
—
|
|
|
$
|
(4,229
|
)
|
|
$
|
(28,494
|
)
|
|
$
|
(32,723
|
)
|
|
|
|
|
|
(1)
|
Carrying value approximates fair value due to the short-term nature.
|
(2)
|
Amounts are included in other assets in the condensed consolidated statements of financial condition.
|
(3)
|
Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition.
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Corporate Investments
|
|
Contingent Consideration Liability
|
|
Corporate Investments
|
|
Contingent Consideration Liability
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
25,624
|
|
|
$
|
(27,884
|
)
|
|
$
|
—
|
|
|
$
|
(28,052
|
)
|
Net gain (loss) included in earnings
|
957
|
|
|
2,889
|
|
|
—
|
|
|
(694
|
)
|
||||
Ending balance
|
$
|
26,581
|
|
|
$
|
(24,995
|
)
|
|
$
|
—
|
|
|
$
|
(28,746
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period
|
$
|
957
|
|
|
$
|
2,889
|
|
|
$
|
—
|
|
|
$
|
(694
|
)
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Corporate Investments
|
|
Contingent Consideration Liability
|
|
Corporate Investments
|
|
Contingent Consideration Liability
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
25,750
|
|
|
$
|
(28,494
|
)
|
|
$
|
—
|
|
|
$
|
(27,245
|
)
|
Net gain (loss) included in earnings
|
831
|
|
|
3,499
|
|
|
—
|
|
|
(1,501
|
)
|
||||
Ending balance
|
$
|
26,581
|
|
|
$
|
(24,995
|
)
|
|
$
|
—
|
|
|
$
|
(28,746
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period
|
$
|
831
|
|
|
$
|
3,499
|
|
|
$
|
—
|
|
|
$
|
(1,501
|
)
|
|
|
Fair Value as of
|
|
|
|
Significant Unobservable Input
|
|
|
|
|
||||||
Financial Instrument
|
|
June 30,
2016 |
|
December 31, 2015
|
|
Valuation Technique
|
|
|
Range
|
|
Weighted Average
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate investment – Limited partnership interests
|
|
$
|
26,581
|
|
|
$
|
25,750
|
|
|
Market approach
(value of underlying assets) |
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
Contingent consideration liability
|
|
(24,995
|
)
|
|
(28,494
|
)
|
|
Discounted cash flow
|
|
Assumed % of total potential contingent payments
|
|
0% – 100%
|
|
48%
|
|
As of June 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt – bank debt
|
$
|
—
|
|
|
$
|
2,562,192
|
|
|
$
|
189,909
|
|
|
$
|
2,752,101
|
|
|
$
|
—
|
|
|
$
|
7,891,929
|
|
|
$
|
1,871,375
|
|
|
$
|
9,763,304
|
|
Corporate debt – all other
|
—
|
|
|
375,435
|
|
|
1,890
|
|
|
377,325
|
|
|
5,450
|
|
|
4,902,226
|
|
|
3,009,164
|
|
|
7,916,840
|
|
||||||||
Equities – common stock
|
149,658
|
|
|
17,361
|
|
|
3,991
|
|
|
171,010
|
|
|
4,836,422
|
|
|
256,604
|
|
|
8,729,202
|
|
|
13,822,228
|
|
||||||||
Equities – preferred stock
|
1,752
|
|
|
—
|
|
|
—
|
|
|
1,752
|
|
|
—
|
|
|
—
|
|
|
1,363,542
|
|
|
1,363,542
|
|
||||||||
Real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,317
|
|
|
—
|
|
|
9,655,270
|
|
|
9,716,587
|
|
||||||||
Real estate loan portfolios
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,597,405
|
|
|
2,597,405
|
|
||||||||
Total investments
|
151,410
|
|
|
2,954,988
|
|
|
195,790
|
|
|
3,302,188
|
|
|
4,903,189
|
|
|
13,050,759
|
|
|
27,225,958
|
|
|
45,179,906
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign-currency forward contracts
|
—
|
|
|
416
|
|
|
—
|
|
|
416
|
|
|
—
|
|
|
156,234
|
|
|
—
|
|
|
156,234
|
|
||||||||
Swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,544
|
|
|
—
|
|
|
16,544
|
|
||||||||
Options and futures
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
25,559
|
|
|
—
|
|
|
25,559
|
|
||||||||
Swaptions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||||
Total derivatives
|
4
|
|
|
416
|
|
|
—
|
|
|
420
|
|
|
—
|
|
|
198,351
|
|
|
—
|
|
|
198,351
|
|
||||||||
Total assets
|
$
|
151,414
|
|
|
$
|
2,955,404
|
|
|
$
|
195,790
|
|
|
$
|
3,302,608
|
|
|
$
|
4,903,189
|
|
|
$
|
13,249,110
|
|
|
$
|
27,225,958
|
|
|
$
|
45,378,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO debt obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior secured notes
(1)
|
$
|
—
|
|
|
$
|
(2,594,841
|
)
|
|
$
|
—
|
|
|
$
|
(2,594,841
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Subordinated notes
(1)
|
—
|
|
|
(83,725
|
)
|
|
—
|
|
|
(83,725
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total CLO debt obligations
|
—
|
|
|
(2,678,566
|
)
|
|
—
|
|
|
(2,678,566
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Securities sold short:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities
|
(61,821
|
)
|
|
—
|
|
|
(17
|
)
|
|
(61,838
|
)
|
|
(91,246
|
)
|
|
—
|
|
|
—
|
|
|
(91,246
|
)
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign-currency forward contracts
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(64,364
|
)
|
|
—
|
|
|
(64,364
|
)
|
||||||||
Swaps
|
—
|
|
|
(921
|
)
|
|
—
|
|
|
(921
|
)
|
|
—
|
|
|
(223,359
|
)
|
|
(8,251
|
)
|
|
(231,610
|
)
|
||||||||
Options and futures
|
(443
|
)
|
|
—
|
|
|
—
|
|
|
(443
|
)
|
|
(88
|
)
|
|
(4,146
|
)
|
|
—
|
|
|
(4,234
|
)
|
||||||||
Total derivatives
|
(443
|
)
|
|
(932
|
)
|
|
—
|
|
|
(1,375
|
)
|
|
(88
|
)
|
|
(291,869
|
)
|
|
(8,251
|
)
|
|
(300,208
|
)
|
||||||||
Total liabilities
|
$
|
(62,264
|
)
|
|
$
|
(2,679,498
|
)
|
|
$
|
(17
|
)
|
|
$
|
(2,741,779
|
)
|
|
$
|
(91,334
|
)
|
|
$
|
(291,869
|
)
|
|
$
|
(8,251
|
)
|
|
$
|
(391,454
|
)
|
|
|
|
|
|
(1)
|
The fair value of CLO liabilities is classified based on the more observable fair value of CLO assets. Please see notes 2 and 9 for more information.
|
|
|
Corporate Debt – Bank Debt
|
|
Corporate Debt – All Other
|
|
Equities – Common Stock
|
|
Equities – Preferred Stock
|
|
Real Estate
|
|
Real Estate Loan Portfolios
|
|
Swaps
|
|
Other
|
|
Total
|
||||||||||||||||||
Three Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
200,811
|
|
|
$
|
1,853
|
|
|
$
|
4,326
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
206,990
|
|
|
Transfers into Level III
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Transfers out of Level III
|
(1,962
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,962
|
)
|
||||||||||
Purchases
|
2,239
|
|
|
1
|
|
|
157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,397
|
|
||||||||||
Sales
|
(10,886
|
)
|
|
—
|
|
|
(525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,411
|
)
|
||||||||||
Realized gains (losses), net
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
||||||||||
Unrealized appreciation (depreciation), net
|
(382
|
)
|
|
36
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
||||||||||
Ending balance
|
$
|
189,909
|
|
|
$
|
1,890
|
|
|
$
|
3,974
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
195,773
|
|
|
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
|
$
|
(2,103
|
)
|
|
$
|
36
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,051
|
)
|
|
Three Months Ended
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
1,573,508
|
|
|
$
|
2,772,859
|
|
|
$
|
10,156,394
|
|
|
$
|
1,381,135
|
|
|
$
|
9,728,967
|
|
|
$
|
2,406,252
|
|
|
$
|
(6,988
|
)
|
|
$
|
3,576
|
|
|
$
|
28,015,703
|
|
|
Transfers into Level III
|
9,598
|
|
|
17,208
|
|
|
50,976
|
|
|
11,199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,981
|
|
||||||||||
Transfers out of Level III
|
(42,396
|
)
|
|
(78,250
|
)
|
|
(523,407
|
)
|
|
(20,382
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(664,435
|
)
|
||||||||||
Purchases
|
42,721
|
|
|
314,898
|
|
|
341,691
|
|
|
147,396
|
|
|
658,056
|
|
|
476,637
|
|
|
—
|
|
|
—
|
|
|
1,981,399
|
|
||||||||||
Sales
|
(185,407
|
)
|
|
(84,407
|
)
|
|
(349,498
|
)
|
|
(2,760
|
)
|
|
(890,418
|
)
|
|
(213,495
|
)
|
|
—
|
|
|
—
|
|
|
(1,725,985
|
)
|
||||||||||
Realized gains (losses), net
|
10,604
|
|
|
(35,773
|
)
|
|
73,211
|
|
|
(1,153
|
)
|
|
432,658
|
|
|
67,817
|
|
|
—
|
|
|
—
|
|
|
547,364
|
|
||||||||||
Unrealized appreciation (depreciation), net
|
(9,351
|
)
|
|
8,839
|
|
|
(46,358
|
)
|
|
144,303
|
|
|
(356,361
|
)
|
|
42,261
|
|
|
(1,656
|
)
|
|
820
|
|
|
(217,503
|
)
|
||||||||||
Ending balance
|
$
|
1,399,277
|
|
|
$
|
2,915,374
|
|
|
$
|
9,703,009
|
|
|
$
|
1,659,738
|
|
|
$
|
9,572,902
|
|
|
$
|
2,779,472
|
|
|
$
|
(8,644
|
)
|
|
$
|
4,396
|
|
|
$
|
28,025,524
|
|
|
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
|
$
|
(12,235
|
)
|
|
$
|
(76,879
|
)
|
|
$
|
(12,504
|
)
|
|
$
|
1,253
|
|
|
$
|
(335,645
|
)
|
|
$
|
27,778
|
|
|
$
|
(225
|
)
|
|
$
|
820
|
|
|
$
|
(407,637
|
)
|
|
|
Corporate Debt – Bank Debt
|
|
Corporate Debt – All Other
|
|
Equities – Common Stock
|
|
Equities – Preferred Stock
|
|
Real Estate
|
|
Real Estate Loan Portfolios
|
|
Swaps
|
|
Other
|
|
Total
|
||||||||||||||||||
Six Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
1,871,375
|
|
|
$
|
3,009,164
|
|
|
$
|
8,729,202
|
|
|
$
|
1,363,542
|
|
|
$
|
9,655,270
|
|
|
$
|
2,597,405
|
|
|
$
|
(8,251
|
)
|
|
$
|
—
|
|
|
$
|
27,217,707
|
|
|
Cumulative-effect adjustment from adoption of accounting guidance
|
(1,672,305
|
)
|
|
(3,007,287
|
)
|
|
(8,725,026
|
)
|
|
(1,363,542
|
)
|
|
(9,655,270
|
)
|
|
(2,597,405
|
)
|
|
8,251
|
|
|
—
|
|
|
(27,012,584
|
)
|
||||||||||
Transfers into Level III
|
37,535
|
|
|
—
|
|
|
398
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,933
|
|
||||||||||
Transfers out of Level III
|
(42,670
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,670
|
)
|
||||||||||
Purchases
|
9,378
|
|
|
2
|
|
|
157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,537
|
|
||||||||||
Sales
|
(12,872
|
)
|
|
—
|
|
|
(821
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,693
|
)
|
||||||||||
Realized gains (losses), net
|
115
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
||||||||||
Unrealized appreciation (depreciation), net
|
(647
|
)
|
|
11
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(572
|
)
|
||||||||||
Ending balance
|
$
|
189,909
|
|
|
$
|
1,890
|
|
|
$
|
3,974
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
195,773
|
|
|
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
|
$
|
(647
|
)
|
|
$
|
11
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(572
|
)
|
|
Six Months Ended
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
1,555,656
|
|
|
$
|
2,750,661
|
|
|
$
|
9,056,579
|
|
|
$
|
1,320,752
|
|
|
$
|
9,216,056
|
|
|
$
|
2,399,105
|
|
|
$
|
(10,687
|
)
|
|
$
|
3,576
|
|
|
$
|
26,291,698
|
|
|
Transfers into Level III
|
116,533
|
|
|
17,208
|
|
|
377,563
|
|
|
15,835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
527,139
|
|
||||||||||
Transfers out of Level III
|
(145,998
|
)
|
|
(110,084
|
)
|
|
(523,423
|
)
|
|
(32,583
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(812,088
|
)
|
||||||||||
Purchases
|
224,751
|
|
|
566,463
|
|
|
1,194,127
|
|
|
205,128
|
|
|
949,574
|
|
|
605,915
|
|
|
—
|
|
|
—
|
|
|
3,745,958
|
|
||||||||||
Sales
|
(340,767
|
)
|
|
(163,351
|
)
|
|
(442,219
|
)
|
|
(54,947
|
)
|
|
(985,355
|
)
|
|
(303,387
|
)
|
|
—
|
|
|
—
|
|
|
(2,290,026
|
)
|
||||||||||
Realized gains (losses), net
|
25,407
|
|
|
(32,499
|
)
|
|
(66,126
|
)
|
|
37,384
|
|
|
479,057
|
|
|
98,628
|
|
|
—
|
|
|
—
|
|
|
541,851
|
|
||||||||||
Unrealized appreciation (depreciation), net
|
(36,305
|
)
|
|
(113,024
|
)
|
|
106,508
|
|
|
168,169
|
|
|
(86,430
|
)
|
|
(20,789
|
)
|
|
2,043
|
|
|
820
|
|
|
20,992
|
|
||||||||||
Ending balance
|
$
|
1,399,277
|
|
|
$
|
2,915,374
|
|
|
$
|
9,703,009
|
|
|
$
|
1,659,738
|
|
|
$
|
9,572,902
|
|
|
$
|
2,779,472
|
|
|
$
|
(8,644
|
)
|
|
$
|
4,396
|
|
|
$
|
28,025,524
|
|
|
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
|
$
|
(17,619
|
)
|
|
$
|
(43,928
|
)
|
|
$
|
192,837
|
|
|
$
|
109,462
|
|
|
$
|
92,476
|
|
|
$
|
(35,272
|
)
|
|
$
|
2,043
|
|
|
$
|
820
|
|
|
$
|
300,819
|
|
Investment Type
|
|
Fair Value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
(9)(10)(11)
|
|
Range
|
|
Weighted Average
(12)
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Credit-oriented investments:
|
|
|
|
|
|
|
|
|
|
|
||
Consumer
discretionary:
|
|
$
|
2,564
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
12% – 15%
|
|
13%
|
|
|
36,217
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Financials:
|
|
2,503
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
15% - 17%
|
|
16%
|
|
|
|
21,341
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Industrials:
|
|
30,458
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 16%
|
|
7%
|
|
|
|
38,727
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Consumer Staples:
|
|
6,221
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 7%
|
|
6%
|
|
|
|
19,042
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Other:
|
|
11,913
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
9% – 27%
|
|
12%
|
|
|
|
2,771
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
7x - 9x
|
|
8x
|
|
|
|
20,042
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
||
|
|
601
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
4x – 13x
|
|
5x
|
|
|
|
3,373
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Total Level III
investments |
|
$
|
195,773
|
|
|
|
|
|
|
|
|
|
Investment Type
|
|
Fair Value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
(9)(10)(11)
|
|
Range
|
|
Weighted Average
(12)
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Credit-oriented investments:
|
|
|
|
|
|
|
|
|
|
|
||
Consumer
discretionary: |
|
$
|
289,107
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 15%
|
|
12%
|
|
|
451,584
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
3x – 10x
|
|
6x
|
|
|
|
232,995
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
156,160
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Financials:
|
|
595,066
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
6% – 14%
|
|
11%
|
|
|
|
259,669
|
|
|
Market approach
(value of underlying assets) (2)(4) |
|
Underlying asset multiple
|
|
1.1x – 1.5x
|
|
1.2x
|
|
|
|
232,958
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
241,667
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Industrials:
|
|
135,808
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 15%
|
|
13%
|
|
|
|
55,310
|
|
|
Discounted cash flow
(1)
/
Sales approach (8) |
|
Discount rate / Market transactions
|
|
9% – 11%
|
|
10%
|
|
|
|
7,549
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
5x – 9x
|
|
7x
|
|
|
|
219,121
|
|
|
Market approach
(value of underlying assets) (2)(4) |
|
Underlying asset multiple
|
|
0.7x – 1.0x
|
|
0.9x
|
|
|
|
45,647
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
24,247
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Materials:
|
|
417,749
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
11% – 14%
|
|
14%
|
|
|
|
128,230
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
7x – 9x
|
|
8x
|
|
|
|
3,938
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
71,174
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Information
technology: |
|
199,841
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
6% – 13%
|
|
12%
|
|
|
|
143,596
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
6x – 8x
|
|
7x
|
|
|
|
63,594
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
62,353
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Other:
|
|
442,797
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 20%
|
|
12%
|
|
|
|
60,643
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
331,485
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
Investment Type
|
|
Fair Value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
(9)(10)(11)
|
|
Range
|
|
Weighted Average
(12)
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
||
Financials:
|
|
58,352
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
14% – 16%
|
|
15%
|
|
|
|
1,029,904
|
|
|
Market approach
(value of underlying assets) (2)(4) |
|
Underlying asset multiple
|
|
1.0x – 1.5x
|
|
1.4x
|
|
|
|
189,714
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
Industrials:
|
|
37,130
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
10% – 12%
|
|
11%
|
|
|
|
2,385,995
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
5x – 18x
|
|
9x
|
|
|
|
1,287,791
|
|
|
Market approach
(value of underlying assets) (2)(4) |
|
Underlying asset multiple
|
|
0.9x – 1.0x
|
|
1.0x
|
|
|
|
248,894
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
53,005
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Materials:
|
|
1,238,760
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
7x – 9x
|
|
8x
|
|
|
|
25,133
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
Utilities
|
|
616,596
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
8x – 11x
|
|
9x
|
|
|
|
266,185
|
|
|
Other
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
200,112
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
Other:
|
|
1,898,334
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
6x – 18x
|
|
10x
|
|
|
|
164,026
|
|
|
Market approach
(value of underlying assets) (2)(4) |
|
Underlying asset multiple
|
|
1.1x – 1.3x
|
|
1.2x
|
|
|
|
221,350
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
171,463
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
(discount not applicable) |
|
Not applicable
|
|
Not applicable
|
|
Real estate-oriented investments:
|
|
|
|
|
|
|
|
|
|
|
||
|
|
3,863,639
|
|
|
Discounted cash flow
(1)(7)
|
|
Discount rate
|
|
6% – 44%
|
|
13%
|
|
|
|
|
|
|
|
Terminal capitalization rate
|
|
5% – 10%
|
|
7%
|
||
|
|
|
|
|
|
Direct capitalization rate
|
|
5% – 10%
|
|
7%
|
||
|
|
|
|
|
|
Net operating income growth rate
|
|
0% – 38%
|
|
10%
|
||
|
|
|
|
|
|
Absorption rate
|
|
25% – 44%
|
|
30%
|
||
|
|
132,640
|
|
|
Discounted cash flow
(1)
/
Sales approach (8) |
|
Discount rate / Market transactions
|
|
6% – 8%
|
|
7%
|
|
|
|
218,817
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
9x – 11x
|
|
11x
|
|
|
|
992,695
|
|
|
Market approach
(value of underlying assets) (2)(4) |
|
Underlying asset multiple
|
|
1x – 1.8x
|
|
1.6x
|
|
|
|
512,120
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
2,385,895
|
|
|
Recent market information
(6)
|
|
Quoted prices / discount
|
|
0% – 5%
|
|
3%
|
|
|
|
1,385,418
|
|
|
Sales approach
(8)
|
|
Market transactions
|
|
Not applicable
|
|
Not applicable
|
|
|
|
164,046
|
|
|
Other
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
Real estate loan portfolios:
|
|
|
|
|
|
|
|
|
|
|
||
|
|
2,101,463
|
|
|
Discounted cash flow
(1)(7)
|
|
Discount rate
|
|
7% – 23%
|
|
13%
|
|
|
|
495,942
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Level III
investments |
|
$
|
27,217,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
A discounted cash-flow method is generally used to value performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments, real estate-oriented investments and real estate loan portfolios.
|
(2)
|
A market approach is generally used to value distressed investments and investments in which the consolidated funds have a controlling interest in the underlying issuer.
|
(3)
|
Earnings multiples are based on comparable public companies and transactions with comparable companies. The Company typically utilizes multiples of EBITDA; however, in certain cases the Company may use other earnings multiples believed to be most relevant to the investment. The Company typically applies the multiple to trailing twelve-months’ EBITDA. However, in certain cases other earnings measures, such as pro forma EBITDA, may be utilized if deemed to be more relevant.
|
(4)
|
A market approach using the value of underlying assets utilizes a multiple, based on comparable companies, of underlying assets or the net book value of the portfolio company. The Company typically obtains the value of underlying assets from the underlying portfolio company’s financial statements or from pricing vendors. The Company may value the underlying assets by using prices and other relevant information from market transactions involving comparable assets.
|
(5)
|
Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date.
|
(6)
|
Certain investments are valued using quoted prices for the subject or similar securities. Generally, investments valued in this manner are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions.
|
(7)
|
The discounted cash flow model for certain real estate-oriented investments and certain real estate loan portfolios contains a sell-out analysis. In these cases, the discounted cash flow is based on the expected timing and prices of sales of the underlying properties. The Company’s determination of the sales prices of these properties typically includes consideration of prices and other relevant information from market transactions involving comparable properties.
|
(8)
|
The sales approach uses prices and other relevant information generated by market transactions involving comparable assets. The significant unobservable inputs used in the sales approach generally include adjustments to transactions involving comparable assets or properties, adjustments to external or internal appraised values, and the Company’s assumptions regarding market trends or other relevant factors.
|
(9)
|
The discount rate is the significant unobservable input used in the fair-value measurement of performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments and real estate loan portfolios. An increase (decrease) in the discount rate would result in a lower (higher) fair-value measurement.
|
(10)
|
Multiple of either earnings or underlying assets is the significant unobservable input used in the market approach for the fair-value measurement of distressed credit-oriented investments, credit-oriented investments in which the consolidated funds have a controlling interest in the underlying issuer, equity investments and certain real estate-oriented investments. An increase (decrease) in the multiple would result in a higher (lower) fair-value measurement.
|
(11)
|
The significant unobservable inputs used in the fair-value measurement of real estate investments utilizing a discounted cash flow analysis can include one or more of the following: discount rate, terminal capitalization rate, direct capitalization rate, net operating income growth rate or absorption rate. An increase (decrease) in a discount rate, terminal capitalization rate or direct capitalization rate would result in a lower (higher) fair-value measurement. An increase (decrease) in a net operating income growth rate or absorption rate would result in a higher (lower) fair-value measurement. Generally, a change in a net operating income growth rate or absorption rate would be accompanied by a directionally similar change in the discount rate.
|
(12)
|
The weighted average is based on the fair value of the investments included in the range.
|
As of June 30, 2016
|
Contract
Amount in
Local Currency
|
|
Contract
Amount in
U.S. Dollars
|
|
Market
Value in
U.S. Dollars
|
|
Net Unrealized
Appreciation
(Depreciation)
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Euro, expiring 7/8/16-9/29/17
|
273,050
|
|
|
$
|
307,020
|
|
|
$
|
304,905
|
|
|
$
|
2,115
|
|
USD (buy GBP), expiring 7/29/16-7/31/17
|
92,963
|
|
|
92,963
|
|
|
102,697
|
|
|
(9,734
|
)
|
|||
Japanese Yen, expiring 9/30/16
|
6,051,400
|
|
|
56,130
|
|
|
58,778
|
|
|
(2,648
|
)
|
|||
Total
|
|
|
$
|
456,113
|
|
|
$
|
466,380
|
|
|
$
|
(10,267
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|||
Euro, expiring 1/8/16-12/30/16
|
246,850
|
|
|
$
|
274,135
|
|
|
$
|
269,603
|
|
|
$
|
4,532
|
|
USD (buy GBP), expiring 1/8/16-10/31/16
|
70,594
|
|
|
70,594
|
|
|
72,476
|
|
|
(1,882
|
)
|
|||
Japanese Yen, expiring 1/29/16-9/30/16
|
5,840,300
|
|
|
48,631
|
|
|
48,692
|
|
|
(61
|
)
|
|||
Total
|
|
|
$
|
393,360
|
|
|
$
|
390,771
|
|
|
$
|
2,589
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Foreign-currency Forward Contracts
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Investment income
|
$
|
6,530
|
|
|
$
|
—
|
|
|
$
|
(2,371
|
)
|
|
$
|
—
|
|
General and administrative expense
(1)
|
(8,221
|
)
|
|
(1,114
|
)
|
|
(18,112
|
)
|
|
22,841
|
|
||||
Total
|
$
|
(1,691
|
)
|
|
$
|
(1,114
|
)
|
|
$
|
(20,483
|
)
|
|
$
|
22,841
|
|
|
|
|
|
|
(1)
|
To the extent that the Company’s freestanding derivatives are utilized to hedge its foreign-currency exposure to investment income and management fees earned from consolidated funds, the related hedged items are eliminated in consolidation, with the derivative impact (a positive number reflects a reduction in expenses) reflected in consolidated general and administrative expense.
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
(298
|
)
|
|
$
|
849
|
|
|
$
|
175,334
|
|
|
$
|
(339,448
|
)
|
Total-return and interest-rate swaps
|
(907
|
)
|
|
222
|
|
|
(2,248
|
)
|
|
(56,008
|
)
|
||||
Options and futures
|
(764
|
)
|
|
60
|
|
|
(21,778
|
)
|
|
(5,150
|
)
|
||||
Swaptions
|
—
|
|
|
—
|
|
|
(1,187
|
)
|
|
1,191
|
|
||||
Total
|
$
|
(1,969
|
)
|
|
$
|
1,131
|
|
|
$
|
150,121
|
|
|
$
|
(399,415
|
)
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
(500
|
)
|
|
$
|
457
|
|
|
$
|
471,310
|
|
|
$
|
(319,064
|
)
|
Total-return and interest-rate swaps
|
(890
|
)
|
|
(1,396
|
)
|
|
(7,174
|
)
|
|
(116,226
|
)
|
||||
Options and futures
|
(849
|
)
|
|
(83
|
)
|
|
(3,977
|
)
|
|
(16,299
|
)
|
||||
Swaptions
|
—
|
|
|
—
|
|
|
(3,007
|
)
|
|
2,342
|
|
||||
Total
|
$
|
(2,239
|
)
|
|
$
|
(1,022
|
)
|
|
$
|
457,152
|
|
|
$
|
(449,247
|
)
|
|
Gross and Net Amounts of Assets (Liabilities) Presented
|
|
Gross Amounts Not Offset in Statements of Financial Condition
|
|
Net Amount
|
||||||||||
As of June 30, 2016
|
|
Derivative Assets (Liabilities)
|
|
Cash Collateral Received (Pledged)
|
|
||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
4,649
|
|
|
$
|
4,289
|
|
|
$
|
—
|
|
|
$
|
360
|
|
Derivative assets of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
416
|
|
|
11
|
|
|
—
|
|
|
405
|
|
||||
Options and futures
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Subtotal
|
420
|
|
|
11
|
|
|
—
|
|
|
409
|
|
||||
Total
|
$
|
5,069
|
|
|
$
|
4,300
|
|
|
$
|
—
|
|
|
$
|
769
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
(14,916
|
)
|
|
$
|
(4,289
|
)
|
|
$
|
—
|
|
|
$
|
(10,627
|
)
|
Interest-rate swaps
|
(712
|
)
|
|
—
|
|
|
—
|
|
|
(712
|
)
|
||||
Subtotal
|
(15,628
|
)
|
|
(4,289
|
)
|
|
—
|
|
|
(11,339
|
)
|
||||
Derivative liabilities of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
(11
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
||||
Total-return and interest-rate swaps
|
(921
|
)
|
|
—
|
|
|
(921
|
)
|
|
—
|
|
||||
Options and futures
|
(443
|
)
|
|
—
|
|
|
(443
|
)
|
|
—
|
|
||||
Subtotal
|
(1,375
|
)
|
|
(11
|
)
|
|
(1,364
|
)
|
|
—
|
|
||||
Total
|
$
|
(17,003
|
)
|
|
$
|
(4,300
|
)
|
|
$
|
(1,364
|
)
|
|
$
|
(11,339
|
)
|
|
Gross and Net Amounts of Assets (Liabilities) Presented
|
|
Gross Amounts Not Offset in Statements of Financial Condition
|
|
Net Amount
|
||||||||||
As of December 31, 2015
|
|
Derivative Assets (Liabilities)
|
|
Cash Collateral Received (Pledged)
|
|
||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
5,875
|
|
|
$
|
2,047
|
|
|
$
|
—
|
|
|
$
|
3,828
|
|
Derivative assets of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
156,234
|
|
|
38,033
|
|
|
—
|
|
|
118,201
|
|
||||
Total-return and interest-rate swaps
|
16,544
|
|
|
4,526
|
|
|
—
|
|
|
12,018
|
|
||||
Options and futures
|
25,559
|
|
|
5,665
|
|
|
—
|
|
|
19,894
|
|
||||
Swaptions
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
198,351
|
|
|
48,238
|
|
|
—
|
|
|
150,113
|
|
||||
Total
|
$
|
204,226
|
|
|
$
|
50,285
|
|
|
$
|
—
|
|
|
$
|
153,941
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
(3,286
|
)
|
|
$
|
(2,047
|
)
|
|
$
|
—
|
|
|
$
|
(1,239
|
)
|
Interest-rate swaps
|
(943
|
)
|
|
—
|
|
|
—
|
|
|
(943
|
)
|
||||
Subtotal
|
(4,229
|
)
|
|
(2,047
|
)
|
|
—
|
|
|
(2,182
|
)
|
||||
Derivative liabilities of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
(64,364
|
)
|
|
(38,788
|
)
|
|
—
|
|
|
(25,576
|
)
|
||||
Total-return and interest-rate swaps
|
(231,610
|
)
|
|
(5,304
|
)
|
|
(202,677
|
)
|
|
(23,629
|
)
|
||||
Options and futures
|
(4,234
|
)
|
|
(4,146
|
)
|
|
(88
|
)
|
|
—
|
|
||||
Subtotal
|
(300,208
|
)
|
|
(48,238
|
)
|
|
(202,765
|
)
|
|
(49,205
|
)
|
||||
Total
|
$
|
(304,437
|
)
|
|
$
|
(50,285
|
)
|
|
$
|
(202,765
|
)
|
|
$
|
(51,387
|
)
|
|
As of
|
||||||
|
June 30,
2016
|
|
December 31,
2015
|
||||
|
|
|
|
||||
Furniture, equipment and capitalized software
|
$
|
18,055
|
|
|
$
|
16,820
|
|
Leasehold improvements
|
45,478
|
|
|
43,107
|
|
||
Corporate airplane
|
12,439
|
|
|
12,439
|
|
||
Other
|
3,373
|
|
|
3,295
|
|
||
Fixed assets
|
79,345
|
|
|
75,661
|
|
||
Accumulated depreciation
|
(42,127
|
)
|
|
(36,394
|
)
|
||
Fixed assets, net
|
$
|
37,218
|
|
|
$
|
39,267
|
|
|
As of
|
||||||
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
|
||||
Contractual rights
|
$
|
28,017
|
|
|
$
|
28,017
|
|
Accumulated amortization
|
(7,672
|
)
|
|
(5,671
|
)
|
||
Intangible assets, net
|
$
|
20,345
|
|
|
$
|
22,346
|
|
|
As of
|
||||||
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
||||
$50,000, 6.09%, issued in June 2006, payable on June 6, 2016
|
$
|
—
|
|
|
$
|
50,000
|
|
$50,000, 5.82%, issued in November 2006, payable on November 8, 2016
|
50,000
|
|
|
50,000
|
|
||
$250,000, 6.75%, issued in November 2009, payable on December 2, 2019
|
250,000
|
|
|
250,000
|
|
||
$250,000, rate as described below, term loan issued in March 2014, payable on March 31, 2021
|
250,000
|
|
|
250,000
|
|
||
$50,000, 3.91%, issued in September 2014, payable on September 3, 2024
|
50,000
|
|
|
50,000
|
|
||
$100,000, 4.01%, issued in September 2014, payable on September 3, 2026
|
100,000
|
|
|
100,000
|
|
||
$100,000, 4.21%, issued in September 2014, payable on September 3, 2029
|
100,000
|
|
|
100,000
|
|
||
Total remaining principal
|
800,000
|
|
|
850,000
|
|
||
Less: Debt issuance costs
|
(4,042
|
)
|
|
(3,646
|
)
|
||
Debt obligations
|
$
|
795,958
|
|
|
$
|
846,354
|
|
Last six months of 2016
|
$
|
50,000
|
|
2017
|
—
|
|
|
2018
|
—
|
|
|
2019
|
250,000
|
|
|
2020
|
—
|
|
|
Thereafter
|
500,000
|
|
|
Total
|
$
|
800,000
|
|
|
Outstanding Amount as of
|
|
Facility Capacity
|
|
LIBOR
Margin
(1)
|
|
Maturity
|
|
Commitment Fee Rate
|
|
L/C Fee
|
||||||||
Credit Agreement
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||
Credit facilities
|
$
|
65,700
|
|
(2)
|
$
|
2,381,324
|
|
|
$
|
450,000
|
|
|
1.25%
|
|
4/19/2019
|
|
N/A
|
|
N/A
|
Revolving credit facilities
|
—
|
|
|
2,718,394
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
||||
Senior variable rate notes
|
—
|
|
|
1,363,044
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
||||
Total debt obligations
|
65,700
|
|
|
6,462,762
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Debt issuance costs
|
—
|
|
|
(20,020
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Total debt obligations, net
|
$
|
65,700
|
|
|
$
|
6,442,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The facility bears interest at an annual rate of LIBOR plus the applicable margin.
|
(2)
|
The credit facility is collateralized by the portfolio investments and cash and cash-equivalents of the borrower.
|
|
As of June 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||
|
Carrying Value
(1)
|
|
Weighted Average Interest Rate
|
|
Weighted Average Remaining Maturity (years)
|
|
Carrying Value
|
|
Fair Value
(2)
|
|
Weighted Average Interest Rate
|
|
Weighted Average Remaining Maturity (years)
|
||||||
Senior secured notes
(3)
|
$
|
455,509
|
|
|
2.63%
|
|
8.8
|
|
$
|
457,196
|
|
|
$
|
447,460
|
|
|
2.37%
|
|
9.3
|
Senior secured notes
(4)
|
456,770
|
|
|
2.81%
|
|
10.5
|
|
454,423
|
|
|
446,558
|
|
|
2.52%
|
|
11.0
|
|||
Senior secured notes
(5)
|
73,833
|
|
|
2.97%
|
|
2.5
|
|
79,914
|
|
|
78,632
|
|
|
2.96%
|
|
3.0
|
|||
Senior secured notes
(6)
|
372,735
|
|
|
2.26%
|
|
11.2
|
|
363,709
|
|
|
357,626
|
|
|
2.26%
|
|
11.7
|
|||
Senior secured notes
(7)
|
457,846
|
|
|
2.72%
|
|
11.5
|
|
455,295
|
|
|
448,933
|
|
|
2.54%
|
|
12.0
|
|||
Senior secured notes
(8)
|
373,649
|
|
|
2.29%
|
|
11.8
|
|
361,142
|
|
|
359,914
|
|
|
2.29%
|
|
12.3
|
|||
Senior secured notes
(9)
|
404,499
|
|
|
2.28%
|
|
12.9
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|||
Subordinated note
(10)
|
10,758
|
|
|
N/A
|
|
10.5
|
|
25,500
|
|
|
16,400
|
|
|
N/A
|
|
11.0
|
|||
Subordinated note
(10)
|
17,896
|
|
|
N/A
|
|
11.2
|
|
21,183
|
|
|
15,876
|
|
|
N/A
|
|
11.7
|
|||
Subordinated note
(10)
|
18,125
|
|
|
N/A
|
|
11.5
|
|
25,500
|
|
|
18,337
|
|
|
N/A
|
|
12.0
|
|||
Subordinated note
(10)
|
14,766
|
|
|
N/A
|
|
11.8
|
|
17,924
|
|
|
11,928
|
|
|
N/A
|
|
12.3
|
|||
Subordinated note
(10)
|
22,180
|
|
|
N/A
|
|
12.9
|
|
12,036
|
|
|
12,036
|
|
|
N/A
|
|
1.6
|
|||
Term loan
|
—
|
|
|
—
|
|
—
|
|
81,238
|
|
|
81,238
|
|
|
1.20%
|
|
1.6
|
|||
Total CLO debt obligations
|
2,678,566
|
|
|
|
|
|
|
2,355,060
|
|
|
$
|
2,294,938
|
|
|
|
|
|
||
Less: Debt issuance costs
|
—
|
|
|
|
|
|
|
(24,701
|
)
|
|
|
|
|
|
|
||||
Total CLO debt obligations, net
|
$
|
2,678,566
|
|
|
|
|
|
|
$
|
2,330,359
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company adopted the measurement alternative guidance for collateralized financing entities on a modified retrospective approach as of January 1, 2016. Upon adoption, the Company elected the fair value option for the financial liabilities of the consolidated CLOs and determined that the fair value of the CLO assets was more observable than the fair value of the CLO liabilities. Accordingly, the fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Please see notes 2 and 5 for more information.
|
(2)
|
The debt obligations of the CLOs are Level III valuations and were valued using prices obtained from pricing vendors or recent transactions. Financial instruments that are valued using quoted prices for the subject or similar securities are generally classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. Financial instruments that are valued based on recent transactions are generally defined as securities purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date. For certain recently issued debt obligations, the carrying value approximates fair value.
|
(3)
|
The weighted average interest rate is based on LIBOR plus
2.01%
.
|
(4)
|
The weighted average interest rate is based on LIBOR plus
2.17%
.
|
(5)
|
The interest rate was LIBOR plus a margin determined based on a formula as defined in the respective borrowing agreements, which incorporate different borrowing values based on the characteristics of collateral investments purchased. The weighted average unused commitment fee rate ranged from
0%
to
2.0%
.
|
(6)
|
The weighted average interest rate is based on EURIBOR (subject to a
zero
floor) plus
2.26%
.
|
(7)
|
The weighted average interest rate is based on LIBOR plus
2.09%
.
|
(8)
|
The weighted average interest rate is based on EURIBOR (subject to a
zero
floor) plus
2.29%
.
|
(9)
|
The weighted average interest rate is based on EURIBOR (subject to a
zero
floor) plus
2.28%
.
|
(10)
|
The subordinated notes do not have a contractual interest rate; instead, they receive distributions from the excess cash flows generated by the CLO.
|
Last six months of 2016
|
$
|
—
|
|
2017
|
—
|
|
|
2018
|
73,833
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
Thereafter
|
2,652,551
|
|
|
Total
|
$
|
2,726,384
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Beginning balance
|
$
|
38,173,125
|
|
|
$
|
41,681,155
|
|
Cumulative-effect adjustment from adoption of accounting guidance
|
(37,969,042
|
)
|
|
—
|
|
||
Contributions
|
64,321
|
|
|
3,309,316
|
|
||
Distributions
|
(21,919
|
)
|
|
(3,711,727
|
)
|
||
Net income
|
1,989
|
|
|
742,608
|
|
||
Change in distributions payable
|
(822
|
)
|
|
544,060
|
|
||
Change in accrued or deferred contributions
|
—
|
|
|
12,267
|
|
||
Foreign currency translation and other
|
1,605
|
|
|
(364,239
|
)
|
||
Ending balance
|
$
|
249,257
|
|
|
$
|
42,213,440
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Weighted average Oaktree Operating Group units outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||
OCGH non-controlling interest
|
92,440
|
|
|
105,467
|
|
|
92,177
|
|
|
106,813
|
|
||||
Class A unitholders
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
||||
Total weighted average units outstanding
|
155,057
|
|
|
153,839
|
|
|
154,433
|
|
|
153,540
|
|
||||
Oaktree Operating Group net income:
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to OCGH non-controlling interest
|
$
|
83,256
|
|
|
$
|
54,240
|
|
|
$
|
142,082
|
|
|
$
|
163,006
|
|
Net income attributable to Class A unitholders
|
56,397
|
|
|
24,878
|
|
|
96,012
|
|
|
70,188
|
|
||||
Oaktree Operating Group net income
(1)
|
$
|
139,653
|
|
|
$
|
79,118
|
|
|
$
|
238,094
|
|
|
$
|
233,194
|
|
Net income attributable to Oaktree Capital Group, LLC:
|
|
|
|
|
|
|
|
|
|
||||||
Oaktree Operating Group net income attributable to Class A unitholders
|
$
|
56,397
|
|
|
$
|
24,878
|
|
|
$
|
96,012
|
|
|
$
|
70,188
|
|
Non-Operating Group expenses
|
(201
|
)
|
|
(626
|
)
|
|
(465
|
)
|
|
(960
|
)
|
||||
Income tax expense of Intermediate Holding Companies
|
(7,149
|
)
|
|
(4,438
|
)
|
|
(18,422
|
)
|
|
(11,161
|
)
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
|
|
|
|
|
(1)
|
Oaktree Operating Group net income does not include amounts attributable to other non-controlling interests, which amounted to
$1,212
and
$1,269
for the three months ended June 30, 2016 and 2015, respectively, and
$2,420
and
$604
for the six months ended June 30, 2016, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
Equity reallocation between controlling and non-controlling interests
|
645
|
|
|
(559
|
)
|
|
8,126
|
|
|
45,202
|
|
||||
Change from net income attributable to Oaktree Capital Group, LLC and transfers from non-controlling interests
|
$
|
49,692
|
|
|
$
|
19,255
|
|
|
$
|
85,251
|
|
|
$
|
103,269
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income per Class A unit (basic and diluted):
|
(in thousands, except per unit amounts)
|
||||||||||||||
|
|
|
|
|
|
|
|||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
Weighted average number of Class A units outstanding (basic and diluted)
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
||||
Basic and diluted net income per Class A unit
|
$
|
0.78
|
|
|
$
|
0.41
|
|
|
$
|
1.24
|
|
|
$
|
1.24
|
|
|
Class A Units
|
|
OCGH Units
|
||||||||||
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
|
||||||
|
|
|
|
|
|
|
|
||||||
Balance, December 31, 2015
|
2,376,340
|
|
|
$
|
38.18
|
|
|
2,265,967
|
|
|
$
|
40.70
|
|
Granted
|
787,103
|
|
|
46.93
|
|
|
629,667
|
|
|
37.56
|
|
||
Vested
|
(922,746
|
)
|
|
37.45
|
|
|
(312,663
|
)
|
|
39.10
|
|
||
Forfeited
|
(41,301
|
)
|
|
37.66
|
|
|
(110,932
|
)
|
|
39.93
|
|
||
Balance, June 30, 2016
|
2,199,396
|
|
|
$
|
41.63
|
|
|
2,472,039
|
|
|
$
|
40.14
|
|
|
As of
|
||||||
|
June 30,
2016
|
|
December 31,
2015
|
||||
Due from affiliates:
|
|
|
|
||||
Loans
|
$
|
23,902
|
|
|
$
|
29,718
|
|
Amounts due from unconsolidated funds
|
40,395
|
|
|
777
|
|
||
Management fees and incentive income due from unconsolidated funds
|
48,811
|
|
|
—
|
|
||
Payments made on behalf of unconsolidated entities
|
3,710
|
|
|
3,788
|
|
||
Non-interest bearing advances made to certain non-controlling interest holders and employees
|
1,045
|
|
|
1,616
|
|
||
Total due from affiliates
|
$
|
117,863
|
|
|
$
|
35,899
|
|
Due to affiliates:
|
|
|
|
|
|||
Due to OCGH unitholders in connection with the tax receivable agreement (please see note 14)
|
$
|
356,851
|
|
|
$
|
356,851
|
|
Amounts due to senior executives, certain non-controlling interest holders and employees
|
1,865
|
|
|
—
|
|
||
Total due to affiliates
|
$
|
358,716
|
|
|
$
|
356,851
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management fees
|
$
|
197,450
|
|
|
$
|
190,197
|
|
|
$
|
398,720
|
|
|
$
|
380,292
|
|
Incentive income
|
87,647
|
|
|
61,148
|
|
|
184,235
|
|
|
214,027
|
|
||||
Investment income
|
47,725
|
|
|
23,365
|
|
|
62,802
|
|
|
76,823
|
|
||||
Total revenues
|
332,822
|
|
|
274,710
|
|
|
645,757
|
|
|
671,142
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|||||||
Compensation and benefits
|
(99,173
|
)
|
|
(104,767
|
)
|
|
(203,443
|
)
|
|
(213,648
|
)
|
||||
Equity-based compensation
|
(12,445
|
)
|
|
(11,901
|
)
|
|
(23,148
|
)
|
|
(18,924
|
)
|
||||
Incentive income compensation
|
(35,407
|
)
|
|
(29,554
|
)
|
|
(85,156
|
)
|
|
(119,656
|
)
|
||||
General and administrative
|
(30,600
|
)
|
|
(30,335
|
)
|
|
(62,081
|
)
|
|
(59,902
|
)
|
||||
Depreciation and amortization
|
(3,048
|
)
|
|
(2,105
|
)
|
|
(6,208
|
)
|
|
(3,996
|
)
|
||||
Total expenses
|
(180,673
|
)
|
|
(178,662
|
)
|
|
(380,036
|
)
|
|
(416,126
|
)
|
||||
Adjusted net income before interest and other income (expense)
|
152,149
|
|
|
96,048
|
|
|
265,721
|
|
|
255,016
|
|
||||
Interest expense, net of interest income
(2)
|
(7,977
|
)
|
|
(8,782
|
)
|
|
(16,659
|
)
|
|
(17,715
|
)
|
||||
Other income (expense), net
|
(1,527
|
)
|
|
(1,987
|
)
|
|
(1,392
|
)
|
|
(1,996
|
)
|
||||
Adjusted net income
|
$
|
142,645
|
|
|
$
|
85,279
|
|
|
$
|
247,670
|
|
|
$
|
235,305
|
|
|
|
|
|
|
(1)
|
In the fourth quarter of 2015, the definition of adjusted net income was modified to reflect differences with respect to (a) third-party placement costs associated with closed-end funds, which under GAAP are expensed as incurred, but for adjusted net income are capitalized and amortized as general and administrative expense in proportion to the associated management fee stream, and (b) gains and losses resulting from foreign-currency transactions and hedging activities, which under GAAP are recognized as general and administrative expense whether realized or unrealized in the current period, whereas for adjusted net income unrealized gains and losses from foreign-currency hedging activities are deferred until realized, at which time they are included in the same revenue or expense line item as the underlying exposure that was hedged. Foreign-currency transaction gains and losses are included in other income (expense), net. Prior periods have not been recast for the change related to third-party placement costs, but have been recast to retroactively reflect the change related to foreign-currency hedging. Placement costs associated with closed-end funds amounted to
$2.8 million
and
$3.7 million
for the three and six months ended June 30, 2015, respectively, and remain expensed as incurred in those periods for both GAAP and ANI purposes.
|
(2)
|
Interest income was
$1.6 million
and
$1.2 million
for the three months ended June 30, 2016 and 2015, respectively, and
$2.9 million
and
$2.2 million
for the six months ended June 30, 2016 and 2015, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
Incentive income
(1)
|
(54
|
)
|
|
(5,805
|
)
|
|
39,888
|
|
|
11,573
|
|
||||
Incentive income compensation
(1)
|
54
|
|
|
5,657
|
|
|
(39,888
|
)
|
|
(17,553
|
)
|
||||
Investment income
(2)
|
(3,149
|
)
|
|
—
|
|
|
(13,578
|
)
|
|
—
|
|
||||
Equity-based compensation
(3)
|
2,281
|
|
|
4,182
|
|
|
5,473
|
|
|
8,865
|
|
||||
Placement costs
(4)
|
1,210
|
|
|
—
|
|
|
7,914
|
|
|
—
|
|
||||
Foreign-currency hedging
(5)
|
3,665
|
|
|
(67
|
)
|
|
9,531
|
|
|
(5,379
|
)
|
||||
Acquisition-related items
(6)
|
(1,889
|
)
|
|
1,695
|
|
|
(1,498
|
)
|
|
3,502
|
|
||||
Income taxes
(7)
|
8,571
|
|
|
5,485
|
|
|
21,251
|
|
|
13,360
|
|
||||
Non-Operating Group expenses
(8)
|
201
|
|
|
626
|
|
|
465
|
|
|
960
|
|
||||
Non-controlling interests
(8)
|
82,708
|
|
|
53,692
|
|
|
140,987
|
|
|
161,910
|
|
||||
Adjusted net income
|
$
|
142,645
|
|
|
$
|
85,279
|
|
|
$
|
247,670
|
|
|
$
|
235,305
|
|
|
|
|
|
|
(1)
|
This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense between adjusted net income and net income attributable to OCG.
|
(2)
|
This adjustment adds back the effect of differences in the recognition of investment income related to corporate investments in CLOs which under GAAP are marked-to-market but for segment reporting are accounted for at amortized cost, subject to impairment between adjusted net income and net income attributable to OCG.
|
(3)
|
This adjustment adds back the effect of (a) equity-based compensation expense related to unit grants made before the Company’s initial public offering, which is excluded from adjusted net income because it is a non-cash charge that does not affect the Company’s financial position, and (b) differences arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting.
|
(4)
|
This adjustment adds back the effect of timing differences with respect to the recognition of third-party placement costs associated with closed-end funds between adjusted net income and net income attributable to OCG.
|
(5)
|
This adjustment adds back the effect of timing differences associated with the recognition of unrealized gains and losses related to foreign-currency hedging between adjusted net income and net income attributable to OCG.
|
(6)
|
This adjustment adds back the effect of acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability.
|
(7)
|
Because adjusted net income is a pre-tax measure, this adjustment adds back the effect of income tax expense.
|
(8)
|
Because adjusted net income is calculated at the Operating Group level, this adjustment adds back the effect of items applicable to OCG, its Intermediate Holding Companies or non-controlling inter
ests.
|
|
As of or for the Three Months Ended June 30, 2016
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
|
|
|
|
|
|
||||||
Management fees
(1)
|
$
|
197,450
|
|
|
$
|
(2,435
|
)
|
|
$
|
195,015
|
|
Incentive income
(1)
|
87,647
|
|
|
54
|
|
|
87,701
|
|
|||
Investment income
(1)
|
47,725
|
|
|
(6,725
|
)
|
|
41,000
|
|
|||
Total expenses
(2)
|
(180,673
|
)
|
|
(10,975
|
)
|
|
(191,648
|
)
|
|||
Interest expense, net
(3)
|
(7,977
|
)
|
|
(18,753
|
)
|
|
(26,730
|
)
|
|||
Other income (expense), net
(4)
|
(1,527
|
)
|
|
7,075
|
|
|
5,548
|
|
|||
Other income of consolidated funds
(5)
|
—
|
|
|
38,519
|
|
|
38,519
|
|
|||
Income taxes
|
—
|
|
|
(8,571
|
)
|
|
(8,571
|
)
|
|||
Net loss attributable to non-controlling interests in consolidated funds
|
—
|
|
|
(7,319
|
)
|
|
(7,319
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(84,468
|
)
|
|
(84,468
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
142,645
|
|
|
$
|
(93,598
|
)
|
|
$
|
49,047
|
|
Corporate investments
(6)
|
$
|
1,371,978
|
|
|
$
|
(335,740
|
)
|
|
$
|
1,036,238
|
|
Total assets
(7)
|
$
|
3,160,373
|
|
|
$
|
3,464,502
|
|
|
$
|
6,624,875
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts earned from the consolidated funds, (b) for management fees, the reclassification of
$27
of net gains related to foreign-currency hedging activities to general and administrative expense, and (c) for investment income, differences of
$3,149
related to corporate investments in CLOs which under GAAP are marked-to-market but for segment reporting accounted for at amortized cost, subject to impairment.
|
(2)
|
The expense adjustment consists of (a) equity-based compensation expense of
$2,821
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$1,635
, (c) expenses incurred by the Intermediate Holding Companies of
$241
, (d) the effect of timing differences in the recognition of incentive income compensation expense between adjusted net income and net income attributable to OCG of
$54
, (e) acquisition-related items of
$1,889
, (f) adjustments of
$5,545
related to amounts received for contractually reimbursable costs that are classified as expenses for segment reporting and as other income under GAAP, (g) differences of
$540
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (h)
$1,210
related to third-party placement costs, and (i)
$5,168
of net losses related to foreign-currency hedging activities.
|
(3)
|
The interest expense adjustment represents the inclusion of interest expense attributable to third-party investors in CLOs, non-controlling interests of the consolidated funds and the exclusion of segment interest income.
|
(4)
|
The adjustment to other income (expense), net represents adjustments related to (a) amounts received for contractually reimbursable costs of
$5,545
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$1,530
in net losses related to foreign-currency hedging activities to general and administrative expense.
|
(5)
|
The adjustment to other income of consolidated funds primarily represents the inclusion of interest, dividend and other investment income attributable to third-party investors in CLOs and non-controlling interests of the consolidated funds.
|
(6)
|
The adjustment to corporate investments is to remove from segment assets the Company’s investments in the consolidated funds, including investments that are treated as equity- or cost-method investments for segment reporting. The
$1.4 billion
of corporate investments included
$1.1 billion
of equity-method investments.
|
(7)
|
The total assets adjustment represents the inclusion of investments and other assets of the consolidated funds, net of segment assets eliminated in consolidation, which are primarily corporate investments in funds and incentive income receivable.
|
|
As of or for the Three Months Ended June 30, 2015
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
|
|
|
|
|
|
||||||
Management fees
(1)
|
$
|
190,197
|
|
|
$
|
(139,274
|
)
|
|
$
|
50,923
|
|
Incentive income
(1)
|
61,148
|
|
|
(60,584
|
)
|
|
564
|
|
|||
Investment income
(1)
|
23,365
|
|
|
(7,671
|
)
|
|
15,694
|
|
|||
Total expenses
(2)
|
(178,662
|
)
|
|
(67,267
|
)
|
|
(245,929
|
)
|
|||
Interest expense, net
(3)
|
(8,782
|
)
|
|
(43,960
|
)
|
|
(52,742
|
)
|
|||
Other income (expense), net
(4)
|
(1,987
|
)
|
|
4,850
|
|
|
2,863
|
|
|||
Other income (loss) of consolidated funds
(5)
|
—
|
|
|
(82,526
|
)
|
|
(82,526
|
)
|
|||
Income taxes
|
—
|
|
|
(5,485
|
)
|
|
(5,485
|
)
|
|||
Net loss attributable to non-controlling interests in consolidated funds
|
—
|
|
|
391,961
|
|
|
391,961
|
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(55,509
|
)
|
|
(55,509
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
85,279
|
|
|
$
|
(65,465
|
)
|
|
$
|
19,814
|
|
Corporate investments
(6)
|
$
|
1,560,235
|
|
|
$
|
(1,383,557
|
)
|
|
$
|
176,678
|
|
Total assets
(7)
|
$
|
3,245,460
|
|
|
$
|
51,941,170
|
|
|
$
|
55,186,630
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts earned from the consolidated funds and (b) for management fees, the reclassification of
$4,639
of net gains related to foreign-currency hedging activities to general and administrative expense.
|
(2)
|
The expense adjustment consists of (a) equity-based compensation expense of
$4,010
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$54,920
, (c) expenses incurred by the Intermediate Holding Companies of
$652
, (d) the effect of timing differences in the recognition of incentive income compensation expense between adjusted net income and net income attributable to OCG of
$5,657
, (e) acquisition-related items of
$1,695
, (f) adjustments of
$5,513
related to amounts received for contractually reimbursable costs that are classified as expenses for segment reporting and as other income under GAAP, (g) differences of
$173
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (h)
$5,369
of net gains related to foreign-currency hedging activities, and (i) other expenses of
$16
.
|
(3)
|
The interest expense adjustment represents the inclusion of interest expense attributable to non-controlling interests of the consolidated funds and the exclusion of segment interest income.
|
(4)
|
The adjustment to other income (expense), net represents adjustments related to (a) amounts received for contractually reimbursable costs of
$5,513
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$663
of net gains related to foreign-currency hedging activities to general and administrative expense.
|
(5)
|
The adjustment to other income of consolidated funds primarily represents the inclusion of interest, dividend and other investment income (loss) attributable to non-controlling interests of the consolidated funds.
|
(6)
|
The adjustment to corporate investments is to remove from segment assets the Company’s investments in the consolidated funds, including investments that are treated as equity- or cost-method investments for segment reporting. The
$1.6 billion
of corporate investments included
$1.3 billion
of equity-method investments.
|
(7)
|
The total assets adjustment represents the inclusion of investments and other assets of the consolidated funds, net of segment assets eliminated in consolidation, which are primarily corporate investments in funds and incentive income receivable.
|
|
As of or for the Six Months Ended June 30, 2016
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
|
|
|
|
|
|
||||||
Management fees
(1)
|
$
|
398,720
|
|
|
$
|
(5,152
|
)
|
|
$
|
393,568
|
|
Incentive income
(1)
|
184,235
|
|
|
(40,597
|
)
|
|
143,638
|
|
|||
Investment income
(1)
|
62,802
|
|
|
7,645
|
|
|
70,447
|
|
|||
Total expenses
(2)
|
(380,036
|
)
|
|
3,204
|
|
|
(376,832
|
)
|
|||
Interest expense, net
(3)
|
(16,659
|
)
|
|
(37,776
|
)
|
|
(54,435
|
)
|
|||
Other income (expense), net
(4)
|
(1,392
|
)
|
|
12,741
|
|
|
11,349
|
|
|||
Other income of consolidated funds
(5)
|
—
|
|
|
57,518
|
|
|
57,518
|
|
|||
Income taxes
|
—
|
|
|
(21,251
|
)
|
|
(21,251
|
)
|
|||
Net loss attributable to non-controlling interests in consolidated funds
|
—
|
|
|
(2,375
|
)
|
|
(2,375
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(144,502
|
)
|
|
(144,502
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
247,670
|
|
|
$
|
(170,545
|
)
|
|
$
|
77,125
|
|
Corporate investments
(6)
|
$
|
1,371,978
|
|
|
$
|
(335,740
|
)
|
|
$
|
1,036,238
|
|
Total assets
(7)
|
$
|
3,160,373
|
|
|
$
|
3,464,502
|
|
|
$
|
6,624,875
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts earned from the consolidated funds, (b) for management fees, the reclassification of
$689
of net gains related to foreign-currency hedging activities to general and administrative expense, and (c) for investment income, differences of
$13,578
related to corporate investments in CLOs which under GAAP are marked-to-market but for segment reporting accounted for at amortized cost, subject to impairment.
|
(2)
|
The expense adjustment consists of (a) equity-based compensation expense of
$6,066
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$2,676
, (c) expenses incurred by the Intermediate Holding Companies of
$536
, (d) the effect of timing differences in the recognition of incentive income compensation expense between adjusted net income and net income attributable to OCG of
$39,888
, (e) acquisition-related items of
$1,498
, (f) adjustments of
$11,346
related to amounts received for contractually reimbursable costs that are classified as expenses for segment reporting and as other income under GAAP, (g) differences of
$593
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (h)
$7,914
related to third-party placement costs, and (i)
$10,237
of net losses related to foreign-currency hedging activities.
|
(3)
|
The interest expense adjustment represents the inclusion of interest expense attributable to third-party investors in CLOs, non-controlling interests of the consolidated funds and the exclusion of segment interest income.
|
(4)
|
The adjustment to other income (expense), net represents adjustments related to (a) amounts received for contractually reimbursable costs of
$11,346
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$1,395
in net losses related to foreign-currency hedging activities to general and administrative expense.
|
(5)
|
The adjustment to other income of consolidated funds primarily represents the inclusion of interest, dividend and other investment income attributable to third-party investors in CLOs and non-controlling interests of the consolidated funds.
|
(6)
|
The adjustment to corporate investments is to remove from segment assets the Company’s investments in the consolidated funds, including investments that are treated as equity- or cost-method investments for segment reporting. The
$1.4 billion
of corporate investments included
$1.1 billion
of equity-method investments.
|
(7)
|
The total assets adjustment represents the inclusion of investments and other assets of the consolidated funds, net of segment assets eliminated in consolidation, which are primarily corporate investments in funds and incentive income receivable.
|
|
As of or for the Six Months Ended June 30, 2015
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
|
|
|
|
|
|
||||||
Management fees
(1)
|
$
|
380,292
|
|
|
$
|
(278,550
|
)
|
|
$
|
101,742
|
|
Incentive income
(1)
|
214,027
|
|
|
(213,463
|
)
|
|
564
|
|
|||
Investment income
(1)
|
76,823
|
|
|
(48,447
|
)
|
|
28,376
|
|
|||
Total expenses
(2)
|
(416,126
|
)
|
|
(65,777
|
)
|
|
(481,903
|
)
|
|||
Interest expense, net
(3)
|
(17,715
|
)
|
|
(81,596
|
)
|
|
(99,311
|
)
|
|||
Other income (expense), net
(4)
|
(1,996
|
)
|
|
9,553
|
|
|
7,557
|
|
|||
Other income of consolidated funds
(5)
|
—
|
|
|
1,422,716
|
|
|
1,422,716
|
|
|||
Income taxes
|
—
|
|
|
(13,360
|
)
|
|
(13,360
|
)
|
|||
Net income attributable to non-controlling interests in consolidated funds
|
—
|
|
|
(744,704
|
)
|
|
(744,704
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(163,610
|
)
|
|
(163,610
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
235,305
|
|
|
$
|
(177,238
|
)
|
|
$
|
58,067
|
|
Corporate investments
(6)
|
$
|
1,560,235
|
|
|
$
|
(1,383,557
|
)
|
|
$
|
176,678
|
|
Total assets
(7)
|
$
|
3,245,460
|
|
|
$
|
51,941,170
|
|
|
$
|
55,186,630
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts earned from the consolidated funds and (b) for management fees, the reclassification of
$6,684
of net gains related to foreign-currency hedging activities to general and administrative expense.
|
(2)
|
The expense adjustment consists of (a) equity-based compensation expense of
$8,605
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$72,430
, (c) expenses incurred by the Intermediate Holding Companies of
$987
, (d) the effect of timing differences in the recognition of incentive income compensation expense between adjusted net income and net income attributable to OCG of
$17,553
, (e) acquisition-related items of
$3,502
, (f) adjustments of
$11,103
related to amounts received for contractually reimbursable costs that are classified as expenses for segment reporting and as other income under GAAP, (g) differences of
$261
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (h)
$13,613
of net gains related to foreign-currency hedging activities, and (i) other expenses of
$55
.
|
(3)
|
The interest expense adjustment represents the inclusion of interest expense attributable to non-controlling interests of the consolidated funds and the exclusion of segment interest income.
|
(4)
|
The adjustment to other income (expense), net represents adjustments related to (a) amounts received for contractually reimbursable costs of
$11,103
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$1,550
of net gains related to foreign-currency hedging activities to general and administrative expense.
|
(5)
|
The adjustment to other income of consolidated funds primarily represents the inclusion of interest, dividend and other investment income attributable to non-controlling interests of the consolidated funds.
|
(6)
|
The adjustment to corporate investments is to remove from segment assets the Company’s investments in the consolidated funds, including investments that are treated as equity- or cost-method investments for segment reporting. The
$1.6 billion
of corporate investments included
$1.3 billion
of equity-method investments.
|
(7)
|
The total assets adjustment represents the inclusion of investments and other assets of the consolidated funds, net of segment assets eliminated in consolidation, which are primarily corporate investments in funds and incentive income receivable.
|
Equity-based Compensation Expense Included in ANI
|
|
Last Six Months of 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||
Estimated expense from equity grants awarded through June 2016
|
|
$
|
24.9
|
|
|
$
|
43.5
|
|
|
$
|
31.4
|
|
|
$
|
22.7
|
|
|
$
|
6.5
|
|
|
$
|
14.0
|
|
|
$
|
143.0
|
|
•
|
Net Income Attributable to Non-controlling Interests in Consolidated Funds.
This category represents the economic interests of the unaffiliated investors in the consolidated funds, as well as the equity interests held by third-party investors in CLOs that had not yet priced as of the respective period end. Those interests are primarily driven by the investment performance of the consolidated funds. In comparison to net income, this measure excludes segment results and other items solely attributable to the Company; and
|
•
|
Net Income Attributable to Non-controlling Interests in Consolidated Subsidiaries.
This category primarily represents the economic interest in the Oaktree Operating Group owned by OCGH (“OCGH non-controlling interest”), as well as the economic interest in certain consolidated subsidiaries held by third parties. The OCGH non-controlling interest is determined at the Oaktree Operating Group level based on the weighted average proportionate share of Oaktree Operating Group units held by the OCGH unitholders. Inasmuch as the number of outstanding Oaktree Operating Group units corresponds with the total number of outstanding OCGH units and Class A units, changes in the economic interest held by the OCGH unitholders are driven by our additional issuances of Class A and OCGH units, as well as repurchases and forfeitures of, and exchanges between, Class A and OCGH units. Certain of our expenses, such as income tax and related administrative expenses of Oaktree Capital Group, LLC and its Intermediate Holding Companies, are solely attributable to the Class A unitholders. Please see note 11 to our condensed consolidated financial statements included elsewhere in this quarterly report for additional information on the economic interest in the Oaktree Operating Group owned by OCGH.
|
•
|
Management Fee-generating Assets Under Management.
Management fee-generating AUM is a forward-looking metric and reflects the beginning AUM on which we will earn management fees in the following quarter. Our closed-end funds typically pay management fees based on committed capital, drawn capital or cost basis during the investment period, without regard to changes in NAV, and during the liquidation period on the lesser of (a) total funded capital or (b) the cost basis of assets remaining in the fund. The annual management fee rate remains unchanged from the investment period through the liquidation period. Our open-end and evergreen funds typically pay management fees based on their NAV, and our CLOs pay management fees based on the aggregate par value of collateral assets and principal cash held by them, as defined in the applicable CLO indentures.
|
•
|
Incentive-creating Assets Under Management.
Incentive-creating AUM refers to the AUM that may eventually produce incentive income. It represents the NAV of our funds for which we are entitled to receive an incentive allocation, excluding CLOs and investments made by us and our employees and directors (which are not subject to an incentive allocation). All funds for which we are entitled to receive an incentive allocation are included in incentive-creating AUM, regardless of whether or not they are currently generating incentives. Incentive-creating AUM does not include undrawn capital commitments.
|
Condensed Consolidated Statements of Operations
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
195,015
|
|
|
$
|
50,923
|
|
|
$
|
393,568
|
|
|
$
|
101,742
|
|
Incentive income
|
87,701
|
|
|
564
|
|
|
143,638
|
|
|
564
|
|
||||
Total revenues
|
282,716
|
|
|
51,487
|
|
|
537,206
|
|
|
102,306
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
(103,002
|
)
|
|
(107,750
|
)
|
|
(211,407
|
)
|
|
(217,893
|
)
|
||||
Equity-based compensation
|
(14,726
|
)
|
|
(16,083
|
)
|
|
(28,622
|
)
|
|
(27,789
|
)
|
||||
Incentive income compensation
|
(35,461
|
)
|
|
(35,211
|
)
|
|
(45,268
|
)
|
|
(102,103
|
)
|
||||
Total compensation and benefits expense
|
(153,189
|
)
|
|
(159,044
|
)
|
|
(285,297
|
)
|
|
(347,785
|
)
|
||||
General and administrative
|
(32,949
|
)
|
|
(33,488
|
)
|
|
(80,780
|
)
|
|
(40,068
|
)
|
||||
Depreciation and amortization
|
(4,048
|
)
|
|
(3,107
|
)
|
|
(8,209
|
)
|
|
(5,999
|
)
|
||||
Consolidated fund expenses
|
(1,462
|
)
|
|
(50,290
|
)
|
|
(2,546
|
)
|
|
(88,051
|
)
|
||||
Total expenses
|
(191,648
|
)
|
|
(245,929
|
)
|
|
(376,832
|
)
|
|
(481,903
|
)
|
||||
Other income (loss):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(26,730
|
)
|
|
(52,742
|
)
|
|
(54,435
|
)
|
|
(99,311
|
)
|
||||
Interest and dividend income
|
37,138
|
|
|
478,311
|
|
|
73,408
|
|
|
1,001,240
|
|
||||
Net realized gain on consolidated funds’ investments
|
6,682
|
|
|
857,548
|
|
|
10,083
|
|
|
1,332,378
|
|
||||
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments
|
(5,301
|
)
|
|
(1,418,385
|
)
|
|
(25,973
|
)
|
|
(910,902
|
)
|
||||
Investment income
|
41,000
|
|
|
15,694
|
|
|
70,447
|
|
|
28,376
|
|
||||
Other income (expense), net
|
5,548
|
|
|
2,863
|
|
|
11,349
|
|
|
7,557
|
|
||||
Total other income (loss)
|
58,337
|
|
|
(116,711
|
)
|
|
84,879
|
|
|
1,359,338
|
|
||||
Income (loss) before income taxes
|
149,405
|
|
|
(311,153
|
)
|
|
245,253
|
|
|
979,741
|
|
||||
Income taxes
|
(8,571
|
)
|
|
(5,485
|
)
|
|
(21,251
|
)
|
|
(13,360
|
)
|
||||
Net income (loss)
|
140,834
|
|
|
(316,638
|
)
|
|
224,002
|
|
|
966,381
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Net (income) loss attributable to non-controlling interests in consolidated funds
|
(7,319
|
)
|
|
391,961
|
|
|
(2,375
|
)
|
|
(744,704
|
)
|
||||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
(84,468
|
)
|
|
(55,509
|
)
|
|
(144,502
|
)
|
|
(163,610
|
)
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
Segment Statements of Operations Data:
(1)
|
As of or for the Three Months
Ended June 30,
|
|
As of or for the Six Months
Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands, except per unit data or as otherwise indicated)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
197,450
|
|
|
$
|
190,197
|
|
|
$
|
398,720
|
|
|
$
|
380,292
|
|
Incentive income
|
87,647
|
|
|
61,148
|
|
|
184,235
|
|
|
214,027
|
|
||||
Investment income
|
47,725
|
|
|
23,365
|
|
|
62,802
|
|
|
76,823
|
|
||||
Total revenues
|
332,822
|
|
|
274,710
|
|
|
645,757
|
|
|
671,142
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
(99,173
|
)
|
|
(104,767
|
)
|
|
(203,443
|
)
|
|
(213,648
|
)
|
||||
Equity-based compensation
|
(12,445
|
)
|
|
(11,901
|
)
|
|
(23,148
|
)
|
|
(18,924
|
)
|
||||
Incentive income compensation
|
(35,407
|
)
|
|
(29,554
|
)
|
|
(85,156
|
)
|
|
(119,656
|
)
|
||||
General and administrative
|
(30,600
|
)
|
|
(30,335
|
)
|
|
(62,081
|
)
|
|
(59,902
|
)
|
||||
Depreciation and amortization
|
(3,048
|
)
|
|
(2,105
|
)
|
|
(6,208
|
)
|
|
(3,996
|
)
|
||||
Total expenses
|
(180,673
|
)
|
|
(178,662
|
)
|
|
(380,036
|
)
|
|
(416,126
|
)
|
||||
Adjusted net income before interest and other income (expense)
|
152,149
|
|
|
96,048
|
|
|
265,721
|
|
|
255,016
|
|
||||
Interest expense, net of interest income
(2)
|
(7,977
|
)
|
|
(8,782
|
)
|
|
(16,659
|
)
|
|
(17,715
|
)
|
||||
Other income (expense), net
|
(1,527
|
)
|
|
(1,987
|
)
|
|
(1,392
|
)
|
|
(1,996
|
)
|
||||
Adjusted net income
|
$
|
142,645
|
|
|
$
|
85,279
|
|
|
$
|
247,670
|
|
|
$
|
235,305
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income-OCG
|
$
|
49,682
|
|
|
$
|
21,422
|
|
|
$
|
79,842
|
|
|
$
|
58,145
|
|
Adjusted net income per Class A unit
|
0.79
|
|
|
0.44
|
|
|
1.28
|
|
|
1.24
|
|
||||
Distributable earnings
|
127,506
|
|
|
111,140
|
|
|
253,231
|
|
|
246,336
|
|
||||
Distributable earnings-OCG
|
44,882
|
|
|
28,635
|
|
|
86,725
|
|
|
63,368
|
|
||||
Distributable earnings per Class A unit
|
0.72
|
|
|
0.59
|
|
|
1.39
|
|
|
1.36
|
|
||||
Fee-related earnings
|
64,629
|
|
|
52,990
|
|
|
126,988
|
|
|
102,746
|
|
||||
Fee-related earnings-OCG
|
23,817
|
|
|
16,221
|
|
|
46,876
|
|
|
28,954
|
|
||||
Fee-related earnings per Class A unit
|
0.38
|
|
|
0.34
|
|
|
0.75
|
|
|
0.62
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average number of Operating Group units outstanding
|
155,057
|
|
|
153,839
|
|
|
154,433
|
|
|
153,540
|
|
||||
Weighted average number of Class A units outstanding
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Metrics:
|
|
|
|
|
|
|
|
||||||||
Assets under management (in millions):
|
|
|
|
|
|
|
|
||||||||
Assets under management
|
$
|
98,124
|
|
|
$
|
103,060
|
|
|
$
|
98,124
|
|
|
$
|
103,060
|
|
Management fee-generating assets under management
|
79,516
|
|
|
78,596
|
|
|
79,516
|
|
|
78,596
|
|
||||
Incentive-creating assets under management
|
30,372
|
|
|
33,860
|
|
|
30,372
|
|
|
33,860
|
|
||||
Uncalled capital commitments
|
22,817
|
|
|
20,141
|
|
|
22,817
|
|
|
20,141
|
|
||||
Accrued incentives (fund level):
|
|
|
|
|
|
|
|
||||||||
Incentives created (fund level)
|
171,142
|
|
|
(64,055
|
)
|
|
124,872
|
|
|
201,407
|
|
||||
Incentives created (fund level), net of associated incentive income compensation expense
|
75,783
|
|
|
(36,066
|
)
|
|
58,792
|
|
|
100,233
|
|
||||
Accrued incentives (fund level)
|
1,525,854
|
|
|
1,936,787
|
|
|
1,525,854
|
|
|
1,936,787
|
|
||||
Accrued incentives (fund level), net of associated incentive income compensation expense
|
771,253
|
|
|
1,005,785
|
|
|
771,253
|
|
|
1,005,785
|
|
|
|
|
|
|
(1)
|
Our business is comprised of one segment, our investment management segment, which consists of the investment management services that we provide to our clients. The components of revenues and expenses used in determining adjusted net income do not give effect to the consolidation of the funds that we manage. Segment revenues include investment income (loss) that is classified in other income (loss) in the GAAP-basis statements of operations. Segment revenues and expenses also reflect Oaktree's proportionate economic interest in Highstar, whereby amounts received for contractually reimbursable costs are classified for segment reporting as expenses and under GAAP as other income. In addition, adjusted net income excludes the effect of (a) non-cash equity-based compensation expense related to unit grants made before our initial public offering, (b) acquisition-related items, including amortization of intangibles and changes in the contingent consideration liability, (c) differences arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (d) income taxes, (e) other income or expenses applicable to OCG or its Intermediate Holding Companies, and (f) the adjustment for non-controlling interests. In the fourth quarter of 2015, the definition of adjusted net income was modified to reflect differences with respect to (a) third-party placement costs associated with closed-end funds, which under GAAP are expensed as incurred, but for adjusted net income are capitalized and amortized as general and administrative expense in proportion to the associated management fee stream, and (b) gains and losses resulting from foreign-currency transactions and hedging activities, which under GAAP are recognized as general and administrative expense whether realized or unrealized in the current period, but for adjusted net income unrealized gains and losses from foreign-currency hedging activities are deferred until realized, at which time they are included in the same revenue or expense line item as the underlying exposure that was hedged. Foreign-currency transaction gains and losses are included in other income (expense), net. Prior periods have not been recast for the change related to third-party placement costs, but have been recast to retroactively reflect the change related to foreign-currency hedging. Incentive income and incentive income compensation expense are included in adjusted net income when the underlying fund distributions are known or knowable as of the respective quarter end, which may be later than the time at which the same revenue or expense is included in the GAAP-basis statements of operations, for which the revenue standard is fixed or determinable and the expense standard is probable and reasonably estimable. CLO investments are carried at fair value for GAAP reporting, whereas for segment reporting they are carried at amortized cost, subject to any impairment charges. Investment income on CLO investments is recognized in adjusted net income when cash distributions are received. Cash distributions are allocated between income and return of capital based on the effective yield method. Adjusted net income is calculated at the Operating Group level. For a detailed description of our segment and operating metrics, please see “—Segment and Operating Metrics” above.
|
(2)
|
Interest income was $1.6 million and $1.2 million for the three months ended June 30, 2016 and 2015, respectively, and $2.9 million and $2.2 million for the six months ended June 30, 2016 and 2015, respectively.
|
|
As of
|
||||||||||
|
June 30,
2016
|
|
March 31, 2016
|
|
June 30,
2015
|
||||||
Assets Under Management:
|
(in millions)
|
||||||||||
Closed-end funds
|
$
|
59,576
|
|
|
$
|
59,081
|
|
|
$
|
59,014
|
|
Open-end funds
|
33,667
|
|
|
33,008
|
|
|
38,813
|
|
|||
Evergreen funds
|
4,881
|
|
|
4,785
|
|
|
5,233
|
|
|||
Total
|
$
|
98,124
|
|
|
$
|
96,874
|
|
|
$
|
103,060
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Change in Assets Under Management:
|
(in millions)
|
||||||||||||||
Beginning balance
|
$
|
96,874
|
|
|
$
|
99,903
|
|
|
$
|
97,359
|
|
|
$
|
90,831
|
|
Closed-end funds:
|
|
|
|
|
|
|
|
||||||||
Capital commitments/other
(1)
|
1,889
|
|
|
4,741
|
|
|
2,755
|
|
|
14,181
|
|
||||
Distributions for a realization event/other
(2)
|
(1,220
|
)
|
|
(1,405
|
)
|
|
(3,234
|
)
|
|
(3,342
|
)
|
||||
Change in uncalled capital commitments for funds entering or in liquidation
(3)
|
13
|
|
|
(632
|
)
|
|
13
|
|
|
(872
|
)
|
||||
Foreign-currency translation
|
(188
|
)
|
|
249
|
|
|
153
|
|
|
(527
|
)
|
||||
Change in market value
(4)
|
350
|
|
|
(209
|
)
|
|
715
|
|
|
988
|
|
||||
Change in applicable leverage
|
(349
|
)
|
|
11
|
|
|
(256
|
)
|
|
383
|
|
||||
Open-end funds:
|
|
|
|
|
|
|
|
||||||||
Contributions
|
1,002
|
|
|
1,501
|
|
|
1,737
|
|
|
3,211
|
|
||||
Redemptions
|
(1,225
|
)
|
|
(1,189
|
)
|
|
(2,996
|
)
|
|
(2,618
|
)
|
||||
Foreign-currency translation
|
(126
|
)
|
|
134
|
|
|
96
|
|
|
(310
|
)
|
||||
Change in market value
(4)
|
1,008
|
|
|
27
|
|
|
1,628
|
|
|
1,078
|
|
||||
Evergreen funds:
|
|
|
|
|
|
|
|
||||||||
Contributions or new capital commitments
|
82
|
|
|
27
|
|
|
148
|
|
|
231
|
|
||||
Redemptions or distributions/other
|
(204
|
)
|
|
(115
|
)
|
|
(254
|
)
|
|
(171
|
)
|
||||
Distributions from restructured funds
|
(4
|
)
|
|
—
|
|
|
(13
|
)
|
|
(5
|
)
|
||||
Foreign-currency translation
|
(5
|
)
|
|
2
|
|
|
(8
|
)
|
|
1
|
|
||||
Change in market value
(4)
|
227
|
|
|
15
|
|
|
281
|
|
|
1
|
|
||||
Ending balance
|
$
|
98,124
|
|
|
$
|
103,060
|
|
|
$
|
98,124
|
|
|
$
|
103,060
|
|
|
|
|
|
|
(1)
|
These amounts represent capital commitments, as well as the aggregate par value of collateral assets and principal cash related to new CLO formations.
|
(2)
|
These amounts represent distributions for a realization event, tax-related distributions, reductions in the par value of collateral assets and principal cash resulting from the repayment of debt as return of principal by CLOs, and recallable distributions at the end of the investment period.
|
(3)
|
The change in uncalled capital commitments reflects declines attributable to funds entering their liquidation periods, as well as capital contributions to funds in their liquidation periods for deferred purchase obligations or other reasons.
|
(4)
|
The change in market value reflects the change in NAV of our funds, less management fees and other fund expenses, as well as changes in the aggregate par value of collateral assets and principal cash held by CLOs.
|
|
As of
|
||||||||||
|
June 30,
2016
|
|
March 31,
2016
|
|
June 30,
2015
|
||||||
Management Fee-generating Assets Under Management:
|
(in millions)
|
||||||||||
Closed-end funds:
|
|
|
|
|
|
||||||
Senior Loans
|
$
|
6,909
|
|
|
$
|
7,184
|
|
|
$
|
6,108
|
|
Other closed-end funds
|
35,096
|
|
|
35,956
|
|
|
30,108
|
|
|||
Open-end funds
|
33,597
|
|
|
32,939
|
|
|
38,731
|
|
|||
Evergreen funds
|
3,914
|
|
|
3,829
|
|
|
3,649
|
|
|||
Total
|
$
|
79,516
|
|
|
$
|
79,908
|
|
|
$
|
78,596
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Change in Management Fee-generating Assets Under Management:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
(in millions)
|
|||||||||||||||
Beginning balance
|
$
|
79,908
|
|
|
$
|
78,497
|
|
|
$
|
78,897
|
|
|
$
|
78,079
|
|
Closed-end funds:
|
|
|
|
|
|
|
|
||||||||
Capital commitments to funds that pay fees based on committed capital/other
(1)
|
326
|
|
|
114
|
|
|
1,012
|
|
|
721
|
|
||||
Capital drawn by funds that pay fees based on drawn capital, NAV or cost basis
|
380
|
|
|
203
|
|
|
581
|
|
|
467
|
|
||||
Change attributable to funds in liquidation
(2)
|
(1,462
|
)
|
|
(754
|
)
|
|
(1,843
|
)
|
|
(1,615
|
)
|
||||
Change in uncalled capital commitments for funds entering or in liquidation that pay fees based on committed capital
(3)
|
13
|
|
|
(36
|
)
|
|
13
|
|
|
(471
|
)
|
||||
Distributions by funds that pay fees based on NAV/other
(4)
|
(101
|
)
|
|
(136
|
)
|
|
(214
|
)
|
|
(245
|
)
|
||||
Foreign-currency translation
|
(181
|
)
|
|
138
|
|
|
48
|
|
|
(329
|
)
|
||||
Change in market value
(5)
|
122
|
|
|
(22
|
)
|
|
207
|
|
|
(5
|
)
|
||||
Change in applicable leverage
|
(232
|
)
|
|
63
|
|
|
(88
|
)
|
|
421
|
|
||||
Open-end funds:
|
|
|
|
|
|
|
|
||||||||
Contributions
|
1,005
|
|
|
1,501
|
|
|
1,740
|
|
|
3,197
|
|
||||
Redemptions
|
(1,231
|
)
|
|
(1,189
|
)
|
|
(3,003
|
)
|
|
(2,602
|
)
|
||||
Foreign-currency translation
|
(126
|
)
|
|
135
|
|
|
96
|
|
|
(309
|
)
|
||||
Change in market value
|
1,010
|
|
|
27
|
|
|
1,629
|
|
|
1,062
|
|
||||
Evergreen funds:
|
|
|
|
|
|
|
|
||||||||
Contributions or capital drawn by funds that pay fees based on drawn capital or NAV
|
90
|
|
|
168
|
|
|
427
|
|
|
401
|
|
||||
Redemptions or distributions
|
(209
|
)
|
|
(114
|
)
|
|
(237
|
)
|
|
(155
|
)
|
||||
Change in market value
|
204
|
|
|
1
|
|
|
251
|
|
|
(21
|
)
|
||||
Ending balance
|
$
|
79,516
|
|
|
$
|
78,596
|
|
|
$
|
79,516
|
|
|
$
|
78,596
|
|
|
|
|
|
|
(1)
|
These amounts represent capital commitments to funds that pay fees based on committed capital, as well as the aggregate par value of collateral assets and principal cash related to new CLO formations.
|
(2)
|
These amounts represent the change for funds that pay fees based on the lesser of funded capital or cost basis during the liquidation period, as well as recallable distributions at the end of the investment period. For most closed-end funds, management fees are charged during the liquidation period on the lesser of (a) total funded capital or (b) the cost basis of assets remaining in the fund, with the cost basis of assets generally calculated by excluding cash balances. Thus, changes in fee basis during the liquidation period are not dependent on distributions made from the fund; rather, they are tied to the cost basis of the fund’s investments, which typically declines as the fund sells assets.
|
(3)
|
The change in uncalled capital commitments reflects declines attributable to funds entering their liquidation periods, as well as capital contributions to funds in their liquidation periods for deferred purchase obligations or other reasons.
|
(4)
|
These amounts represent distributions by funds that pay fees based on NAV, as well as reductions in the par value of collateral assets and principal cash resulting from the repayment of debt as return of principal by CLOs.
|
(5)
|
The change in market value reflects certain funds that pay management fees based on NAV and leverage, as applicable, as well as changes in the aggregate par value of collateral assets and principal cash held by CLOs.
|
•
|
Differences between AUM and either committed capital or cost basis for most closed-end funds, other than for closed-end funds that pay management fees based on NAV and leverage, as applicable;
|
•
|
Undrawn capital commitments to closed-end funds that have not yet commenced their investment periods;
|
•
|
Undrawn capital commitments to funds for which management fees are based on drawn capital or NAV;
|
•
|
The investments we make in our funds as general partner;
|
•
|
Closed-end funds that are beyond the term during which they pay management fees and co-investments that pay no management fees; and
|
•
|
AUM in restructured and liquidating evergreen funds for which management fees were waived.
|
|
As of
|
||||||||||
Reconciliation of Assets Under Management to Management Fee-generating Assets Under Management:
|
June 30,
2016
|
|
March 31,
2016
|
|
June 30,
2015
|
||||||
(in millions)
|
|||||||||||
Assets under management
|
$
|
98,124
|
|
|
$
|
96,874
|
|
|
$
|
103,060
|
|
Difference between assets under management and committed capital or cost basis for applicable closed-end funds
(1)
|
(2,392
|
)
|
|
(1,829
|
)
|
|
(4,595
|
)
|
|||
Undrawn capital commitments to funds that have not yet commenced their investment periods
|
(9,278
|
)
|
|
(8,143
|
)
|
|
(13,184
|
)
|
|||
Undrawn capital commitments to funds for which management fees are based on drawn capital, NAV or cost basis
|
(3,828
|
)
|
|
(4,095
|
)
|
|
(4,237
|
)
|
|||
Oaktree’s general partner investments in management fee-generating funds
|
(1,745
|
)
|
|
(1,727
|
)
|
|
(1,200
|
)
|
|||
Funds that are no longer paying management fees and co-investments that pay no management fees
|
(1,365
|
)
|
|
(1,172
|
)
|
|
(1,248
|
)
|
|||
Management fee-generating assets under management
|
$
|
79,516
|
|
|
$
|
79,908
|
|
|
$
|
78,596
|
|
|
|
|
|
|
(1)
|
This difference is not applicable to closed-end funds that pay management fees based on NAV or leverage.
|
|
As of
|
|||||||
|
June 30,
2016
|
|
March 31,
2016
|
|
June 30,
2015
|
|||
Weighted Average Annual Management Fee Rates:
|
|
|
|
|
|
|||
Closed-end funds:
|
|
|
|
|
|
|||
Senior Loans
|
0.50
|
%
|
|
0.50
|
%
|
|
0.50
|
%
|
Other closed-end funds
|
1.51
|
|
|
1.52
|
|
|
1.54
|
|
Open-end funds
|
0.46
|
|
|
0.47
|
|
|
0.48
|
|
Evergreen funds
|
1.22
|
|
|
1.33
|
|
|
1.49
|
|
Overall
|
0.97
|
|
|
0.98
|
|
|
0.93
|
|
|
As of
|
||||||||||
|
June 30,
2016
|
|
March 31,
2016
|
|
June 30,
2015
|
||||||
Incentive-creating Assets Under Management:
|
(in millions)
|
||||||||||
Closed-end funds
|
$
|
28,462
|
|
|
$
|
29,251
|
|
|
$
|
31,811
|
|
Evergreen funds
|
1,910
|
|
|
1,954
|
|
|
2,049
|
|
|||
Total
|
$
|
30,372
|
|
|
$
|
31,205
|
|
|
$
|
33,860
|
|
|
As of or for the Three Months
Ended June 30,
|
|
As of or for the Six Months
Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Accrued Incentives (Fund Level):
|
(in thousands)
|
||||||||||||||
Beginning balance
|
$
|
1,442,359
|
|
|
$
|
2,061,990
|
|
|
$
|
1,585,217
|
|
|
$
|
1,949,407
|
|
Incentives created (fund level):
|
|
|
|
|
|
|
|
||||||||
Closed-end funds
|
166,850
|
|
|
(64,685
|
)
|
|
120,005
|
|
|
200,772
|
|
||||
Evergreen funds
|
4,292
|
|
|
630
|
|
|
4,867
|
|
|
635
|
|
||||
Total incentives created (fund level)
|
171,142
|
|
|
(64,055
|
)
|
|
124,872
|
|
|
201,407
|
|
||||
Less: segment incentive income recognized by us
|
(87,647
|
)
|
|
(61,148
|
)
|
|
(184,235
|
)
|
|
(214,027
|
)
|
||||
Ending balance
|
$
|
1,525,854
|
|
|
$
|
1,936,787
|
|
|
$
|
1,525,854
|
|
|
$
|
1,936,787
|
|
Accrued incentives (fund level), net of associated incentive income compensation expense
|
$
|
771,253
|
|
|
$
|
1,005,785
|
|
|
$
|
771,253
|
|
|
$
|
1,005,785
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands, except per unit data)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
197,450
|
|
|
$
|
190,197
|
|
|
$
|
398,720
|
|
|
$
|
380,292
|
|
Incentive income
|
87,647
|
|
|
61,148
|
|
|
184,235
|
|
|
214,027
|
|
||||
Investment income
|
47,725
|
|
|
23,365
|
|
|
62,802
|
|
|
76,823
|
|
||||
Total revenues
|
332,822
|
|
|
274,710
|
|
|
645,757
|
|
|
671,142
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
(99,173
|
)
|
|
(104,767
|
)
|
|
(203,443
|
)
|
|
(213,648
|
)
|
||||
Equity-based compensation
|
(12,445
|
)
|
|
(11,901
|
)
|
|
(23,148
|
)
|
|
(18,924
|
)
|
||||
Incentive income compensation
|
(35,407
|
)
|
|
(29,554
|
)
|
|
(85,156
|
)
|
|
(119,656
|
)
|
||||
General and administrative
|
(30,600
|
)
|
|
(30,335
|
)
|
|
(62,081
|
)
|
|
(59,902
|
)
|
||||
Depreciation and amortization
|
(3,048
|
)
|
|
(2,105
|
)
|
|
(6,208
|
)
|
|
(3,996
|
)
|
||||
Total expenses
|
(180,673
|
)
|
|
(178,662
|
)
|
|
(380,036
|
)
|
|
(416,126
|
)
|
||||
Adjusted net income before interest and other income (expense)
|
152,149
|
|
|
96,048
|
|
|
265,721
|
|
|
255,016
|
|
||||
Interest expense, net of interest income
|
(7,977
|
)
|
|
(8,782
|
)
|
|
(16,659
|
)
|
|
(17,715
|
)
|
||||
Other income (expense), net
|
(1,527
|
)
|
|
(1,987
|
)
|
|
(1,392
|
)
|
|
(1,996
|
)
|
||||
Adjusted net income
|
142,645
|
|
|
85,279
|
|
|
247,670
|
|
|
235,305
|
|
||||
Adjusted net income attributable to OCGH non-controlling interest
|
(85,039
|
)
|
|
(58,464
|
)
|
|
(147,801
|
)
|
|
(164,371
|
)
|
||||
Non-Operating Group expenses
|
(201
|
)
|
|
(626
|
)
|
|
(465
|
)
|
|
(960
|
)
|
||||
Adjusted net income-OCG before income taxes
|
57,405
|
|
|
26,189
|
|
|
99,404
|
|
|
69,974
|
|
||||
Income taxes-OCG
|
(7,723
|
)
|
|
(4,767
|
)
|
|
(19,562
|
)
|
|
(11,829
|
)
|
||||
Adjusted net income-OCG
|
$
|
49,682
|
|
|
$
|
21,422
|
|
|
$
|
79,842
|
|
|
$
|
58,145
|
|
Adjusted net income per Class A unit
|
$
|
0.79
|
|
|
$
|
0.44
|
|
|
$
|
1.28
|
|
|
$
|
1.24
|
|
Weighted average number of Class A units outstanding
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
|
|
|
|
|
(1)
|
In the fourth quarter of 2015, the definition of adjusted net income was modified to reflect differences with respect to (a) third-party placement costs associated with closed-end funds, which under GAAP are expensed as incurred, but for adjusted net income are capitalized and amortized as general and administrative expense in proportion to the associated management fee stream, and (b) gains and losses resulting from foreign-currency transactions and hedging activities, which under GAAP are recognized as general and administrative expense whether realized or unrealized in the current period, whereas for adjusted net income unrealized gains and losses from foreign-currency hedging activities are deferred until realized, at which time they are included in the same revenue or expense line item as the underlying exposure that was hedged. Foreign-currency transaction gains and losses are included in other income (expense), net. Prior periods have not been recast for the change related to third-party placement costs, but have been recast to retroactively reflect the change related to foreign-currency hedging. Placement costs associated with closed-end funds amounted to $2.8 million and $3.7 million, respectively, for the three and six months ended June 30, 2015, and remain expensed as incurred in those periods for both GAAP and adjusted net income purposes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands, except per unit data)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
197,450
|
|
|
$
|
190,197
|
|
|
$
|
398,720
|
|
|
$
|
380,292
|
|
Incentive income
|
87,647
|
|
|
61,148
|
|
|
184,235
|
|
|
214,027
|
|
||||
Receipts of investment income from funds
(1)
|
10,694
|
|
|
30,197
|
|
|
23,617
|
|
|
54,158
|
|
||||
Receipts of investment income from companies
|
10,869
|
|
|
8,175
|
|
|
24,427
|
|
|
16,971
|
|
||||
Total distributable earnings revenues
|
306,660
|
|
|
289,717
|
|
|
630,999
|
|
|
665,448
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
(99,173
|
)
|
|
(104,767
|
)
|
|
(203,443
|
)
|
|
(213,648
|
)
|
||||
Incentive income compensation
|
(35,407
|
)
|
|
(29,554
|
)
|
|
(85,156
|
)
|
|
(119,656
|
)
|
||||
General and administrative
|
(30,600
|
)
|
|
(30,335
|
)
|
|
(62,081
|
)
|
|
(59,902
|
)
|
||||
Depreciation and amortization
|
(3,048
|
)
|
|
(2,105
|
)
|
|
(6,208
|
)
|
|
(3,996
|
)
|
||||
Total expenses
|
(168,228
|
)
|
|
(166,761
|
)
|
|
(356,888
|
)
|
|
(397,202
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense, net of interest income
|
(7,977
|
)
|
|
(8,782
|
)
|
|
(16,659
|
)
|
|
(17,715
|
)
|
||||
Operating Group income taxes
|
(1,422
|
)
|
|
(1,047
|
)
|
|
(2,829
|
)
|
|
(2,199
|
)
|
||||
Other income (expense), net
|
(1,527
|
)
|
|
(1,987
|
)
|
|
(1,392
|
)
|
|
(1,996
|
)
|
||||
Distributable earnings
|
127,506
|
|
|
111,140
|
|
|
253,231
|
|
|
246,336
|
|
||||
Distributable earnings attributable to OCGH non-controlling interest
|
(76,014
|
)
|
|
(76,193
|
)
|
|
(151,146
|
)
|
|
(171,632
|
)
|
||||
Non-Operating Group expenses
|
(201
|
)
|
|
(626
|
)
|
|
(465
|
)
|
|
(960
|
)
|
||||
Distributable earnings-OCG income taxes
|
(1,303
|
)
|
|
(806
|
)
|
|
(4,683
|
)
|
|
(1,086
|
)
|
||||
Tax receivable agreement
|
(5,106
|
)
|
|
(4,880
|
)
|
|
(10,212
|
)
|
|
(9,290
|
)
|
||||
Distributable earnings-OCG
|
$
|
44,882
|
|
|
$
|
28,635
|
|
|
$
|
86,725
|
|
|
$
|
63,368
|
|
Distributable earnings per Class A unit
|
$
|
0.72
|
|
|
$
|
0.59
|
|
|
$
|
1.39
|
|
|
$
|
1.36
|
|
Weighted average number of Class A units outstanding
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
|
|
|
|
|
(1)
|
This adjustment characterizes a portion of the distributions received from funds as receipts of investment income or loss. In general, the income or loss component of a fund distribution is calculated by multiplying the amount of the distribution by the ratio of our investment’s undistributed income or loss to our remaining investment balance. In addition, if the distribution is made during the investment period, it is generally not reflected in distributable earnings until after the investment period ends. Additionally, any impairment charges on our CLO investments included in adjusted net income are, for distributable earnings purposes, amortized over the remaining investment period of the respective CLO, in order to align with the timing of expected cash flows.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Distributable earnings
|
$
|
127,506
|
|
|
$
|
111,140
|
|
|
$
|
253,231
|
|
|
$
|
246,336
|
|
Investment income
(1)
|
47,725
|
|
|
23,365
|
|
|
62,802
|
|
|
76,823
|
|
||||
Receipts of investment income from funds
(2)
|
(10,694
|
)
|
|
(30,197
|
)
|
|
(23,617
|
)
|
|
(54,158
|
)
|
||||
Receipts of investment income from companies
|
(10,869
|
)
|
|
(8,175
|
)
|
|
(24,427
|
)
|
|
(16,971
|
)
|
||||
Equity-based compensation
(3)
|
(12,445
|
)
|
|
(11,901
|
)
|
|
(23,148
|
)
|
|
(18,924
|
)
|
||||
Operating Group income taxes
|
1,422
|
|
|
1,047
|
|
|
2,829
|
|
|
2,199
|
|
||||
Adjusted net income
|
142,645
|
|
|
85,279
|
|
|
247,670
|
|
|
235,305
|
|
||||
Incentive income
(4)
|
54
|
|
|
5,805
|
|
|
(39,888
|
)
|
|
(11,573
|
)
|
||||
Incentive income compensation
(4)
|
(54
|
)
|
|
(5,657
|
)
|
|
39,888
|
|
|
17,553
|
|
||||
Investment income
(5)
|
3,149
|
|
|
—
|
|
|
13,578
|
|
|
—
|
|
||||
Equity-based compensation
(6)
|
(2,281
|
)
|
|
(4,182
|
)
|
|
(5,473
|
)
|
|
(8,865
|
)
|
||||
Placement costs
(7)
|
(1,210
|
)
|
|
—
|
|
|
(7,914
|
)
|
|
—
|
|
||||
Foreign-currency hedging
(8)
|
(3,665
|
)
|
|
67
|
|
|
(9,531
|
)
|
|
5,379
|
|
||||
Acquisition-related items
(9)
|
1,889
|
|
|
(1,695
|
)
|
|
1,498
|
|
|
(3,502
|
)
|
||||
Income taxes
(10)
|
(8,571
|
)
|
|
(5,485
|
)
|
|
(21,251
|
)
|
|
(13,360
|
)
|
||||
Non-Operating Group expenses
(11)
|
(201
|
)
|
|
(626
|
)
|
|
(465
|
)
|
|
(960
|
)
|
||||
Non-controlling interests
(11)
|
(82,708
|
)
|
|
(53,692
|
)
|
|
(140,987
|
)
|
|
(161,910
|
)
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
|
|
|
|
|
(1)
|
This adjustment adds back segment investment income, which with respect to investments in funds is initially largely non-cash in nature and is thus not available to fund our operations or make equity distributions.
|
(2)
|
This adjustment eliminates the portion of distributions received from funds characterized as receipts of investment income or loss. In general, the income or loss component of a distribution from a fund is calculated by multiplying the amount of the distribution by the ratio of our investment’s undistributed income or loss to our remaining investment balance. In addition, if the distribution is made during the investment period, it is generally not reflected in distributable earnings until after the investment period ends.
|
(3)
|
This adjustment adds back the effect of equity-based compensation expense related to unit grants made after our initial public offering, which is excluded from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.
|
(4)
|
This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense between adjusted net income and net income attributable to OCG.
|
(5)
|
This adjustment adds back the effect of differences in the recognition of investment income related to corporate investments in CLOs which under GAAP are marked-to-market but for segment reporting are accounted for at amortized cost, subject to impairment between adjusted net income and net income attributable to OCG.
|
(6)
|
This adjustment adds back the effect of (a) equity-based compensation expense related to unit grants made before our initial public offering, which is excluded from adjusted net income because it does not affect our financial position and from distributable earnings because it is non-cash in nature and does not impact our ability to fund operations or make equity distributions, and (b) differences arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting.
|
(7)
|
This adjustment adds back the effect of timing differences with respect to the recognition of third-party placement costs associated with closed-end funds between adjusted net income and net income attributable to OCG.
|
(8)
|
This adjustment adds back the effect of timing differences associated with the recognition of unrealized gains and losses related to foreign-currency hedging between adjusted net income and net income attributable to OCG.
|
(9)
|
This adjustment adds back the effect of acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability.
|
(10)
|
Because adjusted net income and distributable earnings are pre-tax measures, this adjustment adds back the effect of income tax expense.
|
(11)
|
Because adjusted net income and distributable earnings are calculated at the Operating Group level, this adjustment adds back the effect of items applicable to OCG, its Intermediate Holding Companies or non-controlling interests.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Distributable earnings-OCG
(1)
|
$
|
44,882
|
|
|
$
|
28,635
|
|
|
$
|
86,725
|
|
|
$
|
63,368
|
|
Investment income attributable to OCG
|
19,274
|
|
|
7,346
|
|
|
25,341
|
|
|
23,067
|
|
||||
Receipts of investment income from funds attributable to OCG
|
(4,319
|
)
|
|
(9,495
|
)
|
|
(9,519
|
)
|
|
(16,541
|
)
|
||||
Receipts of investment income from companies attributable to OCG
|
(4,389
|
)
|
|
(2,570
|
)
|
|
(9,845
|
)
|
|
(5,157
|
)
|
||||
Equity-based compensation attributable to OCG
(2)
|
(5,026
|
)
|
|
(3,742
|
)
|
|
(9,333
|
)
|
|
(5,807
|
)
|
||||
Distributable earnings-OCG income taxes
|
1,303
|
|
|
806
|
|
|
4,683
|
|
|
1,086
|
|
||||
Tax receivable agreement
|
5,106
|
|
|
4,880
|
|
|
10,212
|
|
|
9,290
|
|
||||
Income taxes of Intermediate Holding Companies
|
(7,149
|
)
|
|
(4,438
|
)
|
|
(18,422
|
)
|
|
(11,161
|
)
|
||||
Adjusted net income-OCG
(1)
|
49,682
|
|
|
21,422
|
|
|
79,842
|
|
|
58,145
|
|
||||
Incentive income attributable to OCG
(3)
|
22
|
|
|
1,825
|
|
|
(16,051
|
)
|
|
(3,285
|
)
|
||||
Incentive income compensation attributable to OCG
(3)
|
(22
|
)
|
|
(1,778
|
)
|
|
16,051
|
|
|
5,047
|
|
||||
Investment income attributable to OCG
(4)
|
1,271
|
|
|
—
|
|
|
5,468
|
|
|
—
|
|
||||
Equity-based compensation attributable to OCG
(5)
|
(921
|
)
|
|
(1,315
|
)
|
|
(2,206
|
)
|
|
(2,692
|
)
|
||||
Placement costs attributable to OCG
(6)
|
(488
|
)
|
|
—
|
|
|
(3,186
|
)
|
|
—
|
|
||||
Foreign-currency hedging attributable to OCG
(7)
|
(1,481
|
)
|
|
21
|
|
|
(3,840
|
)
|
|
1,583
|
|
||||
Acquisition-related items attributable to OCG
(8)
|
763
|
|
|
(533
|
)
|
|
605
|
|
|
(1,064
|
)
|
||||
Non-controlling interests attributable to OCG
(8)
|
221
|
|
|
172
|
|
|
442
|
|
|
333
|
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
|
|
|
|
|
(1)
|
Distributable earnings-OCG and adjusted net income-OCG are calculated to evaluate the portion of adjusted net income and distributable earnings attributable to Class A unitholders. These measures are net of income taxes and expenses applicable to OCG or its Intermediate Holding Companies.
|
(2)
|
This adjustment adds back the effect of equity-based compensation expense attributable to OCG related to unit grants made after our initial public offering, which is excluded from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.
|
(3)
|
This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense between adjusted net income-OCG and net income attributable to OCG.
|
(4)
|
This adjustment adds back the effect of differences in the recognition of investment income related to corporate investments in CLOs which under GAAP are marked-to-market but for segment reporting are accounted for at amortized cost, subject to impairment between adjusted net income-OCG and net income attributable to OCG.
|
(5)
|
This adjustment adds back the effect of (a) equity-based compensation expense attributable to OCG related to unit grants made before our initial public offering, which is excluded from adjusted net income because it does not affect our financial position and from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions, and (b) differences arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting.
|
(6)
|
This adjustment adds back the effect of timing differences with respect to the recognition of third-party placement costs associated with closed-end funds between adjusted net income-OCG and net income attributable to OCG.
|
(7)
|
This adjustment adds back the effect of timing differences associated with the recognition of unrealized gains and losses related to foreign-currency hedging between adjusted net income-OCG and net income attributable to OCG.
|
(8)
|
This adjustment adds back the effect of (a) acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability and (b) non-controlling interests.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands, except per unit data)
|
||||||||||||||
Management fees:
|
|
|
|
|
|
|
|
||||||||
Closed-end funds
|
$
|
145,953
|
|
|
$
|
129,147
|
|
|
$
|
294,204
|
|
|
$
|
260,794
|
|
Open-end funds
|
38,776
|
|
|
46,577
|
|
|
77,189
|
|
|
91,018
|
|
||||
Evergreen funds
|
12,721
|
|
|
14,473
|
|
|
27,327
|
|
|
28,480
|
|
||||
Total management fees
|
197,450
|
|
|
190,197
|
|
|
398,720
|
|
|
380,292
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
(99,173
|
)
|
|
(104,767
|
)
|
|
(203,443
|
)
|
|
(213,648
|
)
|
||||
General and administrative
|
(30,600
|
)
|
|
(30,335
|
)
|
|
(62,081
|
)
|
|
(59,902
|
)
|
||||
Depreciation and amortization
|
(3,048
|
)
|
|
(2,105
|
)
|
|
(6,208
|
)
|
|
(3,996
|
)
|
||||
Total expenses
|
(132,821
|
)
|
|
(137,207
|
)
|
|
(271,732
|
)
|
|
(277,546
|
)
|
||||
Fee-related earnings
|
64,629
|
|
|
52,990
|
|
|
126,988
|
|
|
102,746
|
|
||||
Fee-related earnings attributable to OCGH non-controlling interest
|
(38,531
|
)
|
|
(36,329
|
)
|
|
(75,795
|
)
|
|
(71,453
|
)
|
||||
Non-Operating Group expenses
|
(241
|
)
|
|
(652
|
)
|
|
(536
|
)
|
|
(987
|
)
|
||||
Fee-related earnings-OCG before income taxes
|
25,857
|
|
|
16,009
|
|
|
50,657
|
|
|
30,306
|
|
||||
Fee-related earnings-OCG income taxes
|
(2,040
|
)
|
|
212
|
|
|
(3,781
|
)
|
|
(1,352
|
)
|
||||
Fee-related earnings-OCG
|
$
|
23,817
|
|
|
$
|
16,221
|
|
|
$
|
46,876
|
|
|
$
|
28,954
|
|
Fee-related earnings per Class A unit
|
$
|
0.38
|
|
|
$
|
0.34
|
|
|
$
|
0.75
|
|
|
$
|
0.62
|
|
Weighted average number of Class A units outstanding
|
62,617
|
|
|
48,372
|
|
|
62,256
|
|
|
46,727
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Fee-related earnings
(1)
|
$
|
64,629
|
|
|
$
|
52,990
|
|
|
$
|
126,988
|
|
|
$
|
102,746
|
|
Incentive income
|
87,647
|
|
|
61,148
|
|
|
184,235
|
|
|
214,027
|
|
||||
Incentive income compensation
|
(35,407
|
)
|
|
(29,554
|
)
|
|
(85,156
|
)
|
|
(119,656
|
)
|
||||
Investment income
|
47,725
|
|
|
23,365
|
|
|
62,802
|
|
|
76,823
|
|
||||
Equity-based compensation
(2)
|
(12,445
|
)
|
|
(11,901
|
)
|
|
(23,148
|
)
|
|
(18,924
|
)
|
||||
Interest expense, net of interest income
|
(7,977
|
)
|
|
(8,782
|
)
|
|
(16,659
|
)
|
|
(17,715
|
)
|
||||
Other income (expense), net
|
(1,527
|
)
|
|
(1,987
|
)
|
|
(1,392
|
)
|
|
(1,996
|
)
|
||||
Adjusted net income
|
142,645
|
|
|
85,279
|
|
|
247,670
|
|
|
235,305
|
|
||||
Reconciling adjustments
(3)
|
(93,598
|
)
|
|
(65,465
|
)
|
|
(170,545
|
)
|
|
(177,238
|
)
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
|
|
|
|
|
(1)
|
Fee-related earnings is a component of adjusted net income and is comprised of segment management fees less segment operating expenses other than incentive income compensation expense and non-cash equity-based compensation expense related to unit grants made after our initial public offering.
|
(2)
|
This adjustment adds back the effect of equity-based compensation expense related to unit grants made after our initial public offering, which is excluded from fee-related earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.
|
(3)
|
Please refer to the table on page 79 for a detailed reconciliation of adjusted net income to net income attributable to Oaktree Capital Group, LLC.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Fee-related earnings-OCG
(1)
|
$
|
23,817
|
|
|
$
|
16,221
|
|
|
$
|
46,876
|
|
|
$
|
28,954
|
|
Incentive income attributable to OCG
|
35,395
|
|
|
19,227
|
|
|
74,263
|
|
|
64,185
|
|
||||
Incentive income compensation attributable to OCG
|
(14,298
|
)
|
|
(9,292
|
)
|
|
(34,318
|
)
|
|
(35,789
|
)
|
||||
Investment income attributable to OCG
|
19,274
|
|
|
7,346
|
|
|
25,341
|
|
|
23,067
|
|
||||
Equity-based compensation attributable to OCG
(2)
|
(5,026
|
)
|
|
(3,742
|
)
|
|
(9,333
|
)
|
|
(5,807
|
)
|
||||
Interest expense, net of interest income attributable to OCG
|
(3,181
|
)
|
|
(2,735
|
)
|
|
(6,644
|
)
|
|
(5,361
|
)
|
||||
Other income (expense) attributable to OCG
|
(616
|
)
|
|
(624
|
)
|
|
(562
|
)
|
|
(627
|
)
|
||||
Non-fee-related earnings income taxes attributable to OCG
(3)
|
(5,683
|
)
|
|
(4,979
|
)
|
|
(15,781
|
)
|
|
(10,477
|
)
|
||||
Adjusted net income-OCG
(1)
|
49,682
|
|
|
21,422
|
|
|
79,842
|
|
|
58,145
|
|
||||
Reconciling adjustments
(4)
|
(635
|
)
|
|
(1,608
|
)
|
|
(2,717
|
)
|
|
(78
|
)
|
||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
49,047
|
|
|
$
|
19,814
|
|
|
$
|
77,125
|
|
|
$
|
58,067
|
|
|
|
|
|
|
(1)
|
Fee-related earnings-OCG and adjusted net income-OCG are calculated to evaluate the portion of adjusted net income and fee-related earnings attributable to Class A unitholders. These measures are net of income taxes and other income or expenses applicable to OCG or its Intermediate Holding Companies.
|
(2)
|
This adjustment adds back the effect of equity-based compensation expense attributable to OCG related to unit grants made after our initial public offering, which is excluded from fee-related earnings-OCG because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.
|
(3)
|
This adjustment adds back income taxes associated with segment incentive income, incentive income compensation expense or investment income or loss, which are not included in the calculation of fee-related earnings-OCG.
|
(4)
|
Please refer to the table on page 80 for a detailed reconciliation of adjusted net income-OCG to net income attributable to Oaktree Capital Group, LLC.
|
•
|
Closed-end funds
. Management fees attributable to closed-end funds grew
$16.9
million, or
13.1%
, to
$146.0 million
for the three months ended June 30, 2016, from
$129.1 million
for the three months ended June 30, 2015. The growth reflected an aggregate increase of $31.3 million principally from the start of the investment periods for Oaktree Power Opportunities Fund IV (“Power Fund IV”), Oaktree Principal Fund VI (“PF VI”), Opps X and ROF VII. This increase was partially offset by an aggregate decline of $14.4 million primarily attributable to closed-end funds in liquidation.
|
•
|
Open-end funds
. Management fees attributable to open-end funds decreased
$7.8
million, or
16.7%
, to
$38.8 million
for the three months ended June 30, 2016, from
$46.6 million
for the three months ended June 30, 2015, reflecting net outflows and market-value declines across our open-end strategies.
|
•
|
Evergreen funds
. Management fees attributable to evergreen funds decreased
$1.8
million, or
12.4%
, to
$12.7 million
for the three months ended June 30, 2016, from
$14.5 million
for the three months ended June 30, 2015, primarily attributable to Value Opportunities (“VOF”) as a result of net outflows, market-value declines and a reduction in the average management fee rate. The period-end weighted average annual management fee rate for evergreen funds decreased to
1.22%
as of June 30, 2016, from
1.49%
as of June 30, 2015, primarily reflecting the reduction in the management fee rate for VOF.
|
|
Three Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Incentive Income:
|
|
|
|
||||
Closed-end funds
|
$
|
87,550
|
|
|
$
|
61,148
|
|
Evergreen funds
|
97
|
|
|
—
|
|
||
Total
|
$
|
87,647
|
|
|
$
|
61,148
|
|
|
Three Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Income (loss) from investments in funds:
|
(in thousands)
|
||||||
Oaktree funds:
|
|
|
|
|
|
||
Corporate Debt
|
$
|
12,637
|
|
|
$
|
4,662
|
|
Convertible Securities
|
48
|
|
|
63
|
|
||
Distressed Debt
|
10,276
|
|
|
(6,648
|
)
|
||
Control Investing
|
1,280
|
|
|
1,526
|
|
||
Real Estate
|
1,457
|
|
|
3,254
|
|
||
Listed Equities
|
2,270
|
|
|
6,010
|
|
||
Non-Oaktree funds
|
3,075
|
|
|
2,140
|
|
||
Income from investments in companies
|
16,682
|
|
|
12,358
|
|
||
Total investment income
|
$
|
47,725
|
|
|
$
|
23,365
|
|
•
|
Closed-end funds
. Management fees attributable to closed-end funds grew
$33.4
million, or
12.8%
, to
$294.2 million
for the six months ended June 30, 2016, from
$260.8 million
for the six months ended June 30, 2015. The growth reflected an aggregate increase of $60.6 million principally from the start of the investment periods for Power Fund IV, PF VI, Opps X and ROF VII. The increase was partially offset by an aggregate decline of $27.2 million, primarily attributable to closed-end funds in liquidation.
|
•
|
Open-end funds
. Management fees attributable to open-end funds decreased
$13.8
million, or
15.2%
, to
$77.2 million
for the six months ended June 30, 2016, from
$91.0 million
for the six months ended June 30, 2015, reflecting net outflows and market-value declines across our open-end strategies.
|
•
|
Evergreen funds
. Management fees attributable to evergreen funds decreased
$1.2
million, or
4.2%
, to
$27.3 million
for the six months ended June 30, 2016, from
$28.5 million
for the six months ended June 30, 2015, primarily attributable to VOF as a result of net outflows, market-value declines and a reduction in the average management fee rate. The decrease was partially offset by drawdowns of capital commitments by Strategic Credit. The period-end weighted average annual management fee rate for evergreen funds decreased to
1.22%
as of June 30, 2016, from
1.49%
as of June 30, 2015, primarily reflecting the reduction in the management fee rate for VOF.
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Incentive Income:
|
|
|
|
||||
Closed-end funds
|
$
|
184,138
|
|
|
$
|
214,027
|
|
Evergreen funds
|
97
|
|
|
—
|
|
||
Total
|
$
|
184,235
|
|
|
$
|
214,027
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Income (loss) from investments in funds:
|
(in thousands)
|
||||||
Oaktree funds:
|
|
|
|
|
|
||
Corporate Debt
|
$
|
(906
|
)
|
|
$
|
16,013
|
|
Convertible Securities
|
(896
|
)
|
|
1,011
|
|
||
Distressed Debt
|
19,167
|
|
|
(4,712
|
)
|
||
Control Investing
|
(167
|
)
|
|
19,283
|
|
||
Real Estate
|
4,562
|
|
|
9,023
|
|
||
Listed Equities
|
5,758
|
|
|
9,150
|
|
||
Non-Oaktree funds
|
3,495
|
|
|
4,733
|
|
||
Income from investments in companies
|
31,789
|
|
|
22,322
|
|
||
Total investment income
|
$
|
62,802
|
|
|
$
|
76,823
|
|
|
As of
|
||||||||||
|
June 30,
2016 |
|
March 31,
2016 |
|
June 30,
2015 |
||||||
Assets:
|
(in thousands)
|
||||||||||
Cash and cash-equivalents
|
$
|
403,417
|
|
|
$
|
342,079
|
|
|
$
|
308,192
|
|
U.S. Treasury securities
|
684,224
|
|
|
618,899
|
|
|
681,197
|
|
|||
Corporate investments
|
1,371,978
|
|
|
1,352,362
|
|
|
1,560,235
|
|
|||
Deferred tax assets
|
426,119
|
|
|
425,904
|
|
|
430,756
|
|
|||
Receivables and other assets
|
274,635
|
|
|
397,416
|
|
|
265,080
|
|
|||
Total assets
|
$
|
3,160,373
|
|
|
$
|
3,136,660
|
|
|
$
|
3,245,460
|
|
Liabilities and Capital:
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued expenses
|
$
|
262,392
|
|
|
$
|
253,305
|
|
|
$
|
267,925
|
|
Due to affiliates
|
358,716
|
|
|
356,851
|
|
|
371,276
|
|
|||
Debt obligations
|
795,958
|
|
|
845,736
|
|
|
845,968
|
|
|||
Total liabilities
|
1,417,066
|
|
|
1,455,892
|
|
|
1,485,169
|
|
|||
Capital:
|
|
|
|
|
|
||||||
OCGH non-controlling interest in consolidated subsidiaries
|
982,684
|
|
|
945,519
|
|
|
1,146,303
|
|
|||
Unitholders’ capital attributable to Oaktree Capital Group, LLC
|
760,623
|
|
|
735,249
|
|
|
613,988
|
|
|||
Total capital
|
1,743,307
|
|
|
1,680,768
|
|
|
1,760,291
|
|
|||
Total liabilities and capital
|
$
|
3,160,373
|
|
|
$
|
3,136,660
|
|
|
$
|
3,245,460
|
|
|
As of
|
||||||||||
|
June 30,
2016 |
|
March 31,
2016 |
|
June 30,
2015 |
||||||
Investments in funds:
|
(in thousands)
|
||||||||||
Oaktree funds:
|
|
|
|
|
|
|
|
||||
Corporate Debt
|
$
|
417,883
|
|
|
$
|
381,456
|
|
|
$
|
491,685
|
|
Convertible Securities
|
1,627
|
|
|
1,579
|
|
|
19,709
|
|
|||
Distressed Debt
|
380,324
|
|
|
379,507
|
|
|
416,532
|
|
|||
Control Investing
|
251,612
|
|
|
258,753
|
|
|
256,963
|
|
|||
Real Estate
|
113,406
|
|
|
127,731
|
|
|
142,513
|
|
|||
Listed Equities
|
116,954
|
|
|
111,185
|
|
|
152,914
|
|
|||
Non-Oaktree funds
|
70,551
|
|
|
66,321
|
|
|
65,351
|
|
|||
Investments in companies
|
19,621
|
|
|
25,830
|
|
|
14,568
|
|
|||
Total corporate investments
|
$
|
1,371,978
|
|
|
$
|
1,352,362
|
|
|
$
|
1,560,235
|
|
•
|
raising capital from third-party investors;
|
•
|
using the capital provided by us and third-party investors to fund investments and operating expenses;
|
•
|
financing certain investments with indebtedness;
|
•
|
generating cash flows through the realization of investments, as well as the collection of interest and dividend income; and
|
•
|
distributing net cash flows to fund investors and to us.
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Funds
|
$
|
96,059
|
|
|
$
|
174,237
|
|
Eliminated in consolidation
|
(58,831
|
)
|
|
(133,839
|
)
|
||
Total investments
|
$
|
37,228
|
|
|
$
|
40,398
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Funds
|
$
|
168,212
|
|
|
$
|
137,597
|
|
Eliminated in consolidation
|
(36,053
|
)
|
|
(117,832
|
)
|
||
Unconsolidated companies
|
—
|
|
|
24,013
|
|
||
Total proceeds
|
$
|
132,159
|
|
|
$
|
43,778
|
|
|
Last Six Months of 2016
|
|
2017-2018
|
|
2019-2020
|
|
Thereafter
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Oaktree and Operating Subsidiaries:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
(1)
|
$
|
7,072
|
|
|
$
|
24,140
|
|
|
$
|
29,259
|
|
|
$
|
66,556
|
|
|
$
|
127,027
|
|
Debt obligations payable
|
50,000
|
|
|
—
|
|
|
250,000
|
|
|
500,000
|
|
|
800,000
|
|
|||||
Interest obligations on debt
(2)
|
17,310
|
|
|
60,066
|
|
|
37,952
|
|
|
72,314
|
|
|
187,642
|
|
|||||
Tax receivable agreement
|
19,393
|
|
|
41,882
|
|
|
45,375
|
|
|
250,201
|
|
|
356,851
|
|
|||||
Contingent consideration
(3)
|
24,995
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,995
|
|
|||||
Commitments to Oaktree and third-party funds
(4)
|
516,564
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
516,564
|
|
|||||
Subtotal
|
635,334
|
|
|
126,088
|
|
|
362,586
|
|
|
889,071
|
|
|
2,013,079
|
|
|||||
Consolidated Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Debt obligations of CLOs
|
—
|
|
|
73,833
|
|
|
—
|
|
|
2,652,551
|
|
|
2,726,384
|
|
|||||
Interest on debt obligations of CLOs
(2)
|
33,051
|
|
|
132,150
|
|
|
127,816
|
|
|
412,705
|
|
|
705,722
|
|
|||||
Commitments to fund investments
(5)
|
2,868
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,868
|
|
|||||
Total
|
$
|
671,253
|
|
|
$
|
332,071
|
|
|
$
|
490,402
|
|
|
$
|
3,954,327
|
|
|
$
|
5,448,053
|
|
|
|
|
|
|
(1)
|
We lease our office space under agreements that expire periodically through 2030. The table includes only guaranteed minimum lease payments for these leases and does not project other lease-related payments. These leases are classified as operating leases for financial statement purposes and as such are not recorded as liabilities in our condensed consolidated financial statements.
|
(2)
|
Interest obligations include accrued interest on outstanding indebtedness. Where applicable, current interest rates are applied to estimate future interest obligations on variable-rate debt.
|
(3)
|
This represents the undiscounted contingent consideration obligation as of June 30, 2016 related to the 2014 Highstar acquisition, which is payable in a combination of cash and fully-vested OCGH units. The amount of the contingent consideration obligation is based on the achievement of certain performance targets over a period of up to seven years from the acquisition date. Due to uncertainty in the timing of payment, if any, the entire amount is presented in the 2016 column.
|
(4)
|
These obligations represent commitments by us to provide general partner capital funding to our funds and limited partner capital funding to funds managed by unaffiliated third parties. These amounts are generally due on demand and are therefore presented in the 2016 column. Capital commitments are expected to be called over a period of several years.
|
(5)
|
These obligations represent commitments by our funds to make investments or fund uncalled contingent commitments. These amounts are generally due either on demand or by various contractual dates that vary by investment and are therefore presented in the 2016 column. Capital commitments are expected to be called over a period of several years.
|
As of June 30, 2016
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Closed-end funds
|
$
|
3,436
|
|
|
$
|
235,456
|
|
|
$
|
192,590
|
|
|
$
|
431,482
|
|
Open-end funds
|
41,894
|
|
|
41,371
|
|
|
60
|
|
|
83,325
|
|
||||
Evergreen funds
|
43,820
|
|
|
(921
|
)
|
|
3,123
|
|
|
46,022
|
|
||||
Total
|
$
|
89,150
|
|
|
$
|
275,906
|
|
|
$
|
195,773
|
|
|
$
|
560,829
|
|
•
|
our management fees (relating to (a) and (b) above) would have increased by $5.4 million;
|
•
|
our operating expenses would have increased by $6.2 million;
|
•
|
OCGH interest in net income of consolidated subsidiaries would have decreased by $0.5 million; and
|
•
|
our income tax expense would have decreased by $0.1 million.
|
|
|
|
|
|
As of June 30, 2016
|
||||||||||||||||||||||||||||||||||||||||||
|
Investment Period
|
|
Total Committed Capital
|
|
Drawn Capital
(1)
|
|
Fund Net Income Since Inception
|
|
Distri-
butions Since Inception
|
|
Net Asset Value
|
|
Manage-
ment Fee-gener-
ating AUM
|
|
Oaktree Segment Incentive Income Recog-
nized
|
|
Accrued Incentives (Fund Level)
(2)
|
|
Unreturned Drawn Capital Plus Accrued Preferred Return
(3)
|
|
IRR Since Inception
(4)
|
|
Multiple of Drawn Capital
(5)
|
||||||||||||||||||||||||
|
Start Date
|
|
End Date
|
|
Gross
|
|
Net
|
||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
Distressed Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Opportunities Fund Xb
|
TBD
|
|
—
|
|
$
|
7,985
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
|
n/a
|
||
Oaktree Opportunities Fund X
(6)
|
Jan. 2016
|
|
Jan. 2019
|
|
3,241
|
|
|
486
|
|
|
119
|
|
|
1
|
|
|
604
|
|
|
3,160
|
|
|
—
|
|
|
23
|
|
|
516
|
|
|
nm
|
|
nm
|
|
1.3x
|
|||||||||||
Oaktree Opportunities Fund IX
|
Jan. 2014
|
|
Jan. 2017
|
|
5,066
|
|
|
5,066
|
|
|
(215
|
)
|
|
4
|
|
|
4,847
|
|
|
4,966
|
|
|
—
|
|
|
—
|
|
|
5,988
|
|
|
1.1
|
%
|
|
(2.1
|
)%
|
|
1.0
|
|||||||||
Oaktree Opportunities Fund VIIIb
|
Aug. 2011
|
|
Aug. 2014
|
|
2,692
|
|
|
2,692
|
|
|
374
|
|
|
1,133
|
|
|
1,933
|
|
|
2,140
|
|
|
52
|
|
|
—
|
|
|
2,469
|
|
|
6.4
|
|
|
3.1
|
|
|
1.2
|
|||||||||
Special Account B
|
Nov. 2009
|
|
Nov. 2012
|
|
1,031
|
|
|
1,100
|
|
|
454
|
|
|
1,120
|
|
|
434
|
|
|
423
|
|
|
15
|
|
|
—
|
|
|
433
|
|
|
12.5
|
|
|
9.9
|
|
|
1.5
|
|||||||||
Oaktree Opportunities Fund VIII
|
Oct. 2009
|
|
Oct. 2012
|
|
4,507
|
|
|
4,507
|
|
|
1,871
|
|
|
4,544
|
|
|
1,834
|
|
|
1,867
|
|
|
144
|
|
|
112
|
|
|
1,668
|
|
|
11.7
|
|
|
8.3
|
|
|
1.5
|
|||||||||
Special Account A
|
Nov. 2008
|
|
Oct. 2012
|
|
253
|
|
|
253
|
|
|
280
|
|
|
463
|
|
|
70
|
|
|
75
|
|
|
42
|
|
|
14
|
|
|
—
|
|
|
27.8
|
|
|
22.5
|
|
|
2.1
|
|||||||||
OCM Opportunities Fund VIIb
|
May 2008
|
|
May 2011
|
|
10,940
|
|
|
9,844
|
|
|
8,781
|
|
|
17,329
|
|
|
1,296
|
|
|
1,266
|
|
|
1,453
|
|
|
253
|
|
|
—
|
|
|
22.0
|
|
|
16.7
|
|
|
2.0
|
|||||||||
OCM Opportunities Fund VII
|
Mar. 2007
|
|
Mar. 2010
|
|
3,598
|
|
|
3,598
|
|
|
1,461
|
|
|
4,647
|
|
|
412
|
|
|
689
|
|
|
81
|
|
|
—
|
|
|
532
|
|
|
10.3
|
|
|
7.5
|
|
|
1.5
|
|||||||||
OCM Opportunities Fund VI
|
Jul. 2005
|
|
Jul. 2008
|
|
1,773
|
|
|
1,773
|
|
|
1,295
|
|
|
2,913
|
|
|
155
|
|
|
64
|
|
|
197
|
|
|
56
|
|
|
—
|
|
|
11.9
|
|
|
8.8
|
|
|
1.8
|
|||||||||
OCM Opportunities Fund V
|
Jun. 2004
|
|
Jun. 2007
|
|
1,179
|
|
|
1,179
|
|
|
964
|
|
|
2,097
|
|
|
46
|
|
|
—
|
|
|
179
|
|
|
10
|
|
|
—
|
|
|
18.5
|
|
|
14.2
|
|
|
1.9
|
|||||||||
Legacy funds
(7)
.
|
Various
|
|
Various
|
|
9,543
|
|
|
9,543
|
|
|
8,205
|
|
|
17,695
|
|
|
53
|
|
|
—
|
|
|
1,113
|
|
|
11
|
|
|
—
|
|
|
24.2
|
|
|
19.3
|
|
|
1.9
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.1
|
%
|
|
16.2
|
%
|
|
|
||||||||||||||||
Real Estate Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Real Estate Opportunities Fund VII
(8)
|
Jan. 2016
|
|
Jan. 2020
|
|
$
|
2,395
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
6
|
|
|
$
|
(15
|
)
|
|
$
|
1,936
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
|
n/a
|
||
Oaktree Real Estate Opportunities Fund VI
|
Aug. 2012
|
|
Aug. 2016
|
|
2,677
|
|
|
2,677
|
|
|
1,039
|
|
|
678
|
|
|
3,038
|
|
|
2,454
|
|
|
10
|
|
|
191
|
|
|
2,522
|
|
|
19.1
|
%
|
|
12.8
|
%
|
|
1.5x
|
|||||||||
Oaktree Real Estate Opportunities Fund V
|
Mar. 2011
|
|
Mar. 2015
|
|
1,283
|
|
|
1,283
|
|
|
885
|
|
|
1,410
|
|
|
758
|
|
|
446
|
|
|
56
|
|
|
113
|
|
|
335
|
|
|
17.7
|
|
|
13.0
|
|
|
1.8
|
|||||||||
Special Account D
|
Nov. 2009
|
|
Nov. 2012
|
|
256
|
|
|
264
|
|
|
165
|
|
|
305
|
|
|
124
|
|
|
73
|
|
|
3
|
|
|
13
|
|
|
78
|
|
|
14.2
|
|
|
12.1
|
|
|
1.7
|
|||||||||
Oaktree Real Estate Opportunities Fund IV
|
Dec. 2007
|
|
Dec. 2011
|
|
450
|
|
|
450
|
|
|
388
|
|
|
696
|
|
|
142
|
|
|
110
|
|
|
36
|
|
|
38
|
|
|
—
|
|
|
16.2
|
|
|
11.1
|
|
|
2.0
|
|||||||||
OCM Real Estate Opportunities Fund III
|
Sep. 2002
|
|
Sep. 2005
|
|
707
|
|
|
707
|
|
|
622
|
|
|
1,300
|
|
|
29
|
|
|
—
|
|
|
117
|
|
|
6
|
|
|
—
|
|
|
15.3
|
|
|
11.4
|
|
|
1.9
|
|||||||||
Legacy funds
(7)
.
|
Various
|
|
Various
|
|
1,634
|
|
|
1,610
|
|
|
1,399
|
|
|
3,009
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
—
|
|
|
—
|
|
|
15.2
|
|
|
12.0
|
|
|
1.9
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.6
|
%
|
|
12.0
|
%
|
|
|
||||||||||||||||||
Real Estate Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Oaktree Real Estate Debt Fund
(9)
.
|
Sep. 2013
|
|
Oct. 2016
|
|
$
|
1,112
|
|
|
$
|
506
|
|
|
$
|
66
|
|
|
$
|
405
|
|
|
$
|
167
|
|
|
$
|
492
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
118
|
|
|
25.1
|
%
|
|
18.1
|
%
|
|
1.2x
|
Oaktree PPIP Fund
(10)
.
|
Dec. 2009
|
|
Dec. 2012
|
|
2,322
|
|
|
1,113
|
|
|
457
|
|
|
1,570
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
28.2
|
|
|
n/a
|
|
|
1.4
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
European Principal Investments
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Oaktree European Principal Fund IV
|
TBD
|
|
—
|
|
€
|
840
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
8
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
n/a
|
|
n/a
|
|
n/a
|
||
Oaktree European Principal Fund III
|
Nov. 2011
|
|
Nov. 2016
|
|
€
|
3,164
|
|
|
€
|
2,750
|
|
|
€
|
1,270
|
|
|
€
|
417
|
|
|
€
|
3,603
|
|
|
€
|
3,227
|
|
|
€
|
—
|
|
|
€
|
246
|
|
|
€
|
2,957
|
|
|
19.5
|
%
|
|
12.4
|
%
|
|
1.6x
|
OCM European Principal Opportunities Fund II
|
Dec. 2007
|
|
Dec. 2012
|
|
€
|
1,759
|
|
|
€
|
1,731
|
|
|
€
|
435
|
|
|
€
|
1,476
|
|
|
€
|
690
|
|
|
€
|
1,045
|
|
|
€
|
29
|
|
|
€
|
—
|
|
|
€
|
1,028
|
|
|
8.9
|
|
|
4.9
|
|
|
1.4
|
OCM European Principal Opportunities Fund
|
Mar. 2006
|
|
Mar. 2009
|
|
$
|
495
|
|
|
$
|
473
|
|
|
$
|
454
|
|
|
$
|
857
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
11.7
|
|
|
8.9
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.0
|
%
|
|
8.4
|
%
|
|
|
||||||||||||||||
European Private Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree European Capital Solutions Fund
(6) (9)
|
Dec. 2015
|
|
Dec. 2018
|
|
€
|
287
|
|
|
€
|
74
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
74
|
|
|
€
|
87
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
75
|
|
|
nm
|
|
nm
|
|
1.0x
|
||
Oaktree European Dislocation Fund
(9)
.
|
Oct. 2013
|
|
Oct. 2016
|
|
€
|
294
|
|
|
€
|
182
|
|
|
€
|
29
|
|
|
€
|
140
|
|
|
€
|
71
|
|
|
€
|
178
|
|
|
€
|
—
|
|
|
€
|
4
|
|
|
€
|
54
|
|
|
23.1
|
%
|
|
16.5
|
%
|
|
1.2
|
Special Account E
|
Oct. 2013
|
|
Apr. 2015
|
|
€
|
379
|
|
|
€
|
261
|
|
|
€
|
50
|
|
|
€
|
167
|
|
|
€
|
144
|
|
|
€
|
161
|
|
|
€
|
—
|
|
|
€
|
7
|
|
|
€
|
124
|
|
|
14.4
|
|
|
11.1
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.6
|
%
|
|
12.3
|
%
|
|
|
|
|
|
|
|
As of June 30, 2016
|
||||||||||||||||||||||||||||||||||||||||||
|
Investment Period
|
|
Total Committed Capital
|
|
Drawn Capital
(1)
|
|
Fund Net Income Since Inception
|
|
Distri-
butions Since Inception
|
|
Net Asset Value
|
|
Manage-
ment Fee-gener-
ating AUM
|
|
Oaktree Segment Incentive Income Recog-
nized
|
|
Accrued Incentives (Fund Level)
(2)
|
|
Unreturned Drawn Capital Plus Accrued Preferred Return
(3)
|
|
IRR Since Inception
(4)
|
|
Multiple of Drawn Capital
(5)
|
||||||||||||||||||||||||
|
Start Date
|
|
End Date
|
|
Gross
|
|
Net
|
||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
Global Principal Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Principal Fund VI
|
Nov. 2015
|
|
Nov. 2018
|
|
$
|
1,223
|
|
|
$
|
208
|
|
|
$
|
24
|
|
|
$
|
32
|
|
|
$
|
200
|
|
|
$
|
1,167
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
187
|
|
|
40.3
|
%
|
|
14.8
|
%
|
|
1.2x
|
Oaktree Principal Fund V
|
Feb. 2009
|
|
Feb. 2015
|
|
2,827
|
|
|
2,586
|
|
|
381
|
|
|
1,367
|
|
|
1,600
|
|
|
1,839
|
|
|
50
|
|
|
—
|
|
|
2,175
|
|
|
7.8
|
|
|
3.2
|
|
|
1.3
|
|||||||||
Special Account C
|
Dec. 2008
|
|
Feb. 2014
|
|
505
|
|
|
460
|
|
|
190
|
|
|
362
|
|
|
288
|
|
|
354
|
|
|
21
|
|
|
—
|
|
|
288
|
|
|
11.3
|
|
|
8.0
|
|
|
1.5
|
|||||||||
OCM Principal Opportunities Fund IV
|
Oct. 2006
|
|
Oct. 2011
|
|
3,328
|
|
|
3,328
|
|
|
2,233
|
|
|
3,811
|
|
|
1,750
|
|
|
854
|
|
|
22
|
|
|
234
|
|
|
1,455
|
|
|
11.1
|
|
|
8.2
|
|
|
1.8
|
|||||||||
OCM Principal Opportunities Fund III
|
Nov. 2003
|
|
Nov. 2008
|
|
1,400
|
|
|
1,400
|
|
|
890
|
|
|
2,174
|
|
|
116
|
|
|
—
|
|
|
151
|
|
|
22
|
|
|
—
|
|
|
13.9
|
|
|
9.6
|
|
|
1.8
|
|||||||||
Legacy funds
(7)
.
|
Various
|
|
Various
|
|
2,301
|
|
|
2,301
|
|
|
1,839
|
|
|
4,138
|
|
|
2
|
|
|
—
|
|
|
236
|
|
|
—
|
|
|
—
|
|
|
14.5
|
|
|
11.6
|
|
|
1.8
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.8
|
%
|
|
9.2
|
%
|
|
|
||||||||||||||||
Power Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Oaktree Power Opportunities Fund IV
(6)
|
Nov. 2015
|
|
Nov. 2020
|
|
$
|
1,106
|
|
|
$
|
107
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
95
|
|
|
$
|
1,078
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
109
|
|
|
nm
|
|
nm
|
|
1.0x
|
||
Oaktree Power Opportunities Fund III
|
Apr. 2010
|
|
Apr. 2015
|
|
1,062
|
|
|
698
|
|
|
347
|
|
|
575
|
|
|
470
|
|
|
407
|
|
|
14
|
|
|
52
|
|
|
293
|
|
|
22.6
|
%
|
|
13.5
|
%
|
|
1.6
|
|||||||||
OCM/GFI Power Opportunities Fund II
|
Nov. 2004
|
|
Nov. 2009
|
|
1,021
|
|
|
541
|
|
|
1,450
|
|
|
1,982
|
|
|
9
|
|
|
—
|
|
|
100
|
|
|
1
|
|
|
—
|
|
|
76.1
|
|
|
58.8
|
|
|
3.9
|
|||||||||
OCM/GFI Power Opportunities Fund
|
Nov. 1999
|
|
Nov. 2004
|
|
449
|
|
|
383
|
|
|
251
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
20.1
|
|
|
13.1
|
|
|
1.8
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34.7
|
%
|
|
26.6
|
%
|
|
|
||||||||||||||||
Infrastructure Investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Highstar Capital IV
(12)
.
|
Nov. 2010
|
|
Nov. 2016
|
|
$
|
2,585
|
|
|
$
|
2,453
|
|
|
$
|
490
|
|
|
$
|
411
|
|
|
$
|
2,532
|
|
|
$
|
1,882
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
1,948
|
|
|
16.7
|
%
|
|
9.1
|
%
|
|
1.4x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mezzanine Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Oaktree Mezzanine Fund IV
(9)
|
Oct. 2014
|
|
Oct. 2019
|
|
$
|
852
|
|
|
$
|
248
|
|
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
252
|
|
|
$
|
243
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
251
|
|
|
11.5
|
%
|
|
8.3
|
%
|
|
1.1x
|
Oaktree Mezzanine Fund III
(13)
.
|
Dec. 2009
|
|
Dec. 2014
|
|
1,592
|
|
|
1,423
|
|
|
371
|
|
|
1,330
|
|
|
464
|
|
|
431
|
|
|
10
|
|
|
20
|
|
|
439
|
|
|
15.1
|
|
10.4 / 8.2
|
1.4
|
||||||||||||
OCM Mezzanine Fund II
|
Jun. 2005
|
|
Jun. 2010
|
|
1,251
|
|
|
1,107
|
|
|
528
|
|
|
1,489
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
11.3
|
|
|
7.8
|
|
|
1.6
|
|||||||||
OCM Mezzanine Fund
(14)
.
|
Oct. 2001
|
|
Oct. 2006
|
|
808
|
|
|
773
|
|
|
302
|
|
|
1,073
|
|
|
2
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
15.4
|
|
|
10.8 / 10.5
|
1.5
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.2
|
%
|
|
8.9
|
%
|
|
|
||||||||||||||||||
Emerging Markets Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Emerging Market Opportunities Fund
|
Sep. 2013
|
|
Sep. 2016
|
|
$
|
384
|
|
|
$
|
220
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
232
|
|
|
$
|
364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
7.1
|
%
|
|
3.4
|
%
|
|
1.1x
|
Special Account F
|
Jan. 2014
|
|
Jan. 2017
|
|
253
|
|
|
157
|
|
|
10
|
|
|
—
|
|
|
167
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|
6.1
|
|
|
3.9
|
|
|
1.1
|
|||||||||
|
|
|
|
|
|
|
73,069
|
|
(11)
|
|
|
|
|
|
|
34,174
|
|
(11)
|
|
1,506
|
|
(11)
|
|
6.7
|
%
|
|
3.6
|
%
|
|
|
|||||||||||||||||
|
|
|
Other
(15)
|
|
|
12,328
|
|
|
|
|
|
|
|
|
7,887
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
Total
(16)
|
|
|
$
|
85,397
|
|
(17)
|
|
|
|
|
|
$
|
42,061
|
|
|
|
|
$
|
1,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Drawn capital reflects the capital contributions of investors in the fund, net of any distributions to such investors of uninvested capital.
|
(2)
|
Accrued incentives (fund level) exclude Oaktree segment incentive income previously recognized.
|
(3)
|
Unreturned drawn capital plus accrued preferred return reflects the amount the fund needs to distribute to its investors as a return of capital and a preferred return (as applicable) before Oaktree is entitled to receive incentive income (other than tax distributions) from the fund.
|
(4)
|
The internal rate of return (“IRR”) is the annualized implied discount rate calculated from a series of cash flows. It is the return that equates the present value of all capital invested in an investment to the present value of all returns of capital, or the discount rate that will provide a net present value of all cash flows equal to zero. Fund-level IRRs are calculated based upon the actual timing of cash contributions/distributions to investors and the residual value of such investor’s capital accounts at the end of the applicable period being measured. Gross IRRs reflect returns before allocation of management fees, expenses and any incentive allocation to the fund’s general partner. To the extent material, gross returns include certain transaction, advisory, directors or other ancillary fees (“fee income”) paid directly to us in connection with our funds’ activities (we credit all such fee income back to the respective fund(s) so that our funds’ investors share pro rata in the fee income’s economic benefit). Net IRRs reflect returns to non-affiliated investors after allocation of management fees, expenses and any incentive allocation to the fund’s general partner.
|
(5)
|
Multiple of drawn capital is calculated as drawn capital plus gross income and, if applicable, fee income before fees and expenses divided by drawn capital.
|
(6)
|
The IRR is not considered meaningful (“nm”) as the period from the initial capital contribution through June 30, 2016 was less than 18 months.
|
(7)
|
Legacy funds represent certain predecessor funds within the relevant strategy that have substantially or completely liquidated their assets, including funds managed by certain Oaktree investment professionals while employed at the Trust Company of the West prior to Oaktree’s founding in 1995. When these employees joined Oaktree upon, or shortly after, its founding, they continued to manage the fund through the end of its term pursuant to a sub-advisory relationship between the Trust Company of the West and Oaktree.
|
(8)
|
A portion of this fund pays management fees based on drawn, rather than committed, capital.
|
(9)
|
Management fees during the investment period are calculated on drawn capital or cost basis, rather than committed capital. As a result, as of June 30, 2016 management fee-generating AUM included only that portion of committed capital that had been drawn.
|
(10)
|
Due to differences in the allocation of income and expenses to this fund’s two primary limited partners, the U.S. Treasury and Oaktree PPIP Private Fund, a combined net IRR is not presented. Of the $2,322 million in capital commitments, $1,161 million related to the Oaktree PPIP Private Fund, whose gross and net IRR were 24.7% and 18.6%, respectively.
|
(11)
|
Aggregate IRRs or totals are based on the conversion of cash flows or amounts, respectively, from euros to USD using the June 30, 2016 spot rate of $1.11.
|
(12)
|
The fund includes co-investments of $555 million in AUM, most of which do not pay management fees or an incentive allocation. These co-investments have been excluded from the calculation of gross and net IRR, as well as the unreturned drawn capital plus accrued preferred return amount and multiple of drawn capital. The fund follows the American-style distribution waterfall, whereby the general partner may receive an incentive allocation as soon as it has returned the drawn capital and paid a preferred return on the fund’s realized investments (i.e., on a deal-by-deal basis). However, such cash distributions of incentives may be subject to repayment, or clawback. As of June 30, 2016, Oaktree had not recognized any incentive income from this fund. The accrued incentives (fund level) amount shown for this fund represents Oaktree’s effective 8% of the potential incentives generated by this fund in accordance with the terms of the Highstar acquisition.
|
(13)
|
The fund’s partnership interests are divided into Class A and Class B interests, with the Class A interests having priority with respect to the distribution of current income and disposition proceeds. The net IRR for Class A interests was 10.4% and Class B interests was 8.2%. The combined net IRR for Class A and Class B interests was 9.4%.
|
(14)
|
The fund’s partnership interests are divided into Class A and Class B interests, with the Class A interests having priority with respect to the distribution of current income and disposition proceeds. The net IRR for Class A interests was 10.8% and Class B interests was 10.5%. The combined net IRR for the Class A and Class B interests was 10.6%.
|
(15)
|
This includes our closed-end Senior Loan funds, Oaktree Asia Special Situations Fund, OCM Asia Principal Opportunities Fund, CLOs, a non-Oaktree fund, certain separate accounts, co-investments and certain evergreen separate accounts in our Real Estate Debt, Emerging Markets Opportunities and Emerging Markets Total Return strategies.
|
(16)
|
This excludes two closed-end funds with management fee-generating AUM aggregating $550 million as of June 30, 2016, which has been included as part of the Strategic Credit strategy within the evergreen funds table, and includes certain evergreen separate accounts in our Real Estate Debt, Emerging Markets Opportunities and Emerging Markets Total Return strategies with an aggregate $606 million of management fee-generating AUM.
|
(17)
|
The aggregate change in drawn capital for the three months ended June 30, 2016 was $1.0 billion.
|
|
|
|
Manage-
ment Fee-gener-
ating AUM
as of
June 30, 2016
|
|
Twelve Months Ended
June 30, 2016
|
|
Since Inception through June 30, 2016
|
||||||||||||||||||||
|
Strategy Inception
|
|
|
Rates of Return
(1)
|
|
Annualized Rates of Return
(1)
|
|
Sharpe Ratio
|
|||||||||||||||||||
|
Oaktree
|
|
Rele-
vant Bench-
mark
|
|
Oaktree
|
|
Rele-
vant Bench-
mark
|
|
Oaktree Gross
|
|
Rele-
vant Bench-
mark
|
||||||||||||||||
|
Gross
|
|
Net
|
|
|
Gross
|
|
Net
|
|
||||||||||||||||||
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. High Yield Bonds
|
Jan. 1986
|
|
$
|
15,871
|
|
|
1.0
|
%
|
|
0.5
|
%
|
|
0.9
|
%
|
|
9.3
|
%
|
|
8.8
|
%
|
|
8.3
|
%
|
|
0.78
|
|
0.54
|
Global High Yield Bonds
|
Nov. 2010
|
|
4,349
|
|
|
1.9
|
|
|
1.4
|
|
|
2.2
|
|
|
6.9
|
|
|
6.3
|
|
|
6.2
|
|
|
1.01
|
|
0.94
|
|
European High Yield Bonds
|
May 1999
|
|
1,370
|
|
|
5.4
|
|
|
4.8
|
|
|
4.5
|
|
|
8.0
|
|
|
7.5
|
|
|
6.1
|
|
|
0.68
|
|
0.41
|
|
U.S. Convertibles
|
Apr. 1987
|
|
3,554
|
|
|
(8.0
|
)
|
|
(8.5
|
)
|
|
(4.5
|
)
|
|
9.3
|
|
|
8.7
|
|
|
7.9
|
|
|
0.47
|
|
0.34
|
|
Non-U.S. Convertibles
|
Oct. 1994
|
|
1,566
|
|
|
(2.0
|
)
|
|
(2.5
|
)
|
|
(3.4
|
)
|
|
8.3
|
|
|
7.8
|
|
|
5.6
|
|
|
0.75
|
|
0.38
|
|
High Income Convertibles
|
Aug. 1989
|
|
798
|
|
|
3.9
|
|
|
3.1
|
|
|
0.9
|
|
|
11.4
|
|
|
10.5
|
|
|
8.1
|
|
|
1.04
|
|
0.57
|
|
U.S. Senior Loans
|
Sept. 2008
|
|
1,588
|
|
|
(0.6
|
)
|
|
(1.1
|
)
|
|
0.9
|
|
|
5.8
|
|
|
5.3
|
|
|
5.0
|
|
|
1.00
|
|
0.59
|
|
European Senior Loans
|
May 2009
|
|
1,550
|
|
|
3.5
|
|
|
3.0
|
|
|
2.0
|
|
|
8.5
|
|
|
8.0
|
|
|
9.2
|
|
|
1.67
|
|
1.67
|
|
Emerging Markets Equities
|
Jul. 2011
|
|
2,951
|
|
|
(15.2
|
)
|
|
(15.8
|
)
|
|
(12.1
|
)
|
|
(3.7
|
)
|
|
(4.4
|
)
|
|
(3.8
|
)
|
|
(0.19)
|
|
(0.21)
|
|
Total
|
|
$
|
33,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Returns represent time-weighted rates of return, including reinvestment of income, net of commissions and transaction costs. The returns for Relevant Benchmarks are presented on a gross basis.
|
|
|
|
As of June 30, 2016
|
|
Twelve Months Ended
June 30, 2016 |
|
Since Inception through
June 30, 2016 |
||||||||||||||||||
|
|
|
AUM
|
|
Manage-
ment
Fee-gener-
ating AUM
|
|
Accrued Incen-
tives (Fund Level)
|
|
|
||||||||||||||||
|
Strategy Inception
|
|
|
|
|
Rates of Return
(1)
|
|
Annualized Rates
of Return
(1)
|
|||||||||||||||||
|
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||||||||||
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Strategic Credit
(2)
.
|
Jul. 2012
|
|
$
|
3,105
|
|
|
$
|
2,386
|
|
|
$ n/a
|
|
|
(1.8
|
)%
|
|
(3.4
|
)%
|
|
7.3
|
%
|
|
5.0
|
%
|
|
Value Opportunities
|
Sept. 2007
|
|
1,170
|
|
|
1,112
|
|
|
—
|
|
(3)
|
(6.4
|
)
|
|
(8.4
|
)
|
|
8.8
|
|
|
4.7
|
|
|||
Value Equities
(4)
|
May 2012
|
|
307
|
|
|
242
|
|
|
—
|
|
(3)
|
(10.0
|
)
|
|
(11.5
|
)
|
|
15.1
|
|
|
9.9
|
|
|||
Emerging Markets Absolute Return
|
Apr. 1997
|
|
138
|
|
|
118
|
|
|
—
|
|
(3)
|
(4.6
|
)
|
|
(5.8
|
)
|
|
13.0
|
|
|
8.7
|
|
|||
|
|
|
|
|
3,858
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Restructured funds
|
|
|
—
|
|
|
4
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
(2) (5)
|
|
|
$
|
3,858
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Returns represent time-weighted rates of return.
|
(2)
|
Includes two closed-end funds with an aggregate $765 million and $550 million of AUM and management fee-generating AUM, respectively.
|
(3)
|
As of June 30, 2016, the aggregate depreciation below high-water marks previously established for individual investors in the fund totaled approximately $254 million for Value Opportunities, $22 million for Value Equities and $9 million for Emerging Markets Absolute Return.
|
(4)
|
Includes performance results of a proprietary fund with an initial capital commitment of $25 million since its inception on May 1, 2012.
|
(5)
|
Total excludes certain evergreen separate accounts in our Real Estate Debt, Emerging Markets Opportunities and Emerging Markets Total Return strategies with an aggregate $606 million of management fee-generating AUM as of June 30, 2016.
|
|
Oaktree Capital Group, LLC
|
|
|
By:
|
/s/ Susan Gentile
|
|
Name:
|
Susan Gentile
|
|
|
|
|
Title:
|
Chief Accounting Officer and Managing Director
and Authorized Signatory
|
Exhibit No.
|
Description of Exhibit
|
|
|
3.1
|
Restated Certificate of Formation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on June 17, 2011).
|
|
|
3.2
|
Third Amended and Restated Operating Agreement of the Registrant dated as of August 31, 2011 (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on September 2, 2011).
|
|
|
3.3
|
Amendment to Third Amended and Restated Operating Agreement of the Registrant dated as of
March 29, 2012 (incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on March 30, 2012). |
|
|
3.4
|
Unit Designation, effective November 16, 2015 (incorporated by reference to Exhibit 3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 18, 2015).
|
|
|
31.1
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
|
32.2
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|