Form 10-K
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x
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ANNUAL 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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Oaktree Capital Group, LLC
(Exact name of registrant as specified in its charter)
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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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333 South Grand Avenue, 28th Floor
Los Angeles, CA 90071
Telephone: (213) 830-6300
(Address, zip code, and telephone number, including
area code, of registrant’s principal executive offices)
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Title of each class
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Name of each exchange on which registered
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Class A units representing limited liability company interests
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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PART I.
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PART II.
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PART III.
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PART IV.
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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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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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our European Senior Loan strategy, to the Credit Suisse Western European Leveraged Loan Index (EUR Hedged);
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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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our High Income Convertible Securities strategy, to the Citigroup U.S. High Yield Market Index; and
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our Emerging Markets Equities strategy, to the Morgan Stanley Capital International Emerging Markets Index (Net).
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•
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Focus on Risk-Adjusted Returns
. Our primary goal is not simply to achieve superior investment performance, but to do so with less-than-commensurate risk. We believe that the best long-term records are built more through the avoidance of losses in bad times than the achievement of superior relative returns in good times. It is our overriding belief that, especially in the opportunistic markets in which we work, “if we avoid the losers, the winners will take care of themselves.”
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Focus on Fundamental Analysis
. We employ a bottom-up approach to investing, based on proprietary, company-specific research. We seek to generate consistent outperformance through superior knowledge of companies and their securities, not from macro-forecasting. We do not believe in the predictive ability required to correctly time markets. However, concern about the market climate may cause us to tilt toward more defensive investments, increase selectivity or act more deliberately. Our 297 investment professionals have developed a deep and thorough understanding of a wide number of companies and industries, providing us with a significant institutional knowledge base.
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Specialization
. We offer a broad array of specialized investment strategies. We believe this offers the surest path to the results we, and our clients, seek. Clients interested in a single investment strategy can limit themselves to the risk exposure of that particular strategy, while clients interested in more than one investment strategy can combine investments in our funds to achieve their desired mix. Our focus on specific strategies has allowed us to build investment teams with extensive experience and expertise. At the same time, our teams access and leverage each other’s expertise, affording us both the benefits of specialization and the strengths of a larger organization.
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Strategy Inception
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Strategy Inception
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AUM
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AUM
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(in millions)
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(in millions)
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Corporate Debt:
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Control Investing:
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U.S. High Yield Bonds
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1986
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$
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17,292
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Special Situations
(1)
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1994
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$
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5,547
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Global High Yield Bonds
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2010
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4,450
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European Principal
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2006
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5,543
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European High Yield Bonds
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1999
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1,316
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Infrastructure Investing
(2)
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2014
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2,762
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U.S. Senior Loans
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2007
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7,735
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Power Opportunities
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1999
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1,775
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European Senior Loans
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2009
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3,048
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15,627
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European High Yield Bonds and Senior Loans
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2016
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220
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Real Estate:
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Strategic Credit
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2012
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3,281
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Real Estate Opportunities
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1994
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6,557
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Mezzanine Finance
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2001
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1,469
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Real Estate Debt
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2012
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1,475
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European Private Debt
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2013
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659
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Real Estate Value-Add
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2016
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615
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Emerging Markets Debt Total Return
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2015
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441
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8,647
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39,911
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Listed Equities:
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Convertible Securities:
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Emerging Markets Equities
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2011
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3,084
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U.S. Convertibles
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1987
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3,411
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Emerging Markets Absolute Return
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1997
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131
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Non-U.S. Convertibles
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1994
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1,456
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Value Equities
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2012
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371
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High Income Convertibles
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1989
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864
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Other
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69
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5,731
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3,655
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Distressed Debt:
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Distressed Debt
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1988
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24,751
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Total
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$
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100,504
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Value Opportunities
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2007
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1,272
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Emerging Markets Opportunities
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2012
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910
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26,933
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(1)
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Effective November 2016, the Global Principal strategy was renamed Special Situations.
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(2)
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Oaktree acquired the Highstar Capital team in 2014, which represents the inception date of this strategy. Highstar’s inception date was 2000.
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Strategy Inception
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Total Drawn Capital
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IRR Since Inception
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Multiple of Drawn Capital
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Gross
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Net
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(in millions)
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Distressed Debt
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1988
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$
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40,692
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22.0
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%
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16.2
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%
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1.7x
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Real Estate Opportunities
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1994
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7,283
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15.5
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11.9
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1.7
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Special Situations
(1)
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1994
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10,283
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13.3
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9.6
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1.9
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European Principal
(2)
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2006
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5,225
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13.7
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9.1
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1.7
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Power Opportunities
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1999
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2,099
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34.7
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26.5
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2.2
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Mezzanine Finance
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2001
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3,642
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13.2
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8.9
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1.4
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Sub-total
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69,224
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Other funds
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18,755
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Total
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$
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87,979
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(1)
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Effective November 2016, the Global Principal strategy was renamed Special Situations. The figures shown include the performance of Oaktree Special Situations Fund, which commenced its investment period in November 2015. Excluding Oaktree Special Situations Fund, the aggregate gross and net IRRs as of December 31, 2016 were 13.3% and 9.5%, respectively.
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(2)
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All figures are based on the conversion of amounts or cash flows from euros to USD using the December 31, 2016 spot rate of $1.05.
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Strategy Inception
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AUM
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Since Inception
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Annualized Rates of Return
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Sharpe Ratio
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Oaktree
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Relevant Benchmark
(Gross)
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Oaktree Gross
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Relevant Benchmark
(Gross) |
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Gross
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Net
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(in millions)
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U.S. High Yield Bonds
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1986
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$
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17,292
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9.4
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%
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8.8
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%
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8.4
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%
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0.80
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0.56
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Global High Yield Bonds
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2010
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4,450
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7.5
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7.0
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6.9
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1.13
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1.07
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European High Yield Bonds
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1999
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1,316
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8.1
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7.6
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6.3
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0.71
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0.44
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U.S. Convertibles
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1987
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3,411
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9.4
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8.8
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8.1
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0.48
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0.36
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Non-U.S. Convertibles
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1994
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1,456
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8.4
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7.8
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5.6
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0.78
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0.40
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High Income Convertibles
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1989
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864
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11.4
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10.6
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8.2
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1.06
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0.60
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U.S. Senior Loans
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2008
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1,589
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6.2
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5.7
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5.3
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1.11
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0.65
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European Senior Loans
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2009
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1,422
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8.5
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7.9
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9.2
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1.72
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1.73
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Emerging Markets Equities
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2011
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3,084
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(1.7
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)
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(2.5
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)
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(2.7
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)
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(0.09)
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(0.15)
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AUM by Client Type
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AUM
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%
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AUM by Client Location
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AUM
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%
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(in millions)
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(in millions)
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Public funds
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$
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23,861
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24
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%
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Americas
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$
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71,831
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72
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%
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Corporate and corporate pension
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23,749
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24
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Europe, Middle East & Africa
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15,568
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15
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Insurance companies
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9,187
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9
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Asia Pacific
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13,105
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13
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Sub-advisory – mutual funds
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8,685
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9
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Total
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$
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100,504
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100
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%
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Sovereign wealth funds
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8,351
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8
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Endowments/foundations
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5,716
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6
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Private – high net worth/family office
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5,041
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5
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Oaktree & affiliates
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4,179
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4
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Fund of funds
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3,028
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3
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Unions
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2,038
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2
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Other
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6,669
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6
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Total
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$
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100,504
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100
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%
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All Employees
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Employee Owners
(1)
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Employees Located Outside the U.S.
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Investment professionals
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297
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177
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106
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Other professionals
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488
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95
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74
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Support staff
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154
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—
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40
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Total
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939
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272
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220
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(1)
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Holds 100% of the Class B units and 0.02% of the Class A units, which together represent 93.6% of the total combined voting power of our outstanding Class A and Class B units. The Class B units have no economic interest in us. The general partner of Oaktree Capital Group Holdings, L.P. is Oaktree Capital Group Holdings GP, LLC, which is controlled by our senior executives. Oaktree Capital Group Holdings GP, LLC also acts as our manager and in that capacity has the authority to designate all the members of our board of directors for so long as the Oaktree control condition is satisfied.
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(2)
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The percent economic interest represents the applicable number of Class A units as a percentage of the Oaktree Operating Group units. As of December 31, 2016, there were 154,790,343 Oaktree Operating Group units outstanding.
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(3)
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The percent economic interest in Oaktree Operating Group represents the aggregate number of Oaktree Operating Group units held, directly or indirectly, as a percentage of the total number of Oaktree Operating Group units outstanding.
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(4)
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Oaktree Capital Group, LLC holds 1,000 shares of non-voting Class A common stock of Oaktree AIF Holdings, Inc., which are entitled to receive 100% of any dividends. Oaktree Capital Group Holdings, L.P. holds 100 shares of voting Class B common stock of Oaktree AIF Holdings, Inc., which do not participate in dividends or otherwise represent an economic interest in Oaktree AIF Holdings, Inc.
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(5)
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Owned indirectly by Oaktree Holdings, LLC through an entity not reflected in this diagram that is treated as a partnership for U.S. federal income tax purposes. Through this entity, each of Oaktree Holdings, Inc. and Oaktree Holdings, Ltd. owns a less than 1% indirect interest in Oaktree Capital I, L.P.
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As of December 31, 2016
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Investment Period
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Total Committed Capital
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% Invested
(1)
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%
Drawn
(2)
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Fund Net Income Since Inception
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Distri-
butions Since Inception
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Net Asset Value
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Manage-
ment Fee-gener-
ating AUM
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Oaktree Segment Incentive Income Recog-
nized
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Accrued Incentives (Fund Level)
(3)
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Unreturned Drawn Capital Plus Accrued Preferred Return
(4)
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IRR Since Inception
(5)
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Multiple of Drawn Capital
(6)
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Start Date
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End Date
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Gross
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Net
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||||||||||||||||||||||||||||||||||||||||||
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(in millions)
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||||||||||||||||||||||||||||||||||||||||||||||||
Distressed Debt
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||||||||||||||||||||
Oaktree Opportunities Fund Xb
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TBD
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—
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$
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8,063
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—
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%
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—
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%
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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n/a
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n/a
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n/a
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||
Oaktree Opportunities Fund X
(7)
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Jan. 2016
|
|
Jan. 2019
|
|
3,243
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|
|
74
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|
|
35
|
|
|
367
|
|
|
41
|
|
|
1,461
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|
|
3,161
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|
|
—
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71
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1,152
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|
nm
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|
nm
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|
1.4x
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||||||||||
Oaktree Opportunities Fund IX
|
Jan. 2014
|
|
Jan. 2017
|
|
5,066
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|
|
100
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|
100
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|
|
132
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|
5
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|
|
5,193
|
|
|
4,966
|
|
|
—
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|
|
—
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|
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6,219
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|
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3.7
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%
|
|
0.9
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%
|
|
1.1
|
||||||||
Oaktree Opportunities Fund VIIIb
|
Aug. 2011
|
|
Aug. 2014
|
|
2,692
|
|
|
nm
|
|
|
100
|
|
|
452
|
|
|
1,314
|
|
|
1,830
|
|
|
2,074
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|
|
52
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|
|
—
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|
|
2,372
|
|
|
6.7
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|
|
3.7
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|
|
1.3
|
||||||||
Special Account B
|
Nov. 2009
|
|
Nov. 2012
|
|
1,031
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|
|
nm
|
|
|
100
|
|
|
497
|
|
|
1,147
|
|
|
452
|
|
|
438
|
|
|
15
|
|
|
—
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|
|
428
|
|
|
12.8
|
|
|
10.3
|
|
|
1.5
|
||||||||
Oaktree Opportunities Fund VIII
|
Oct. 2009
|
|
Oct. 2012
|
|
4,507
|
|
|
nm
|
|
|
100
|
|
|
2,069
|
|
|
4,652
|
|
|
1,924
|
|
|
1,797
|
|
|
144
|
|
|
218
|
|
|
1,627
|
|
|
12.1
|
|
|
8.4
|
|
|
1.5
|
||||||||
Special Account A
|
Nov. 2008
|
|
Oct. 2012
|
|
253
|
|
|
nm
|
|
|
100
|
|
|
297
|
|
|
466
|
|
|
84
|
|
|
71
|
|
|
42
|
|
|
17
|
|
|
—
|
|
|
28.1
|
|
|
22.7
|
|
|
2.2
|
||||||||
OCM Opportunities Fund VIIb
|
May 2008
|
|
May 2011
|
|
10,940
|
|
|
nm
|
|
|
90
|
|
|
8,817
|
|
|
17,369
|
|
|
1,292
|
|
|
1,202
|
|
|
1,472
|
|
|
242
|
|
|
—
|
|
|
21.9
|
|
|
16.6
|
|
|
2.0
|
||||||||
OCM Opportunities Fund VII
|
Mar. 2007
|
|
Mar. 2010
|
|
3,598
|
|
|
nm
|
|
|
100
|
|
|
1,472
|
|
|
4,637
|
|
|
433
|
|
|
633
|
|
|
81
|
|
|
—
|
|
|
553
|
|
|
10.3
|
|
|
7.6
|
|
|
1.5
|
||||||||
OCM Opportunities Fund VI
|
Jul. 2005
|
|
Jul. 2008
|
|
1,773
|
|
|
nm
|
|
|
100
|
|
|
1,297
|
|
|
3,051
|
|
|
19
|
|
|
—
|
|
|
249
|
|
|
4
|
|
|
—
|
|
|
11.9
|
|
|
8.8
|
|
|
1.8
|
||||||||
OCM Opportunities Fund V
|
Jun. 2004
|
|
Jun. 2007
|
|
1,179
|
|
|
nm
|
|
|
100
|
|
|
957
|
|
|
2,104
|
|
|
32
|
|
|
—
|
|
|
180
|
|
|
7
|
|
|
—
|
|
|
18.4
|
|
|
14.1
|
|
|
1.9
|
||||||||
Legacy funds
(8)
.
|
Various
|
|
Various
|
|
9,543
|
|
|
nm
|
|
|
100
|
|
|
8,205
|
|
|
17,695
|
|
|
53
|
|
|
—
|
|
|
1,113
|
|
|
11
|
|
|
—
|
|
|
24.2
|
|
|
19.3
|
|
|
1.9
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.0
|
%
|
|
16.2
|
%
|
|
|
||||||||||||||||
Real Estate Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Real Estate Opportunities Fund VII
(7)
(9)
|
Jan. 2016
|
|
Jan. 2020
|
|
$
|
2,920
|
|
|
41
|
%
|
|
10
|
%
|
|
$
|
27
|
|
|
$
|
12
|
|
|
$
|
307
|
|
|
$
|
2,450
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
294
|
|
|
nm
|
|
nm
|
|
1.3x
|
||
Oaktree Real Estate Opportunities Fund VI
|
Aug. 2012
|
|
Aug. 2016
|
|
2,677
|
|
|
nm
|
|
|
100
|
|
|
1,083
|
|
|
1,111
|
|
|
2,649
|
|
|
2,037
|
|
|
10
|
|
|
199
|
|
|
2,182
|
|
|
16.9
|
%
|
|
11.3
|
%
|
|
1.5
|
||||||||
Oaktree Real Estate Opportunities Fund V
|
Mar. 2011
|
|
Mar. 2015
|
|
1,283
|
|
|
nm
|
|
|
100
|
|
|
930
|
|
|
1,597
|
|
|
616
|
|
|
355
|
|
|
56
|
|
|
121
|
|
|
162
|
|
|
17.6
|
|
|
12.9
|
|
|
1.8
|
||||||||
Special Account D
|
Nov. 2009
|
|
Nov. 2012
|
|
256
|
|
|
nm
|
|
|
100
|
|
|
185
|
|
|
311
|
|
|
138
|
|
|
73
|
|
|
3
|
|
|
15
|
|
|
77
|
|
|
14.7
|
|
|
12.7
|
|
|
1.7
|
||||||||
Oaktree Real Estate Opportunities Fund IV
|
Dec. 2007
|
|
Dec. 2011
|
|
450
|
|
|
nm
|
|
|
100
|
|
|
395
|
|
|
714
|
|
|
131
|
|
|
91
|
|
|
49
|
|
|
25
|
|
|
—
|
|
|
16.1
|
|
|
11.0
|
|
|
2.0
|
||||||||
OCM Real Estate Opportunities Fund III
|
Sep. 2002
|
|
Sep. 2005
|
|
707
|
|
|
nm
|
|
|
100
|
|
|
618
|
|
|
1,307
|
|
|
18
|
|
|
—
|
|
|
119
|
|
|
4
|
|
|
—
|
|
|
15.3
|
|
|
11.3
|
|
|
2.0
|
||||||||
Legacy funds
(8)
.
|
Various
|
|
Various
|
|
1,634
|
|
|
nm
|
|
|
99
|
|
|
1,399
|
|
|
3,009
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
—
|
|
|
—
|
|
|
15.2
|
|
|
12.0
|
|
|
1.9
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.5
|
%
|
|
11.9
|
%
|
|
|
||||||||||||||||||
Real Estate Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Oaktree Real Estate Debt Fund II
(10)
|
TBD
|
|
—
|
|
$
|
505
|
|
|
—
|
%
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
Oaktree Real Estate Debt Fund
|
Sep. 2013
|
|
Oct. 2016
|
|
1,112
|
|
|
nm
|
|
|
58
|
|
|
94
|
|
|
417
|
|
|
318
|
|
|
623
|
|
|
—
|
|
|
14
|
|
|
246
|
|
|
25.9
|
%
|
|
19.0
|
%
|
|
1.3x
|
||||||||
Oaktree PPIP Fund
(11)
.
|
Dec. 2009
|
|
Dec. 2012
|
|
2,322
|
|
|
nm
|
|
|
48
|
|
|
457
|
|
|
1,570
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
28.2
|
|
|
n/a
|
|
|
1.4
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Real Estate Value-Add
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Special Account G
(7)
(10)
|
Oct. 2016
|
|
Oct. 2020
|
|
$
|
615
|
|
|
31
|
%
|
|
31
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
nm
|
|
nm
|
|
1.0x
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
European Principal
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Oaktree European Principal Fund IV
(13)
|
TBD
|
|
—
|
|
€
|
936
|
|
|
5
|
%
|
|
—
|
%
|
|
€
|
(6
|
)
|
|
€
|
—
|
|
|
€
|
(6
|
)
|
|
€
|
48
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
n/a
|
|
n/a
|
|
n/a
|
||
Oaktree European Principal Fund III
|
Nov. 2011
|
|
Nov. 2016
|
|
€
|
3,164
|
|
|
nm
|
|
|
85
|
|
|
€
|
1,699
|
|
|
€
|
548
|
|
|
€
|
3,900
|
|
|
€
|
2,682
|
|
|
€
|
—
|
|
|
€
|
330
|
|
|
€
|
2,941
|
|
|
20.4
|
%
|
|
13.6
|
%
|
|
1.7x
|
OCM European Principal Opportunities Fund II
|
Dec. 2007
|
|
Dec. 2012
|
|
€
|
1,759
|
|
|
nm
|
|
|
100
|
|
|
€
|
469
|
|
|
€
|
1,867
|
|
|
€
|
332
|
|
|
€
|
770
|
|
|
€
|
29
|
|
|
€
|
—
|
|
|
€
|
664
|
|
|
9.1
|
|
|
5.1
|
|
|
1.4
|
OCM European Principal Opportunities Fund
|
Mar. 2006
|
|
Mar. 2009
|
|
$
|
495
|
|
|
nm
|
|
|
96
|
|
|
$
|
454
|
|
|
$
|
927
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
11.7
|
|
|
8.9
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.7
|
%
|
|
9.1
|
%
|
|
|
|
|
|
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||||||||||||||||||||
|
Investment Period
|
|
Total Committed Capital
|
|
% Invested
(1)
|
|
%
Drawn
(2)
|
|
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)
(3)
|
|
Unreturned Drawn Capital Plus Accrued Preferred Return
(4)
|
|
IRR Since Inception
(5)
|
|
Multiple of Drawn Capital
(6)
|
||||||||||||||||||||||||
|
Start Date
|
|
End Date
|
|
Gross
|
|
Net
|
||||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||||
European Private Debt
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree European Capital Solutions Fund
(7) (10)
|
Dec. 2015
|
|
Dec. 2018
|
|
€
|
430
|
|
|
54
|
%
|
|
43
|
%
|
|
€
|
3
|
|
|
€
|
—
|
|
|
€
|
188
|
|
|
€
|
194
|
|
|
€
|
—
|
|
|
€
|
—
|
|
|
€
|
189
|
|
|
nm
|
|
nm
|
|
1.0x
|
||
Oaktree European Dislocation Fund
|
Oct. 2013
|
|
Oct. 2016
|
|
€
|
294
|
|
|
nm
|
|
|
57
|
|
|
€
|
34
|
|
|
€
|
140
|
|
|
€
|
76
|
|
|
€
|
97
|
|
|
€
|
—
|
|
|
€
|
5
|
|
|
€
|
56
|
|
|
22.3
|
%
|
|
15.9
|
%
|
|
1.2
|
Special Account E
|
Oct. 2013
|
|
Apr. 2015
|
|
€
|
379
|
|
|
nm
|
|
|
69
|
|
|
€
|
55
|
|
|
€
|
232
|
|
|
€
|
84
|
|
|
€
|
107
|
|
|
€
|
—
|
|
|
€
|
8
|
|
|
€
|
62
|
|
|
14.3
|
|
|
11.0
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.0
|
%
|
|
11.6
|
%
|
|
|
||||||||||||||||||
Special Situations
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Special Situations Fund
|
Nov. 2015
|
|
Nov. 2018
|
|
$
|
1,223
|
|
|
51
|
%
|
|
17
|
%
|
|
$
|
66
|
|
|
$
|
67
|
|
|
$
|
207
|
|
|
$
|
1,167
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
157
|
|
|
51.0
|
%
|
|
24.4
|
%
|
|
1.5x
|
Other funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Principal Fund V
|
Feb. 2009
|
|
Feb. 2015
|
|
$
|
2,827
|
|
|
nm
|
|
|
91
|
%
|
|
$
|
545
|
|
|
$
|
1,563
|
|
|
$
|
1,568
|
|
|
$
|
1,712
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
2,052
|
|
|
8.8
|
%
|
|
4.4
|
%
|
|
1.4x
|
Special Account C
|
Dec. 2008
|
|
Feb. 2014
|
|
505
|
|
|
nm
|
|
|
91
|
|
|
223
|
|
|
398
|
|
|
285
|
|
|
288
|
|
|
21
|
|
|
13
|
|
|
263
|
|
|
11.9
|
|
|
8.3
|
|
|
1.6
|
||||||||
OCM Principal Opportunities Fund IV
|
Oct. 2006
|
|
Oct. 2011
|
|
3,328
|
|
|
nm
|
|
|
100
|
|
|
2,886
|
|
|
4,122
|
|
|
2,092
|
|
|
539
|
|
|
22
|
|
|
541
|
|
|
1,183
|
|
|
12.5
|
|
|
9.0
|
|
|
2.0
|
||||||||
OCM Principal Opportunities Fund III
|
Nov. 2003
|
|
Nov. 2008
|
|
1,400
|
|
|
nm
|
|
|
100
|
|
|
881
|
|
|
2,205
|
|
|
76
|
|
|
—
|
|
|
167
|
|
|
3
|
|
|
—
|
|
|
13.8
|
|
|
9.5
|
|
|
1.8
|
||||||||
Legacy funds
(8)
.
|
Various
|
|
Various
|
|
2,301
|
|
|
nm
|
|
|
100
|
|
|
1,840
|
|
|
4,138
|
|
|
3
|
|
|
—
|
|
|
236
|
|
|
1
|
|
|
—
|
|
|
14.5
|
|
|
11.6
|
|
|
1.8
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.3
|
%
|
|
9.5
|
%
|
|
|
||||||||||||||||
Power Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Oaktree Power Opportunities Fund IV
(7)
|
Nov. 2015
|
|
Nov. 2020
|
|
$
|
1,106
|
|
|
43
|
%
|
|
43
|
%
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
483
|
|
|
$
|
1,078
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
490
|
|
|
nm
|
|
nm
|
|
1.1x
|
||
Oaktree Power Opportunities Fund III
|
Apr. 2010
|
|
Apr. 2015
|
|
1,062
|
|
|
nm
|
|
|
66
|
|
|
408
|
|
|
575
|
|
|
531
|
|
|
412
|
|
|
14
|
|
|
64
|
|
|
304
|
|
|
22.9
|
%
|
|
14.2
|
%
|
|
1.7
|
||||||||
OCM/GFI Power Opportunities Fund II
|
Nov. 2004
|
|
Nov. 2009
|
|
1,021
|
|
|
nm
|
|
|
53
|
|
|
1,446
|
|
|
1,982
|
|
|
5
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
76.1
|
|
|
58.8
|
|
|
3.8
|
||||||||
OCM/GFI Power Opportunities Fund
|
Nov. 1999
|
|
Nov. 2004
|
|
449
|
|
|
nm
|
|
|
85
|
|
|
251
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
20.1
|
|
|
13.1
|
|
|
1.8
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34.7
|
%
|
|
26.5
|
%
|
|
|
||||||||||||||||
Infrastructure Investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Infrastructure Fund
(15)
|
TBD
|
|
—
|
|
$
|
409
|
|
|
—
|
%
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
Highstar Capital IV
(16)
.
|
Nov. 2010
|
|
Nov. 2016
|
|
2,000
|
|
|
nm
|
|
|
100
|
|
|
442
|
|
|
441
|
|
|
2,001
|
|
|
1,317
|
|
|
—
|
|
|
5
|
|
|
2,002
|
|
|
14.8
|
%
|
|
8.8
|
%
|
|
1.4x
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mezzanine Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Oaktree Mezzanine Fund IV
(10)
|
Oct. 2014
|
|
Oct. 2019
|
|
$
|
852
|
|
|
41
|
%
|
|
40
|
%
|
|
$
|
35
|
|
|
$
|
27
|
|
|
$
|
347
|
|
|
$
|
331
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
340
|
|
|
12.3
|
%
|
|
8.5
|
%
|
|
1.1x
|
Oaktree Mezzanine Fund III
(17)
.
|
Dec. 2009
|
|
Dec. 2014
|
|
1,592
|
|
|
nm
|
|
|
89
|
|
|
400
|
|
|
1,437
|
|
|
386
|
|
|
378
|
|
|
10
|
|
|
26
|
|
|
348
|
|
|
15.2
|
|
10.4 / 8.6
|
1.4
|
|||||||||||
OCM Mezzanine Fund II
|
Jun. 2005
|
|
Jun. 2010
|
|
1,251
|
|
|
nm
|
|
|
88
|
|
|
529
|
|
|
1,504
|
|
|
132
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154
|
|
|
11.3
|
|
|
7.8
|
|
|
1.6
|
||||||||
OCM Mezzanine Fund
(18)
.
|
Oct. 2001
|
|
Oct. 2006
|
|
808
|
|
|
nm
|
|
|
96
|
|
|
302
|
|
|
1,075
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
15.4
|
|
|
10.8 / 10.5
|
1.5
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.2
|
%
|
|
8.9
|
%
|
|
|
||||||||||||||||||
Emerging Markets Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Oaktree Emerging Market Opportunities Fund
(19)
|
Sep. 2013
|
|
Sep. 2017
|
|
$
|
384
|
|
|
65
|
%
|
|
65
|
%
|
|
$
|
48
|
|
|
$
|
1
|
|
|
$
|
297
|
|
|
$
|
246
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
291
|
|
|
12.5
|
%
|
|
8.2
|
%
|
|
1.2x
|
Special Account F
|
Jan. 2014
|
|
Jan. 2017
|
|
253
|
|
|
74
|
|
|
74
|
|
|
33
|
|
|
—
|
|
|
220
|
|
|
218
|
|
|
—
|
|
|
4
|
|
|
215
|
|
|
11.6
|
|
|
8.3
|
|
|
1.2
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,957
|
|
(12)
|
|
1,988
|
|
(12)
|
|
12.2
|
%
|
|
8.9
|
%
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Other
(20)
|
|
|
8,399
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
(21)
|
|
|
$
|
40,356
|
|
|
|
|
$
|
2,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For our incentive-creating closed-end funds in their investment periods, this percentage equals invested capital divided by committed capital. Invested capital for this purpose is the sum of capital drawn from fund investors plus net borrowings, if any, outstanding, under a fund-level credit facility where such borrowings were made in lieu of drawing capital from fund investors.
|
(2)
|
Represents capital drawn from fund investors divided by committed capital. The aggregate change in drawn capital for the three months ended December 31, 2016 was $2.3 billion.
|
(3)
|
Accrued incentives (fund level) exclude Oaktree segment incentive income previously recognized.
|
(4)
|
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.
|
(5)
|
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.
|
(6)
|
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.
|
(7)
|
The IRR is not considered meaningful (“nm”) as the period from the initial capital contribution through December 31, 2016 was less than 18 months.
|
(8)
|
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.
|
(9)
|
A portion of this fund pays management fees based on drawn, rather than committed, capital.
|
(10)
|
Management fees during the investment period are calculated on drawn capital or cost basis, rather than committed capital. As a result, as of December 31, 2016 management fee-generating AUM included only that portion of committed capital that had been drawn.
|
(11)
|
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.
|
(12)
|
Aggregate IRRs or totals are based on the conversion of cash flows or amounts, respectively, from euros to USD using the December 31, 2016 spot rate of $1.05.
|
(13)
|
Management fees are based on aggregate contributed capital for the period from the initial investment date until the investment period start date, which includes indebtedness incurred in lieu of drawn capital.
|
(14)
|
Effective November 2016, the Global Principal strategy was renamed the Special Situations strategy. The aggregate gross and net IRRs presented for this strategy exclude the performance of Oaktree Special Situations Fund.
|
(15)
|
A portion of the $409 million of commitments to Oaktree Infrastructure Fund is subject to certain contingencies.
|
(16)
|
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 December 31, 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.
|
(17)
|
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 8.6%. The combined net IRR for Class A and Class B interests was 9.6%.
|
(18)
|
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%.
|
(19)
|
In the third quarter of 2016, the investment period for Oaktree Emerging Market Opportunities Fund was extended for a one year period until September 2017. However, management fees stepped down to the post-investment period basis effective October 1, 2016.
|
(20)
|
This includes our closed-end Senior Loan funds, CLOs, Oaktree European Special Situations Fund, OCM Asia Principal Opportunities Fund, a non-Oaktree fund, certain separate accounts, co-investments and certain evergreen separate accounts in our Real Estate Debt and Emerging Markets Opportunities strategies.
|
(21)
|
The total excludes two closed-end funds with management fee-generating AUM aggregating $472 million as of December 31, 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 and Emerging Markets Opportunities strategies with an aggregate $334 million of management fee-generating AUM.
|
|
|
|
Manage-
ment Fee-gener-
ating AUM
as of
Dec. 31, 2016
|
|
Year Ended December 31, 2016
|
|
Since Inception through December 31, 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
|
1986
|
|
$
|
17,289
|
|
|
14.2
|
%
|
|
13.6
|
%
|
|
17.3
|
%
|
|
9.4
|
%
|
|
8.8
|
%
|
|
8.4
|
%
|
|
0.80
|
|
0.56
|
Global High Yield Bonds
|
2010
|
|
4,425
|
|
|
15.5
|
|
|
15.0
|
|
|
16.9
|
|
|
7.5
|
|
|
7.0
|
|
|
6.9
|
|
|
1.13
|
|
1.07
|
|
European High Yield Bonds
|
1999
|
|
1,316
|
|
|
11.1
|
|
|
10.6
|
|
|
12.5
|
|
|
8.1
|
|
|
7.6
|
|
|
6.3
|
|
|
0.71
|
|
0.44
|
|
U.S. Convertibles
|
1987
|
|
3,411
|
|
|
8.2
|
|
|
7.6
|
|
|
10.4
|
|
|
9.4
|
|
|
8.8
|
|
|
8.1
|
|
|
0.48
|
|
0.36
|
|
Non-U.S. Convertibles
|
1994
|
|
1,456
|
|
|
3.7
|
|
|
3.2
|
|
|
0.9
|
|
|
8.4
|
|
|
7.8
|
|
|
5.6
|
|
|
0.78
|
|
0.40
|
|
High Income Convertibles
|
1989
|
|
863
|
|
|
15.0
|
|
|
14.1
|
|
|
17.8
|
|
|
11.4
|
|
|
10.6
|
|
|
8.2
|
|
|
1.06
|
|
0.60
|
|
U.S. Senior Loans
|
2008
|
|
1,572
|
|
|
11.5
|
|
|
10.9
|
|
|
9.9
|
|
|
6.2
|
|
|
5.7
|
|
|
5.3
|
|
|
1.11
|
|
0.65
|
|
European Senior Loans
|
2009
|
|
1,422
|
|
|
6.7
|
|
|
6.2
|
|
|
6.5
|
|
|
8.5
|
|
|
7.9
|
|
|
9.2
|
|
|
1.72
|
|
1.73
|
|
Emerging Markets Equities
|
2011
|
|
3,060
|
|
|
15.1
|
|
|
14.2
|
|
|
11.2
|
|
|
(1.7
|
)
|
|
(2.5
|
)
|
|
(2.7
|
)
|
|
(0.09)
|
|
(0.15)
|
|
Other
|
|
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
$
|
35,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, 2016
|
|
Year Ended
December 31, 2016
|
|
Since Inception through
December 31, 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)
.
|
2012
|
|
$
|
3,281
|
|
|
$
|
2,392
|
|
|
$
|
—
|
|
(3)
|
16.3
|
%
|
|
12.8
|
%
|
|
8.3
|
%
|
|
6.0
|
%
|
Value Opportunities
|
2007
|
|
1,272
|
|
|
1,207
|
|
|
—
|
|
(4)
|
17.7
|
|
|
15.5
|
|
|
9.5
|
|
|
5.5
|
|
|||
Emerging Markets Debt Total Return
(5)
|
2015
|
|
441
|
|
|
366
|
|
|
2
|
|
(3)
|
31.3
|
|
|
25.0
|
|
|
15.5
|
|
|
12.1
|
|
|||
Value Equities
(6)
|
2012
|
|
371
|
|
|
301
|
|
|
—
|
|
(3)
|
29.6
|
|
|
25.7
|
|
|
19.5
|
|
|
14.1
|
|
|||
Emerging Markets Absolute Return
|
1997
|
|
131
|
|
|
111
|
|
|
—
|
|
(4)
|
5.8
|
|
|
4.4
|
|
|
12.9
|
|
|
8.7
|
|
|||
|
|
|
|
|
4,377
|
|
|
2
|
|
|
|
|
|
|
|
|
|
||||||||
Restructured funds
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
(2) (7)
|
|
|
$
|
4,377
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Returns represent time-weighted rates of return.
|
(2)
|
Includes two closed-end funds with an aggregate $799 million and $472 million of AUM and management fee-generating AUM, respectively. Beginning with the third quarter of 2016, annual performance-based fees have been reflected as incentive income (as opposed to management fees). Such amounts were not material in prior periods.
|
(3)
|
For the year ended December 31, 2016, segment gross incentive income recognized by Oaktree totaled $19.3 million, $4.8 million and $5.3 million for Strategic Credit, Emerging Markets Debt Total Return and Value Equities, respectively.
|
(4)
|
As of December 31, 2016, the aggregate depreciation below high-water marks previously established for individual investors in the fund totaled approximately $67 million for Value Opportunities and $2 million for Emerging Markets Absolute Return.
|
(5)
|
The rates of return reflect the performance of a composite of accounts, including a single account with a December 2014 inception date.
|
(6)
|
Includes performance of a proprietary fund with an initial capital commitment of $25 million since its inception in May 2012.
|
(7)
|
The total excludes certain evergreen separate accounts in our Real Estate Debt and Emerging Markets Opportunities strategies with an aggregate $334 million of management fee-generating AUM as of December 31, 2016.
|
•
|
from time to time, we have suspended marketing certain of our open-end funds or other funds that we sub-advise, sometimes for long periods, and have declined to participate in searches aggregating billions of dollars;
|
•
|
from time to time, we have returned capital from certain of our closed-end funds prior to the end of such funds’ respective investment periods;
|
•
|
we intentionally sized certain of our closed-ended funds to be smaller than their predecessors even though we could have raised additional capital; and
|
•
|
since our founding we have turned away substantial amounts of capital offered to us for management.
|
•
|
future growth that does not follow our historical trends;
|
•
|
changes in the economic environment, competitive landscape and financial markets;
|
•
|
new and additional costs and expenses attributable to our operations, including our operations as a public company, as a mutual fund adviser and as a company within an extensively regulated industry;
|
•
|
increases in non-cash compensation charges relating to the vesting of OCGH and Class A units issued after our initial public offering in April 2012; and
|
•
|
a provision for corporate income taxes on the income of certain of our Intermediate Holding Companies that are taxed as corporations for U.S. federal income tax purposes.
|
•
|
a number of our competitors have more personnel and greater financial, technical, marketing and other resources than we do, and, in the case of some competitors, longer operating histories, more established relationships and/or greater experience;
|
•
|
many of our competitors have raised, or are expected to raise, significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities and reduce the size and duration of pricing inefficiencies that we seek to exploit;
|
•
|
some of our competitors (including strategic competitors) may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our funds, particularly our funds that directly use leverage or rely on debt financing of their portfolio companies to generate superior investment returns;
|
•
|
some of our competitors have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments;
|
•
|
our competitors may be able to achieve synergistic cost savings in respect of an investment that we cannot, which may provide them with a competitive advantage in bidding for an investment;
|
•
|
there are relatively few barriers to entry impeding new investment funds, and the successful efforts of new entrants into our various lines of business, including major commercial and investment banks and other financial institutions, have resulted in increased competition;
|
•
|
some investors may prefer to invest with an investment manager whose equity securities are not traded on a national securities exchange;
|
•
|
some investors may prefer to pursue investments directly instead of investing through one of our funds; and
|
•
|
other industry participants will from time to time seek to recruit our investment professionals and other employees away from us.
|
•
|
the diversion of management’s attention from our existing business;
|
•
|
the disruption of our existing business;
|
•
|
potential conflicts of interest with existing products;
|
•
|
entry into markets or lines of business in which we may have limited or no experience;
|
•
|
exposure to new market risks;
|
•
|
assumption of liabilities in acquired businesses;
|
•
|
increased fees and expenses related to outside accounts, tax professionals, legal advisers, consultants and other service providers;
|
•
|
increased costs and demands on our operational systems;
|
•
|
potential increase in investor concentration; and
|
•
|
increased risks associated with U.S. or foreign regulatory requirements or conducting operations in foreign jurisdictions.
|
•
|
derivative instruments can be expensive, particularly during periods of volatility in interest rates, foreign currency and the prices of reference instruments;
|
•
|
an imperfect or variable degree of correlation between price movements of the available derivative instruments and the underlying asset, reference rate or index sought to be hedged may prevent us from achieving the intended hedging effect or expose us to the risk of loss;
|
•
|
the gain (or loss) on such instruments may not fully offset the corresponding loss (or gain) in the value of the underlying assets in our portfolio;
|
•
|
the duration of a hedge may be significantly different than the duration of the underlying liability or asset;
|
•
|
typically, investing in a derivative instrument requires the deposit or payment of an initial amount much smaller than the notional or nominal exposure amount from such derivative instrument, potentially magnifying the loss if the relevant market moves against us or our funds;
|
•
|
certain derivatives may be illiquid, making them unable to be sold at the desired time or price, so that in volatile markets we may not be able to close out a position without incurring a loss;
|
•
|
the credit quality of the counterparty of the hedge may be downgraded to such an extent that it impairs or makes economically unattractive our ability to sell or assign our side of the hedging transaction;
|
•
|
the counterparty owing money in a hedging transaction may default on its obligation to pay, see “—Derivative instruments often involve counterparty risks and costs”;
|
•
|
the cost of using certain derivative instruments may increase during a period of increased volatility, for instance, with respect to interest rate hedges, during periods of rising and volatile interest rates and, with respect to foreign-currency hedges, during periods of volatile foreign currencies;
|
•
|
the value of derivative instruments depends upon the price of the underlying asset, reference rate or index, which may be subject to volatility;
|
•
|
actual or implied daily limits on price fluctuations and speculative position limits on the exchanges or over-the-counter markets in which we may conduct our transactions in derivative instruments may prevent prompt liquidation of positions, subjecting us to the potential of greater losses;
|
•
|
significant disparities may exist between “bid” and “asked” prices for derivative instruments that are traded over-the-counter and not on an exchange;
|
•
|
the derivative instruments used by us may be difficult to value or involve the risk of mispricing or improper valuation, especially where the markets for such derivative instruments are illiquid and/or such derivatives involve complex structures, or where there is imperfect correlation between the value of the derivative instrument and the underlying asset, reference rate or index;
|
•
|
derivative contracts could require us to fund cash payments in the future under certain circumstances, including an event of default or other early termination event, or the decision by a counterparty to request margin in the form of securities or other forms of collateral under the terms of the derivative contract and/or under applicable laws; and
|
•
|
compared with exchange-traded instruments, the market for OTC derivatives is less liquid and the derivative instruments used by us and our funds may be difficult to value or involve the risk of mispricing or improper valuation, especially where the markets for such derivative instruments are illiquid and/or such derivatives involve complex structures, or where there is imperfect correlation between the value of a derivative instrument and the underlying asset, reference rate or index.
|
•
|
we may create new funds in the future that reflect a different asset mix and different investment strategies, as well as a varied geographic and industry exposure as compared to our present funds, and any such new funds could have different returns from our existing or previous funds;
|
•
|
the rates of return of our closed-end funds reflect unrealized gains as of the applicable measurement date that may never be realized, which may result in a lower internal rate of return and ultimate return for some closed-end funds from those presented in this annual report;
|
•
|
our funds’ returns have previously benefited from investment opportunities and general market conditions that may not repeat themselves, and there can be no assurance that our current or future funds will be able to avail themselves of profitable investment opportunities;
|
•
|
many of our funds’ historical investments were made over a long period of time and over the course of various market and macroeconomic cycles, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past;
|
•
|
newly-established funds may generate lower returns during the period in which they initially deploy their capital;
|
•
|
our funds may not be able to successfully identify, make and realize upon any particular investment or generate returns for their investors; and
|
•
|
any material increase or decrease in the size of our funds could result in materially different rates of returns.
|
•
|
our funds’ abilities to exchange local currencies for U.S. dollars and other currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another;
|
•
|
controls on, and changes in controls on, foreign investment and limitations on repatriation of invested capital;
|
•
|
less developed or less efficient financial markets than exist in the United States, which may lead to price volatility and relative illiquidity;
|
•
|
the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation;
|
•
|
differences in legal and regulatory environments, particularly with respect to bankruptcy and reorganization, less developed corporate laws regarding fiduciary duties and the protection of investors and less reliable judicial systems to enforce contracts and applicable law;
|
•
|
less publicly available information in respect of companies in non-U.S. markets;
|
•
|
heightened exposure to corruption risk;
|
•
|
certain economic and political risks, including potential exchange control regulations and restrictions on our non-U.S. investments and repatriation of capital, potential political, economic or social instability, the possibility of nationalization or expropriation or confiscatory taxation and adverse economic and political developments; and
|
•
|
the possible imposition of non-U.S. taxes or withholding on income and gains recognized with respect to the securities.
|
•
|
variations in our quarterly operating results or distributions, which may be substantial;
|
•
|
our policy of taking a long-term perspective on making investment, operational and strategic decisions, which is expected to result in significant and unpredictable variations in our quarterly returns;
|
•
|
failure to meet analysts’ performance estimates;
|
•
|
publication of research reports about us or the investment management industry or the failure of securities analysts to cover our Class A units;
|
•
|
additions or departures of key management or investment personnel;
|
•
|
adverse market reaction to any indebtedness we may incur or securities we may issue in the future;
|
•
|
changes in market valuations of similar companies;
|
•
|
speculation in the press or investment community;
|
•
|
changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations or announcements relating to these matters;
|
•
|
a lack of liquidity in the trading of our Class A units;
|
•
|
adverse publicity about the asset management industry generally or individual scandals, specifically; and
|
•
|
general market, political and economic conditions.
|
•
|
it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or
|
•
|
absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
|
|
2016
|
|
2015
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
50.15
|
|
|
$
|
38.66
|
|
|
$
|
57.07
|
|
|
$
|
51.09
|
|
Second Quarter
|
49.65
|
|
|
43.72
|
|
|
55.19
|
|
|
51.00
|
|
||||
Third Quarter
|
48.94
|
|
|
41.21
|
|
|
56.54
|
|
|
48.69
|
|
||||
Fourth Quarter
|
43.70
|
|
|
36.95
|
|
|
52.15
|
|
|
45.67
|
|
|
|
|
Future Estimated Reductions Associated
With the Tax Receivable Agreement
|
||||||||||
Transactions
|
Fiscal Year 2016 Reductions
(1)
|
|
Total Future Aggregate Reductions
|
|
Fiscal Year 2017 Reductions
(1)
|
|
Reductions Through Fiscal Year
|
||||||
|
($ in millions)
|
|
|
||||||||||
2007 Private Offering
|
$
|
3.8
|
|
|
$
|
32.1
|
|
|
$
|
4.0
|
|
|
2029
|
Initial public offering
|
4.4
|
|
|
66.3
|
|
|
4.5
|
|
|
2033
|
|||
May 2013 Offering
|
5.5
|
|
|
93.0
|
|
|
5.6
|
|
|
2034
|
|||
March 2014 Offering
|
3.9
|
|
|
70.6
|
|
|
4.0
|
|
|
2035
|
|||
March 2015 Offering
|
2.9
|
|
|
59.9
|
|
|
3.4
|
|
|
2036
|
|||
Total
|
$
|
20.5
|
|
|
$
|
321.9
|
|
|
$
|
21.5
|
|
|
|
|
|
|
|
|
(1)
|
This column represents reductions in quarterly distributions to Class A unitholders associated with payments under the tax receivable agreement attributable to the applicable fiscal year.
|
|
As of or for the Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands, except per unit data or as otherwise indicated)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
1,125,746
|
|
|
$
|
201,905
|
|
|
$
|
193,894
|
|
|
$
|
194,922
|
|
|
$
|
144,983
|
|
Total expenses
|
(789,336
|
)
|
|
(940,908
|
)
|
|
(947,477
|
)
|
|
(1,107,062
|
)
|
|
(790,603
|
)
|
|||||
Total other income (loss)
|
272,212
|
|
|
(776,410
|
)
|
|
2,947,671
|
|
|
7,149,104
|
|
|
7,348,895
|
|
|||||
Income (loss) before income taxes
|
608,622
|
|
|
(1,515,413
|
)
|
|
2,194,088
|
|
|
6,236,964
|
|
|
6,703,275
|
|
|||||
Income taxes
|
(42,519
|
)
|
|
(17,549
|
)
|
|
(18,536
|
)
|
|
(26,232
|
)
|
|
(30,858
|
)
|
|||||
Net income (loss)
|
566,103
|
|
|
(1,532,962
|
)
|
|
2,175,552
|
|
|
6,210,732
|
|
|
6,672,417
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net (income) loss attributable to non-controlling interests in consolidated funds
|
(22,921
|
)
|
|
1,809,683
|
|
|
(1,649,890
|
)
|
|
(5,163,939
|
)
|
|
(6,016,342
|
)
|
|||||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
(348,477
|
)
|
|
(205,372
|
)
|
|
(399,379
|
)
|
|
(824,795
|
)
|
|
(548,265
|
)
|
|||||
Net income attributable to OCG
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
|
$
|
221,998
|
|
|
$
|
107,810
|
|
Distributions declared per Class A unit
|
$
|
2.25
|
|
|
$
|
2.10
|
|
|
$
|
3.15
|
|
|
$
|
4.71
|
|
|
$
|
2.31
|
|
Net income per Class A unit
|
$
|
3.11
|
|
|
$
|
1.45
|
|
|
$
|
2.97
|
|
|
$
|
6.35
|
|
|
$
|
3.83
|
|
Weighted average number of Class A units outstanding
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
|
34,979
|
|
|
28,170
|
|
|
|
|
|
|
(1)
|
In the first quarter of 2016, Oaktree adopted the new consolidation and collateralized financing entity guidance under the modified retrospective approach. The modified retrospective approach did not require prior periods to be recast. The adoption resulted in the deconsolidation of substantially all of Oaktree’s investment funds.
|
|
As of or for the Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands, except as otherwise indicated)
|
||||||||||||||||||
Consolidated Statements of Financial Condition Data:
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
7,649,110
|
|
|
$
|
51,762,731
|
|
|
$
|
53,320,716
|
|
|
$
|
45,243,708
|
|
|
$
|
43,858,921
|
|
Debt obligations
|
4,284,063
|
|
|
9,619,455
|
|
|
7,133,041
|
|
|
2,857,099
|
|
|
1,095,727
|
|
|||||
Non-controlling redeemable interests in consolidated funds
|
344,047
|
|
|
38,173,125
|
|
|
41,681,155
|
|
|
38,834,831
|
|
|
39,670,831
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment Statements of Operations:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Management fees
|
$
|
785,673
|
|
|
$
|
753,805
|
|
|
$
|
762,823
|
|
|
$
|
749,901
|
|
|
$
|
747,440
|
|
Incentive income
|
355,152
|
|
|
263,806
|
|
|
491,402
|
|
|
1,030,195
|
|
|
461,116
|
|
|||||
Investment income
|
221,377
|
|
|
48,253
|
|
|
117,662
|
|
|
258,654
|
|
|
202,392
|
|
|||||
Total segment revenues
|
1,362,202
|
|
|
1,065,864
|
|
|
1,371,887
|
|
|
2,038,750
|
|
|
1,410,948
|
|
|||||
Compensation and benefits
|
(381,937
|
)
|
|
(404,442
|
)
|
|
(379,360
|
)
|
|
(365,306
|
)
|
|
(329,741
|
)
|
|||||
Equity-based compensation
|
(51,759
|
)
|
|
(37,978
|
)
|
|
(19,705
|
)
|
|
(3,828
|
)
|
|
(318
|
)
|
|||||
Incentive income compensation
|
(169,683
|
)
|
|
(141,822
|
)
|
|
(231,871
|
)
|
|
(436,217
|
)
|
|
(222,594
|
)
|
|||||
General and administrative
|
(123,784
|
)
|
|
(120,783
|
)
|
|
(127,954
|
)
|
|
(117,361
|
)
|
|
(102,685
|
)
|
|||||
Depreciation and amortization
|
(12,219
|
)
|
|
(10,018
|
)
|
|
(7,249
|
)
|
|
(7,119
|
)
|
|
(7,397
|
)
|
|||||
Total expenses
|
(739,382
|
)
|
|
(715,043
|
)
|
|
(766,139
|
)
|
|
(929,831
|
)
|
|
(662,735
|
)
|
|||||
Interest expense, net of interest income
(3)
|
(31,845
|
)
|
|
(35,032
|
)
|
|
(30,190
|
)
|
|
(28,621
|
)
|
|
(31,730
|
)
|
|||||
Other income (expense), net
|
(8,392
|
)
|
|
(3,927
|
)
|
|
(2,431
|
)
|
|
409
|
|
|
767
|
|
|||||
Adjusted net income
|
$
|
582,583
|
|
|
$
|
311,862
|
|
|
$
|
573,127
|
|
|
$
|
1,080,707
|
|
|
$
|
717,250
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment Statements of Financial Condition Data:
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash-equivalents
|
$
|
291,470
|
|
|
$
|
476,046
|
|
|
$
|
405,290
|
|
|
$
|
390,721
|
|
|
$
|
458,191
|
|
U.S. Treasury, government agency and time deposit securities
|
757,578
|
|
|
661,116
|
|
|
655,529
|
|
|
676,600
|
|
|
370,614
|
|
|||||
Corporate investments
|
1,480,928
|
|
|
1,434,109
|
|
|
1,515,443
|
|
|
1,197,173
|
|
|
1,115,952
|
|
|||||
Total assets
|
3,313,714
|
|
|
3,254,082
|
|
|
3,263,382
|
|
|
2,811,136
|
|
|
2,352,227
|
|
|||||
Debt obligations
|
745,897
|
|
|
846,354
|
|
|
845,583
|
|
|
573,473
|
|
|
607,858
|
|
|||||
Total liabilities
|
1,445,891
|
|
|
1,572,185
|
|
|
1,544,993
|
|
|
1,120,886
|
|
|
958,334
|
|
|||||
Total unitholders’ capital
|
1,867,823
|
|
|
1,681,897
|
|
|
1,718,389
|
|
|
1,690,250
|
|
|
1,393,893
|
|
|||||
Operating Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets under management (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets under management
|
$
|
100,504
|
|
|
$
|
97,359
|
|
|
$
|
90,831
|
|
|
$
|
83,605
|
|
|
$
|
77,051
|
|
Management fee-generating assets under management
|
79,767
|
|
|
78,897
|
|
|
78,079
|
|
|
71,950
|
|
|
66,784
|
|
|||||
Incentive-creating assets under management
|
33,627
|
|
|
31,923
|
|
|
33,861
|
|
|
32,379
|
|
|
33,989
|
|
|||||
Uncalled capital commitments
(4)
|
20,755
|
|
|
21,650
|
|
|
10,333
|
|
|
13,169
|
|
|
11,201
|
|
|||||
Accrued incentives (fund level):
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Incentives created (fund level)
|
784,032
|
|
|
(100,384
|
)
|
|
164,370
|
|
|
1,168,836
|
|
|
911,947
|
|
|||||
Incentives created (fund level), net of associated incentive income compensation expense
|
320,472
|
|
|
(66,399
|
)
|
|
24,228
|
|
|
549,545
|
|
|
493,005
|
|
|||||
Accrued incentives (fund level)
|
2,014,097
|
|
|
1,585,217
|
|
|
1,949,407
|
|
|
2,276,439
|
|
|
2,137,798
|
|
|||||
Accrued incentives (fund level), net of associated incentive income compensation expense
|
946,542
|
|
|
811,540
|
|
|
999,923
|
|
|
1,235,226
|
|
|
1,282,194
|
|
|
|
|
|
|
(1)
|
In the first quarter of 2016, Oaktree adopted the new consolidation and collateralized financing entity guidance under the modified retrospective approach. The modified retrospective approach did not require prior periods to be recast. The adoption resulted in the deconsolidation of substantially all of Oaktree’s investment funds.
|
(2)
|
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
|
(3)
|
Interest income was $6.6 million, $5.1 million, $3.6 million, $3.2 million and $2.6 million for the years ended December 31, 2016, 2015, 2014, 2013 and 2012, respectively.
|
(4)
|
Uncalled capital commitments represent undrawn capital commitments by partners (including Oaktree as general partner) of our closed-end funds in their investment periods and certain evergreen funds. If a fund distributes capital during its investment period, that capital is typically subject to possible recall, in which case it is included in uncalled capital commitments.
|
(5)
|
Our funds record as accrued incentives the incentive income that would be paid to us if the funds were liquidated at their reported values as of the date of the financial statements. Incentives created (fund level) refers to the gross amount of potential incentives generated by the funds during the period. We refer to the amount of incentive income recognized as revenue by us as segment incentive income. Amounts recognized by us as incentive income are no longer included in accrued incentives (fund level), the term we use for remaining fund-level accruals. Incentives created (fund level), incentive income and accrued incentives (fund level) are presented gross, without deduction for direct compensation expense that is owed to our investment professionals associated with the particular fund when we earn the incentive income. We call that charge “incentive income compensation expense.” Incentive income compensation expense varies by the investment strategy and vintage of the particular fund, among many factors.
|
Equity-based Compensation Expense Included in ANI
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||
Estimated expense from equity grants awarded through December 2016
|
|
$
|
45.2
|
|
|
$
|
32.6
|
|
|
$
|
24.0
|
|
|
$
|
7.7
|
|
|
$
|
5.3
|
|
|
$
|
12.8
|
|
|
$
|
127.6
|
|
•
|
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 related parties or 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 Class A and OCGH 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 12 to our consolidated financial statements included elsewhere in this annual 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 generally 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.
|
|
Year Ended December 31,
|
||||||||||
Consolidated Statements of Operations:
|
2016
|
|
2015
|
|
2014
|
||||||
(in thousands)
|
|||||||||||
Revenues:
|
|
|
|
|
|
||||||
Management fees
|
$
|
774,587
|
|
|
$
|
195,308
|
|
|
$
|
192,055
|
|
Incentive income
|
351,159
|
|
|
6,597
|
|
|
1,839
|
|
|||
Total revenues
|
1,125,746
|
|
|
201,905
|
|
|
193,894
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
(389,892
|
)
|
|
(416,907
|
)
|
|
(388,512
|
)
|
|||
Equity-based compensation
|
(63,724
|
)
|
|
(54,381
|
)
|
|
(41,395
|
)
|
|||
Incentive income compensation
|
(168,276
|
)
|
|
(160,831
|
)
|
|
(221,194
|
)
|
|||
Total compensation and benefits expense
|
(621,892
|
)
|
|
(632,119
|
)
|
|
(651,101
|
)
|
|||
General and administrative
|
(145,430
|
)
|
|
(110,677
|
)
|
|
(99,835
|
)
|
|||
Depreciation and amortization
|
(16,222
|
)
|
|
(14,022
|
)
|
|
(8,003
|
)
|
|||
Consolidated fund expenses
|
(5,792
|
)
|
|
(184,090
|
)
|
|
(188,538
|
)
|
|||
Total expenses
|
(789,336
|
)
|
|
(940,908
|
)
|
|
(947,477
|
)
|
|||
Other income (loss):
|
|
|
|
|
|
||||||
Interest expense
|
(120,610
|
)
|
|
(216,799
|
)
|
|
(129,942
|
)
|
|||
Interest and dividend income
|
165,066
|
|
|
1,958,802
|
|
|
1,902,576
|
|
|||
Net realized gain on consolidated funds’ investments
|
27,593
|
|
|
1,177,150
|
|
|
2,131,584
|
|
|||
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments
|
(12,453
|
)
|
|
(3,767,527
|
)
|
|
(993,260
|
)
|
|||
Investment income
|
199,126
|
|
|
51,958
|
|
|
33,695
|
|
|||
Other income (expense), net
|
13,490
|
|
|
20,006
|
|
|
3,018
|
|
|||
Total other income (loss)
|
272,212
|
|
|
(776,410
|
)
|
|
2,947,671
|
|
|||
Income (loss) before income taxes
|
608,622
|
|
|
(1,515,413
|
)
|
|
2,194,088
|
|
|||
Income taxes
|
(42,519
|
)
|
|
(17,549
|
)
|
|
(18,536
|
)
|
|||
Net income (loss)
|
566,103
|
|
|
(1,532,962
|
)
|
|
2,175,552
|
|
|||
Less:
|
|
|
|
|
|
||||||
Net (income) loss attributable to non-controlling interests in consolidated funds
|
(22,921
|
)
|
|
1,809,683
|
|
|
(1,649,890
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
(348,477
|
)
|
|
(205,372
|
)
|
|
(399,379
|
)
|
|||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
|
As of or for the Year Ended December 31,
|
||||||||||
Segment Statements of Operations Data:
(1)
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per unit data or
as otherwise indicated)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Management fees
|
$
|
785,673
|
|
|
$
|
753,805
|
|
|
$
|
762,823
|
|
Incentive income
|
355,152
|
|
|
263,806
|
|
|
491,402
|
|
|||
Investment income
|
221,377
|
|
|
48,253
|
|
|
117,662
|
|
|||
Total revenues
|
1,362,202
|
|
|
1,065,864
|
|
|
1,371,887
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
(381,937
|
)
|
|
(404,442
|
)
|
|
(379,360
|
)
|
|||
Equity-based compensation
|
(51,759
|
)
|
|
(37,978
|
)
|
|
(19,705
|
)
|
|||
Incentive income compensation
|
(169,683
|
)
|
|
(141,822
|
)
|
|
(231,871
|
)
|
|||
General and administrative
|
(123,784
|
)
|
|
(120,783
|
)
|
|
(127,954
|
)
|
|||
Depreciation and amortization
|
(12,219
|
)
|
|
(10,018
|
)
|
|
(7,249
|
)
|
|||
Total expenses
|
(739,382
|
)
|
|
(715,043
|
)
|
|
(766,139
|
)
|
|||
Adjusted net income before interest and other income (expense)
|
622,820
|
|
|
350,821
|
|
|
605,748
|
|
|||
Interest expense, net of interest income
(2)
|
(31,845
|
)
|
|
(35,032
|
)
|
|
(30,190
|
)
|
|||
Other income (expense), net
|
(8,392
|
)
|
|
(3,927
|
)
|
|
(2,431
|
)
|
|||
Adjusted net income
|
$
|
582,583
|
|
|
$
|
311,862
|
|
|
$
|
573,127
|
|
Adjusted net income-OCG
|
$
|
194,844
|
|
|
$
|
79,941
|
|
|
$
|
137,159
|
|
Adjusted net income per Class A unit
|
3.11
|
|
|
1.62
|
|
|
3.22
|
|
|||
Distributable earnings
|
538,420
|
|
|
447,576
|
|
|
606,136
|
|
|||
Distributable earnings-OCG
|
184,225
|
|
|
119,406
|
|
|
145,370
|
|
|||
Distributable earnings per Class A unit
|
2.94
|
|
|
2.42
|
|
|
3.41
|
|
|||
Fee-related earnings
|
267,733
|
|
|
218,562
|
|
|
248,260
|
|
|||
Fee-related earnings-OCG
|
93,740
|
|
|
66,328
|
|
|
59,915
|
|
|||
Fee-related earnings per Class A unit
|
1.50
|
|
|
1.34
|
|
|
1.41
|
|
|||
Weighted average number of Operating Group units outstanding
|
154,687
|
|
|
153,751
|
|
|
152,660
|
|
|||
Weighted average number of Class A units outstanding
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
|||
Operating Metrics:
|
|
|
|
|
|
|
|
|
|||
Assets under management (in millions):
|
|
|
|
|
|
|
|
|
|||
Assets under management
|
$
|
100,504
|
|
|
$
|
97,359
|
|
|
$
|
90,831
|
|
Management fee-generating assets under management
|
79,767
|
|
|
78,897
|
|
|
78,079
|
|
|||
Incentive-creating assets under management
|
33,627
|
|
|
31,923
|
|
|
33,861
|
|
|||
Uncalled capital commitments
|
20,755
|
|
|
21,650
|
|
|
10,333
|
|
|||
Accrued incentives (fund level):
|
|
|
|
|
|
||||||
Incentives created (fund level)
|
784,032
|
|
|
(100,384
|
)
|
|
164,370
|
|
|||
Incentives created (fund level), net of associated incentive income compensation expense
|
320,472
|
|
|
(66,399
|
)
|
|
24,228
|
|
|||
Accrued incentives (fund level)
|
2,014,097
|
|
|
1,585,217
|
|
|
1,949,407
|
|
|||
Accrued incentives (fund level), net of associated incentive income compensation expense
|
946,542
|
|
|
811,540
|
|
|
999,923
|
|
|
|
|
|
|
(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 ANI 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
|
(2)
|
Interest income was $6.6 million, $5.1 million and $3.6 million for the years ended December 31, 2016, 2015 and 2014, respectively.
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Assets Under Management:
|
(in millions)
|
||||||||||
Closed-end funds
|
$
|
60,104
|
|
|
$
|
59,430
|
|
|
$
|
48,203
|
|
Open-end funds
|
35,105
|
|
|
33,202
|
|
|
37,452
|
|
|||
Evergreen funds
|
5,295
|
|
|
4,727
|
|
|
5,176
|
|
|||
Total
|
$
|
100,504
|
|
|
$
|
97,359
|
|
|
$
|
90,831
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Change in Assets Under Management:
|
(in millions)
|
||||||||||
Beginning balance
|
$
|
97,359
|
|
|
$
|
90,831
|
|
|
$
|
83,605
|
|
Closed-end funds:
|
|
|
|
|
|
||||||
Capital commitments/other
(1)
|
5,864
|
|
|
17,868
|
|
|
4,172
|
|
|||
Acquisition (Highstar)
|
—
|
|
|
—
|
|
|
2,349
|
|
|||
Distributions for a realization event/other
(2)
|
(7,747
|
)
|
|
(5,225
|
)
|
|
(6,956
|
)
|
|||
Change in uncalled capital commitments for funds entering or in liquidation
(3)
|
(1,084
|
)
|
|
(767
|
)
|
|
(315
|
)
|
|||
Foreign-currency translation
|
(176
|
)
|
|
(706
|
)
|
|
(868
|
)
|
|||
Change in market value
(4)
|
3,754
|
|
|
(522
|
)
|
|
2,279
|
|
|||
Change in applicable leverage
|
63
|
|
|
579
|
|
|
857
|
|
|||
Open-end funds:
|
|
|
|
|
|
||||||
Contributions
|
5,444
|
|
|
4,919
|
|
|
9,123
|
|
|||
Redemptions
|
(7,048
|
)
|
|
(7,260
|
)
|
|
(4,415
|
)
|
|||
Foreign-currency translation
|
(130
|
)
|
|
(422
|
)
|
|
(522
|
)
|
|||
Change in market value
(4)
|
3,637
|
|
|
(1,487
|
)
|
|
398
|
|
|||
Evergreen funds:
|
|
|
|
|
|
||||||
Contributions or new capital commitments
|
259
|
|
|
349
|
|
|
1,447
|
|
|||
Redemptions or distributions/other
|
(381
|
)
|
|
(406
|
)
|
|
(273
|
)
|
|||
Foreign-currency translation
|
(2
|
)
|
|
—
|
|
|
6
|
|
|||
Change in market value
(4)
|
692
|
|
|
(392
|
)
|
|
(56
|
)
|
|||
Ending balance
|
$
|
100,504
|
|
|
$
|
97,359
|
|
|
$
|
90,831
|
|
|
|
|
|
|
(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 December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Management Fee-generating Assets Under Management:
|
(in millions)
|
||||||||||
Closed-end funds:
|
|
|
|
|
|
||||||
Senior Loans
|
$
|
7,504
|
|
|
$
|
6,580
|
|
|
$
|
5,255
|
|
Other closed-end funds
|
32,990
|
|
|
35,709
|
|
|
32,017
|
|
|||
Open-end funds
|
35,034
|
|
|
33,135
|
|
|
37,383
|
|
|||
Evergreen funds
|
4,239
|
|
|
3,473
|
|
|
3,424
|
|
|||
Total
|
$
|
79,767
|
|
|
$
|
78,897
|
|
|
$
|
78,079
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Change in Management Fee-generating Assets Under Management:
|
(in millions)
|
||||||||||
Beginning balance
|
$
|
78,897
|
|
|
$
|
78,079
|
|
|
$
|
71,950
|
|
Closed-end funds:
|
|
|
|
|
|
||||||
Capital commitments to funds that pay fees based on committed capital/other
(1)
|
2,125
|
|
|
7,354
|
|
|
1,667
|
|
|||
Acquisition (Highstar)
|
—
|
|
|
—
|
|
|
1,882
|
|
|||
Capital drawn by funds that pay fees based on drawn capital, NAV or cost basis
|
1,390
|
|
|
1,175
|
|
|
959
|
|
|||
Change attributable to funds in liquidation
(2)
|
(4,162
|
)
|
|
(2,812
|
)
|
|
(3,303
|
)
|
|||
Change in uncalled capital commitments for funds entering or in liquidation that pay fees based on committed capital
(3)
|
(881
|
)
|
|
(409
|
)
|
|
(169
|
)
|
|||
Distributions by funds that pay fees based on NAV/other
(4)
|
(636
|
)
|
|
(381
|
)
|
|
(511
|
)
|
|||
Foreign-currency translation
|
(242
|
)
|
|
(443
|
)
|
|
(662
|
)
|
|||
Change in market value
(5)
|
427
|
|
|
(294
|
)
|
|
29
|
|
|||
Change in applicable leverage
|
184
|
|
|
827
|
|
|
958
|
|
|||
Open-end funds:
|
|
|
|
|
|
||||||
Contributions
|
5,395
|
|
|
4,903
|
|
|
9,095
|
|
|||
Redemptions
|
(7,024
|
)
|
|
(7,243
|
)
|
|
(4,418
|
)
|
|||
Foreign-currency translation
|
(130
|
)
|
|
(421
|
)
|
|
(521
|
)
|
|||
Change in market value
|
3,658
|
|
|
(1,487
|
)
|
|
397
|
|
|||
Evergreen funds:
|
|
|
|
|
|
||||||
Contributions or capital drawn by funds that pay fees based on drawn capital or NAV
|
533
|
|
|
760
|
|
|
998
|
|
|||
Redemptions or distributions
|
(413
|
)
|
|
(322
|
)
|
|
(214
|
)
|
|||
Change in market value
|
646
|
|
|
(389
|
)
|
|
(58
|
)
|
|||
Ending balance
|
$
|
79,767
|
|
|
$
|
78,897
|
|
|
$
|
78,079
|
|
|
|
|
|
|
(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.
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Reconciliation of Assets Under Management to Management Fee-generating Assets Under Management:
|
|
|
|
|
|
|
|
|
|||
Assets under management
|
$
|
100,504
|
|
|
$
|
97,359
|
|
|
$
|
90,831
|
|
Difference between assets under management and committed capital or the lesser of funded capital or cost basis for applicable closed-end funds
(1)
|
(4,183
|
)
|
|
(2,958
|
)
|
|
(5,521
|
)
|
|||
Undrawn capital commitments to closed-end funds that have not yet commenced their investment periods
|
(10,367
|
)
|
|
(8,215
|
)
|
|
(320
|
)
|
|||
Undrawn capital commitments to funds for which management fees are based on drawn capital, NAV or cost basis
|
(3,109
|
)
|
|
(4,754
|
)
|
|
(4,528
|
)
|
|||
Oaktree’s general partner investments in management fee-generating funds
|
(1,822
|
)
|
|
(1,357
|
)
|
|
(1,231
|
)
|
|||
Funds that are no longer paying management fees and co-investments that pay no management fees
|
(1,256
|
)
|
|
(1,178
|
)
|
|
(1,152
|
)
|
|||
Management fee-generating assets under management
|
$
|
79,767
|
|
|
$
|
78,897
|
|
|
$
|
78,079
|
|
|
|
|
|
|
(1)
|
This difference is not applicable to closed-end funds that pay management fees based on NAV or leverage.
|
|
As of December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Weighted Average Annual Management Fee Rates:
|
|
|
|
|
|
|||
Closed-end funds:
|
|
|
|
|
|
|||
Senior Loans
|
0.50
|
%
|
|
0.50
|
%
|
|
0.50
|
%
|
Other closed-end funds
|
1.50
|
|
|
1.52
|
|
|
1.54
|
|
Open-end funds
|
0.46
|
|
|
0.48
|
|
|
0.47
|
|
Evergreen funds
|
1.22
|
|
|
1.43
|
|
|
1.53
|
|
Overall
|
0.93
|
|
|
0.99
|
|
|
0.96
|
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Incentive-creating Assets Under Management:
|
|
|
|
|
|
||||||
Closed-end funds
|
$
|
30,292
|
|
|
$
|
30,100
|
|
|
$
|
31,743
|
|
Evergreen funds
|
3,335
|
|
|
1,823
|
|
|
2,118
|
|
|||
Total
|
$
|
33,627
|
|
|
$
|
31,923
|
|
|
$
|
33,861
|
|
|
As of or for the Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Accrued Incentives (Fund Level):
|
|
|
|
|
|
|
|
|
|||
Beginning balance
|
$
|
1,585,217
|
|
|
$
|
1,949,407
|
|
|
$
|
2,276,439
|
|
Incentives created (fund level):
|
|
|
|
|
|
||||||
Closed-end funds
|
746,349
|
|
|
(100,633
|
)
|
|
163,194
|
|
|||
Evergreen funds
|
37,683
|
|
|
249
|
|
|
1,176
|
|
|||
Total incentives created (fund level)
|
784,032
|
|
|
(100,384
|
)
|
|
164,370
|
|
|||
Less: segment incentive income recognized by us
|
(355,152
|
)
|
|
(263,806
|
)
|
|
(491,402
|
)
|
|||
Ending balance
|
$
|
2,014,097
|
|
|
$
|
1,585,217
|
|
|
$
|
1,949,407
|
|
Accrued incentives (fund level), net of associated incentive income compensation expense
|
$
|
946,542
|
|
|
$
|
811,540
|
|
|
$
|
999,923
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per unit data)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Management fees
|
$
|
785,673
|
|
|
$
|
753,805
|
|
|
$
|
762,823
|
|
Incentive income
|
355,152
|
|
|
263,806
|
|
|
491,402
|
|
|||
Investment income
|
221,377
|
|
|
48,253
|
|
|
117,662
|
|
|||
Total revenues
|
1,362,202
|
|
|
1,065,864
|
|
|
1,371,887
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
(381,937
|
)
|
|
(404,442
|
)
|
|
(379,360
|
)
|
|||
Equity-based compensation
|
(51,759
|
)
|
|
(37,978
|
)
|
|
(19,705
|
)
|
|||
Incentive income compensation
|
(169,683
|
)
|
|
(141,822
|
)
|
|
(231,871
|
)
|
|||
General and administrative
|
(123,784
|
)
|
|
(120,783
|
)
|
|
(127,954
|
)
|
|||
Depreciation and amortization
|
(12,219
|
)
|
|
(10,018
|
)
|
|
(7,249
|
)
|
|||
Total expenses
|
(739,382
|
)
|
|
(715,043
|
)
|
|
(766,139
|
)
|
|||
Adjusted net income before interest and other income (expense)
|
622,820
|
|
|
350,821
|
|
|
605,748
|
|
|||
Interest expense, net of interest income
|
(31,845
|
)
|
|
(35,032
|
)
|
|
(30,190
|
)
|
|||
Other income (expense), net
|
(8,392
|
)
|
|
(3,927
|
)
|
|
(2,431
|
)
|
|||
Adjusted net income
|
582,583
|
|
|
311,862
|
|
|
573,127
|
|
|||
Adjusted net income attributable to OCGH non-controlling interest
|
(346,807
|
)
|
|
(214,629
|
)
|
|
(415,859
|
)
|
|||
Non-Operating Group expenses
|
(1,176
|
)
|
|
(2,097
|
)
|
|
(1,645
|
)
|
|||
Adjusted net income-OCG before income taxes
|
234,600
|
|
|
95,136
|
|
|
155,623
|
|
|||
Income taxes-OCG
|
(39,756
|
)
|
|
(15,195
|
)
|
|
(18,464
|
)
|
|||
Adjusted net income-OCG
|
$
|
194,844
|
|
|
$
|
79,941
|
|
|
$
|
137,159
|
|
Adjusted net income per Class A unit
|
$
|
3.11
|
|
|
$
|
1.62
|
|
|
$
|
3.22
|
|
Weighted average number of Class A units outstanding
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per unit data)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Management fees
|
$
|
785,673
|
|
|
$
|
753,805
|
|
|
$
|
762,823
|
|
Incentive income
|
355,152
|
|
|
263,806
|
|
|
491,402
|
|
|||
Receipts of investment income from funds
(1)
|
66,390
|
|
|
101,296
|
|
|
81,438
|
|
|||
Receipts of investment income from companies
|
63,700
|
|
|
48,067
|
|
|
49,546
|
|
|||
Total distributable earnings revenues
|
1,270,915
|
|
|
1,166,974
|
|
|
1,385,209
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
(381,937
|
)
|
|
(404,442
|
)
|
|
(379,360
|
)
|
|||
Incentive income compensation
|
(169,683
|
)
|
|
(141,822
|
)
|
|
(231,871
|
)
|
|||
General and administrative
|
(123,784
|
)
|
|
(120,783
|
)
|
|
(127,954
|
)
|
|||
Depreciation and amortization
|
(12,219
|
)
|
|
(10,018
|
)
|
|
(7,249
|
)
|
|||
Total expenses
|
(687,623
|
)
|
|
(677,065
|
)
|
|
(746,434
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense, net of interest income
|
(31,845
|
)
|
|
(35,032
|
)
|
|
(30,190
|
)
|
|||
Operating Group income taxes
|
(4,635
|
)
|
|
(3,374
|
)
|
|
(18
|
)
|
|||
Other income (expense), net
|
(8,392
|
)
|
|
(3,927
|
)
|
|
(2,431
|
)
|
|||
Distributable earnings
|
538,420
|
|
|
447,576
|
|
|
606,136
|
|
|||
Distributable earnings attributable to OCGH non-controlling interest
|
(320,611
|
)
|
|
(304,900
|
)
|
|
(439,130
|
)
|
|||
Non-Operating Group expenses
|
(1,176
|
)
|
|
(2,097
|
)
|
|
(1,645
|
)
|
|||
Distributable earnings-OCG income taxes
|
(11,939
|
)
|
|
(2,083
|
)
|
|
(4,138
|
)
|
|||
Tax receivable agreement
|
(20,469
|
)
|
|
(19,090
|
)
|
|
(15,853
|
)
|
|||
Distributable earnings-OCG
|
$
|
184,225
|
|
|
$
|
119,406
|
|
|
$
|
145,370
|
|
Distributable earnings per Class A unit
|
$
|
2.94
|
|
|
$
|
2.42
|
|
|
$
|
3.41
|
|
Weighted average number of Class A units outstanding
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
|
|
|
|
|
(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 ANI are, for distributable earnings purposes, amortized over the remaining investment period of the respective CLO to align with the timing of expected cash flows.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Incentive income
(1)
|
1,407
|
|
|
(19,002
|
)
|
|
28,813
|
|
|||
Incentive income compensation
(1)
|
(1,407
|
)
|
|
19,009
|
|
|
(10,677
|
)
|
|||
Investment income
(2)
|
(21,814
|
)
|
|
—
|
|
|
—
|
|
|||
Equity-based compensation
(3)
|
11,965
|
|
|
16,403
|
|
|
21,690
|
|
|||
Placement costs
(4)
|
11,870
|
|
|
3,619
|
|
|
—
|
|
|||
Foreign-currency hedging
(5)
|
1,496
|
|
|
2,619
|
|
|
(2,003
|
)
|
|||
Acquisition-related items
(6)
|
(924
|
)
|
|
5,251
|
|
|
2,442
|
|
|||
Income taxes
(7)
|
42,519
|
|
|
17,549
|
|
|
18,536
|
|
|||
Non-Operating Group expenses
(8)
|
1,176
|
|
|
2,097
|
|
|
1,645
|
|
|||
Non-controlling interests
(8)
|
341,590
|
|
|
192,968
|
|
|
386,398
|
|
|||
Adjusted net income
|
582,583
|
|
|
311,862
|
|
|
573,127
|
|
|||
Investment income
(9)
|
(221,377
|
)
|
|
(48,253
|
)
|
|
(117,662
|
)
|
|||
Receipts of investment income from funds
(10)
|
66,390
|
|
|
101,296
|
|
|
81,438
|
|
|||
Receipts of investment income from companies
|
63,700
|
|
|
48,067
|
|
|
49,546
|
|
|||
Equity-based compensation
(11)
|
51,759
|
|
|
37,978
|
|
|
19,705
|
|
|||
Operating Group income taxes
|
(4,635
|
)
|
|
(3,374
|
)
|
|
(18
|
)
|
|||
Distributable earnings
|
$
|
538,420
|
|
|
$
|
447,576
|
|
|
$
|
606,136
|
|
|
|
|
|
|
(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.
|
(3)
|
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 and fee-related earnings because it is a non-cash charge that does not affect our 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, which are excluded from adjusted net income.
|
(7)
|
Because adjusted net income and fee-related earnings are pre-tax measures, this adjustment adds back the effect of income tax expense.
|
(8)
|
Because adjusted net income and fee-related 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.
|
(9)
|
This adjustment eliminates 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.
|
(10)
|
This adjustment reflects 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.
|
(11)
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Incentive income attributable to OCG
(1)
|
407
|
|
|
(8,087
|
)
|
|
6,641
|
|
|||
Incentive income compensation attributable to OCG
(1)
|
(407
|
)
|
|
8,209
|
|
|
(1,913
|
)
|
|||
Investment income attributable to OCG
(2)
|
(8,807
|
)
|
|
—
|
|
|
—
|
|
|||
Equity-based compensation attributable to OCG
(3)
|
4,839
|
|
|
5,238
|
|
|
6,053
|
|
|||
Placement costs attributable to OCG
(4)
|
4,793
|
|
|
1,301
|
|
|
—
|
|
|||
Foreign-currency hedging attributable to OCG
(5)
|
572
|
|
|
1,006
|
|
|
(603
|
)
|
|||
Acquisition-related items attributable to OCG
(6)
|
(372
|
)
|
|
1,628
|
|
|
698
|
|
|||
Non-controlling interests attributable to OCG
(6)
|
(886
|
)
|
|
(703
|
)
|
|
—
|
|
|||
Adjusted net income-OCG
(7)
|
194,844
|
|
|
79,941
|
|
|
137,159
|
|
|||
Investment income attributable to OCG
|
(89,698
|
)
|
|
(13,693
|
)
|
|
(32,399
|
)
|
|||
Receipts of investment income from funds attributable to OCG
|
26,879
|
|
|
32,163
|
|
|
22,674
|
|
|||
Receipts of investment income from companies attributable to OCG
|
25,784
|
|
|
15,735
|
|
|
13,892
|
|
|||
Equity-based compensation attributable to OCG
(8)
|
20,940
|
|
|
12,259
|
|
|
5,517
|
|
|||
Distributable earnings-OCG income taxes
|
(11,939
|
)
|
|
(2,083
|
)
|
|
(4,138
|
)
|
|||
Tax receivable agreement
|
(20,469
|
)
|
|
(19,090
|
)
|
|
(15,853
|
)
|
|||
Income taxes of Intermediate Holding Companies
|
37,884
|
|
|
14,174
|
|
|
18,518
|
|
|||
Distributable earnings-OCG
(7)
|
$
|
184,225
|
|
|
$
|
119,406
|
|
|
$
|
145,370
|
|
|
|
|
|
|
(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-OCG 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.
|
(3)
|
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-OCG and fee-related earnings-OCG because it is a non-cash charge that does not affect our 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-OCG 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-OCG and net income attributable to OCG.
|
(6)
|
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, which are both excluded from segment reporting.
|
(7)
|
Adjusted net income-OCG and distributable earnings-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.
|
(8)
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Reconciling adjustments
(1)
|
387,878
|
|
|
240,513
|
|
|
446,844
|
|
|||
Adjusted net income
|
582,583
|
|
|
311,862
|
|
|
573,127
|
|
|||
Incentive income
|
(355,152
|
)
|
|
(263,806
|
)
|
|
(491,402
|
)
|
|||
Incentive income compensation
|
169,683
|
|
|
141,822
|
|
|
231,871
|
|
|||
Investment income
|
(221,377
|
)
|
|
(48,253
|
)
|
|
(117,662
|
)
|
|||
Equity-based compensation
(2)
|
51,759
|
|
|
37,978
|
|
|
19,705
|
|
|||
Interest expense, net of interest income
|
31,845
|
|
|
35,032
|
|
|
30,190
|
|
|||
Other (income) expense, net
|
8,392
|
|
|
3,927
|
|
|
2,431
|
|
|||
Fee-related earnings
|
$
|
267,733
|
|
|
$
|
218,562
|
|
|
$
|
248,260
|
|
|
|
|
|
|
(1)
|
Please refer to the table on page 99 for a detailed reconciliation of net income attributable to Oaktree Capital Group, LLC to adjusted net income.
|
(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.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Reconciling adjustments
(1)
|
139
|
|
|
8,592
|
|
|
10,876
|
|
|||
Adjusted net income-OCG
(2)
|
194,844
|
|
|
79,941
|
|
|
137,159
|
|
|||
Incentive income attributable to OCG
|
(143,595
|
)
|
|
(81,314
|
)
|
|
(132,901
|
)
|
|||
Incentive income compensation attributable to OCG
|
68,609
|
|
|
43,414
|
|
|
62,719
|
|
|||
Investment income attributable to OCG
|
(89,698
|
)
|
|
(13,693
|
)
|
|
(32,399
|
)
|
|||
Equity-based compensation attributable to OCG
(3)
|
20,940
|
|
|
12,259
|
|
|
5,517
|
|
|||
Interest expense, net of interest income attributable to OCG
|
13,002
|
|
|
11,642
|
|
|
8,439
|
|
|||
Other income (expense) attributable to OCG
|
3,400
|
|
|
1,308
|
|
|
671
|
|
|||
Non-fee-related earnings income taxes attributable to OCG
(4)
|
26,238
|
|
|
12,771
|
|
|
10,710
|
|
|||
Fee-related earnings-OCG
(2)
|
$
|
93,740
|
|
|
$
|
66,328
|
|
|
$
|
59,915
|
|
|
|
|
|
|
(1)
|
Please refer to the table on page 100 for a detailed reconciliation of net income attributable to Oaktree Capital Group, LLC to adjusted net income-OCG.
|
(2)
|
Adjusted net income-OCG and fee-related earnings-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. A reconciliation of fee-related earnings to fee-related earnings-OCG is presented below.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Fee-related earnings
|
$
|
267,733
|
|
|
$
|
218,562
|
|
|
$
|
248,260
|
|
Fee-related earnings attributable to OCGH non-controlling interest
|
(159,424
|
)
|
|
(148,119
|
)
|
|
(178,944
|
)
|
|||
Non-Operating Group expenses
|
(1,051
|
)
|
|
(1,691
|
)
|
|
(1,647
|
)
|
|||
Fee-related earnings-OCG income taxes
|
(13,518
|
)
|
|
(2,424
|
)
|
|
(7,754
|
)
|
|||
Fee-related earnings-OCG
|
$
|
93,740
|
|
|
$
|
66,328
|
|
|
$
|
59,915
|
|
Fee-related earnings-OCG per Class A unit
|
$
|
1.50
|
|
|
$
|
1.34
|
|
|
$
|
1.41
|
|
(3)
|
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.
|
(4)
|
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.
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Management Fees:
|
|
|
|
|
|
||
Closed-end funds
|
$
|
575,290
|
|
|
$
|
518,513
|
|
Open-end funds
|
156,533
|
|
|
178,409
|
|
||
Evergreen funds
|
53,850
|
|
|
56,883
|
|
||
Total
|
$
|
785,673
|
|
|
$
|
753,805
|
|
•
|
Closed-end funds
. Management fees attributable to closed-end funds grew
$56.8
million, or
11.0%
, to
$575.3 million
for the year ended December 31, 2016, from
$518.5 million
for the year ended December 31, 2015. The growth reflected an aggregate increase of $116.8 million principally from the start of investment periods for Oaktree Power Opportunities Fund IV, SSF, Opps X and ROF VII. This increase was partially offset by an aggregate decline of $60.0 million primarily attributable to closed-end funds in liquidation.
|
•
|
Open-end funds
. Management fees attributable to open-end funds decreased
$21.9
million, or
12.3%
, to
$156.5 million
for the year ended December 31, 2016, from
$178.4 million
for the year ended December 31, 2015, primarily reflecting net outflows.
|
•
|
Evergreen funds
. Management fees attributable to evergreen funds decreased
$3.0
million, or
5.3%
, to
$53.9 million
for the year ended December 31, 2016, from
$56.9 million
for the year ended December 31, 2015, primarily reflecting net outflows and a reduction in the average management fee rate for Value Opportunities (“VOF”). The decrease was partially offset by drawdowns of capital commitments by Strategic Credit. The weighted average annual management fee rate for evergreen funds decreased to
1.22%
as of December 31, 2016, from
1.43%
as of December 31, 2015, primarily reflecting the reduction in the management fee rate for VOF.
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Incentive Income:
|
|
|
|
||||
Closed-end funds
|
$
|
320,866
|
|
|
$
|
261,143
|
|
Evergreen funds
|
34,286
|
|
|
2,663
|
|
||
Total
|
$
|
355,152
|
|
|
$
|
263,806
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Income (loss) from investments in funds:
|
(in thousands)
|
||||||
Oaktree funds:
|
|
|
|
|
|
||
Corporate Debt
|
$
|
24,375
|
|
|
$
|
7,020
|
|
Convertible Securities
|
(788
|
)
|
|
(201
|
)
|
||
Distressed Debt
|
57,605
|
|
|
(46,977
|
)
|
||
Control Investing
|
34,422
|
|
|
17,072
|
|
||
Real Estate
|
11,025
|
|
|
14,980
|
|
||
Listed Equities
|
22,646
|
|
|
(1,857
|
)
|
||
Non-Oaktree funds
|
5,665
|
|
|
7,930
|
|
||
Income from investments in companies
|
66,427
|
|
|
50,286
|
|
||
Total investment income
|
$
|
221,377
|
|
|
$
|
48,253
|
|
•
|
Closed-end funds
. Management fees attributable to closed-end funds decreased $18.3 million, or 3.4%, to $518.5 million for the year ended December 31, 2015, from $536.8 million for the year ended December 31, 2014. The decrease reflected an aggregate decline of $61.5 million primarily attributable to closed-end funds in liquidation, partially offset by an aggregate increase of $43.2 million from the Highstar acquisition, closed-end funds for which management fees are based on drawn capital or NAV, new CLOs, and the start of the investment periods for Oaktree Power Opportunities Fund IV and SSF.
|
•
|
Open-end funds
. Management fees attributable to open-end funds increased $5.4 million, or 3.1%, to $178.4 million for the year ended December 31, 2015, from $173.0 million for the year ended December 31, 2014, primarily as a result of net inflows to Emerging Markets Equities.
|
•
|
Evergreen funds
. Management fees attributable to evergreen funds increased $3.9 million, or 7.4%, to $56.9 million for the year ended December 31, 2015, from $53.0 million for the year ended
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Income (loss) from investments in funds:
|
(in thousands)
|
||||||
Oaktree funds:
|
|
|
|
|
|
||
Corporate Debt
|
$
|
7,020
|
|
|
$
|
15,767
|
|
Convertible Securities
|
(201
|
)
|
|
143
|
|
||
Distressed Debt
|
(46,977
|
)
|
|
(894
|
)
|
||
Control Investing
|
17,072
|
|
|
26,369
|
|
||
Real Estate
|
14,980
|
|
|
32,347
|
|
||
Listed Equities
|
(1,857
|
)
|
|
8,466
|
|
||
Non-Oaktree funds
|
7,930
|
|
|
2,479
|
|
||
Income from investments in companies
|
50,286
|
|
|
32,985
|
|
||
Total investment income
|
$
|
48,253
|
|
|
$
|
117,662
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
Cash and cash-equivalents
|
$
|
291,470
|
|
|
$
|
476,046
|
|
U.S. Treasury and time deposit securities
|
757,578
|
|
|
661,116
|
|
||
Corporate investments
|
1,480,928
|
|
|
1,434,109
|
|
||
Deferred tax assets
|
404,614
|
|
|
425,798
|
|
||
Receivables and other assets
|
379,124
|
|
|
257,013
|
|
||
Total assets
|
$
|
3,313,714
|
|
|
$
|
3,254,082
|
|
Liabilities and Capital:
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
353,451
|
|
|
$
|
368,980
|
|
Due to affiliates
|
346,543
|
|
|
356,851
|
|
||
Debt obligations
|
745,897
|
|
|
846,354
|
|
||
Total liabilities
|
1,445,891
|
|
|
1,572,185
|
|
||
Capital:
|
|
|
|
||||
OCGH non-controlling interest in consolidated subsidiaries
|
1,053,109
|
|
|
944,882
|
|
||
Unitholders’ capital attributable to Oaktree Capital Group, LLC
|
814,714
|
|
|
737,015
|
|
||
Total capital
|
1,867,823
|
|
|
1,681,897
|
|
||
Total liabilities and capital
|
$
|
3,313,714
|
|
|
$
|
3,254,082
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Investments in funds:
|
(in thousands)
|
||||||
Oaktree funds:
|
|
|
|
|
|
||
Corporate Debt
|
$
|
422,330
|
|
|
$
|
432,228
|
|
Convertible Securities
|
1,735
|
|
|
18,497
|
|
||
Distressed Debt
|
426,108
|
|
|
379,676
|
|
||
Control Investing
|
265,919
|
|
|
267,692
|
|
||
Real Estate
|
141,234
|
|
|
135,922
|
|
||
Listed Equities
|
116,988
|
|
|
105,631
|
|
||
Non-Oaktree funds
|
71,682
|
|
|
65,901
|
|
||
Investments in companies
|
34,932
|
|
|
28,562
|
|
||
Total corporate investments
|
$
|
1,480,928
|
|
|
$
|
1,434,109
|
|
•
|
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.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(in millions)
|
||||||||||
Funds
|
|
$
|
238.8
|
|
|
$
|
300.4
|
|
|
$
|
600.3
|
|
Eliminated in consolidation
|
|
(125.3
|
)
|
|
(218.1
|
)
|
|
(536.3
|
)
|
|||
Unconsolidated companies
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|||
Total investments
|
|
$
|
113.5
|
|
|
$
|
82.3
|
|
|
$
|
68.5
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(in millions)
|
||||||||||
Funds
|
|
$
|
291.1
|
|
|
$
|
347.0
|
|
|
$
|
372.9
|
|
Eliminated in consolidation
|
|
(109.3
|
)
|
|
(313.0
|
)
|
|
(365.3
|
)
|
|||
Unconsolidated companies
|
|
—
|
|
|
24.0
|
|
|
30.7
|
|
|||
Total investments
|
|
$
|
181.8
|
|
|
$
|
58.0
|
|
|
$
|
38.3
|
|
|
2017
|
|
2018-2019
|
|
2020-2021
|
|
Thereafter
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Oaktree and Operating Subsidiaries:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
(1)
|
$
|
10,056
|
|
|
$
|
28,831
|
|
|
$
|
26,633
|
|
|
$
|
55,480
|
|
|
$
|
121,000
|
|
Debt obligations payable
(2)
|
—
|
|
|
250,000
|
|
|
150,000
|
|
|
350,000
|
|
|
750,000
|
|
|||||
Interest obligations on debt
(3)
|
33,798
|
|
|
65,115
|
|
|
27,730
|
|
|
97,194
|
|
|
223,837
|
|
|||||
Tax receivable agreement
|
20,677
|
|
|
43,757
|
|
|
47,879
|
|
|
228,653
|
|
|
340,966
|
|
|||||
Contingent consideration
(4)
|
23,567
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,567
|
|
|||||
Commitments to Oaktree and third-party funds
(5)
|
565,429
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
565,429
|
|
|||||
Subtotal
|
653,527
|
|
|
387,703
|
|
|
252,242
|
|
|
731,327
|
|
|
2,024,799
|
|
|||||
Consolidated Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Debt obligations payable
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
488,997
|
|
|
488,997
|
|
|||||
Interest obligations on debt
(3)
|
12,861
|
|
|
25,721
|
|
|
25,721
|
|
|
76,593
|
|
|
140,896
|
|
|||||
Debt obligations of CLOs
(2)
|
—
|
|
|
49,336
|
|
|
—
|
|
|
3,002,952
|
|
|
3,052,288
|
|
|||||
Interest on debt obligations of CLOs
(3)
|
73,517
|
|
|
145,363
|
|
|
143,772
|
|
|
408,944
|
|
|
771,596
|
|
|||||
Commitments to fund investments
(6)
|
2,133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,133
|
|
|||||
Total
|
$
|
742,038
|
|
|
$
|
608,123
|
|
|
$
|
421,735
|
|
|
$
|
4,708,813
|
|
|
$
|
6,480,709
|
|
|
|
|
|
|
(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 consolidated financial statements.
|
(2)
|
These obligations represent future principal payments, gross of debt issuance costs, and for CLOs, the par value.
|
(3)
|
Interest obligations include accrued interest on outstanding indebtedness. Where applicable, current interest rates are applied to estimate future interest obligations on variable-rate debt.
|
(4)
|
This represents the undiscounted contingent consideration obligation as of December 31, 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 2017 column.
|
(5)
|
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 2017 column. Capital commitments are expected to be called over a period of several years.
|
(6)
|
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 2017 column. Capital commitments are expected to be called over a period of several years.
|
•
|
Level I –
Quoted unadjusted prices for identical instruments in active markets to which we have 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, other investments where the fair value is based on observable inputs, and upon adoption of the new CLO measurement guidance as of January 1, 2016, debt obligations of consolidated CLOs.
|
•
|
Level III –
Valuations for which one or more significant inputs are unobservable. These inputs reflect our 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 December 31, 2016
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
Closed-end funds
|
$
|
6,078
|
|
|
$
|
320,688
|
|
|
$
|
242,961
|
|
|
$
|
569,727
|
|
Open-end funds
|
37,608
|
|
|
59,832
|
|
|
—
|
|
|
97,440
|
|
||||
Evergreen funds
|
44,660
|
|
|
(941
|
)
|
|
1,393
|
|
|
45,112
|
|
||||
Total
|
$
|
88,346
|
|
|
$
|
379,579
|
|
|
$
|
244,354
|
|
|
$
|
712,279
|
|
As of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Closed-end funds
|
$
|
3,435,823
|
|
|
$
|
8,557,125
|
|
|
$
|
26,508,067
|
|
|
$
|
38,501,015
|
|
Open-end funds
|
992,683
|
|
|
3,814,699
|
|
|
80,210
|
|
|
4,887,592
|
|
||||
Evergreen funds
|
383,349
|
|
|
585,417
|
|
|
629,430
|
|
|
1,598,196
|
|
||||
Total
|
$
|
4,811,855
|
|
|
$
|
12,957,241
|
|
|
$
|
27,217,707
|
|
|
$
|
44,986,803
|
|
•
|
our management fees (relating to (a) and (b) above) would have increased by $10.6 million;
|
•
|
our operating expenses would have increased by $14.7 million;
|
•
|
OCGH interest in net income of consolidated subsidiaries would have decreased by $2.4 million; and
|
•
|
our income tax expense would have decreased by $0.6 million.
|
Audited Consolidated Financial Statements:
|
Page
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Cash and cash-equivalents
|
$
|
291,470
|
|
|
$
|
480,590
|
|
U.S. Treasury and time deposit securities
|
757,578
|
|
|
661,116
|
|
||
Corporate investments (includes $107,591 and $67,626 measured at fair value as of December 31, 2016 and 2015, respectively)
|
1,123,732
|
|
|
213,988
|
|
||
Due from affiliates
|
208,643
|
|
|
35,899
|
|
||
Deferred tax assets
|
404,614
|
|
|
425,798
|
|
||
Other assets
|
237,466
|
|
|
254,267
|
|
||
Assets of consolidated funds:
|
|
|
|
|
|||
Cash and cash-equivalents
|
667,730
|
|
|
2,850,512
|
|
||
Investments, at fair value
|
3,808,234
|
|
|
45,179,906
|
|
||
Dividends and interest receivable
|
15,297
|
|
|
189,693
|
|
||
Due from brokers
|
98,746
|
|
|
706,708
|
|
||
Receivable for securities sold
|
34,932
|
|
|
163,799
|
|
||
Derivative assets, at fair value
|
357
|
|
|
198,351
|
|
||
Other assets
|
311
|
|
|
402,104
|
|
||
Total assets
|
$
|
7,649,110
|
|
|
$
|
51,762,731
|
|
Liabilities and Unitholders’ Capital
|
|
|
|
|
|||
Liabilities:
|
|
|
|
|
|||
Accrued compensation expense
|
$
|
284,510
|
|
|
$
|
319,834
|
|
Accounts payable, accrued expenses and other liabilities
|
150,596
|
|
|
121,934
|
|
||
Due to affiliates
|
346,543
|
|
|
356,851
|
|
||
Debt obligations
|
745,897
|
|
|
846,354
|
|
||
Liabilities of consolidated funds:
|
|
|
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
11,689
|
|
|
128,774
|
|
||
Payables for securities purchased
|
291,182
|
|
|
478,437
|
|
||
Securities sold short, at fair value
|
41,016
|
|
|
91,246
|
|
||
Derivative liabilities, at fair value
|
1,086
|
|
|
300,208
|
|
||
Distributions payable
|
9,207
|
|
|
364,773
|
|
||
Borrowings under credit facilities
|
483,956
|
|
|
6,442,742
|
|
||
Debt obligations of CLOs
|
3,054,210
|
|
|
2,330,359
|
|
||
Total liabilities
|
5,419,892
|
|
|
11,781,512
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|||
Non-controlling redeemable interests in consolidated funds
|
344,047
|
|
|
38,173,125
|
|
||
Unitholders’ capital:
|
|
|
|
|
|||
Class A units, no par value, unlimited units authorized, 63,032,276 and 61,969,860 units issued and outstanding as of December 31, 2016 and 2015, respectively
|
—
|
|
|
—
|
|
||
Class B units, no par value, unlimited units authorized, 91,758,067 and 91,937,873 units issued and outstanding as of December 31, 2016 and 2015, respectively
|
—
|
|
|
—
|
|
||
Paid-in capital
|
749,618
|
|
|
735,166
|
|
||
Retained earnings
|
54,494
|
|
|
—
|
|
||
Accumulated other comprehensive income (loss)
|
1,793
|
|
|
(1,216
|
)
|
||
Class A unitholders’ capital
|
805,905
|
|
|
733,950
|
|
||
Non-controlling interests in consolidated subsidiaries
|
1,050,319
|
|
|
1,043,930
|
|
||
Non-controlling interests in consolidated funds
|
28,947
|
|
|
30,214
|
|
||
Total unitholders’ capital
|
1,885,171
|
|
|
1,808,094
|
|
||
Total liabilities and unitholders’ capital
|
$
|
7,649,110
|
|
|
$
|
51,762,731
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
|
|
||||
Management fees
|
$
|
774,587
|
|
|
$
|
195,308
|
|
|
$
|
192,055
|
|
Incentive income
|
351,159
|
|
|
6,597
|
|
|
1,839
|
|
|||
Total revenues
|
1,125,746
|
|
|
201,905
|
|
|
193,894
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
(389,892
|
)
|
|
(416,907
|
)
|
|
(388,512
|
)
|
|||
Equity-based compensation
|
(63,724
|
)
|
|
(54,381
|
)
|
|
(41,395
|
)
|
|||
Incentive income compensation
|
(168,276
|
)
|
|
(160,831
|
)
|
|
(221,194
|
)
|
|||
Total compensation and benefits expense
|
(621,892
|
)
|
|
(632,119
|
)
|
|
(651,101
|
)
|
|||
General and administrative
|
(145,430
|
)
|
|
(110,677
|
)
|
|
(99,835
|
)
|
|||
Depreciation and amortization
|
(16,222
|
)
|
|
(14,022
|
)
|
|
(8,003
|
)
|
|||
Consolidated fund expenses
|
(5,792
|
)
|
|
(184,090
|
)
|
|
(188,538
|
)
|
|||
Total expenses
|
(789,336
|
)
|
|
(940,908
|
)
|
|
(947,477
|
)
|
|||
Other income (loss):
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
(120,610
|
)
|
|
(216,799
|
)
|
|
(129,942
|
)
|
|||
Interest and dividend income
|
165,066
|
|
|
1,958,802
|
|
|
1,902,576
|
|
|||
Net realized gain on consolidated funds’ investments
|
27,593
|
|
|
1,177,150
|
|
|
2,131,584
|
|
|||
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments
|
(12,453
|
)
|
|
(3,767,527
|
)
|
|
(993,260
|
)
|
|||
Investment income
|
199,126
|
|
|
51,958
|
|
|
33,695
|
|
|||
Other income (expense), net
|
13,490
|
|
|
20,006
|
|
|
3,018
|
|
|||
Total other income (loss)
|
272,212
|
|
|
(776,410
|
)
|
|
2,947,671
|
|
|||
Income (loss) before income taxes
|
608,622
|
|
|
(1,515,413
|
)
|
|
2,194,088
|
|
|||
Income taxes
|
(42,519
|
)
|
|
(17,549
|
)
|
|
(18,536
|
)
|
|||
Net income (loss)
|
566,103
|
|
|
(1,532,962
|
)
|
|
2,175,552
|
|
|||
Less:
|
|
|
|
|
|
|
|
|
|||
Net (income) loss attributable to non-controlling interests in consolidated funds
|
(22,921
|
)
|
|
1,809,683
|
|
|
(1,649,890
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
(348,477
|
)
|
|
(205,372
|
)
|
|
(399,379
|
)
|
|||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Distributions declared per Class A unit
|
$
|
2.25
|
|
|
$
|
2.10
|
|
|
$
|
3.15
|
|
Net income per unit (basic and diluted):
|
|
|
|
|
|
|
|
|
|||
Net income per Class A unit
|
$
|
3.11
|
|
|
$
|
1.45
|
|
|
$
|
2.97
|
|
Weighted average number of Class A units outstanding
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
Year Ended December 31, 2016
|
|
Oaktree Capital Group, LLC
|
|
Non-controlling Interests in Consolidated Subsidiaries
|
|
Non-controlling Interests in Consolidated Funds
|
|
Total
|
||||||||
Net income
|
$
|
194,705
|
|
|
$
|
348,477
|
|
|
$
|
22,921
|
|
|
$
|
566,103
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|||||||||
Foreign-currency translation adjustments
|
2,666
|
|
|
3,913
|
|
|
—
|
|
|
6,579
|
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
343
|
|
|
504
|
|
|
—
|
|
|
847
|
|
|||||
Other comprehensive income, net of tax
|
3,009
|
|
|
4,417
|
|
|
—
|
|
|
7,426
|
|
|||||
Total comprehensive income
|
197,714
|
|
|
352,894
|
|
|
22,921
|
|
|
573,529
|
|
|||||
Less: Comprehensive income attributable to non-controlling interests
|
—
|
|
|
(352,894
|
)
|
|
(22,921
|
)
|
|
(375,815
|
)
|
|||||
Comprehensive income attributable to Oaktree Capital Group, LLC
|
$
|
197,714
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197,714
|
|
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
71,349
|
|
|
$
|
205,372
|
|
|
$
|
(1,809,683
|
)
|
|
$
|
(1,532,962
|
)
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|||||||||
Foreign-currency translation adjustments
|
(621
|
)
|
|
(1,589
|
)
|
|
—
|
|
|
(2,210
|
)
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
475
|
|
|
899
|
|
|
—
|
|
|
1,374
|
|
|||||
Other comprehensive loss, net of tax
|
(146
|
)
|
|
(690
|
)
|
|
—
|
|
|
(836
|
)
|
|||||
Total comprehensive income (loss)
|
71,203
|
|
|
204,682
|
|
|
(1,809,683
|
)
|
|
(1,533,798
|
)
|
|||||
Less: Comprehensive (income) loss attributable to non-controlling interests
|
—
|
|
|
(204,682
|
)
|
|
1,809,683
|
|
|
1,605,001
|
|
|||||
Comprehensive income attributable to Oaktree Capital Group, LLC
|
$
|
71,203
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,203
|
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
126,283
|
|
|
$
|
399,379
|
|
|
$
|
1,649,890
|
|
|
$
|
2,175,552
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign-currency translation adjustments
|
(489
|
)
|
|
(1,204
|
)
|
|
—
|
|
|
(1,693
|
)
|
|||||
Unrealized gain on interest-rate swap designated as cash-flow hedge
|
541
|
|
|
1,311
|
|
|
—
|
|
|
1,852
|
|
|||||
Other comprehensive income, net of tax
|
52
|
|
|
107
|
|
|
—
|
|
|
159
|
|
|||||
Total comprehensive income
|
126,335
|
|
|
399,486
|
|
|
1,649,890
|
|
|
2,175,711
|
|
|||||
Less: Comprehensive income attributable to non-controlling interests
|
—
|
|
|
(399,486
|
)
|
|
(1,649,890
|
)
|
|
(2,049,376
|
)
|
|||||
Comprehensive income attributable to Oaktree Capital Group, LLC
|
$
|
126,335
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126,335
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
566,103
|
|
|
$
|
(1,532,962
|
)
|
|
$
|
2,175,552
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
|
|
|
||||
Investment income
|
(199,126
|
)
|
|
(51,958
|
)
|
|
(33,695
|
)
|
|||
Depreciation and amortization
|
16,222
|
|
|
14,022
|
|
|
8,003
|
|
|||
Equity-based compensation
|
63,724
|
|
|
54,381
|
|
|
41,395
|
|
|||
Net realized and unrealized (gain) loss from consolidated funds’ investments
|
(15,140
|
)
|
|
2,590,377
|
|
|
(1,138,324
|
)
|
|||
Amortization (accretion) of original issue and market discount of consolidated funds’ investments, net
|
(6,583
|
)
|
|
(26,366
|
)
|
|
(5,910
|
)
|
|||
Income distributions from corporate investments in funds and companies
|
121,421
|
|
|
50,252
|
|
|
45,817
|
|
|||
Other non-cash items
|
4,688
|
|
|
15,689
|
|
|
12,042
|
|
|||
Cash flows due to changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Decrease in deferred tax assets
|
24,578
|
|
|
10,645
|
|
|
15,255
|
|
|||
(Increase) decrease in other assets
|
23,833
|
|
|
34,349
|
|
|
(62,883
|
)
|
|||
Decrease in net due to affiliates
|
(105,401
|
)
|
|
(3,857
|
)
|
|
(12,908
|
)
|
|||
Increase (decrease) in accrued compensation expense
|
(34,915
|
)
|
|
24,948
|
|
|
16,231
|
|
|||
Increase (decrease) in accounts payable, accrued expenses and other liabilities
|
33,595
|
|
|
(26,537
|
)
|
|
43,661
|
|
|||
Cash flows due to changes in operating assets and liabilities of consolidated funds:
|
|
|
|
|
|
|
|
||||
(Increase) decrease in dividends and interest receivable
|
(3,122
|
)
|
|
3,735
|
|
|
(33,171
|
)
|
|||
(Increase) decrease in due from brokers
|
57,605
|
|
|
(100,826
|
)
|
|
(322,119
|
)
|
|||
(Increase) decrease in receivables for securities sold
|
(21,200
|
)
|
|
8,018
|
|
|
177,130
|
|
|||
(Increase) decrease in other assets
|
25
|
|
|
224,296
|
|
|
(171,720
|
)
|
|||
Increase (decrease) in accounts payable, accrued expenses and other liabilities
|
(3,367
|
)
|
|
64,482
|
|
|
(32,640
|
)
|
|||
Increase (decrease) in payables for securities purchased
|
149,575
|
|
|
(289,294
|
)
|
|
(287,005
|
)
|
|||
Purchases of securities
|
(3,460,598
|
)
|
|
(17,994,888
|
)
|
|
(21,975,014
|
)
|
|||
Proceeds from maturities and sales of securities
|
2,470,177
|
|
|
15,988,267
|
|
|
17,213,767
|
|
|||
Net cash used in operating activities
|
(317,906
|
)
|
|
(943,227
|
)
|
|
(4,326,536
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Purchases of U.S. Treasury and time deposit securities
|
(874,480
|
)
|
|
(385,642
|
)
|
|
(414,970
|
)
|
|||
Proceeds from maturities and sales of U.S. Treasury and time deposit securities
|
778,018
|
|
|
380,055
|
|
|
436,041
|
|
|||
Corporate investments in funds and companies
|
(113,464
|
)
|
|
(82,273
|
)
|
|
(68,499
|
)
|
|||
Distributions and proceeds from corporate investments in funds and companies
|
181,769
|
|
|
57,954
|
|
|
38,341
|
|
|||
Acquisition, net of cash acquired (Highstar)
|
—
|
|
|
—
|
|
|
(25,637
|
)
|
|||
Purchases of fixed assets
|
(70,430
|
)
|
|
(23,724
|
)
|
|
(5,005
|
)
|
|||
Net cash used in investing activities
|
(98,587
|
)
|
|
(53,630
|
)
|
|
(39,729
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of debt obligations
|
$
|
100,000
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
Payment of debt issuance costs
|
(1,310
|
)
|
|
—
|
|
|
(2,296
|
)
|
|||
Repayments of debt obligations
|
(200,000
|
)
|
|
—
|
|
|
(229,464
|
)
|
|||
Proceeds from issuance of Class A units
|
—
|
|
|
237,820
|
|
|
296,650
|
|
|||
Purchase of OCGH units
|
—
|
|
|
(237,820
|
)
|
|
(296,400
|
)
|
|||
Repurchase and cancellation of units
|
(12,764
|
)
|
|
(4,926
|
)
|
|
(2,085
|
)
|
|||
Distributions to Class A unitholders
|
(141,561
|
)
|
|
(99,120
|
)
|
|
(131,954
|
)
|
|||
Distributions to OCGH unitholders
|
(252,902
|
)
|
|
(273,534
|
)
|
|
(418,867
|
)
|
|||
Contributions from non-controlling interests
|
—
|
|
|
4,000
|
|
|
—
|
|
|||
Distributions to non-controlling interests
|
(6,888
|
)
|
|
(6,493
|
)
|
|
—
|
|
|||
Cash flows from financing activities of consolidated funds:
|
|
|
|
|
|
|
|
||||
Contributions from non-controlling interests
|
144,060
|
|
|
5,404,333
|
|
|
8,260,647
|
|
|||
Distributions to non-controlling interests
|
(59,757
|
)
|
|
(6,633,233
|
)
|
|
(6,826,094
|
)
|
|||
Proceeds from debt obligations issued by CLOs
|
839,448
|
|
|
982,962
|
|
|
1,601,535
|
|
|||
Payment of debt issuance costs
|
(13,015
|
)
|
|
(25,156
|
)
|
|
(29,697
|
)
|
|||
Borrowings on credit facilities
|
1,025,333
|
|
|
7,682,232
|
|
|
7,503,750
|
|
|||
Repayments on credit facilities
|
(657,317
|
)
|
|
(6,038,796
|
)
|
|
(5,133,389
|
)
|
|||
Net cash provided by financing activities
|
763,327
|
|
|
992,269
|
|
|
5,092,336
|
|
|||
Effect of exchange rate changes on cash
|
(6,546
|
)
|
|
(12,804
|
)
|
|
(15,242
|
)
|
|||
Net increase (decrease) in cash and cash-equivalents
|
340,288
|
|
|
(17,392
|
)
|
|
710,829
|
|
|||
Cash and cash-equivalents, beginning balance
|
3,331,102
|
|
|
3,348,494
|
|
|
2,637,665
|
|
|||
Change in cash and cash-equivalents from adoption of accounting guidance
|
(2,712,190
|
)
|
|
—
|
|
|
—
|
|
|||
Cash and cash-equivalents, ending balance
|
$
|
959,200
|
|
|
$
|
3,331,102
|
|
|
$
|
3,348,494
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
* * *
|
|||||||||||
Supplemental cash flow disclosures:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
99,740
|
|
|
$
|
159,460
|
|
|
$
|
79,222
|
|
Cash paid for income taxes
|
15,178
|
|
|
5,586
|
|
|
7,947
|
|
|||
|
|
|
|
|
|
||||||
Supplemental disclosure of non-cash activities:
|
|
|
|
|
|
||||||
Issuance of OCGH units related to the Highstar acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,996
|
|
Net assets related to the initial consolidation of a fund
|
34,095
|
|
|
—
|
|
|
961,634
|
|
|||
Non-controlling interests in consolidated subsidiaries acquired
|
—
|
|
|
—
|
|
|
72,195
|
|
|
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 Deficit)
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
||||||||||||||||||
Unitholders’ capital as of December 31, 2013
|
38,473
|
|
|
112,584
|
|
|
$
|
590,236
|
|
|
$
|
(114,905
|
)
|
|
$
|
(1,122
|
)
|
|
$
|
1,234,169
|
|
|
$
|
—
|
|
|
$
|
1,708,378
|
|
Activity for the year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Issuance of Class A units
|
5,291
|
|
|
—
|
|
|
296,650
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
296,650
|
|
||||||
Issuance of Class B units
|
—
|
|
|
1,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units associated with forfeitures
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units
|
—
|
|
|
(5,330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of OCGH units related to the Highstar acquisition
|
—
|
|
|
—
|
|
|
1,137
|
|
|
—
|
|
|
—
|
|
|
2,859
|
|
|
—
|
|
|
3,996
|
|
||||||
Purchase of OCGH units from OCGH unitholders
|
—
|
|
|
—
|
|
|
(296,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(296,400
|
)
|
||||||
Deferred tax effect resulting from the purchase of OCGH units
|
—
|
|
|
—
|
|
|
13,705
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,705
|
|
||||||
Repurchase and cancellation of units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,085
|
)
|
|
—
|
|
|
(2,085
|
)
|
||||||
Non-controlling interests related to the Highstar acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,195
|
|
|
—
|
|
|
72,195
|
|
||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,810
|
|
|
51,644
|
|
|
65,454
|
|
||||||
Equity reallocation between controlling and non-controlling interests
|
—
|
|
|
—
|
|
|
51,525
|
|
|
—
|
|
|
—
|
|
|
(51,525
|
)
|
|
—
|
|
|
—
|
|
||||||
Capital increase related to equity-based compensation
|
—
|
|
|
—
|
|
|
11,532
|
|
|
—
|
|
|
—
|
|
|
29,729
|
|
|
—
|
|
|
41,261
|
|
||||||
Distributions declared
|
—
|
|
|
—
|
|
|
(131,954
|
)
|
|
—
|
|
|
—
|
|
|
(432,677
|
)
|
|
(26,351
|
)
|
|
(590,982
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
126,283
|
|
|
—
|
|
|
399,379
|
|
|
2,137
|
|
|
527,799
|
|
||||||
Foreign-currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(489
|
)
|
|
(1,204
|
)
|
|
—
|
|
|
(1,693
|
)
|
||||||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
541
|
|
|
1,311
|
|
|
—
|
|
|
1,852
|
|
||||||
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 year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Issuance of Class A units
|
18,231
|
|
|
—
|
|
|
237,820
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237,820
|
|
||||||
Issuance of Class B units
|
—
|
|
|
1,338
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units associated with forfeitures
|
(25
|
)
|
|
(135
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units
|
—
|
|
|
(18,354
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of OCGH units from OCGH unitholders
|
—
|
|
|
—
|
|
|
(237,820
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(237,820
|
)
|
||||||
Deferred tax effect resulting from the purchase of OCGH units
|
—
|
|
|
—
|
|
|
16,606
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,606
|
|
||||||
Repurchase and cancellation of units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,926
|
)
|
|
—
|
|
|
(4,926
|
)
|
||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
|
2,880
|
|
|
6,880
|
|
||||||
Equity reallocation between controlling and non-controlling interests
|
—
|
|
|
—
|
|
|
181,539
|
|
|
—
|
|
|
—
|
|
|
(181,539
|
)
|
|
—
|
|
|
—
|
|
||||||
Capital increase related to equity-based compensation
|
—
|
|
|
—
|
|
|
16,983
|
|
|
—
|
|
|
—
|
|
|
35,779
|
|
|
—
|
|
|
52,762
|
|
||||||
Distributions declared
|
—
|
|
|
—
|
|
|
(16,393
|
)
|
|
(82,727
|
)
|
|
—
|
|
|
(280,027
|
)
|
|
(2,952
|
)
|
|
(382,099
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
71,349
|
|
|
—
|
|
|
205,372
|
|
|
2,856
|
|
|
279,577
|
|
||||||
Foreign-currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(621
|
)
|
|
(1,589
|
)
|
|
—
|
|
|
(2,210
|
)
|
||||||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
|
899
|
|
|
—
|
|
|
1,374
|
|
||||||
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 year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative-effect adjustment from adoption of accounting guidance
|
—
|
|
|
—
|
|
|
(12,912
|
)
|
|
—
|
|
|
—
|
|
|
(109,709
|
)
|
|
—
|
|
|
(122,621
|
)
|
||||||
Issuance of Class A units
|
1,420
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of Class B units
|
—
|
|
|
630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units associated with forfeitures
|
(108
|
)
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellation of units
|
(250
|
)
|
|
(603
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Deferred tax effect resulting from the purchase of OCGH units
|
—
|
|
|
—
|
|
|
745
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
745
|
|
||||||
Repurchase and cancellation of units
|
—
|
|
|
—
|
|
|
(12,200
|
)
|
|
—
|
|
|
—
|
|
|
(564
|
)
|
|
—
|
|
|
(12,764
|
)
|
||||||
Equity reallocation between controlling and non-controlling interests
|
—
|
|
|
—
|
|
|
14,388
|
|
|
—
|
|
|
—
|
|
|
(14,388
|
)
|
|
—
|
|
|
—
|
|
||||||
Capital increase related to equity-based compensation
|
—
|
|
|
—
|
|
|
25,781
|
|
|
—
|
|
|
—
|
|
|
37,946
|
|
|
—
|
|
|
63,727
|
|
||||||
Distributions declared
|
—
|
|
|
—
|
|
|
(1,350
|
)
|
|
(140,211
|
)
|
|
—
|
|
|
(259,790
|
)
|
|
(3,200
|
)
|
|
(404,551
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
194,705
|
|
|
—
|
|
|
348,477
|
|
|
1,933
|
|
|
545,115
|
|
||||||
Foreign-currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,666
|
|
|
3,913
|
|
|
—
|
|
|
6,579
|
|
||||||
Unrealized gain on interest-rate swap designated as cash-flow hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|
504
|
|
|
—
|
|
|
847
|
|
||||||
Unitholders’ capital as of December 31, 2016
|
63,032
|
|
|
91,758
|
|
|
$
|
749,618
|
|
|
$
|
54,494
|
|
|
$
|
1,793
|
|
|
$
|
1,050,319
|
|
|
$
|
28,947
|
|
|
$
|
1,885,171
|
|
•
|
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, other investments where the fair value is based on observable inputs, and upon adoption of the new CLO measurement guidance as of January 1, 2016, debt obligations of consolidated CLOs.
|
•
|
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 December 31,
|
||||||
Corporate Investments:
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Equity-method investments:
|
|
|
|
||||
Funds
|
$
|
981,209
|
|
|
$
|
117,800
|
|
Companies
|
34,932
|
|
|
28,562
|
|
||
Other investments, at fair value
|
107,591
|
|
|
67,626
|
|
||
Total corporate investments
|
$
|
1,123,732
|
|
|
$
|
213,988
|
|
|
Year Ended December 31,
|
||||||||||
Investment Income (Loss):
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Equity-method investments:
|
|
|
|
|
|
||||||
Funds
|
$
|
123,511
|
|
|
$
|
1,813
|
|
|
$
|
556
|
|
Companies
|
66,427
|
|
|
49,933
|
|
|
46,212
|
|
|||
Other investments, at fair value
|
9,188
|
|
|
212
|
|
|
(13,073
|
)
|
|||
Total investment income
|
$
|
199,126
|
|
|
$
|
51,958
|
|
|
$
|
33,695
|
|
Statements of Operations
:
|
Year Ended December 31, 2016
|
||
Revenues / investment income
|
$
|
2,188,044
|
|
Interest expense
|
(176,009
|
)
|
|
Other expenses
|
(899,288
|
)
|
|
Net realized and unrealized gain on investments
|
4,065,939
|
|
|
Net income
|
$
|
5,178,686
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Realized gain (loss)
|
$
|
1,808
|
|
|
$
|
1,372
|
|
|
$
|
2,838
|
|
Net change in unrealized gain (loss)
|
7,380
|
|
|
(1,160
|
)
|
|
(15,911
|
)
|
|||
Total
|
$
|
9,188
|
|
|
$
|
212
|
|
|
$
|
(13,073
|
)
|
|
Fair Value as of December 31,
|
|
Fair Value as a Percentage of Investments of Consolidated Funds as of December 31,
|
||||||||||
Investments:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||
United States:
|
|
|
|
|
|
|
|
||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||
Consumer discretionary
|
$
|
628,621
|
|
|
$
|
3,387,072
|
|
|
16.5
|
%
|
|
7.5
|
%
|
Consumer staples
|
123,395
|
|
|
686,071
|
|
|
3.2
|
|
|
1.5
|
|
||
Energy
|
55,655
|
|
|
854,220
|
|
|
1.5
|
|
|
1.9
|
|
||
Financials
|
182,685
|
|
|
1,293,508
|
|
|
4.8
|
|
|
2.9
|
|
||
Government
|
5,234
|
|
|
95,508
|
|
|
0.1
|
|
|
0.2
|
|
||
Health care
|
337,138
|
|
|
1,135,799
|
|
|
8.9
|
|
|
2.5
|
|
||
Industrials
|
379,122
|
|
|
1,710,706
|
|
|
10.0
|
|
|
3.8
|
|
||
Information technology
|
272,637
|
|
|
1,293,815
|
|
|
7.2
|
|
|
2.9
|
|
||
Materials
|
237,417
|
|
|
1,393,521
|
|
|
6.2
|
|
|
3.1
|
|
||
Telecommunication services
|
93,893
|
|
|
471,711
|
|
|
2.5
|
|
|
1.0
|
|
||
Utilities
|
76,920
|
|
|
686,126
|
|
|
2.0
|
|
|
1.5
|
|
||
Total debt securities (cost: $2,378,759 and $15,304,870 as of December 31, 2016 and 2015, respectively)
|
2,392,717
|
|
|
13,008,057
|
|
|
62.9
|
|
|
28.8
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||
Consumer discretionary
|
711
|
|
|
1,813,832
|
|
|
0.0
|
|
|
4.0
|
|
||
Consumer staples
|
—
|
|
|
872,472
|
|
|
—
|
|
|
1.9
|
|
||
Energy
|
2,002
|
|
|
1,810,290
|
|
|
0.1
|
|
|
4.0
|
|
||
Financials
|
3,977
|
|
|
7,639,790
|
|
|
0.1
|
|
|
16.9
|
|
||
Health care
|
343
|
|
|
92,866
|
|
|
0.0
|
|
|
0.2
|
|
||
Industrials
|
1
|
|
|
1,728,086
|
|
|
0.0
|
|
|
3.8
|
|
||
Information technology
|
—
|
|
|
67,253
|
|
|
—
|
|
|
0.2
|
|
||
Materials
|
691
|
|
|
882,366
|
|
|
0.0
|
|
|
2.0
|
|
||
Telecommunication services
|
—
|
|
|
16,471
|
|
|
—
|
|
|
0.0
|
|
||
Utilities
|
—
|
|
|
156,865
|
|
|
—
|
|
|
0.3
|
|
||
Total equity securities (cost: $5,462 and $13,290,699 as of December 31, 2016 and 2015, respectively)
|
7,725
|
|
|
15,080,291
|
|
|
0.2
|
|
|
33.3
|
|
|
Fair Value as of December 31,
|
|
Fair Value as a Percentage of Investments of Consolidated Funds as of December 31,
|
||||||||||
Investments:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||
Europe:
|
|
|
|
|
|
|
|
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
||||||
Consumer discretionary
|
$
|
374,627
|
|
|
$
|
1,329,387
|
|
|
9.8
|
%
|
|
2.9
|
%
|
Consumer staples
|
92,750
|
|
|
222,789
|
|
|
2.4
|
|
|
0.5
|
|
||
Energy
|
13,274
|
|
|
144,742
|
|
|
0.3
|
|
|
0.3
|
|
||
Financials
|
13,822
|
|
|
808,568
|
|
|
0.4
|
|
|
1.8
|
|
||
Government
|
1,996
|
|
|
46,946
|
|
|
0.1
|
|
|
0.1
|
|
||
Health care
|
210,078
|
|
|
197,569
|
|
|
5.5
|
|
|
0.5
|
|
||
Industrials
|
54,578
|
|
|
291,950
|
|
|
1.4
|
|
|
0.7
|
|
||
Information technology
|
23,832
|
|
|
71,168
|
|
|
0.6
|
|
|
0.2
|
|
||
Materials
|
226,961
|
|
|
377,460
|
|
|
6.0
|
|
|
0.8
|
|
||
Telecommunication services
|
214,182
|
|
|
200,610
|
|
|
5.6
|
|
|
0.4
|
|
||
Utilities
|
—
|
|
|
18,028
|
|
|
—
|
|
|
0.0
|
|
||
Total debt securities (cost: $1,214,068 and $4,207,531 as of December 31, 2016 and 2015, respectively)
|
1,226,100
|
|
|
3,709,217
|
|
|
32.1
|
|
|
8.2
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
||||||
Consumer discretionary
|
—
|
|
|
270,370
|
|
|
—
|
|
|
0.6
|
|
||
Consumer staples
|
—
|
|
|
145,108
|
|
|
—
|
|
|
0.3
|
|
||
Energy
|
—
|
|
|
21,791
|
|
|
—
|
|
|
0.0
|
|
||
Financials
|
1,605
|
|
|
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: $1,494 and $7,627,245 as of December 31, 2016 and 2015, respectively)
|
1,605
|
|
|
9,122,229
|
|
|
0.0
|
|
|
20.2
|
|
||
Asia and other:
|
|
|
|
|
|
|
|
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||
Consumer discretionary
|
3,145
|
|
|
102,531
|
|
|
0.1
|
|
|
0.2
|
|
||
Consumer staples
|
5,994
|
|
|
33,061
|
|
|
0.2
|
|
|
0.1
|
|
||
Energy
|
9,570
|
|
|
193,645
|
|
|
0.3
|
|
|
0.4
|
|
||
Financials
|
—
|
|
|
27,413
|
|
|
—
|
|
|
0.1
|
|
||
Government
|
1,506
|
|
|
6,974
|
|
|
0.0
|
|
|
0.0
|
|
||
Health care
|
1,245
|
|
|
47,010
|
|
|
0.0
|
|
|
0.1
|
|
||
Industrials
|
15,450
|
|
|
268,710
|
|
|
0.4
|
|
|
0.6
|
|
||
Information technology
|
409
|
|
|
31,983
|
|
|
0.0
|
|
|
0.1
|
|
||
Materials
|
10,245
|
|
|
248,830
|
|
|
0.3
|
|
|
0.6
|
|
||
Telecommunication services
|
4,809
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||
Utilities
|
928
|
|
|
2,713
|
|
|
0.0
|
|
|
0.0
|
|
||
Total debt securities (cost: $57,400 and $1,090,867 as of December 31, 2016 and 2015, respectively)
|
53,301
|
|
|
962,870
|
|
|
1.4
|
|
|
2.2
|
|
|
Fair Value as of December 31,
|
|
Fair Value as a Percentage of Investments of Consolidated Funds as of December 31,
|
||||||||||
Investments:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||
Asia and other:
|
|
|
|
|
|
|
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|||||
Consumer discretionary
|
$
|
7,639
|
|
|
$
|
506,761
|
|
|
0.2
|
%
|
|
1.1
|
%
|
Consumer staples
|
3,786
|
|
|
29,863
|
|
|
0.1
|
|
|
0.1
|
|
||
Energy
|
6,978
|
|
|
192,844
|
|
|
0.2
|
|
|
0.4
|
|
||
Financials
|
44,328
|
|
|
986,753
|
|
|
1.2
|
|
|
2.2
|
|
||
Health care
|
—
|
|
|
18,535
|
|
|
—
|
|
|
0.1
|
|
||
Industrials
|
21,564
|
|
|
1,032,225
|
|
|
0.6
|
|
|
2.3
|
|
||
Information technology
|
16,642
|
|
|
244,433
|
|
|
0.4
|
|
|
0.5
|
|
||
Materials
|
19,697
|
|
|
96,326
|
|
|
0.5
|
|
|
0.2
|
|
||
Telecommunication services
|
4,296
|
|
|
34,678
|
|
|
0.1
|
|
|
0.1
|
|
||
Utilities
|
1,856
|
|
|
154,824
|
|
|
0.1
|
|
|
0.3
|
|
||
Total equity securities (cost: $118,292 and $3,370,406 as of December 31, 2016 and 2015, respectively)
|
126,786
|
|
|
3,297,242
|
|
|
3.4
|
|
|
7.3
|
|
||
Total debt securities
|
3,672,118
|
|
|
17,680,144
|
|
|
96.4
|
|
|
39.2
|
|
||
Total equity securities
|
136,116
|
|
|
27,499,762
|
|
|
3.6
|
|
|
60.8
|
|
||
Total investments, at fair value
|
$
|
3,808,234
|
|
|
$
|
45,179,906
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Securities Sold Short:
|
|
|
|
|
|
|
|
|
|||||
Equity securities (proceeds: $41,541 and $102,236 as of December 31, 2016 and 2015, respectively)
|
$
|
(41,016
|
)
|
|
$
|
(91,246
|
)
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
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
|
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
||||||||||||
Investments and other financial instruments
|
$
|
30,718
|
|
|
$
|
109,398
|
|
|
$
|
895,271
|
|
|
$
|
(3,602,437
|
)
|
|
$
|
1,937,061
|
|
|
$
|
(1,080,571
|
)
|
CLO liabilities
(1)
|
—
|
|
|
(120,702
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign-currency forward contracts
(2)
|
521
|
|
|
264
|
|
|
457,594
|
|
|
(98,420
|
)
|
|
179,675
|
|
|
278,647
|
|
||||||
Total-return and interest-rate swaps
(2)
|
(2,353
|
)
|
|
(1,416
|
)
|
|
(215,837
|
)
|
|
(38,658
|
)
|
|
54,437
|
|
|
(193,079
|
)
|
||||||
Options and futures
(2)
|
(1,293
|
)
|
|
3
|
|
|
43,055
|
|
|
(30,198
|
)
|
|
(38,431
|
)
|
|
6,513
|
|
||||||
Swaptions
(2)(3)
|
—
|
|
|
—
|
|
|
(2,933
|
)
|
|
2,186
|
|
|
(1,158
|
)
|
|
(4,770
|
)
|
||||||
Total
|
$
|
27,593
|
|
|
$
|
(12,453
|
)
|
|
$
|
1,177,150
|
|
|
$
|
(3,767,527
|
)
|
|
$
|
2,131,584
|
|
|
$
|
(993,260
|
)
|
|
|
|
|
|
(1)
|
Represents the net change in the fair value of CLO liabilities based on the more observable fair value of CLO assets, as measured under the CLO measurement guidance. Please see note 2 for more information.
|
(2)
|
Please see note 7 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 December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and time deposit securities
(1)
|
$
|
757,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
757,578
|
|
|
$
|
661,116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
661,116
|
|
Corporate investments
|
—
|
|
|
27,551
|
|
|
74,663
|
|
|
102,214
|
|
|
—
|
|
|
41,876
|
|
|
25,750
|
|
|
67,626
|
|
||||||||
Foreign-currency forward contracts
(2)
|
—
|
|
|
16,142
|
|
|
—
|
|
|
16,142
|
|
|
—
|
|
|
5,875
|
|
|
—
|
|
|
5,875
|
|
||||||||
Total assets
|
$
|
757,578
|
|
|
$
|
43,693
|
|
|
$
|
74,663
|
|
|
$
|
875,934
|
|
|
$
|
661,116
|
|
|
$
|
47,751
|
|
|
$
|
25,750
|
|
|
$
|
734,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration
(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(23,567
|
)
|
|
$
|
(23,567
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28,494
|
)
|
|
$
|
(28,494
|
)
|
Foreign-currency forward contracts
(3)
|
—
|
|
|
(7,805
|
)
|
|
—
|
|
|
(7,805
|
)
|
|
—
|
|
|
(3,286
|
)
|
|
—
|
|
|
(3,286
|
)
|
||||||||
Interest-rate swaps
(3)
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
|
(943
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
(7,865
|
)
|
|
$
|
(23,567
|
)
|
|
$
|
(31,432
|
)
|
|
$
|
—
|
|
|
$
|
(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 consolidated statements of financial condition, except for
$5,377
of the December 31, 2016 amount, which is included within corporate investments in the consolidated statements of financial condition.
|
(3)
|
Amounts are included in accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
Corporate Investments
|
|
Contingent Consideration Liability
|
|
Corporate Investments
|
|
Contingent Consideration Liability
|
|
Corporate Investments
|
|
Contingent Consideration Liability
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance
|
$
|
25,750
|
|
|
$
|
(28,494
|
)
|
|
$
|
—
|
|
|
$
|
(27,245
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Contributions or additions
|
43,521
|
|
|
—
|
|
|
25,750
|
|
|
—
|
|
|
—
|
|
|
(25,559
|
)
|
||||||
Distributions
|
(1,470
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net gain (loss) included in earnings
|
6,862
|
|
|
4,927
|
|
|
—
|
|
|
(1,249
|
)
|
|
—
|
|
|
(1,686
|
)
|
||||||
Ending balance
|
$
|
74,663
|
|
|
$
|
(23,567
|
)
|
|
$
|
25,750
|
|
|
$
|
(28,494
|
)
|
|
$
|
—
|
|
|
$
|
(27,245
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period
|
$
|
5,913
|
|
|
$
|
4,927
|
|
|
$
|
—
|
|
|
$
|
(1,249
|
)
|
|
$
|
—
|
|
|
$
|
(1,686
|
)
|
|
|
Fair Value as of December 31,
|
|
|
|
Significant Unobservable Input
|
|
|
|
Weighted Average
|
||||||
Financial Instrument
|
|
2016
|
|
2015
|
|
Valuation Technique
|
|
|
Range
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate investment – Limited partnership interests
|
|
$
|
74,663
|
|
|
$
|
25,750
|
|
|
Market approach
(value of underlying assets) |
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
Contingent consideration liability
|
|
23,567
|
|
|
28,494
|
|
|
Discounted cash flow
|
|
Assumed % of total potential contingent payments
|
|
0% – 100%
|
|
45%
|
|
As of December 31, 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
|
$
|
—
|
|
|
$
|
2,973,482
|
|
|
$
|
208,868
|
|
|
$
|
3,182,350
|
|
|
$
|
—
|
|
|
$
|
7,891,929
|
|
|
$
|
1,871,375
|
|
|
$
|
9,763,304
|
|
Corporate debt – all other
|
—
|
|
|
460,975
|
|
|
28,793
|
|
|
489,768
|
|
|
5,450
|
|
|
4,902,226
|
|
|
3,009,164
|
|
|
7,916,840
|
|
||||||||
Equities – common stock
|
129,362
|
|
|
61
|
|
|
6,693
|
|
|
136,116
|
|
|
4,836,422
|
|
|
256,604
|
|
|
8,729,202
|
|
|
13,822,228
|
|
||||||||
Equities – preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
129,362
|
|
|
3,434,518
|
|
|
244,354
|
|
|
3,808,234
|
|
|
4,903,189
|
|
|
13,050,759
|
|
|
27,225,958
|
|
|
45,179,906
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign-currency forward contracts
|
—
|
|
|
216
|
|
|
—
|
|
|
216
|
|
|
—
|
|
|
156,234
|
|
|
—
|
|
|
156,234
|
|
||||||||
Swaps
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
16,544
|
|
|
—
|
|
|
16,544
|
|
||||||||
Options and futures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,559
|
|
|
—
|
|
|
25,559
|
|
||||||||
Swaptions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||||
Total derivatives
|
—
|
|
|
357
|
|
|
—
|
|
|
357
|
|
|
—
|
|
|
198,351
|
|
|
—
|
|
|
198,351
|
|
||||||||
Total assets
|
$
|
129,362
|
|
|
$
|
3,434,875
|
|
|
$
|
244,354
|
|
|
$
|
3,808,591
|
|
|
$
|
4,903,189
|
|
|
$
|
13,249,110
|
|
|
$
|
27,225,958
|
|
|
$
|
45,378,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CLO debt obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior secured notes
(1)
|
$
|
—
|
|
|
$
|
(2,953,880
|
)
|
|
$
|
—
|
|
|
$
|
(2,953,880
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Subordinated notes
(1)
|
—
|
|
|
(100,330
|
)
|
|
—
|
|
|
(100,330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total CLO debt obligations
|
—
|
|
|
(3,054,210
|
)
|
|
—
|
|
|
(3,054,210
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Securities sold short:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities
|
(41,016
|
)
|
|
—
|
|
|
—
|
|
|
(41,016
|
)
|
|
(91,246
|
)
|
|
—
|
|
|
—
|
|
|
(91,246
|
)
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign-currency forward contracts
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(64,364
|
)
|
|
—
|
|
|
(64,364
|
)
|
||||||||
Swaps
|
—
|
|
|
(1,082
|
)
|
|
—
|
|
|
(1,082
|
)
|
|
—
|
|
|
(223,359
|
)
|
|
(8,251
|
)
|
|
(231,610
|
)
|
||||||||
Options and futures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(4,146
|
)
|
|
—
|
|
|
(4,234
|
)
|
||||||||
Total derivatives
|
—
|
|
|
(1,086
|
)
|
|
—
|
|
|
(1,086
|
)
|
|
(88
|
)
|
|
(291,869
|
)
|
|
(8,251
|
)
|
|
(300,208
|
)
|
||||||||
Total liabilities
|
$
|
(41,016
|
)
|
|
$
|
(3,055,296
|
)
|
|
$
|
—
|
|
|
$
|
(3,096,312
|
)
|
|
$
|
(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 10 for more information.
|
|
Corporate Debt – Bank Debt
|
|
Corporate Debt – All Other
|
|
Equities – Common Stock
|
|
Equities – Preferred Stock
|
|
Real Estate
|
|
Real Estate Loan Portfolio
|
|
Swaps
|
|
Other
|
|
Total
|
||||||||||||||||||
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
|
83,218
|
|
|
657
|
|
|
3,089
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,964
|
|
|||||||||
Transfers out of Level III
|
(43,728
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,728
|
)
|
|||||||||
Purchases
|
21,259
|
|
|
26,662
|
|
|
1,301
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,222
|
|
|||||||||
Sales
|
(57,659
|
)
|
|
(219
|
)
|
|
(2,651
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,529
|
)
|
|||||||||
Realized gains (losses), net
|
389
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|||||||||
Unrealized appreciation (depreciation), net
|
6,319
|
|
|
(186
|
)
|
|
778
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,911
|
|
|||||||||
Ending balance
|
$
|
208,868
|
|
|
$
|
28,793
|
|
|
$
|
6,693
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
244,354
|
|
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
|
$
|
6,196
|
|
|
$
|
(186
|
)
|
|
$
|
778
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Beginning balance
|
$
|
1,555,656
|
|
|
$
|
2,750,661
|
|
|
$
|
9,044,579
|
|
|
$
|
1,320,752
|
|
|
$
|
9,216,056
|
|
|
$
|
2,399,105
|
|
|
$
|
(10,687
|
)
|
|
$
|
15,576
|
|
|
$
|
26,291,698
|
|
Transfers into Level III
|
364,501
|
|
|
248,824
|
|
|
570,137
|
|
|
15,835
|
|
|
142,165
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,341,462
|
|
|||||||||
Transfers out of Level III
|
(199,119
|
)
|
|
(246,615
|
)
|
|
(1,427,473
|
)
|
|
(32,692
|
)
|
|
(61,317
|
)
|
|
—
|
|
|
—
|
|
|
(12,000
|
)
|
|
(1,979,216
|
)
|
|||||||||
Purchases
|
684,359
|
|
|
1,267,168
|
|
|
1,706,683
|
|
|
203,077
|
|
|
1,973,704
|
|
|
1,207,691
|
|
|
—
|
|
|
—
|
|
|
7,042,682
|
|
|||||||||
Sales
|
(493,438
|
)
|
|
(584,756
|
)
|
|
(1,315,766
|
)
|
|
(305,917
|
)
|
|
(2,242,760
|
)
|
|
(1,100,273
|
)
|
|
—
|
|
|
(5,513
|
)
|
|
(6,048,423
|
)
|
|||||||||
Realized gains (losses), net
|
16,245
|
|
|
(4,670
|
)
|
|
125,637
|
|
|
81,037
|
|
|
766,400
|
|
|
283,074
|
|
|
—
|
|
|
3,147
|
|
|
1,270,870
|
|
|||||||||
Unrealized appreciation (depreciation), net
|
(56,829
|
)
|
|
(421,448
|
)
|
|
25,405
|
|
|
81,450
|
|
|
(138,978
|
)
|
|
(192,192
|
)
|
|
2,436
|
|
|
(1,210
|
)
|
|
(701,366
|
)
|
|||||||||
Ending balance
|
$
|
1,871,375
|
|
|
$
|
3,009,164
|
|
|
$
|
8,729,202
|
|
|
$
|
1,363,542
|
|
|
$
|
9,655,270
|
|
|
$
|
2,597,405
|
|
|
$
|
(8,251
|
)
|
|
$
|
—
|
|
|
$
|
27,217,707
|
|
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
|
$
|
(43,305
|
)
|
|
$
|
(340,883
|
)
|
|
$
|
(33,299
|
)
|
|
$
|
169,799
|
|
|
$
|
342,560
|
|
|
$
|
(192,192
|
)
|
|
$
|
2,436
|
|
|
$
|
—
|
|
|
$
|
(94,884
|
)
|
Investment Type
|
|
Fair Value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
(9)(10)(11)
|
|
Range
|
|
Weighted Average
(12)
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Credit-oriented investments:
|
|
|
|
|
|
|
|
|
|
|
||
Consumer
discretionary: |
|
$
|
7,658
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 13%
|
|
7%
|
|
|
64,147
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Consumer Staples:
|
|
7,356
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
6% – 12%
|
|
7%
|
|
|
|
23,182
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Energy:
|
|
12,758
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Industrials:
|
|
10,574
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
5% – 7%
|
|
6%
|
|
|
|
4,230
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
5x - 7x
|
|
6x
|
|
|
|
30,531
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Information
technology: |
|
11,681
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
6% – 13%
|
|
9%
|
|
|
|
5,076
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Materials:
|
|
1,206
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
11% – 13%
|
|
12%
|
|
|
|
15,586
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Other:
|
|
13,754
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
8% – 16%
|
|
12%
|
|
|
|
9,137
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
|
|
20,785
|
|
|
Recent transaction price
(5)
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
|
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
||
|
|
3,542
|
|
|
Market approach
(comparable companies) (2) |
|
Earnings multiple
(3)
|
|
4x – 11x
|
|
8x
|
|
|
|
1,352
|
|
|
Discounted cash flow
(1)
|
|
Discount rate
|
|
11% – 33%
|
|
14%
|
|
|
|
1,799
|
|
|
Recent market information
(6)
|
|
Quoted prices
|
|
Not applicable
|
|
Not applicable
|
|
Total Level III
investments |
|
$
|
244,354
|
|
|
|
|
|
|
|
|
|
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 December 31, 2016:
|
Contract
Amount in Local Currency |
|
Contract
Amount in
U.S. Dollars
|
|
Market
Amount in
U.S. Dollars
|
|
Net Unrealized
Appreciation
(Depreciation)
|
|||||||
Euro, expiring 1/9/17-12/29/17
|
242,100
|
|
|
$
|
271,848
|
|
|
$
|
257,652
|
|
|
$
|
14,196
|
|
USD (buy GBP), expiring 1/31/17-12/29/17
|
72,565
|
|
|
72,565
|
|
|
78,143
|
|
|
(5,578
|
)
|
|||
Japanese Yen, expiring 1/31/17-2/28/17
|
6,150,000
|
|
|
52,511
|
|
|
52,792
|
|
|
(281
|
)
|
|||
Total
|
|
|
$
|
396,924
|
|
|
$
|
388,587
|
|
|
$
|
8,337
|
|
|
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
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Investment income
|
$
|
4,630
|
|
|
$
|
—
|
|
|
$
|
2,554
|
|
General and administrative expense
(1)
|
(8,846
|
)
|
|
23,554
|
|
|
31,772
|
|
|||
Total
|
$
|
(4,216
|
)
|
|
$
|
23,554
|
|
|
$
|
34,326
|
|
|
|
|
|
|
(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.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
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
|
|
Net Realized Gain (Loss) on Investments
|
|
Net Change in Unrealized Appreciation (Depreciation) on Investments
|
||||||||||||
Foreign-currency forward contracts
|
$
|
521
|
|
|
$
|
264
|
|
|
$
|
457,594
|
|
|
$
|
(98,420
|
)
|
|
$
|
179,675
|
|
|
$
|
278,647
|
|
Total-return and interest-rate swaps
|
(2,353
|
)
|
|
(1,416
|
)
|
|
(215,837
|
)
|
|
(38,658
|
)
|
|
54,437
|
|
|
(193,079
|
)
|
||||||
Options and futures
|
(1,293
|
)
|
|
3
|
|
|
43,055
|
|
|
(30,198
|
)
|
|
(38,431
|
)
|
|
6,513
|
|
||||||
Swaptions
|
—
|
|
|
—
|
|
|
(2,933
|
)
|
|
2,186
|
|
|
(1,158
|
)
|
|
(4,770
|
)
|
||||||
Total
|
$
|
(3,125
|
)
|
|
$
|
(1,149
|
)
|
|
$
|
281,879
|
|
|
$
|
(165,090
|
)
|
|
$
|
194,523
|
|
|
$
|
87,311
|
|
As of December 31, 2016:
|
Buy (Sell) Contract Amount in Local Currency
|
|
Contract Amount in U.S. Dollars
|
|
Market Amount in U.S. Dollars
|
|
Net Unrealized Appreciation (Depreciation)
|
|||||||
Euro, expiring 1/6/17-3/16/17
|
(10,248
|
)
|
|
$
|
10,997
|
|
|
$
|
10,821
|
|
|
$
|
176
|
|
Pound Sterling, expiring 1/6/17
|
(901
|
)
|
|
1,146
|
|
|
1,110
|
|
|
36
|
|
|||
Total
|
|
|
|
$
|
12,143
|
|
|
$
|
11,931
|
|
|
$
|
212
|
|
As of December 31, 2015:
|
Buy (Sell) Contract Amount in Local Currency
|
|
Contract Amount in U.S. Dollars
|
|
Market Amount in U.S. Dollars
|
|
Net Unrealized Appreciation (Depreciation)
|
|||||||
Euro, expiring 1/12/16-11/13/18
|
(2,383,537
|
)
|
|
$
|
2,630,690
|
|
|
$
|
2,600,245
|
|
|
$
|
30,445
|
|
Pound Sterling, expiring 1/12/16-11/14/16
|
(1,401,289
|
)
|
|
2,135,175
|
|
|
2,065,891
|
|
|
69,284
|
|
|||
Canadian Dollar, expiring 2/4/16-5/19/16
|
(46,505
|
)
|
|
35,279
|
|
|
33,485
|
|
|
1,794
|
|
|||
Australian Dollar, expiring 3/17/16
|
(323,440
|
)
|
|
228,399
|
|
|
234,428
|
|
|
(6,029
|
)
|
|||
Hong Kong Dollar, expiring 1/21/16
|
(1,896
|
)
|
|
245
|
|
|
245
|
|
|
—
|
|
|||
Japanese Yen, expiring 1/21/16 -4/7/16
|
(7,651,169
|
)
|
|
62,040
|
|
|
63,709
|
|
|
(1,669
|
)
|
|||
Swiss Franc, expiring 1/21/16
|
(481
|
)
|
|
493
|
|
|
481
|
|
|
12
|
|
|||
Singapore Dollar, expiring 1/21/16
|
(2,444
|
)
|
|
1,753
|
|
|
1,722
|
|
|
31
|
|
|||
South Korean Won, expiring 1/4/16-12/1/16
|
(151,173,334
|
)
|
|
132,553
|
|
|
128,757
|
|
|
3,796
|
|
|||
New Zealand Dollar, expiring 3/17/16-6/9/16
|
(284,364
|
)
|
|
178,371
|
|
|
193,723
|
|
|
(15,352
|
)
|
|||
Danish Krone, expiring 11/4/16
|
(362,000
|
)
|
|
54,167
|
|
|
53,316
|
|
|
851
|
|
|||
Chinese Yuan, expiring 3/17/16-5/20/16
|
(466,187
|
)
|
|
74,667
|
|
|
71,220
|
|
|
3,447
|
|
|||
Swedish Krona, expiring 1/21/16
|
(145
|
)
|
|
(11
|
)
|
|
(17
|
)
|
|
6
|
|
|||
U.S. Dollar (buy Euro), expiring 1/12/16-11/18/16
|
(32,547
|
)
|
|
37,577
|
|
|
32,323
|
|
|
5,254
|
|
|||
Total
|
|
|
|
$
|
5,571,398
|
|
|
$
|
5,479,528
|
|
|
$
|
91,870
|
|
|
Gross and Net Amounts of Assets (Liabilities) Presented
|
|
Gross Amounts Not Offset in Statements of Financial Condition
|
|
Net Amount
|
||||||||||
As of December 31, 2016:
|
|
Derivative Assets (Liabilities)
|
|
Cash Collateral Received (Pledged)
|
|
||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
16,142
|
|
|
$
|
7,805
|
|
|
$
|
—
|
|
|
$
|
8,337
|
|
Derivative assets of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
216
|
|
|
4
|
|
|
—
|
|
|
212
|
|
||||
Total-return and interest-rate swaps
|
141
|
|
|
141
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
357
|
|
|
145
|
|
|
—
|
|
|
212
|
|
||||
Total
|
$
|
16,499
|
|
|
$
|
7,950
|
|
|
$
|
—
|
|
|
$
|
8,549
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
$
|
(7,805
|
)
|
|
$
|
(7,805
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-rate swaps
|
(60
|
)
|
|
|
|
—
|
|
|
(60
|
)
|
|||||
Subtotal
|
(7,865
|
)
|
|
(7,805
|
)
|
|
—
|
|
|
(60
|
)
|
||||
Derivative liabilities of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Foreign-currency forward contracts
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Total-return and interest-rate swaps
|
(1,082
|
)
|
|
(141
|
)
|
|
(941
|
)
|
|
—
|
|
||||
Subtotal
|
(1,086
|
)
|
|
(145
|
)
|
|
(941
|
)
|
|
—
|
|
||||
Total
|
$
|
(8,951
|
)
|
|
$
|
(7,950
|
)
|
|
$
|
(941
|
)
|
|
$
|
(60
|
)
|
|
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 December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Furniture, equipment and capitalized software
|
$
|
18,771
|
|
|
$
|
16,820
|
|
Leasehold improvements
|
49,626
|
|
|
43,107
|
|
||
Corporate aircraft
|
66,277
|
|
|
12,439
|
|
||
Other
|
3,748
|
|
|
3,295
|
|
||
Fixed assets
|
138,422
|
|
|
75,661
|
|
||
Accumulated depreciation
|
(45,344
|
)
|
|
(36,394
|
)
|
||
Fixed assets, net
|
$
|
93,078
|
|
|
$
|
39,267
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Contractual rights
|
$
|
28,017
|
|
|
$
|
28,017
|
|
Accumulated amortization
|
(9,675
|
)
|
|
(5,671
|
)
|
||
Intangible assets, net
|
$
|
18,342
|
|
|
$
|
22,346
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
$50,000, 6.09%, issued in June 2006, matured on June 6, 2016
|
$
|
—
|
|
|
$
|
50,000
|
|
$50,000, 5.82%, issued in November 2006, matured on November 8, 2016
|
—
|
|
|
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
|
150,000
|
|
|
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
|
|
||
$100,000, 3.69%, issued in July 2016, payable on July 12, 2031
|
100,000
|
|
|
—
|
|
||
Total remaining principal
|
750,000
|
|
|
850,000
|
|
||
Less: Debt issuance costs
|
(4,103
|
)
|
|
(3,646
|
)
|
||
Debt obligations
|
$
|
745,897
|
|
|
$
|
846,354
|
|
2017
|
$
|
—
|
|
2018
|
—
|
|
|
2019
|
250,000
|
|
|
2020
|
—
|
|
|
2021
|
150,000
|
|
|
Thereafter
|
350,000
|
|
|
Total
|
$
|
750,000
|
|
|
Outstanding Amount as of December 31,
|
|
Facility Capacity
|
|
LIBOR
Margin
(1)
|
|
Maturity
|
|
Commitment Fee Rate
|
|
L/C Fee
|
||||||||
Credit Agreement
|
2016
|
|
2015
|
||||||||||||||||
Credit facilities
|
$
|
—
|
|
|
$
|
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
(2)
|
488,997
|
|
|
1,363,044
|
|
|
$
|
489,000
|
|
|
Various
|
|
10/20/2027
|
|
N/A
|
|
N/A
|
||
Total debt obligations
|
488,997
|
|
|
6,462,762
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Debt issuance costs
|
(5,041
|
)
|
|
(20,020
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Total debt obligations, net
|
$
|
483,956
|
|
|
$
|
6,442,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The facility bears interest at an annual rate of LIBOR plus the applicable margin.
|
(2)
|
The weighted average interest rate was
2.63%
as of December 31, 2016.
|
|
As of December 31, 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)
|
$
|
471,603
|
|
|
2.90%
|
|
8.2
|
|
$
|
457,196
|
|
|
$
|
447,460
|
|
|
2.37%
|
|
9.3
|
Senior secured notes
(3)
|
470,298
|
|
|
3.03%
|
|
9.9
|
|
454,423
|
|
|
446,558
|
|
|
2.52%
|
|
11.0
|
|||
Senior secured notes
(4)
|
49,336
|
|
|
3.31%
|
|
2.0
|
|
79,914
|
|
|
78,632
|
|
|
2.96%
|
|
3.0
|
|||
Senior secured notes
(5)
|
357,706
|
|
|
1.73%
|
|
10.7
|
|
363,709
|
|
|
357,626
|
|
|
2.26%
|
|
11.7
|
|||
Senior secured notes
(3)
|
467,084
|
|
|
2.96%
|
|
11.0
|
|
455,295
|
|
|
448,933
|
|
|
2.54%
|
|
12.0
|
|||
Senior secured notes
(5)
|
360,234
|
|
|
2.29%
|
|
11.3
|
|
361,142
|
|
|
359,914
|
|
|
2.29%
|
|
12.3
|
|||
Senior secured notes
(5)
|
395,458
|
|
|
2.28%
|
|
12.4
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|||
Senior secured notes
(5)
|
382,161
|
|
|
1.99%
|
|
13.2
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|||
Subordinated note
(6)
|
12,281
|
|
|
N/A
|
|
9.9
|
|
25,500
|
|
|
16,400
|
|
|
N/A
|
|
11.0
|
|||
Subordinated note
(6)
|
17,871
|
|
|
N/A
|
|
10.7
|
|
21,183
|
|
|
15,876
|
|
|
N/A
|
|
11.7
|
|||
Subordinated note
(6)
|
18,432
|
|
|
N/A
|
|
11.0
|
|
25,500
|
|
|
18,337
|
|
|
N/A
|
|
12.0
|
|||
Subordinated note
(6)
|
13,422
|
|
|
N/A
|
|
11.3
|
|
17,924
|
|
|
11,928
|
|
|
N/A
|
|
12.3
|
|||
Subordinated note
(6)
|
17,073
|
|
|
N/A
|
|
12.4
|
|
12,036
|
|
|
12,036
|
|
|
N/A
|
|
1.6
|
|||
Subordinated note
(6)
|
21,251
|
|
|
N/A
|
|
13.2
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|||
Term loan
|
—
|
|
|
—
|
|
—
|
|
81,238
|
|
|
81,238
|
|
|
1.20%
|
|
1.6
|
|||
Total CLO debt obligations
|
3,054,210
|
|
|
|
|
|
|
2,355,060
|
|
|
$
|
2,294,938
|
|
|
|
|
|
||
Less: Debt issuance costs
|
—
|
|
|
|
|
|
|
(24,701
|
)
|
|
|
|
|
|
|
||||
Total CLO debt obligations, net
|
$
|
3,054,210
|
|
|
|
|
|
|
$
|
2,330,359
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company adopted the CLO measurement guidance 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 6 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
|
(3)
|
The weighted average interest rate is based on LIBOR plus a margin.
|
(4)
|
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%
.
|
(5)
|
The weighted average interest rate is based on EURIBOR (subject to a
zero
floor) plus a margin.
|
(6)
|
The subordinated notes do not have a contractual interest rate; instead, they receive distributions from the excess cash flows generated by the CLO.
|
2017
|
$
|
—
|
|
2018
|
49,336
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
2021
|
—
|
|
|
Thereafter
|
3,002,952
|
|
|
Total
|
$
|
3,052,288
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balance
|
$
|
38,173,125
|
|
|
$
|
41,681,155
|
|
|
$
|
38,834,831
|
|
Cumulative-effect adjustment from adoption of accounting guidance
|
(37,969,042
|
)
|
|
—
|
|
|
—
|
|
|||
Contributions
|
144,060
|
|
|
5,796,081
|
|
|
9,420,044
|
|
|||
Distributions
|
(56,557
|
)
|
|
(7,407,437
|
)
|
|
(7,962,362
|
)
|
|||
Net income (loss)
|
20,988
|
|
|
(1,812,539
|
)
|
|
1,647,753
|
|
|||
Change in distributions payable
|
(4,227
|
)
|
|
387,989
|
|
|
(528,051
|
)
|
|||
Change in accrued or deferred contributions
|
—
|
|
|
526
|
|
|
(26,760
|
)
|
|||
Initial consolidation of a fund
|
34,095
|
|
|
—
|
|
|
902,979
|
|
|||
Foreign-currency translation and other
|
1,605
|
|
|
(472,650
|
)
|
|
(607,279
|
)
|
|||
Ending balance
|
$
|
344,047
|
|
|
$
|
38,173,125
|
|
|
$
|
41,681,155
|
|
Payment Date
|
|
Record Date
|
|
Applicable to Quarterly Period Ended
|
|
Distribution Per Unit
|
||
November 14, 2016
|
|
November 7, 2016
|
|
September 30, 2016
|
|
$
|
0.65
|
|
August 12, 2016
|
|
August 8, 2016
|
|
June 30, 2016
|
|
0.58
|
|
|
May 13, 2016
|
|
May 9, 2016
|
|
March 31, 2016
|
|
0.55
|
|
|
February 26, 2016
|
|
February 19, 2016
|
|
December 31, 2015
|
|
0.47
|
|
|
Total 2016
|
|
$
|
2.25
|
|
||||
|
|
|
|
|
|
|
||
November 12, 2015
|
|
November 9, 2015
|
|
September 30, 2015
|
|
$
|
0.40
|
|
August 13, 2015
|
|
August 10, 2015
|
|
June 30, 2015
|
|
0.50
|
|
|
May 14, 2015
|
|
May 11, 2015
|
|
March 31, 2015
|
|
0.64
|
|
|
February 25, 2015
|
|
February 19, 2015
|
|
December 31, 2014
|
|
0.56
|
|
|
Total 2015
|
|
$
|
2.10
|
|
||||
|
|
|
|
|
|
|
||
November 13, 2014
|
|
November 10, 2014
|
|
September 30, 2014
|
|
$
|
0.62
|
|
August 14, 2014
|
|
August 11, 2014
|
|
June 30, 2014
|
|
0.55
|
|
|
May 15, 2014
|
|
May 12, 2014
|
|
March 31, 2014
|
|
0.98
|
|
|
February 27, 2014
|
|
February 24, 2014
|
|
December 31, 2013
|
|
1.00
|
|
|
Total 2014
|
|
$
|
3.15
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Weighted average Oaktree Operating Group units outstanding
(in thousands):
|
|
|
|
|
|
||||||
OCGH non-controlling interest
|
92,122
|
|
|
104,427
|
|
|
110,078
|
|
|||
Class A unitholders
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
|||
Total weighted average units outstanding
|
154,687
|
|
|
153,751
|
|
|
152,660
|
|
|||
Oaktree Operating Group net income:
|
|
|
|
|
|
|
|
||||
Net income attributable to OCGH non-controlling interest
|
$
|
343,781
|
|
|
$
|
195,162
|
|
|
$
|
386,398
|
|
Net income attributable to Class A unitholders
|
233,765
|
|
|
87,620
|
|
|
146,446
|
|
|||
Oaktree Operating Group net income
(1)
|
$
|
577,546
|
|
|
$
|
282,782
|
|
|
$
|
532,844
|
|
Net income attributable to Oaktree Capital Group, LLC:
|
|
|
|
|
|
|
|
||||
Oaktree Operating Group net income attributable to Class A unitholders
|
$
|
233,765
|
|
|
$
|
87,620
|
|
|
$
|
146,446
|
|
Non-Operating Group expenses
|
(1,176
|
)
|
|
(2,097
|
)
|
|
(1,645
|
)
|
|||
Income tax expense of Intermediate Holding Companies
|
(37,884
|
)
|
|
(14,174
|
)
|
|
(18,518
|
)
|
|||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
|
|
|
|
|
(1)
|
Oaktree Operating Group net income does not include amounts attributable to other non-controlling interests, which amounted to
$4,696
,
$10,214
and
$12,981
for the years ended December 31, 2016, 2015 and 2014, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Equity reallocation between controlling and non-controlling interests
|
14,388
|
|
|
181,539
|
|
|
51,525
|
|
|||
Change from net income attributable to Oaktree Capital Group, LLC and transfers from non-controlling interests
|
$
|
209,093
|
|
|
$
|
252,888
|
|
|
$
|
177,808
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income per Class A unit (basic and diluted):
|
(in thousands, except per unit amounts)
|
||||||||||
|
|
|
|
|
|||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Weighted average number of Class A units outstanding (basic and diluted)
|
62,565
|
|
|
49,324
|
|
|
42,582
|
|
|||
Basic and diluted net income per Class A unit
|
$
|
3.11
|
|
|
$
|
1.45
|
|
|
$
|
2.97
|
|
|
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, 2013
|
16,582
|
|
|
$
|
45.34
|
|
|
4,465,722
|
|
|
$
|
30.30
|
|
Granted
|
7,164
|
|
|
58.88
|
|
|
1,770,418
|
|
|
43.98
|
|
||
Vested
|
(4,697
|
)
|
|
44.54
|
|
|
(1,109,170
|
)
|
|
24.90
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
(55,978
|
)
|
|
34.42
|
|
||
Balance, December 31, 2014
|
19,049
|
|
|
50.63
|
|
|
5,070,992
|
|
|
36.21
|
|
||
Granted
|
7,940
|
|
|
55.75
|
|
|
1,175,213
|
|
|
44.04
|
|
||
Vested
|
(50,931
|
)
|
|
40.11
|
|
|
(1,421,597
|
)
|
|
32.38
|
|
||
Exchanged
(1)
|
2,418,282
|
|
|
38.10
|
|
|
(2,418,282
|
)
|
|
38.10
|
|
||
Forfeited
|
(18,000
|
)
|
|
42.29
|
|
|
(140,359
|
)
|
|
35.68
|
|
||
Balance, December 31, 2015
|
2,376,340
|
|
|
38.18
|
|
|
2,265,967
|
|
|
40.70
|
|
||
Granted
|
830,949
|
|
|
46.79
|
|
|
879,667
|
|
|
35.96
|
|
||
Vested
|
(997,039
|
)
|
|
37.71
|
|
|
(601,249
|
)
|
|
39.18
|
|
||
Forfeited
|
(81,850
|
)
|
|
35.63
|
|
|
(206,432
|
)
|
|
34.60
|
|
||
Balance, December 31, 2016
|
2,128,400
|
|
|
$
|
41.86
|
|
|
2,337,953
|
|
|
$
|
39.80
|
|
|
|
|
|
|
(1)
|
Represents the unvested units with respect to the November 2015 exchange of
12,998,725
outstanding vested and unvested OCGH units into an equal number of Class A units.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
U.S. federal income tax
|
$
|
10,268
|
|
|
$
|
1,478
|
|
|
$
|
4,128
|
|
State and local income tax
|
6,154
|
|
|
1,650
|
|
|
(372
|
)
|
|||
Foreign income tax
|
1,436
|
|
|
2,621
|
|
|
2,245
|
|
|||
|
$
|
17,858
|
|
|
$
|
5,749
|
|
|
$
|
6,001
|
|
Deferred:
|
|
|
|
|
|
|
|
||||
U.S. federal income tax
|
$
|
23,835
|
|
|
$
|
11,306
|
|
|
$
|
12,544
|
|
State and local income tax
|
2,110
|
|
|
786
|
|
|
1,836
|
|
|||
Foreign income tax
|
(1,284
|
)
|
|
(292
|
)
|
|
(1,845
|
)
|
|||
|
$
|
24,661
|
|
|
$
|
11,800
|
|
|
$
|
12,535
|
|
Total:
|
|
|
|
|
|
|
|
||||
U.S. federal income tax
|
$
|
34,103
|
|
|
$
|
12,784
|
|
|
$
|
16,672
|
|
State and local income tax
|
8,264
|
|
|
2,436
|
|
|
1,464
|
|
|||
Foreign income tax
|
152
|
|
|
2,329
|
|
|
400
|
|
|||
Income tax expense
|
$
|
42,519
|
|
|
$
|
17,549
|
|
|
$
|
18,536
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic income (loss) before income taxes
|
$
|
623,712
|
|
|
$
|
(1,518,108
|
)
|
|
$
|
2,195,174
|
|
Foreign income (loss) before income taxes
|
(15,090
|
)
|
|
2,695
|
|
|
(1,086
|
)
|
|||
Total income (loss) before income taxes
|
$
|
608,622
|
|
|
$
|
(1,515,413
|
)
|
|
$
|
2,194,088
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Income tax expense at federal statutory rate
|
35.00
|
%
|
|
35.00
|
%
|
|
35.00
|
%
|
Income passed through
|
(30.31
|
)
|
|
(35.91
|
)
|
|
(34.15
|
)
|
State and local taxes, net of federal benefit
|
1.28
|
|
|
(0.17
|
)
|
|
0.05
|
|
Foreign taxes
|
0.89
|
|
|
(0.09
|
)
|
|
0.04
|
|
Other, net
|
0.13
|
|
|
0.01
|
|
|
(0.10
|
)
|
Total effective rate
|
6.99
|
%
|
|
(1.16
|
)%
|
|
0.84
|
%
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|||
Investment in partnerships
|
$
|
386,796
|
|
|
$
|
414,142
|
|
|
$
|
351,962
|
|
Equity-based compensation expense
|
4,449
|
|
|
3,773
|
|
|
5,514
|
|
|||
Other, net
|
14,329
|
|
|
9,675
|
|
|
3,071
|
|
|||
Total deferred tax assets
|
405,574
|
|
|
427,590
|
|
|
360,547
|
|
|||
Total deferred tax liabilities
|
960
|
|
|
1,792
|
|
|
3,183
|
|
|||
Net deferred tax assets before valuation allowance
|
404,614
|
|
|
425,798
|
|
|
357,364
|
|
|||
Valuation allowance
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net deferred tax assets
|
$
|
404,614
|
|
|
$
|
425,798
|
|
|
$
|
357,364
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized tax benefits, January 1
|
$
|
4,956
|
|
|
$
|
5,575
|
|
|
$
|
10,390
|
|
Additions for tax positions related to the current year
|
350
|
|
|
1,156
|
|
|
1,492
|
|
|||
Additions for tax positions related to prior years
|
2,121
|
|
|
109
|
|
|
—
|
|
|||
Reductions for tax positions related to prior years
|
(79
|
)
|
|
—
|
|
|
(1,373
|
)
|
|||
Settlements
|
—
|
|
|
—
|
|
|
(3,657
|
)
|
|||
Lapse in statute of limitations
|
(1,580
|
)
|
|
(1,884
|
)
|
|
(1,277
|
)
|
|||
Unrecognized tax benefits, December 31
|
$
|
5,768
|
|
|
$
|
4,956
|
|
|
$
|
5,575
|
|
2017
|
$
|
10,056
|
|
2018
|
14,275
|
|
|
2019
|
14,556
|
|
|
2020
|
14,961
|
|
|
2021
|
11,672
|
|
|
Thereafter
|
55,480
|
|
|
Total
|
$
|
121,000
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Due from affiliates:
|
|
|
|
||||
Loans
|
$
|
19,325
|
|
|
$
|
29,718
|
|
Amounts due from unconsolidated funds
|
53,573
|
|
|
777
|
|
||
Management fees and incentive income due from unconsolidated funds
|
130,708
|
|
|
—
|
|
||
Payments made on behalf of unconsolidated entities
|
3,779
|
|
|
3,788
|
|
||
Non-interest bearing advances made to certain non-controlling interest holders and employees
|
1,258
|
|
|
1,616
|
|
||
Total due from affiliates
|
$
|
208,643
|
|
|
$
|
35,899
|
|
Due to affiliates:
|
|
|
|
|
|||
Due to OCGH unitholders in connection with the tax receivable agreement (please see note 15)
|
$
|
340,966
|
|
|
$
|
356,851
|
|
Amounts due to senior executives, certain non-controlling interest holders and employees
|
5,577
|
|
|
—
|
|
||
Total due to affiliates
|
$
|
346,543
|
|
|
$
|
356,851
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Management fees
|
$
|
785,673
|
|
|
$
|
753,805
|
|
|
$
|
762,823
|
|
Incentive income
|
355,152
|
|
|
263,806
|
|
|
491,402
|
|
|||
Investment income
|
221,377
|
|
|
48,253
|
|
|
117,662
|
|
|||
Total revenues
|
1,362,202
|
|
|
1,065,864
|
|
|
1,371,887
|
|
|||
Expenses:
|
|
|
|
|
|
|
|||||
Compensation and benefits
|
(381,937
|
)
|
|
(404,442
|
)
|
|
(379,360
|
)
|
|||
Equity-based compensation
|
(51,759
|
)
|
|
(37,978
|
)
|
|
(19,705
|
)
|
|||
Incentive income compensation
|
(169,683
|
)
|
|
(141,822
|
)
|
|
(231,871
|
)
|
|||
General and administrative
|
(123,784
|
)
|
|
(120,783
|
)
|
|
(127,954
|
)
|
|||
Depreciation and amortization
|
(12,219
|
)
|
|
(10,018
|
)
|
|
(7,249
|
)
|
|||
Total expenses
|
(739,382
|
)
|
|
(715,043
|
)
|
|
(766,139
|
)
|
|||
Adjusted net income before interest and other income (expense)
|
622,820
|
|
|
350,821
|
|
|
605,748
|
|
|||
Interest expense, net of interest income
(1)
|
(31,845
|
)
|
|
(35,032
|
)
|
|
(30,190
|
)
|
|||
Other income (expense), net
|
(8,392
|
)
|
|
(3,927
|
)
|
|
(2,431
|
)
|
|||
Adjusted net income
|
$
|
582,583
|
|
|
$
|
311,862
|
|
|
$
|
573,127
|
|
|
|
|
|
|
(1)
|
Interest income was
$6.6 million
,
$5.1 million
and
$3.6 million
for the years ended December 31, 2016, 2015 and 2014, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income attributable to Oaktree Capital Group, LLC
|
$
|
194,705
|
|
|
$
|
71,349
|
|
|
$
|
126,283
|
|
Incentive income
(1)
|
1,407
|
|
|
(19,002
|
)
|
|
28,813
|
|
|||
Incentive income compensation
(1)
|
(1,407
|
)
|
|
19,009
|
|
|
(10,677
|
)
|
|||
Investment income
(2)
|
(21,814
|
)
|
|
—
|
|
|
—
|
|
|||
Equity-based compensation
(3)
|
11,965
|
|
|
16,403
|
|
|
21,690
|
|
|||
Placement costs
(4)
|
11,870
|
|
|
3,619
|
|
|
—
|
|
|||
Foreign-currency hedging
(5)
|
1,496
|
|
|
2,619
|
|
|
(2,003
|
)
|
|||
Acquisition-related items
(6)
|
(924
|
)
|
|
5,251
|
|
|
2,442
|
|
|||
Income taxes
(7)
|
42,519
|
|
|
17,549
|
|
|
18,536
|
|
|||
Non-Operating Group expenses
(8)
|
1,176
|
|
|
2,097
|
|
|
1,645
|
|
|||
Non-controlling interests
(8)
|
341,590
|
|
|
192,968
|
|
|
386,398
|
|
|||
Adjusted net income
|
$
|
582,583
|
|
|
$
|
311,862
|
|
|
$
|
573,127
|
|
|
|
|
|
|
(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.
|
(3)
|
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 and fee-related earnings because it is a non-cash charge that does not affect our 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, which are excluded from adjusted net income.
|
(7)
|
Because adjusted net income and fee-related earnings are pre-tax measures, this adjustment adds back the effect of income tax expense.
|
(8)
|
Because adjusted net income and fee-related 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.
|
|
As of or for the Year Ended December 31, 2016
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
Management fees
(1)
|
$
|
785,673
|
|
|
$
|
(11,086
|
)
|
|
$
|
774,587
|
|
Incentive income
(1)
|
355,152
|
|
|
(3,993
|
)
|
|
351,159
|
|
|||
Investment income
(1)
|
221,377
|
|
|
(22,251
|
)
|
|
199,126
|
|
|||
Total expenses
(2)
|
(739,382
|
)
|
|
(49,954
|
)
|
|
(789,336
|
)
|
|||
Interest expense, net
(3)
|
(31,845
|
)
|
|
(88,765
|
)
|
|
(120,610
|
)
|
|||
Other income (expense), net
(4)
|
(8,392
|
)
|
|
21,882
|
|
|
13,490
|
|
|||
Other income of consolidated funds
(5)
|
—
|
|
|
180,206
|
|
|
180,206
|
|
|||
Income taxes
|
—
|
|
|
(42,519
|
)
|
|
(42,519
|
)
|
|||
Net income attributable to non-controlling interests in consolidated funds
|
—
|
|
|
(22,921
|
)
|
|
(22,921
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(348,477
|
)
|
|
(348,477
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
582,583
|
|
|
$
|
(387,878
|
)
|
|
$
|
194,705
|
|
Corporate investments
(6)
|
$
|
1,480,928
|
|
|
$
|
(357,196
|
)
|
|
$
|
1,123,732
|
|
Total assets
(7)
|
$
|
3,313,714
|
|
|
$
|
4,335,396
|
|
|
$
|
7,649,110
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts earned from the consolidated funds, (b) for management fees, the reclassification of
$408
of net gains related to foreign-currency hedging activities to general and administrative expense and (c) for investment income, differences of
$21,814
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
$13,627
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$4,428
, (c) expenses incurred by the Intermediate Holding Companies of
$1,051
, (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
$1,407
, (e) acquisition-related items of
$924
, (f) adjustments of
$21,194
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
$1,661
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (h)
$11,870
related to third-party placement costs, and (i)
$1,776
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
$21,194
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$688
of 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
$1.5 billion
of corporate investments included
$1.2 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 Year Ended December 31, 2015
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
Management fees
(1)
|
$
|
753,805
|
|
|
$
|
(558,497
|
)
|
|
$
|
195,308
|
|
Incentive income
(1)
|
263,806
|
|
|
(257,209
|
)
|
|
6,597
|
|
|||
Investment income
(1)
|
48,253
|
|
|
3,705
|
|
|
51,958
|
|
|||
Total expenses
(2)
|
(715,043
|
)
|
|
(225,865
|
)
|
|
(940,908
|
)
|
|||
Interest expense, net
(3)
|
(35,032
|
)
|
|
(181,767
|
)
|
|
(216,799
|
)
|
|||
Other income (expense), net
(4)
|
(3,927
|
)
|
|
23,933
|
|
|
20,006
|
|
|||
Other income (loss) of consolidated funds
(5)
|
—
|
|
|
(631,575
|
)
|
|
(631,575
|
)
|
|||
Income taxes
|
—
|
|
|
(17,549
|
)
|
|
(17,549
|
)
|
|||
Net loss attributable to non-controlling interests in consolidated funds
|
—
|
|
|
1,809,683
|
|
|
1,809,683
|
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(205,372
|
)
|
|
(205,372
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
311,862
|
|
|
$
|
(240,513
|
)
|
|
$
|
71,349
|
|
Corporate investments
(6)
|
$
|
1,434,109
|
|
|
$
|
(1,220,121
|
)
|
|
$
|
213,988
|
|
Total assets
(7)
|
$
|
3,254,082
|
|
|
$
|
48,508,649
|
|
|
$
|
51,762,731
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts attributable to the consolidated funds and (b) for management fees, the reclassification of
$12,676
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
$16,475
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$165,904
, (c) expenses incurred by the Intermediate Holding Companies of
$1,690
and (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
$19,009
, (e) acquisition-related items of
$5,251
, (f) adjustments of
$23,552
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
$72
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (g)
$9,676
of net gains related to foreign-currency hedging activities, and (i) other expenses of
$113
.
|
(4)
|
The adjustment to other income (expense), net represents adjustments related to (a) amounts received for contractually reimbursable costs of
$23,552
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$381
of 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 that are treated as equity- or cost-method investments for segment reporting. The
$1.4 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 Year Ended December 31, 2014
|
||||||||||
|
Segment
|
|
Adjustments
|
|
Consolidated
|
||||||
Management fees
(1)
|
$
|
762,823
|
|
|
$
|
(570,768
|
)
|
|
$
|
192,055
|
|
Incentive income
(1)
|
491,402
|
|
|
(489,563
|
)
|
|
1,839
|
|
|||
Investment income
(1)
|
117,662
|
|
|
(83,967
|
)
|
|
33,695
|
|
|||
Total expenses
(2)
|
(766,139
|
)
|
|
(181,338
|
)
|
|
(947,477
|
)
|
|||
Interest expense, net
(3)
|
(30,190
|
)
|
|
(99,752
|
)
|
|
(129,942
|
)
|
|||
Other income (expense), net
(4)
|
(2,431
|
)
|
|
5,449
|
|
|
3,018
|
|
|||
Other income of consolidated funds
(5)
|
—
|
|
|
3,040,900
|
|
|
3,040,900
|
|
|||
Income taxes
|
—
|
|
|
(18,536
|
)
|
|
(18,536
|
)
|
|||
Net income attributable to non-controlling interests in consolidated funds
|
—
|
|
|
(1,649,890
|
)
|
|
(1,649,890
|
)
|
|||
Net income attributable to non-controlling interests in consolidated subsidiaries
|
—
|
|
|
(399,379
|
)
|
|
(399,379
|
)
|
|||
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
|
$
|
573,127
|
|
|
$
|
(446,844
|
)
|
|
$
|
126,283
|
|
Corporate investments
(6)
|
$
|
1,515,443
|
|
|
$
|
(1,327,480
|
)
|
|
$
|
187,963
|
|
Total assets
(7)
|
$
|
3,263,382
|
|
|
$
|
50,057,334
|
|
|
$
|
53,320,716
|
|
|
|
|
|
|
(1)
|
The adjustment represents (a) the elimination of amounts attributable to the consolidated funds and (b) for management fees, the reclassification of
$1,669
of net losses related to foreign-currency hedging activities to general and administrative expense.
|
(2)
|
The expense adjustment consists of (a) equity-based compensation expense of
$21,657
related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of
$161,055
, (c) expenses incurred by the Intermediate Holding Companies of
$1,645
, (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
$10,677
, (e) acquisition-related items of
$2,442
, (f) adjustments of
$8,319
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
$33
arising from EVUs that are classified as liability awards under GAAP but as equity awards for segment reporting, (g)
$3,204
of net gains related to foreign-currency hedging activities, and (i) other expenses of
$68
.
|
(4)
|
The adjustment to other income (expense), net represents adjustments related to (a) amounts received for contractually reimbursable costs of
$8,319
that are classified as expenses for segment reporting and as other income under GAAP, and (b) the reclassification of
$2,870
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 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 that are treated as equity- or cost-method investments for segment reporting. The
$1.5 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.
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2016
|
|
June 30, 2016
|
|
September 30, 2016
|
|
December 31, 2016
|
||||||||
Revenues
|
$
|
254,490
|
|
|
$
|
282,716
|
|
|
$
|
290,230
|
|
|
$
|
298,310
|
|
Expenses
|
(185,184
|
)
|
|
(191,648
|
)
|
|
(202,339
|
)
|
|
(210,165
|
)
|
||||
Other income (loss)
|
26,542
|
|
|
58,337
|
|
|
89,499
|
|
|
97,834
|
|
||||
Income before income taxes
|
$
|
95,848
|
|
|
$
|
149,405
|
|
|
$
|
177,390
|
|
|
$
|
185,979
|
|
Net income
|
$
|
83,168
|
|
|
$
|
140,834
|
|
|
$
|
168,823
|
|
|
$
|
173,278
|
|
Net income attributable to Oaktree Capital Group, LLC
|
$
|
28,078
|
|
|
$
|
49,047
|
|
|
$
|
58,297
|
|
|
$
|
59,283
|
|
Net income per unit (basic and diluted):
|
|
|
|
|
|
|
|
||||||||
Net income per Class A unit
|
$
|
0.45
|
|
|
$
|
0.78
|
|
|
$
|
0.93
|
|
|
$
|
0.94
|
|
Distributions declared per Class A unit
|
$
|
0.47
|
|
|
$
|
0.55
|
|
|
$
|
0.58
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
||||||||||||||
|
March 31, 2015
|
|
June 30, 2015
|
|
September 30, 2015
|
|
December 31, 2015
|
||||||||
Revenues
|
$
|
50,819
|
|
|
$
|
51,487
|
|
|
$
|
50,491
|
|
|
$
|
49,108
|
|
Expenses
|
(235,974
|
)
|
|
(245,929
|
)
|
|
(190,518
|
)
|
|
(268,487
|
)
|
||||
Other income (loss)
|
1,476,049
|
|
|
(116,711
|
)
|
|
(1,624,651
|
)
|
|
(511,097
|
)
|
||||
Income (loss) before income taxes
|
$
|
1,290,894
|
|
|
$
|
(311,153
|
)
|
|
$
|
(1,764,678
|
)
|
|
$
|
(730,476
|
)
|
Net income (loss)
|
$
|
1,283,019
|
|
|
$
|
(316,638
|
)
|
|
$
|
(1,766,571
|
)
|
|
$
|
(732,772
|
)
|
Net income attributable to Oaktree Capital Group, LLC
|
$
|
38,253
|
|
|
$
|
19,814
|
|
|
$
|
1,887
|
|
|
$
|
11,395
|
|
Net income per unit (basic and diluted):
|
|
|
|
|
|
|
|
||||||||
Net income per Class A unit
|
$
|
0.85
|
|
|
$
|
0.41
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
Distributions declared per Class A unit
|
$
|
0.56
|
|
|
$
|
0.64
|
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
NEO
|
Compensation Elements
|
Jay S. Wintrob
|
● Profit sharing arrangement
● Equity grants
|
David M. Kirchheimer
|
● Profit sharing arrangement
|
John B. Frank
|
● Profit sharing arrangement
● Carried interest payments
|
Stephen A. Kaplan
|
● Base salary
● Carried interest payments
|
Todd E. Molz
|
● Base salary
● Annual bonus
● Equity grants
|
Name
|
|
Number of OCGH Units
(1)
|
|
Number of EVUs
|
|
Number of Class A Units
|
|
Total Number of Units
|
|
Percentage of Beneficial Ownership of Oaktree Operating Group
|
|||||
Jay S. Wintrob
|
—
|
|
|
2,000,000
|
|
|
28,128
|
|
|
2,028,128
|
|
|
*
|
|
|
David M. Kirchheimer
|
1,407,097
|
|
|
—
|
|
|
66,803
|
|
|
1,473,900
|
|
|
*
|
|
|
John B. Frank
|
2,100,397
|
|
|
—
|
|
|
75,185
|
|
|
2,175,582
|
|
|
1.4
|
%
|
|
Stephen A. Kaplan
|
1,672,328
|
|
|
—
|
|
|
100,181
|
|
|
1,772,509
|
|
|
1.2
|
%
|
|
Todd E. Molz
|
202,304
|
|
|
—
|
|
|
99,177
|
|
|
301,481
|
|
|
*
|
|
|
|
|
|
|
*
|
Less than 1%
|
(1)
|
Following the May 2007 Restructuring, the OCGH unitholders’ interests in OCGH continued to take into account any disproportionate sharing in historical incentive income in accordance with the terms of the OCGH limited partnership agreement that were in effect prior to the May 2007 Restructuring. As a result, distributions to the OCGH unitholders by OCGH that are attributable to historical incentive income (i.e., attributable to funds formed before 2007) are not made pro rata in proportion to the OCGH unitholders’ interest in OCGH units but instead will be adjusted to account for the disproportionate sharing of historical incentive income. The figures included in this table do not reflect an NEO’s rights to historical incentive income, if applicable.
|
A.
|
Jay S. Wintrob
|
•
|
The reference OCGH units are not real OCGH units; they represent a reference point for purposes of calculating cash distributions only.
|
•
|
The number of reference OCGH units based off of which the cash distributions are to be calculated is determined by application of a vesting schedule (described below) and a performance condition. The performance condition for each year is appreciation in value in a Class A unit and in the aggregate cash distributions made on a per-OCGH unit basis over a pre-set hurdle.
|
•
|
Once the number of reference OCGH units is determined for a given fiscal year (commencing with 2016), Mr. Wintrob will be entitled to receive, for each reference OCGH unit, the amount of the per-OCGH unit distributions all OCGH unitholders otherwise receive for the applicable year.
|
•
|
Mr. Wintrob’s entitlement to cash distributions in one year does not mean he will be entitled to them in the next year.
|
•
|
2,000,000 EVUs (reduced to 1,333,334 with respect to 2020 and 666,667 with respect to 2021),
multiplied by
|
•
|
Mr. Wintrob’s vested percentage in the EVUs as of the December 31 preceding the year of distribution,
multiplied by
|
•
|
the amount by which the end of year VWAP plus the eligible cash distributions exceeds the applicable annual hurdle,
divided by
|
•
|
the end of year VWAP.
|
B.
|
David M. Kirchheimer
|
C.
|
John B. Frank
|
D.
|
Stephen A. Kaplan
|
E.
|
Todd E. Molz
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
Stock Awards ($)
(1)(2)
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
All Other Compensation ($)
(3)
|
|
Total ($)
|
||||||||||||
Jay S. Wintrob,
Chief Executive Officer |
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,082,152
|
|
|
$
|
—
|
|
|
$
|
5,124,532
|
|
|
$
|
6,206,684
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,000,000
|
|
|
$
|
4,000,000
|
|
|
|
2014
|
|
$
|
81,254
|
|
|
$
|
991,636
|
|
|
$
|
13,805,454
|
|
|
$
|
—
|
|
|
$
|
833,000
|
|
|
$
|
15,711,344
|
|
David M. Kirchheimer,
Chief Financial Officer |
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,133,140
|
|
|
$
|
6,133,140
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,306,832
|
|
|
$
|
3,306,832
|
|
|
|
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,360,729
|
|
|
$
|
5,360,729
|
|
John B. Frank,
Vice Chairman
|
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,364,386
|
|
|
$
|
7,364,386
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,703,501
|
|
|
$
|
6,703,501
|
|
|
|
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,172,107
|
|
|
$
|
13,172,107
|
|
Stephen A. Kaplan,
Principal
|
|
2016
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,765,362
|
|
|
$
|
7,015,362
|
|
Todd E. Molz,
General Counsel and Chief Administrative Officer
|
|
2016
|
|
$
|
500,000
|
|
|
$
|
2,500,000
|
|
|
$
|
1,415,643
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,415,643
|
|
|
|
|
|
|
(1)
|
For Mr. Wintrob, reflects a grant of Class A units in respect of $1,082,152 earned in 2015 as profits participation, and for Mr. Molz, reflects a grant of Class A and OCGH units in respect of $1,415,643 earned in 2015 as part of his 2015 total compensation.
|
(2)
|
The grant date fair value of the units received by our NEOs during each year is reflected in the “Stock Awards” column in the Summary Compensation Table because we must account for such units as compensation expense for financial statement reporting purposes. We recognize expense for financial statement reporting purposes in respect of the unvested OCGH and Class A units received by our NEOs on the basis of the value of those units at the time of the grant pursuant to Financial Accounting Standards Board Accounting Codification (ASC) Topic 718 or “ASC Topic 718,” Accounting for Stock Compensation. Please see notes 2 and 14 to our consolidated financial statements included elsewhere in this annual report for further information concerning the assumptions underlying such expense. The compensation shown in the Summary Compensation Table uses the ASC Topic 718 grant date fair values of the equity unit awards actually granted in the reported fiscal year, regardless of when those awards were earned. Accordingly, our equity awards granted in 2016 in respect of 2015 performance are shown in the 2016 line in the Summary Compensation Table instead of the 2015 line. Our equity awards to be granted in 2017 in respect of 2016 performance are not shown in the 2016 line in the Summary Compensation Table (but will appear in the 2017 line in next year’s Summary Compensation Table for next year’s named executive officers).
|
(3)
|
Please see the “All Other Compensation Supplemental Table” below.
|
Name
|
|
Year
|
|
Payments in Respect of Carried Interest
(1)
|
|
Profits Participation
(2)
|
|
Perquisites
(3)
|
|
Total
|
||||||||
Jay S. Wintrob
|
|
2016
|
|
$
|
—
|
|
|
$
|
5,124,532
|
|
|
$
|
—
|
|
|
$
|
5,124,532
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
4,000,000
|
|
|
$
|
—
|
|
|
$
|
4,000,000
|
|
|
|
2014
|
|
$
|
—
|
|
|
$
|
833,000
|
|
|
$
|
—
|
|
|
$
|
833,000
|
|
David M. Kirchheimer
|
|
2016
|
|
$
|
—
|
|
|
$
|
6,102,368
|
|
|
$
|
30,772
|
|
|
$
|
6,133,140
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
3,281,631
|
|
|
$
|
25,201
|
|
|
$
|
3,306,832
|
|
|
|
2014
|
|
$
|
—
|
|
|
$
|
5,338,247
|
|
|
$
|
22,482
|
|
|
$
|
5,360,729
|
|
John B. Frank
|
|
2016
|
|
$
|
2,731,734
|
|
|
$
|
4,606,761
|
|
|
$
|
25,891
|
|
|
$
|
7,364,386
|
|
|
|
2015
|
|
$
|
3,131,713
|
|
|
$
|
3,547,712
|
|
|
$
|
24,076
|
|
|
$
|
6,703,501
|
|
|
|
2014
|
|
$
|
6,138,185
|
|
|
$
|
7,012,095
|
|
|
$
|
21,827
|
|
|
$
|
13,172,107
|
|
Stephen A. Kaplan
|
|
2016
|
|
$
|
6,741,881
|
|
|
$
|
—
|
|
|
$
|
23,481
|
|
|
$
|
6,765,362
|
|
Todd E. Molz
|
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
(1)
|
Amounts included for 2016 represent amounts earned on an accrual basis in respect of participation interests in incentive income generated by our funds with respect to the year ended December 31, 2016. To the extent that timing differences may exist between when amounts are earned on an accrual basis and paid in cash, these amounts do not reflect actual cash carried interest distributions to the NEOs during such periods. Timing differences typically arise when cash is distributed in the quarter immediately following the one in which the related income was earned.
|
(2)
|
Amounts included for 2016 represent the amounts earned on an accrual basis in a given year in respect of the NEO’s annual profits participation interest. The amount for Mr. Wintrob excludes $1,676,511 earned in profits participation for 2016 that will be paid to Mr. Wintrob in the form of a grant of Class A units in the first quarter of 2017.
|
(3)
|
Amounts included for 2016 represent tax preparation fees of $13,420 and $17,302 related to internet services provided for Mr. Kirchheimer; tax preparation fees of $15,250 and $10,641 related to internet services provided for Mr. Frank, and tax preparation fees of $13,430 and $10,051 related to internet services provided for Mr. Kaplan.
|
•
|
engage in any business activity in which we operate, including any Competitive Business (as defined below);
|
•
|
render any services to any Competitive Business; or
|
•
|
acquire a financial interest in or become actively involved with any Competitive Business (other than as a passive investor holding a minimal percentage of the stock of a public company).
|
Name
|
Grant Date
|
|
All Other Stock Awards: Number of Shares of Stock or Units
|
|
Grant Date Fair Value of Stock Awards
(3)
|
|||
Jay S. Wintrob
|
3/31/2016
|
|
21,937
|
|
(1)
|
$
|
1,082,152
|
|
Todd E. Molz
|
3/31/2016
|
|
34,187
|
|
(2)
|
$
|
1,415,643
|
|
|
|
|
|
|
(1)
|
Reflects a grant of 21,937 Class A units, which vest ratably over four years.
|
(2)
|
Includes a grant of 14,077 Class A units and 11,172 OCGH units, which all vest ratably over four years, and 8,938 OCGH units, which vest ratably over ten years.
|
(3)
|
Grant date fair value is based on the grant date determined under ASC Topic 718 of March 31, 2016 for Mr. Wintrob’s Class A units and March 24, 2016 for Mr. Molz’s Class A and OCGH units. Accordingly, the grant date fair value for the Class A units is based on the Class A unit price of $46.93 per unit on March 24, 2016 for Mr. Molz and $49.33 per unit on March 31, 2016 for Mr. Wintrob. The fair value of the OCGH units for Mr. Molz is $37.54, which is based on the March 24, 2016 Class A price of $46.93 per unit, less a discount applied to the OCGH units as detailed in notes 2 and 14 to our consolidated financial statements. Please see note 2 to the Summary Compensation Table above.
|
|
|
Stock Awards
|
|||||
Name
|
|
Number of Units That Have Not Vested
|
|
Market Value of Units That Have Not Vested
(1)
|
|||
Jay S. Wintrob
|
1,621,937
|
|
(2)
|
$
|
4,614,638
|
|
|
David M. Kirchheimer
|
27,500
|
|
(3)
|
$
|
825,000
|
|
|
John B. Frank
|
110,000
|
|
(4)
|
$
|
3,487,500
|
|
|
Stephen A. Kaplan
|
—
|
|
|
$
|
—
|
|
|
Todd E. Molz
|
140,173
|
|
(5)
|
$
|
4,931,535
|
|
|
|
|
|
|
(1)
|
The fair market value of $37.50 per Class A unit and $30.00 per OCGH unit is based on the closing price for our Class A units on December 31, 2016, less a discount applied to OCGH units as detailed in notes 2 and 14 to our consolidated financial statements. The fair value of $2.37 per EVU was determined as of December 31, 2016 using a Monte Carlo simulation model as detailed in note 14 to our consolidated financial statements.
|
(2)
|
Mr. Wintrob’s units are composed of 1,600,000 EVUs and 21,937 Class A units. With respect to the EVUs, 400,000 will vest on December 31 of each of 2017 and 2018, and 800,000 will vest on December 31, 2019. The Class A units will vest on February 15 of each of 2017 through 2020, respectively, in the following amounts: 6,810, 6,358, 5,484 and 5,485.
|
(3)
|
Mr. Kirchheimer’s units are composed entirely of OCGH units, of which 2,500 OCGH units will vest on January 1 and February 15 of each of 2017 through 2021, respectively, and 2,500 OCGH units will vest on February 15, 2022.
|
(4)
|
Mr. Frank’s units are composed of 25,000 Class A units and 85,000 OCGH units. The Class A units will vest on January 1, 2018, February 15, 2018, and January 1, 2019, respectively, in the following amounts: 10,000, 10,000 and 5,000. With respect to the OCGH units (i) 10,000 will vest on January 1 of each of 2017, 2020 and 2021, respectively, (ii) 5,000 will vest on January 1, 2019 and (iii) 10,000 will vest on February 15 of each of 2017 and 2019 through 2022, respectively.
|
(5)
|
Mr. Molz’s units are composed of 96,846 Class A units and 43,327 OCGH units. With respect to the Class A units (i) 5,000 will vest on January 1 of each of 2017 through 2021, respectively, and (ii) the following amounts will vest on February 15 of each of 2017 through 2022, respectively: 15,750, 15,750, 15,748, 13,902, 10,382 and 314. With respect to the OCGH units, the following amounts will vest on February 15 of each of 2017 through 2026, respectively: 3,686, 3,687, 3,687, 3,687, 894, 10,961, 6,276, 6,276, 3,279 and 894.
|
|
|
Stock Awards
(1)
|
|||||
Name
|
|
Number of Units Acquired on Vesting
|
|
Market Value of Units Vesting
(2)
|
|||
Jay S. Wintrob
|
401,328
|
|
|
$
|
1,008,809
|
|
|
David M. Kirchheimer
|
5,000
|
|
|
$
|
187,020
|
|
|
John B. Frank
|
20,000
|
|
|
$
|
748,080
|
|
|
Stephen A. Kaplan
|
—
|
|
|
$
|
—
|
|
|
Todd E. Molz
|
17,231
|
|
|
$
|
798,657
|
|
|
|
|
|
|
(1)
|
The references to Stock Awards or units in this table refer to 400,000 EVUs and 1,328 Class A units in the case of Mr. Wintrob; 17,231 Class A units in the case of Mr. Molz; and otherwise refer to OCGH units.
|
(2)
|
The fair market value per unit is based on the trading price for our Class A units on applicable vesting dates of January 1, 2016 and March 1, 2016, respectively, less a discount applied to OCGH units. The fair market value of $2.37 per EVU was determined as of December 31, 2016 using a Monte Carlo simulation model. Please see notes 2 and 14 to our consolidated financial statements for more details.
|
•
|
the participating NEO’s interest prior to such event; and
|
•
|
if the fund is in its investment period, a percentage equal to the applicable fund’s aggregate committed capital that had been contributed as of the date of the termination event.
|
•
|
the participating NEO’s interest prior to such resignation;
|
•
|
the participating NEO’s vested percentage as of the resignation date (as discussed above under “—Carried Interest or Incentive Income”); and
|
•
|
if the fund is in its investment period, a percentage equal to the applicable fund’s aggregate committed capital that had been contributed as of the resignation date.
|
Name
|
|
Liquidation Value of Interests Subject to Vesting Acceleration
|
||
Jay S. Wintrob
|
$
|
—
|
|
|
David M. Kirchheimer
|
$
|
—
|
|
|
John B. Frank
|
$
|
9,756,715
|
|
|
Stephen A. Kaplan
|
$
|
52,756,876
|
|
|
Todd E. Molz
|
$
|
—
|
|
•
|
“cause” includes (i) willful and continued failure to fulfill responsibilities under the employment agreement, (ii) gross negligence or willful misconduct detrimental to Oaktree, (iii) material breach of the employment agreement or any other agreement with Oaktree, (iv) material violation of a material regulation or regulatory rule, (v) conviction of, or entry of a guilty plea or of no contest to, certain felonies, (vi) court or regulatory order removing Mr. Wintrob as an officer (or equivalent person) of Oaktree or prohibiting him from participating in the conduct of any Oaktree affairs, (vii) fraud, theft misappropriation or dishonesty relating to Oaktree, or (viii) material breach of Oaktree policies; and
|
•
|
“good reason” includes (i) a material diminution or adverse change in duties, authority, responsibilities, positions or reporting lines of authority under the employment agreement, (ii) relocation of Mr. Wintrob’s principal job location or office by more than 35 miles, and (iii) any material breach by Oaktree of the employment agreement.
|
|
|
OCGH Units or Class A Units
(1)
|
|||||
Name
|
|
Number of Units of Stock Subject to Vesting Acceleration
|
|
Market Value of Accelerated Vesting of Units
(2)
|
|||
Jay S. Wintrob
|
21,937
|
|
|
$
|
822,638
|
|
|
David M. Kirchheimer
|
27,500
|
|
|
$
|
825,000
|
|
|
John B. Frank
|
110,000
|
|
|
$
|
3,487,500
|
|
|
Steven A. Kaplan
|
—
|
|
|
$
|
—
|
|
|
Todd E. Molz
|
140,173
|
|
|
$
|
4,931,535
|
|
|
|
|
|
|
(1)
|
The references to stock awards or units in this table refer to Class A units in the case of Mr. Wintrob, OCGH units in the case of Mr. Kirchheimer and both Class A and OCGH units in the case of Messrs. Frank and Molz.
|
(2)
|
The fair market value of $37.50 per Class A unit and $30.00 per OCGH unit is based on the closing price for our Class A units on December 31, 2016, less a discount applied to OCGH units as detailed in notes 2 and 14 to our consolidated financial statements.
|
Name
|
Fees Earned or Paid in Cash
(1)
|
|
Unit Awards
(2)
|
|
Other Compensation
|
|
Total
|
||||||||
Robert E. Denham
|
$
|
75,000
|
|
|
$
|
104,842
|
|
|
$
|
—
|
|
|
$
|
179,842
|
|
Steven J. Gilbert
|
$
|
16,667
|
|
|
$
|
16,301
|
|
|
$
|
—
|
|
|
$
|
32,968
|
|
D. Richard Masson
|
$
|
100,000
|
|
|
$
|
104,842
|
|
|
$
|
16,727
|
|
(3)
|
$
|
221,569
|
|
Wayne G. Pierson
|
$
|
100,000
|
|
|
$
|
104,842
|
|
|
$
|
—
|
|
|
$
|
204,842
|
|
Marna C. Whittington
|
$
|
115,000
|
|
|
$
|
104,842
|
|
|
$
|
—
|
|
|
$
|
219,842
|
|
|
|
|
|
|
(1)
|
Annual cash retainer and fees for serving on our Board of Directors and, other than Mr. Denham, for serving on the Audit Committee of our Board. Mr. Gilbert’s fees represent a prorated annual amount for 2016.
|
(2)
|
On March 31, 2016, we granted 2,234 Class A units to each of Messrs. Denham, Masson and Pierson and Ms. Whittington, which will vest ratably over four years beginning on March 1, 2017, in consideration of their service as members of our board of directors in 2016. On November 14, 2016, we granted 406 Class A units to Steven Gilbert in consideration of his services as a member of our board for directors in 2016, which will vest ratably over four years beginning on August 1, 2017. The number of outstanding and unvested Class A units held by Messrs. Denham, Masson, Pierson, Ms. Whittington, and Gilbert as of December 31, 2016 was 5,923, 5,470, 3,723 5,753, and 406 units, respectively. We recognize expense for financial statement reporting purposes in respect of the unvested Class A units received by our directors on the basis of the value of those units at the time of the grant pursuant to ASC Topic 718, Accounting for Stock Compensation. Please see notes 2 and 14 to our consolidated financial statements included elsewhere in this annual report for further information concerning the assumptions underlying such expense.
|
(3)
|
Represents the cost of internet services provided at personal residence.
|
•
|
each person known to us to beneficially own more than 5% of any class of the outstanding voting securities of Oaktree Capital Group, LLC;
|
•
|
each of our directors;
|
•
|
each of our named executive officers; and
|
•
|
all directors and executive officers as a group.
|
|
|
Class A Units
Beneficially Owned
|
|
Class B Units
Beneficially Owned
|
|
OCGH Units
Beneficially Owned
(1)
|
||||||||||||
Named Executive Officers and Directors
|
|
Number
|
|
Percent
|
|
Number
|
|
Percent
|
|
Number
|
|
Percent
|
||||||
Howard S. Marks
|
|
101,826
|
|
|
*
|
|
—
|
|
(2)
|
—
|
|
|
17,058,600
|
|
|
11.0
|
%
|
|
Bruce A. Karsh
|
|
101,826
|
|
|
*
|
|
—
|
|
(2)
|
—
|
|
|
17,765,767
|
|
|
11.5
|
|
|
Jay S. Wintrob
|
|
25,913
|
|
|
*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
John B. Frank
|
|
75,185
|
|
|
*
|
|
—
|
|
|
—
|
|
|
2,100,397
|
|
|
1.4
|
|
|
David M. Kirchheimer
|
|
58,470
|
|
|
*
|
|
—
|
|
|
—
|
|
|
1,407,097
|
|
|
*
|
||
Sheldon M. Stone
|
|
101,009
|
|
|
*
|
|
—
|
|
|
—
|
|
|
9,900,223
|
|
|
6.4
|
|
|
Todd E. Molz
|
|
76,096
|
|
|
*
|
|
—
|
|
|
—
|
|
|
202,304
|
|
|
*
|
||
Stephen A. Kaplan
|
|
100,181
|
|
|
*
|
|
—
|
|
|
—
|
|
|
1,672,328
|
|
|
1.1
|
|
|
Robert E. Denham
|
|
22,410
|
|
|
*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Steven J. Gilbert
|
|
406
|
|
|
*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Larry W. Keele
|
|
66,989
|
|
|
*
|
|
—
|
|
|
—
|
|
|
2,901,695
|
|
|
1.9
|
|
|
D. Richard Masson
|
|
108,650
|
|
|
*
|
|
—
|
|
|
—
|
|
|
2,849,490
|
|
|
1.8
|
|
|
Wayne G. Pierson
(3)
|
|
4,219
|
|
|
*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Marna C. Whittington
|
|
14,560
|
|
|
*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
All executive officers and directors as a group (15 persons)
|
|
873,599
|
|
|
*
|
|
—
|
|
|
—
|
|
|
55,857,901
|
|
|
36.1
|
|
|
5% Unitholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
FMR LLC
(4)
|
|
4,639,224
|
|
|
7.4
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Oaktree Capital Group Holdings, L.P.
|
|
13,000
|
|
|
*
|
|
91,547,128
|
|
|
100
|
%
|
|
—
|
|
|
—
|
|
|
|
|
|
|
*
|
Represents less than 1%.
|
(1)
|
Subject to certain restrictions, each OCGH unitholder has the right, subject to the approval of our board of directors, to exchange his or her units following the expiration of any applicable lock-up period pursuant to the terms of an exchange agreement. Pursuant to the exchange agreement and the terms of the OCGH partnership agreement, the OCGH units will be exchanged for, at the option of our board of directors, our Class A units on a one-for-one basis, an equivalent amount of cash based on then-prevailing market prices, other consideration of equal value or any combination of the foregoing, and we will cancel a corresponding number of Class B units.
|
(2)
|
Excludes 13,000 Class A units and 91,547,128 Class B units held by OCGH. The general partner of OCGH is Oaktree Capital Group Holdings GP, LLC. In their capacities as members of the executive committee of Oaktree Capital Group Holdings GP, LLC holding more than 50% of the aggregate number of OCGH units held by all of the members of the executive committee as a group, Mr. Marks and Mr. Karsh may be deemed to be beneficial owners of the securities held by OCGH. Each of Mr. Marks and Mr. Karsh disclaims beneficial ownership of such securities.
|
(3)
|
Excludes 7,703,250 OCGH units held by Acorn Investors, LLC, which Mr. Pierson may be deemed to beneficially own. Mr. Pierson is the President of Acorn Investors, LLC and disclaims beneficial ownership of the Class A and OCGH units held by that entity.
|
(4)
|
Reflects Class A units beneficially owned as of December 31, 2016 by FMR LLC based on a Schedule 13G filed by FMR LLC on January 10, 2017. The Schedule 13G includes 4,639,224 Class A units beneficially owned by Abigail Johnson and Fidelity Management & Research Company (together with FMR LLC and Abigail Johnson, “Fidelity”), a wholly owned subsidiary of FMR LLC, in its capacity as investment adviser to various registered investment companies (the “Fidelity funds”). The Schedule 13G states that members of the Johnson family, including Abigail, through their ownership of FMR LLC voting common stock and the execution of a shareholders’ voting agreement, may be deemed a controlling group with respect to FMR LLC. The Schedule 13G also states that neither FMR LLC nor Ms. Johnson has the sole power to vote or direct the voting of the shares owned directly by the Fidelity funds, which power resides with the Fidelity funds’ boards of trustees pursuant to established guidelines. The address of Fidelity is 245 Summer Street, Boston, Massachusetts 02210.
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(1)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
(2)
|
|||
|
(a)
|
|
(b)
|
|
(c)
|
|||
Equity compensation plans approved by security holders
|
9,363,365
|
|
|
—
|
|
|
13,722,795
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
Total
(3)
|
9,363,365
|
|
|
—
|
|
|
13,722,795
|
|
|
|
|
|
|
(1)
|
Reflects the aggregate number of OCGH units, Class A units, phantom units and EVUs granted under the 2011 Plan as of December 31, 2016.
|
(2)
|
The 2011 Plan provides that the maximum number of Units that may be delivered pursuant to awards under the 2011 Plan is 22,300,000, as increased on January 1 of each year beginning in 2012 by a number of Units equal to the excess of (a) 15% of the number of outstanding Oaktree Operating Group units on December 31 of the immediately preceding year over (b) the number of Oaktree Operating Group units that have been issued or are issuable under the 2011 Plan as of such date, except that our board of directors may, in its discretion, increase the number of Units covered by the 2011 Plan by a lesser amount. The issuance of Units or the payment of cash upon the exercise of an award or in consideration of the cancellation or termination of an award will reduce the total number of Units available under the 2011 Plan, as applicable. Units underlying awards under the 2011 Plan that are forfeited, cancelled, expire unexercised or are settled in cash will be available again to be used as awards under the 2011 Plan. However, Units used to pay the required exercise price or tax obligations, or Units not issued in connection with the settlement of an award or that are used or withheld to satisfy tax obligations of a participant, will not be available again for other awards under the 2011 Plan.
|
(3)
|
As of December 31, 2016, 4,954,976 OCGH units have been granted under the 2007 Plan. However, such amounts are not reflected in this table because our board of directors has resolved that the administrator of the 2007 Plan will no longer grant awards under the 2007 Plan. Please see note 11 to our consolidated financial statements included elsewhere in this annual report for additional information.
|
•
|
such OCGH units will be acquired by the Intermediate Holding Companies in exchange for, at the option of our board of directors, Class A units, an equivalent amount of cash based on then-prevailing market prices, other consideration of equal value or any combination of the foregoing;
|
•
|
the OCGH units acquired by the Intermediate Holding Companies may then be redeemed by OCGH in exchange for Oaktree Operating Group units;
|
•
|
the Intermediate Holding Companies may exchange Oaktree Operating Group units with each other such that, immediately after such exchange, each Intermediate Holding Company holds Oaktree Operating Group units only in the Oaktree Operating Group entity for which such Intermediate Holding Company serves as the general partner; and
|
•
|
we will cancel a corresponding number of Class B units.
|
•
|
the timing of the exchanges – for instance, the increase in any tax deductions will vary depending on the fair market value, which may fluctuate over time, of the depreciable or amortizable assets of the Oaktree Operating Group at the time of the transaction;
|
•
|
the price of our Class A units at the time of the exchanges – the increase in any tax deductions, as well as the tax basis increase in other assets, of the Oaktree Operating Group, is directly proportional to the market value of our Class A units at the time of the exchange;
|
•
|
the extent to which an exchange of OCGH units is taxable – if an exchange is not taxable for any reason (for instance, in connection with a charitable contribution), increased deductions will not be available;
|
•
|
the amount and timing of our income – Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc. will be required to pay 85% of the tax savings as and when realized, if any; and
|
•
|
the corporate income tax rates (both U.S. federal and state and local) in effect at the time the tax deductions are utilized to offset taxable income - since an increase in tax rates will generally result in higher payments, and a decrease in tax rates will generally result in lower payments.
|
|
For the Year Ended December 31,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Oaktree Capital Group, LLC
|
|
Oaktree Consolidated Funds and Affiliates
(5)
|
|
Oaktree Capital Group, LLC
|
|
Oaktree Consolidated Funds and Affiliates
|
||||||||
|
($ in thousands, except where noted)
|
||||||||||||||
Audit fees
(1)
|
$
|
3,434
|
|
|
$
|
444
|
|
|
$
|
5,497
|
|
|
$
|
4,833
|
|
Audit-related fees
(2)
|
300
|
|
|
—
|
|
|
300
|
|
|
2,761
|
|
||||
Tax fees
(3)
|
4,886
|
|
|
210
|
|
|
2,384
|
|
|
13,437
|
|
||||
Other fees
(4)
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
(1)
|
Audit fees consist of fees for services related to the annual audit of our consolidated financial statements, the audit of the effectiveness of internal control over financial reporting, reviews of our interim consolidated financial statements on Form 10-Q, statutory audits, and services that only the independent auditors can reasonably provide such as services associated with SEC registration statements or other documents issued in connection with securities offerings (including consents and comfort letters), and accounting consultations and services that are normally provided in connection with statutory and regulatory filings and engagements. Fees in 2015 include $0.2 million related to 2014 audits.
|
(2)
|
Audit-related fees consist of fees related to examinations of our investment adviser operations controls. For 2015, such fees also include due diligence services in connection with acquisitions of portfolio companies for investment by consolidated funds managed by Oaktree in its capacity as general partner.
|
(3)
|
Tax fees consist of fees related to tax compliance and tax advisory services. Tax fees in 2016 include $3,363 for tax compliance services and $1,733 for tax advisory services. For 2015, such fees also include tax diligence services in connection with acquisitions of portfolio companies for investments by funds managed by Oaktree in its capacity as general partner.
|
(4)
|
Other fees consist of fees related to advice and assistance regarding European statutory regulatory reporting and capital requirements.
|
(5)
|
Decrease in fees for Oaktree funds from 2015 to 2016 relates to the adoption of a new accounting standard effective January 1, 2016, which resulted in the deconsolidation of substantially all of our funds. Please see note 2 of our consolidated financial statements included in Item 8 of this Form 10-K for additional information.
|
(1)
|
Financial statements: Please see Item 8 above.
|
(2)
|
Financial statement schedules: Schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are not applicable and therefore have been omitted.
|
(3)
|
Exhibits: For a list of exhibits filed with this report, please refer to the Exhibits Index on the page immediately preceding the exhibits, which Exhibit Index is incorporated herein by reference.
|
|
Oaktree Capital Group, LLC
|
|
|
By:
|
/s/ Susan Gentile
|
|
Name:
|
Susan Gentile
|
|
|
|
|
Title:
|
Chief Accounting Officer and Managing Director
and Authorized Signatory
|
Signature
|
|
|
Title
|
|
/s/ Howard S. Marks
|
|
|
||
Howard S. Marks
|
|
Director and Co-Chairman
|
||
/s/ Bruce A. Karsh
|
|
|
||
Bruce A. Karsh
|
|
Director, Co-Chairman and Chief Investment Officer
|
||
/s/ Jay S. Wintrob
|
|
|
||
Jay S. Wintrob
|
|
Director and Chief Executive Officer
(Principal Executive Officer)
|
||
/s/ John B. Frank
|
|
|
||
John B. Frank
|
|
Director and Vice Chairman
|
||
/s/ David M. Kirchheimer
|
|
|
||
David M. Kirchheimer
|
|
Director, Chief Financial Officer and Principal
(Principal Financial Officer)
|
||
/s/ Susan Gentile
|
|
|
||
Susan Gentile
|
|
Chief Accounting Officer and Managing Director
(Principal Accounting Officer)
|
||
/s/ Sheldon M. Stone
|
|
|
||
Sheldon M. Stone
|
|
Director and Principal
|
||
/s/ Robert E. Denham
|
|
|
||
Robert E. Denham
|
|
Director
|
||
/s/ Steven J. Gilbert
|
|
|
||
Steven J. Gilbert
|
|
Director
|
||
/s/ Larry W. Keele
|
|
|
||
Larry W. Keele
|
|
Director
|
||
/s/ D. Richard Masson
|
|
|
||
D. Richard Masson
|
|
Director
|
||
/s/ Wayne G. Pierson
|
|
|
||
Wayne G. Pierson
|
|
Director
|
||
/s/ Marna C. Whittington
|
|
|
||
Marna C. Whittington
|
|
Director
|
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).
|
|
|
4.1
|
Specimen Certificate evidencing the Registrant’s Class A units (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on September 2, 2011).
|
|
|
4.2
|
Indenture, dated as of November 24, 2009, by and among Oaktree Capital Management, L.P., as Issuer, Oaktree Capital Group, LLC, Oaktree Capital Group Holdings, L.P., Oaktree Capital II, L.P. and Oaktree AIF Investments, L.P., each an Initial Guarantor, and Wells Fargo Bank, National Association, as Trustee, with respect to 6.75% Senior Notes Due 2019 (incorporated by reference to Exhibit 4.15 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
4.3
|
Note and Guaranty Agreement, dated as of July 11, 2014, by and among Oaktree Capital Management, L.P., Oaktree Capital I, L.P., Oaktree Capital II, L.P. and Oaktree AIF Investments, L.P. and each of the purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 15, 2014).
|
|
|
4.4
|
Form of 3.91% Senior Notes, Series A, due September 3, 2024 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 15, 2014).
|
|
|
4.5
|
Form of 4.01% Senior Notes, Series B, due September 3, 2026 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 15, 2014).
|
|
|
4.6
|
Form of 4.21% Senior Notes, Series C, due September 3, 2029 (incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 15, 2014).
|
|
|
4.7
|
Note and Guaranty Agreement, dated as of July 12, 2016, by and among Oaktree Capital Management, L.P., Oaktree Capital I, L.P., Oaktree Capital II, L.P. and Oaktree AIF Investments, L.P. and each of the purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 12, 2016).
|
|
|
4.8
|
Form of 3.69% Senior Notes due July 12, 2031 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 12, 2016).
|
|
|
10.1
|
Amended and Restated Limited Partnership Agreement of Oaktree Capital I, L.P., dated as of May 25, 2007 (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.2
|
Amended and Restated Limited Partnership Agreement of Oaktree Capital II, L.P., dated as of May 25, 2007 (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.3
|
Limited Partnership Agreement of Oaktree Capital Management, L.P., dated as of May 25, 2007 (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.4
|
Amended and Restated Limited Partnership Agreement of Oaktree Capital Management (Cayman), L.P., dated as of May 25, 2007 (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.5
|
Second Amended and Restated Limited Partnership Agreement of Oaktree Investment Holdings, L.P., dated as of May 25, 2011 (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.6
|
Second Amended and Restated Limited Partnership Agreement of Oaktree AIF Investments, L.P., dated as of October 29, 2008 (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.7
|
Second Amended and Restated Tax Receivable Agreement, dated as of March 29, 2012, by and among Oaktree Holdings, Inc., Oaktree AIF Holdings, Inc., Oaktree Capital II, L.P., Oaktree Capital Management, L.P., Oaktree Investment Holdings, L.P., Oaktree AIF Investments, L.P. and the other parties from time to time party thereto (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on March 30, 2012).
|
|
|
10.8
|
Second Amended and Restated Exchange Agreement, dated as of March 29, 2012, by and among Oaktree Capital Group, LLC, OCM Holdings I, LLC, Oaktree Holdings, Inc., Oaktree AIF Holdings, Inc., Oaktree Holdings, Ltd., Oaktree Capital Group Holdings, L.P. and the other parties from time to time party thereto (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on March 30, 2012).
|
|
|
10.9
|
Credit Agreement, dated as of March 31, 2014, by and among Oaktree Capital Management, L.P., Oaktree Capital II, L.P., Oaktree AIF Investments, L.P., Oaktree Capital I, L.P., the Lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender, and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Lead Bookrunner (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 4, 2014).
|
|
|
10.9.1
|
First Amendment, dated as of November 3, 2014, to the March 31, 2014 Credit Agreement by and among Oaktree Capital Management, L.P., Oaktree Capital II, L.P., Oaktree AIF Investments, L.P., Oaktree Capital I, L.P., the Lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender, and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Lead Bookrunner (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 7, 2014).
|
|
|
10.9.2
|
Second Amendment, dated as of March 31, 2016, to the March 31, 2014 Credit Agreement, by and among Oaktree Capital Management, L.P., Oaktree Capital II, L.P., Oaktree AIF Investments, L.P., Oaktree Capital I, L.P., the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 6, 2016).
|
|
|
10.10
|
Form of Indemnification Agreement by and between Oaktree Capital Management, L.P. and the director or officer named therein (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on October 20, 2011).
|
|
|
10.11*
|
2007 Oaktree Capital Group Equity Incentive Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.12*
|
Summary Employment Agreement by and among Oaktree Capital Management Limited and Howard Marks, dated as of September 26, 2006 (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1, filed with the SEC on August 1, 2011).
|
|
|
10.13*
|
Sixth Amended and Restated Limited Partnership Agreement of Oaktree Fund GP I, L.P., dated as of March 20, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 6, 2015).
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10.14*
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Sixth Amended and Restated Limited Partnership Agreement of Oaktree Fund GP II, L.P., dated as of March 20, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 6, 2015).
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10.15*
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Fourth Amended and Restated Limited Partnership Agreement of Oaktree Fund GP III, L.P., dated as of March 20, 2015 (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 6, 2015).
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10.16*
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Amended and Restated Oaktree Capital Group, LLC 2011 Equity Incentive Plan (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-8, filed with the SEC on March 30, 2016).
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10.17*
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Form of Grant Agreement under the Oaktree Capital Group, LLC 2011 Equity Incentive Plan (incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015).
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10.18*
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Amended and Restated Employment Agreement by and among the Registrant, Oaktree Capital Management, L.P. and Jay S. Wintrob dated February 24, 2015 (incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015).
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10.19*
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Letter Agreement between Oaktree Capital Management, L.P. and Jay S. Wintrob dated October 6, 2014 (incorporated by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015).
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10.20*
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Amended and Restated Grant Agreement under the Oaktree Capital Group, LLC 2011 Equity Incentive Plan by and among Oaktree Capital Group Holdings, L.P., Oaktree Capital Group Holdings GP, LLC and Jay S. Wintrob dated February 24, 2015 (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015).
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10.21*
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Form of Oaktree Capital Group, LLC Class A Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 9, 2016).
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10.22*
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Form of Oaktree Capital Group Holdings, L.P. Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 9, 2016).
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10.23*
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Form of Oaktree Capital Group, LLC Class A Restricted Unit Award Agreement for Outside Directors (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 9, 2016).
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10.24*
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Form of Profit Sharing Letter Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 9, 2016).
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10.25*
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Summaries of compensation for John B. Frank, Steven A. Kaplan and Todd E. Molz (incorporated by reference to sections C and D and the third paragraph of section E, respectively, under “Executive Compensation—Compensation Discussion and Analysis—Compensation of the Individual NEOs” on pages 204-205 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 1, 2017).
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21.1
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Subsidiaries of the Registrant.
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23.1
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Consent of Ernst & Young LLP.
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23.2
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Consent of PricewaterhouseCoopers LLP.
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31.1
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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.
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31.2
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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.
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32.1
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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).
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32.2
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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).
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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*
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Management contract or compensatory plan or arrangement.
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