Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | OZM | ||
Entity Registrant Name | Och-Ziff Capital Management Group LLC | ||
Entity Central Index Key | 1,403,256 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 462.2 | ||
Class A Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 190,781,536 | ||
Class B Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 304,339,478 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 469,513,000 | $ 329,813,000 |
Investments (includes assets measured at fair value of $224,722 and $21,341 as of December 31, 2017 and 2016, respectively) | 238,974,000 | 37,980,000 |
Income and fees receivable | 354,456,000 | 176,638,000 |
Due from related parties | 28,202,000 | 20,494,000 |
Deferred income tax assets | 375,230,000 | 695,441,000 |
Other assets, net | 116,361,000 | 169,984,000 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 43,366,000 | 37,661,000 |
Other assets of consolidated funds | 13,331,000 | 17,544,000 |
Total Assets | 1,639,433,000 | 1,485,555,000 |
Liabilities | ||
Compensation payable | 208,639,000 | 206,106,000 |
Unearned incentive | 143,710,000 | 96,079,000 |
Due to related parties | 281,555,000 | 522,101,000 |
Debt obligations | 569,379,000 | 577,128,000 |
Other liabilities | 75,122,000 | 78,915,000 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 11,340,000 | 15,197,000 |
Total Liabilities | 1,289,745,000 | 1,495,526,000 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interests | 445,617,000 | 284,121,000 |
Shareholders’ (Deficit) Equity | ||
Paid-in capital | 3,102,074,000 | 3,097,431,000 |
Accumulated deficit | (3,555,905,000) | (3,563,452,000) |
Shareholders’ deficit attributable to Class A Shareholders | (453,831,000) | (466,021,000) |
Shareholders’ equity attributable to noncontrolling interests | 357,902,000 | 171,929,000 |
Total Shareholders’ (Deficit) Equity | (95,929,000) | (294,092,000) |
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ (Deficit) Equity | 1,639,433,000 | 1,485,555,000 |
Class A Shares | ||
Shareholders’ (Deficit) Equity | ||
Class A Shares, no par value, 1,000,000,000 shares authorized, 189,573,210 and 184,843,255 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 0 | 0 |
Class B Shares, no par value, 750,000,000 shares authorized, 339,339,478 and 297,317,019 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 0 | 0 |
Class B Shares | ||
Shareholders’ (Deficit) Equity | ||
Class A Shares, no par value, 1,000,000,000 shares authorized, 189,573,210 and 184,843,255 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 0 | 0 |
Class B Shares, no par value, 750,000,000 shares authorized, 339,339,478 and 297,317,019 shares issued and outstanding as of December 31, 2017 and 2016, respectively | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investments measured at fair value | $ 224,722 | $ 21,341 |
Class A Shares | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 189,573,210 | 184,843,255 |
Common stock, shares outstanding | 189,573,210 | 184,843,255 |
Class B Shares | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 339,339,478 | 297,317,019 |
Common stock, shares outstanding | 339,339,478 | 297,317,019 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Management fees | $ 319,458 | $ 533,156 | $ 643,991 |
Incentive income | 528,000 | 233,440 | 187,563 |
Other revenues | 6,777 | 2,006 | 2,077 |
Income of consolidated funds | 4,102 | 1,762 | 489,350 |
Total Revenues | 858,337 | 770,364 | 1,322,981 |
Expenses | |||
Compensation and benefits | 436,549 | 409,883 | 430,526 |
Reorganization expenses | 14,064 | ||
Interest expense | 23,191 | 23,776 | 21,441 |
General, administrative and other | 152,071 | 646,468 | 239,991 |
Expenses of consolidated funds | 9,391 | 350 | 303,770 |
Total Expenses | 621,202 | 1,080,477 | 1,009,792 |
Other Income (Loss) | |||
Changes in tax receivable agreement liability | 222,859 | (1,663) | 55,852 |
Net gains on investments in funds and joint ventures | 3,465 | 3,760 | 68 |
Net gains (losses) of consolidated funds | 8,472 | 2,915 | (69,572) |
Total Other Income (Loss) | 234,796 | 5,012 | (13,652) |
Income (Loss) Before Income Taxes | 471,931 | (305,101) | 299,537 |
Income taxes | 317,559 | 10,886 | 132,224 |
Consolidated and Comprehensive Net Income (Loss) | 154,372 | (315,987) | 167,313 |
Less: (Income) loss attributable to noncontrolling interests | (131,630) | 193,757 | (191,177) |
Less: (Income) loss attributable to redeemable noncontrolling interests | (1,667) | (2,450) | 49,604 |
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP | 21,075 | (124,680) | 25,740 |
Less: Change in redemption value of Preferred Units | (2,853) | (6,082) | 0 |
Net Income (Loss) Attributable to Class A Shareholders | $ 18,222 | $ (130,762) | $ 25,740 |
Earnings (Loss) per Class A Share | |||
Income (Loss) Per Class A Share, Basic (in dollars per share) | $ 0.10 | $ (0.72) | $ 0.14 |
Income (Loss) Per Class A Share, Diluted (in dollars per share) | $ 0.10 | $ (0.73) | $ 0.14 |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 186,423,793 | 182,670,173 | 177,935,977 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 187,181,760 | 479,987,268 | 180,893,947 |
Dividends Paid per Class A Share | |||
Dividends Paid per Class A Share (in dollars per share) | $ 0.07 | $ 0 | $ 0.87 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Class A Shares | Class B Shares | Paid-in Capital | Appropriated Retained Earnings (Deficit) | Accumulated Deficit | Shareholders' Deficit Attributable to Class A Shareholders | Shareholders' Equity Attributable to Noncontrolling Interests |
Balance at Beginning of Period, Values at Dec. 31, 2014 | $ 1,692,077 | $ 3,004,881 | $ (31,336) | $ (3,264,304) | $ (290,759) | $ 1,982,836 | ||
Balance at Beginning of Period, Shares at Dec. 31, 2014 | 175,946,555 | 301,884,116 | ||||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | ||||||||
Capital contributions | 261,417 | 0 | 0 | 0 | 0 | 261,417 | ||
Capital distributions | (822,570) | 0 | 0 | 0 | 0 | (822,570) | ||
Cash dividends declared on Class A Shares | (153,452) | 0 | 0 | (153,452) | (153,452) | 0 | ||
Equity-based compensation, net of taxes, Values | 88,429 | 31,614 | 0 | 0 | 31,614 | 56,815 | ||
Dividend equivalents on Class A restricted share units | 0 | 4,806 | 0 | (4,806) | 0 | 0 | ||
Equity-based compensation, Shares | 5,079,900 | (10,110) | ||||||
Group A Unit repurchase | (20,476) | (6,315) | 0 | 0 | (6,315) | (14,161) | ||
Operating Group Unit Exchange | 0 | (4,556,606) | ||||||
Impact of changes in Oz Operating Group ownership | 0 | 455 | 0 | 0 | 455 | (455) | ||
Increase in paid in capital as a result of TRA waiver | 0 | |||||||
Initial consolidation of CLOs | (35,838) | 0 | (35,838) | 0 | (35,838) | 0 | ||
Allocation of income of consolidated CLOs | 0 | 0 | 7,511 | 0 | 7,511 | (7,511) | ||
Impact of amortization of Reorganization charges on capital | 14,064 | 5,214 | 0 | 0 | 5,214 | 8,850 | ||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | 216,917 | 0 | 0 | 25,740 | 25,740 | 191,177 | ||
Balance at End of Period, Values at Dec. 31, 2015 | 1,240,568 | 3,040,655 | (59,663) | (3,396,822) | (415,830) | 1,656,398 | ||
Balance at End of Period, Shares at Dec. 31, 2015 | 181,026,455 | 297,317,400 | ||||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | ||||||||
Capital contributions | 3,015 | 3,015 | ||||||
Capital distributions | (477) | (477) | ||||||
Equity-based compensation, net of taxes, Values | 62,140 | 20,848 | 0 | 0 | 20,848 | 41,292 | ||
Dividend equivalents on Class A restricted share units | (676) | 676 | ||||||
Equity-based compensation, Shares | 3,816,800 | (381) | ||||||
Impact of changes in Oz Operating Group ownership | 0 | (2,137) | 0 | 0 | (2,137) | 2,137 | ||
Increase in paid in capital as a result of TRA waiver | 39,233 | 44,823 | 44,823 | (5,590) | ||||
Change in redemption value of Preferred Units | (16,043) | (6,082) | (6,082) | (9,961) | ||||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | (318,437) | 0 | 0 | (124,680) | (124,680) | (193,757) | ||
Balance at End of Period, Values at Dec. 31, 2016 | (294,092) | 3,097,431 | 0 | (3,563,452) | (466,021) | 171,929 | ||
Balance at End of Period, Shares at Dec. 31, 2016 | 184,843,255 | 297,317,019 | ||||||
Increase (Decrease) in Shareholders' (Deficit) Equity [Roll Forward] | ||||||||
Deconsolidation of funds on adoption of ASU 2015-02 | (1,304,091) | $ 59,663 | (42,626) | 17,037 | (1,321,128) | |||
Capital contributions | 1,297 | 0 | 0 | 0 | 1,297 | |||
Capital distributions | (22,526) | 0 | 0 | 0 | (22,526) | |||
Cash dividends declared on Class A Shares | (12,972) | 0 | (12,972) | (12,972) | 0 | |||
Equity-based compensation, net of taxes, Values | 76,585 | 31,411 | 0 | 31,411 | 45,174 | |||
Dividend equivalents on Class A restricted share units | 0 | 556 | (556) | 0 | 0 | |||
Equity-based compensation, Shares | 4,729,955 | 172,459 | ||||||
Relinquishment of Group A Units | (30,000,000) | |||||||
Class B Shares Granted to Holders of Group P Units | 71,850,000 | |||||||
Impact of changes in Oz Operating Group ownership | 0 | (14,092) | 0 | (14,092) | 14,092 | |||
Increase in paid in capital as a result of TRA waiver | 10,520 | 10,840 | 10,840 | (320) | ||||
Dilution of Proceeds From Tax Receivable Agreement Waiver | 0 | (21,219) | 0 | (21,219) | 21,219 | |||
Change in redemption value of Preferred Units | (7,446) | (2,853) | 0 | (2,853) | (4,593) | |||
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests | 152,705 | 0 | 21,075 | 21,075 | 131,630 | |||
Balance at End of Period, Values at Dec. 31, 2017 | $ (95,929) | $ 3,102,074 | $ (3,555,905) | $ (453,831) | $ 357,902 | |||
Balance at End of Period, Shares at Dec. 31, 2017 | 189,573,210 | 339,339,478 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities | |||
Consolidated net income (loss) | $ 154,372 | $ (315,987) | $ 167,313 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Reorganization expenses | 14,064 | ||
Amortization of equity-based compensation | 84,169 | 75,217 | 112,639 |
Depreciation, amortization and net gains and losses on fixed assets | 10,334 | 19,882 | 11,331 |
Deferred income taxes | 312,764 | 2,236 | 115,760 |
Net gains on investments in funds and joint ventures | (3,465) | (3,760) | (68) |
Operating cash flows due to changes in: | |||
Income and fees receivable | (177,819) | (74,077) | 346,481 |
Due from related parties | (7,708) | (10,502) | (3,133) |
Other assets, net | (6,388) | (8,376) | 23,693 |
Compensation payable | 2,658 | 29,479 | (67,913) |
Unearned incentive income | 47,631 | 96,079 | 0 |
Due to related parties | (222,563) | 1,320 | (109,515) |
Other liabilities | (3,869) | (88,419) | (8,120) |
Consolidated funds related items: | |||
Net gains of consolidated funds | (8,472) | (2,915) | 69,572 |
Purchases of investments | (423,147) | (242,474) | (4,122,079) |
Proceeds from sale of investments | 184,783 | 231,591 | 4,136,801 |
Other assets of consolidated funds | (307,379) | 3,925 | (120,301) |
Securities Sold Under Agreements To Repurchase | 0 | 0 | (111,515) |
Other liabilities of consolidated funds | 80,421 | 5,319 | (12,731) |
Net Cash (Used in) Provided by Operating Activities | (283,678) | (281,462) | 442,279 |
Cash Flows from Investing Activities | |||
Purchases of fixed assets | (4,990) | (8,808) | (43,801) |
Proceeds from sale of fixed assets | 57,599 | 0 | 0 |
Purchases of United States government obligations | (112,400) | (59,909) | 0 |
Maturities of United States government obligations | 100,000 | 78,500 | 18,473 |
Investments in funds | (165,519) | (40,920) | (2,826) |
Return of investments in funds | 6,959 | 14,696 | 384 |
Other, net | 0 | (17) | 0 |
Net Cash Used in Investing Activities | (118,351) | (16,458) | (27,770) |
Cash Flows from Financing Activities | |||
Issuance and sale of Preferred Units, net of issuance costs | 150,054 | 246,457 | 0 |
Contributions from noncontrolling and redeemable noncontrolling interests | 3,629 | 3,019 | 602,654 |
Distributions to noncontrolling and redeemable noncontrolling interests | (22,526) | (477) | (824,890) |
Group A Unit repurchase | 0 | 0 | (22,783) |
Dividends on Class A Shares | (12,972) | 0 | (153,452) |
Proceeds from debt obligations | 154,490 | 135,951 | 3,606 |
Repayment of debt obligations | (167,516) | (3,667) | (3,089) |
Proceeds from debt obligations of consolidated CLO | 666,711 | 0 | 0 |
Repayment of debt obligations of consolidated CLO | (222,434) | 0 | 0 |
Withholding taxes paid on vested RSUs | (7,577) | (7,960) | (15,865) |
Other, net | (130) | 340 | 2,777 |
Net Cash Provided (Used) by Financing Activities | 541,729 | 373,663 | (411,042) |
Net Change in Cash and Cash Equivalents | 139,700 | 75,743 | 3,467 |
Cash and Cash Equivalents, Beginning of Period | 329,813 | 254,070 | 250,603 |
Cash and Cash Equivalents, End of Period | 469,513 | 329,813 | 254,070 |
Cash paid during the period: | |||
Interest | 20,904 | 19,514 | 19,446 |
Income taxes | 4,156 | 9,504 | 19,185 |
Non-cash transactions: | |||
Assets related to the initial consolidation of CLOs | 100,156 | 0 | 2,042,463 |
Liabilities related to the initial consolidation of CLOs | 99,878 | 0 | 2,078,301 |
Assets related to the deconsolidation of funds | 653,629 | 9,351,057 | 0 |
Liabilities related to the deconsolidation of funds | 629,282 | 7,233,850 | 0 |
Increase in paid in capital as a result of TRA waiver | $ 10,520 | $ 39,233 | $ 0 |
Overview
Overview | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | OVERVIEW Och-Ziff Capital Management Group LLC (the “Registrant”), a Delaware limited liability company, together with its consolidated subsidiaries (collectively, the “Company” or “Oz Management”), is a global alternative asset management firm with offices in New York, London, Hong Kong, Mumbai, Beijing, Shanghai and Houston. The Company provides asset management services to its investment funds (the “funds”), which pursue a broad range of global investment opportunities. The Company currently manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”) and other customized solutions for clients. The Company’s primary sources of revenues are management fees, which are based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of its funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the funds. The Company currently has two operating segments: the Oz Funds Segment and the Company’s real estate business. T he Oz Funds Segment is currently the Company’s only reportable operating segment under U.S. generally accepted accounting principles (“GAAP”) and provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles. The Company’s real estate business, which provides asset management services to its real estate funds, is included within Other Operations, as it does not meet the threshold of a reportable operating segment. The Company generates substantially all of its revenues in the United States. The liability of the Company’s Class A Shareholders is limited to the extent of their capital contributions. The Company conducts its operations through OZ Management LP, OZ Advisors LP and OZ Advisors II LP and their consolidated subsidiaries (collectively, the “Oz Operating Group”). References to the Company’s “executive managing directors” refer to the current limited partners of OZ Management LP, OZ Advisors LP and OZ Advisors II LP other than the Company’s intermediate holding companies, and include the Company’s founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business. References to the “Ziffs” refer collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons. References to the Company’s “intermediate holding companies” refer, collectively, to Och-Ziff Holding Corporation (“Oz Corp”) and Och-Ziff Holding LLC, each of which are wholly owned subsidiaries of the Registrant. Company Structure The Registrant is a holding company that, through its intermediate holding companies, holds equity ownership interests in the Oz Operating Group. The Registrant has issued and outstanding the following share classes: • Class A Shares —Class A Shares are publicly traded and entitle the holders thereof to one vote per share on matters submitted to a vote of shareholders. The holders of Class A Shares are entitled to any distributions declared by the Registrant’s Board of Directors (the “Board”). • Class B Shares —Class B Shares are held by the Company’s executive managing directors. These shares are not publicly traded but rather entitle the executive managing directors to one vote per share on matters submitted to a vote of shareholders. These shares do not participate in the earnings of the Registrant, as the executive managing directors participate in the related economics of the Oz Operating Group through their direct ownership of Group A Units, Group D Units and the Preferred Units, as discussed below. The Company’s executive managing directors have granted an irrevocable proxy to vote all of their Class B Shares to the Class B Shareholder Committee, the sole member of which is currently Mr. Och, as it may determine in its sole discretion. As a result, Mr. Och is currently able to control all matters requiring the approval of the Company’s shareholders. This proxy will terminate on December 31, 2019, subject to extension if either (i) the Company has advised Mr. Och that he may not withdraw any capital from the funds that he may request to withdraw or (ii) Mr. Och is advised by counsel that he is prohibited by law from withdrawing any capital from the funds he has requested to withdraw. The Company conducts its operations through the Oz Operating Group. The following is a list of the outstanding units of the Oz Operating Group: • Group A Units —The Group A Units are equity interests held by the Company’s executive managing directors. Once vested, these units may be exchanged on a one-to-one basis for Class A Shares, subject to minimum ownership requirements and transfer restrictions. • Group B Units —The Group B Units are equity interests held by the Company’s intermediate holding companies. These units represent the Company’s economic interest in the Oz Operating Group. • Group D Units —The Company also issues Group D Units to executive managing directors. Group D Units receive distributions on a pro rata basis with the Group A Units and the Group B Units. A Group D Unit converts into a Group A Unit to the extent the Company determines that it has become economically equivalent to a Group A Unit, at which point it is considered a grant of equity-based compensation for GAAP purposes. As of December 31, 2017 , the Group D Units represented a 14.5% non-equity profits interest in the Oz Operating Group. Group D Units are not considered equity for GAAP purposes, and therefore distributions made to holders of these units are recognized within compensation and benefits in the consolidated statements of comprehensive income (loss). • Group P Units —On March 1, 2017, the Company issued Group P Units to certain executive managing directors. Group P Units entitle holders to receive distributions of future profits of the Oz Operating Group, and each Group P Unit becomes exchangeable for one Class A Share (or the cash equivalent), in each case upon satisfaction of certain service and market conditions and at such time the Company determines that a Group P Unit has become economically equivalent to a Group A Unit. The terms of the Group P Units may be varied for certain executive managing directors. Group P Unit grants are accounted for as equity-based compensation. See Note 10 for additional information. • Preferred Units —The Preferred Units are non-voting preferred equity interests in the Oz Operating Group entities and have an aggregate liquidation preference of $1,000 , plus accrued and unpaid distributions. See Note 9 for additional information regarding the terms of the Preferred Units. The Company issues its executive managing directors a number of Class B Shares of the Registrant equal to the number of Group A Units and Group P Units held. Upon the exchange of a Group A Unit or a Group P Unit for a Class A Share, the corresponding Class B Share is canceled and a Group B Unit is issued to the intermediate holding companies of the Company. In addition, the Company issues Class A restricted share units (“RSUs”) and, beginning in 2018, performance-based RSUs (“PSUs”) to its employees and executive managing directors as a form of compensation. See Note 10 for additional information regard RSUs and Note 17 for additional information regarding PSUs. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements of the Company. The most critical of these estimates are related to (i) fair value measurements of the assets and liabilities of the funds, which impacts the Company’s management fees and incentive income; (ii) the accounting treatment for variable interest entities; and (iii) the estimate of future taxable income, which impacts the carrying amount of the Company’s deferred income tax assets. While management believes that the estimates utilized in preparing the consolidated financial statements are reasonable and prudent, actual results could differ materially from those estimates. Reclassifications The Company has reclassified the changes in tax receivable agreement liability from general, administrative and other expenses to other income (loss) in the consolidated statements of comprehensive income (loss). The Company also reclassified its investments in funds, joint ventures and United States government obligations from other assets, net to investments in the Company’s consolidated balance sheets. In addition, the Company reclassified unearned incentive from other liabilities to a stand-alone line item in the Company’s consolidated balance sheets, which had a corresponding reclassification in the consolidated statements of cash flows. These reclassifications had no impact on the Company’s financial position or results of operations, and prior period amounts have been reclassified to conform to the current year presentation. Foreign Currency The functional currency of substantially all of the Company’s consolidated subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars at the closing rates of exchange on the balance sheet date. Gains and losses on transactions denominated in foreign currencies due to changes in exchange rates are recorded as other expenses within general, administrative and other in the consolidated statements of comprehensive income (loss). Consolidation Policies The Company adopted Accounting Standards Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis as of January 1, 2016 using the modified retrospective method of transition, which resulted in a cumulative effect adjustment to opening equity on the date of adoption. The Company did not restate prior-period results. The impact to the Company’s opening retained earnings in 2016 was driven by the cumulative effect of a change in incentive income recognition for the funds no longer consolidated, net of deferred income tax effects. Incentive income from funds not consolidated is generally recognized at the end of the applicable commitment period when the amounts are contractually payable and when no longer subject to clawback. Prior to deconsolidation, incentive income from these previously consolidated funds was recognized by allocating a portion of the net income of these funds to the Company rather than to the fund investors (noncontrolling interests) based on the contractual terms of the relevant fund agreements. This resulted in incentive income being allocated to the Company that was subject to clawback in the event of future losses in the respective funds. The deconsolidation of the majority of the Company’s previously consolidated funds resulted in a substantial decrease in assets of consolidated funds, liabilities of consolidated funds, redeemable noncontrolling interests, appropriated retained deficit and shareholders’ equity attributable to noncontrolling interests in the Company’s consolidated balance sheet. Additionally, the deconsolidation has caused a significant decrease in the amount of income of consolidated funds, expenses of consolidated funds, and net gains of consolidated funds in the Company’s consolidated statements of comprehensive income (loss). The Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds are generally organized using a “master-feeder” structure. Fund investors, including the Company’s executive managing directors, employees and other related parties, to the extent they invest in a given fund, generally invest directly into the feeder funds. These feeder funds are typically limited partnerships or limited companies that hold direct or indirect interests in a master fund. The master fund, together with its subsidiaries, is the primary investment vehicle for its feeder funds. The Company generally collects its management fees and incentive income from the feeder funds or subsidiaries of the feeder funds (“intermediate funds”), and generally does not collect any management fees or incentive income directly from the master funds. The Company also organizes certain funds (e.g., its real estate funds and closed-end opportunistic credit funds) without the use of a master-feeder structure. These are typically organized as limited partnerships, in which the Company is the general partner and collects management fees and incentive income directly from these entities; however, in the case of the real estate funds, the Company collects management fees directly from those funds’ investors. Finally, CLOs are collateralized financing vehicles that issue notes to investors and use those proceeds to acquire various types of credit-related investments that serve as collateral for the notes. Senior notes issued by these vehicles make periodic payments based on a stated interest rate, while the most subordinated notes have no stated interest rate but receive periodic payments from excess cash flows remaining after periodic payments have been made to the other notes and for fees and expenses due. The Company generally directs the activities of its funds through its role as general partner or as the investment manager or CLO collateral manager with decision-making rights. The consolidated financial statements include the accounts of the Registrant and entities in which it, directly or indirectly, is determined to have a controlling financial interest under the following set of guidelines: • Variable Interest Entities (“VIEs”)— The Company determines whether, if by design, an entity has any of the following characteristics: (i) equity investors who lack the characteristics of a controlling financial interest; (ii) the entity does not have sufficient equity at risk to finance its expected activities without additional subordinated financial support from other parties; or (iii) substantially all of the activities of the entity are performed on behalf of a party with disproportionately few voting rights. An entity with any one of these characteristics is a VIE. Partnerships, and similarly structured entities, will be considered as VIEs where a simple majority of third party investors with equity at risk are not able to exercise substantive kick-out or participating rights over the general partner. • Voting Interest Entities (“VOEs”)— Where an entity does not have the characteristics of a VIE, it will be a VOE. The determination of whether a fund is a VIE or a VOE is based on the facts and circumstances for each individual fund in accordance with the guidelines described below. Classification of such entities is reassessed where there is a substantive change in the governing documents or contractual arrangements of the entity, to the capital structure of the entity or in the activities of the entity. The Company continuously reassesses whether it should consolidate a VIE or VOE. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Under ASU 2015-02, beginning in 2016, fee arrangements are no longer considered variable interests when they are commensurate with the level of effort required to provide services and include only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length, and where the Company does not hold other interests in the entity that would absorb more than an insignificant amount of the variability of the entity. Where the Company does not have a variable interest in the entity, it will not consolidate the entity. Where the Company has a variable interest, it is required to determine whether the entity will be considered as a VIE or VOE, the classification of which will determine the analysis that the Company is required to perform when determining whether it should consolidate the entity. Funds that are VIEs Funds that are VIEs are generally VIEs because fund investors are deemed to lack the characteristics of a controlling financial interest or the entity does not have sufficient equity at risk. The party identified as the primary beneficiary of a VIE is required to consolidate the entity. The Company is the primary beneficiary of a VIE where it has a controlling financial interest in the entity, which is defined as (i) the power to direct the activities of the entity that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Where the Company does not have a controlling financial interest, but is part of a related party group under common control that collectively has characteristics of a controlling financial interest, the Company may be required to determine which party within the related party group is more closely associated with the VIE and would therefore consolidate a VIE. This assessment would also be performed where power is shared within a related party group that collectively has characteristics of a controlling financial interest. The types of funds that are VIEs and not consolidated are generally (i) master funds and intermediate fund vehicles for the Company’s multi-strategy funds, as well as opportunistic credit, real estate and certain other fund vehicles, as third party investors in these entities have not been granted substantive removal rights; and (ii) CLOs, as they lack sufficient equity at risk to finance their expected activities without additional subordinated financial support from other parties. The Company does not consolidate VIEs where it does not have a controlling financial interest. The types of funds that are VIEs consolidated by the Company are certain new funds that the Company has seeded and generally expects to deconsolidate when the fund has a certain level of additional third party capital. For the purposes of determining whether it is the primary beneficiary of a fund that is a VIE, the Company considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. Funds that are VOEs Funds that are corporations, or similarly structured entities that are not VIEs, would be consolidated by the Company where the Company has an equity investment of greater than 50% and has control over significant operating, financial and investing decisions of the entity. The Company will generally not consolidate partnerships, or similarly structured entities that are not VIEs, where a single investor or simple majority of third party investors with equity have the ability to exercise substantive kick-out or participating rights over the entity. The types of funds that are VOEs and not consolidated by the Company are generally feeder funds of the Company’s multi-strategy funds, as third party fund investors in these entities have been granted substantive removal rights. The Company does not currently consolidate any funds that are VOEs. Allocations of Oz Operating Group Earnings and Capital The Company consolidates the Oz Operating Group. Earnings of the Oz Operating Group are allocated on a pro rata basis between the Group A Units, which interests are reflected within net income (loss) attributable to noncontrolling interests, and Group B Units, which interests are reflected within net income (loss) attributable to Och-Ziff Capital Management Group LLC, in the consolidated statements of comprehensive income (loss). Paid-in capital of the Oz Operating Group is also allocated pro rata between the Group A Units, which interests are reflected within noncontrolling interests, and Group B Units, which interests are reflected within the Company’s paid-in capital, in the consolidated balance sheets. As of December 31, 2017 , Group P Units are not participating in the earnings of the Oz Operating Group, as certain service and performance conditions, as described in Note 10 , have not been met as of the reporting period end. See Note 3 for additional information regarding the Company’s interest in the Oz Operating Group. Noncontrolling Interests and Appropriated Retained Earnings (Deficit) The Group A Units represent interests in the Oz Operating Group not held by the Company, and amounts attributable to these units are presented as noncontrolling interests in the consolidated balance sheets. Prior to the adoption of ASU 2015-02, the Company consolidated certain funds in which it held a controlling financial interest and in which fund investors were not able to redeem their interests until the funds liquidated or is otherwise wound-up. Ownership interests in these consolidated funds that are not held by the Company were also presented as noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests are reflected within net income (loss) attributable to noncontrolling interests in the consolidated statements of comprehensive income (loss). Additionally, the Company consolidates certain credit funds that it manages, wherein investors are able to redeem their interests after an initial lock-up period of up to three years. Amounts relating to these fund investors’ interests in these funds are presented as redeemable noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests are presented as net income (loss) attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss). The Company also consolidated the CLOs it managed prior to adoption of ASU 2015-02. The Company elected the fair value option for the notes and loans payable of the consolidated CLOs upon the initial consolidation of each CLO. The recognition of the initial difference between the fair value of assets and liabilities of consolidated CLOs was treated as an adjustment to appropriated retained earnings (deficit). Net changes in the fair value of consolidated CLO assets and liabilities and related income and expenses were allocated to noncontrolling interests in the statements of comprehensive income (loss). These allocations are then reclassified from noncontrolling interests to appropriated retained earnings (deficit) in the consolidated balance sheets. Such amounts were reclassified, as the holders of each CLO’s beneficial interests, as opposed to the Company, received the benefits or absorbed the losses of the CLO’s assets. See Note 3 for additional information regarding noncontrolling interests. Preferred Units The Company reports Preferred Units as redeemable noncontrolling interests, outside of permanent equity on the Company’s consolidated balance sheet, as the redemption of the Preferred Units may be effected in a manner not solely in control of the Company. The Company recorded the proceeds from the issuance and sale net of transactions costs. As the redemption of the Preferred Units is outside of the control of the Company, the carrying value of the Preferred Units is their current full redemption value. The change in redemption value was treated as a reduction of the common equity holders’ interests in the Oz Operating Group. The pro rata share of the change in redemption value that was allocable to the Registrant was treated as a reduction of net income (loss) attributable to Class A Shareholder when calculating earnings (loss) per Class A Share. See Note 9 for additional information on the Preferred Units. Revenue Recognition Policies The Company has two principal sources of revenues: management fees and incentive income. These revenues are derived from the Company’s agreements with the funds. The agreements are generally automatically renewed on an annual basis unless the agreements are terminated by the general partner or directors of the respective funds. Certain investments held by employees, executive managing directors and other related parties in the funds are not subject to management fees or incentive income charges. See Note 14 for additional information regarding these waived fees. Management Fees Management fees for the Company’s multi-strategy funds typically range from 0.97% to 2.50% annually of assets under management based on the net asset value of these funds. For the Company’s opportunistic credit funds, management fees typically range from 0.75% to 1.75% based on the net asset value of these funds. Management fees for the Company’s CLOs within Institutional Credit Strategies are generally range from 0.43% to 0.50% based on the par value of the collateral and cash held in the CLOs. Management fees for the Company’s real estate funds typically range from 0.75% to 1.50% annually based on the amount of capital committed or invested during the investment period, and on the amount of invested capital after the investment period. Management fees are recognized over the period during which the related services are performed. Management fees are generally calculated and paid to the Company on a quarterly basis in advance, based on the amount of assets under management at the beginning of the quarter. Management fees are prorated for capital inflows and redemptions during the quarter. Accordingly, changes in the Company’s management fee revenues from quarter to quarter are driven by changes in the quarterly opening balances of assets under management, the relative magnitude and timing of inflows and redemptions during the respective quarter, as well as the impact of differing management fee rates charged on those inflows and redemptions. Incentive Income The Company earns incentive income based on the cumulative performance of the funds over a commitment period. Incentive income is typically equal to 20% of the realized and unrealized profits, net of management fees, attributable to each fund investor in the Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds, but it excludes unrealized gains and losses attributable to investments that the Company, as investment manager, believes lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance (“Special Investments”). For the Company’s closed-end opportunistic credit funds, real estate funds and certain other funds, incentive income is typically equal to 20% of the realized profits, net of management fees, attributable to each fund investor. For CLOs, incentive income is typically 20% of the excess cash flows available to the holders of the subordinated notes. The Company’s ability to earn incentive income from some of its funds may be impacted by hurdle rates as further discussed below. Incentive income is generally recognized at the end of the applicable commitment period when the amounts are contractually payable, or “crystallized,” and when no longer subject to clawback. Additionally, all of the Company’s multi-strategy funds and open-end opportunistic credit funds are subject to a perpetual loss carry forward, or perpetual “high-water mark,” meaning the Company will not be able to earn incentive income with respect to positive investment performance it generates for a fund investor in any year following negative investment performance until that loss is recouped, at which point a fund investor’s investment surpasses the high-water mark. The Company earns incentive income on any net profits in excess of the high-water mark. The commitment period for most of the Company’s multi-strategy assets under management is for a period of one year on a calendar-year basis, and therefore it generally crystallizes incentive income annually on December 31. The Company may also recognize incentive income related to fund investor redemptions at other times during the year, as well as on assets under management subject to commitment periods that are longer than one year. The Company may also recognize incentive income for tax distributions related to these assets. Tax distributions are amounts distributed to the Company to cover tax liabilities related to incentive income that has been accrued at the fund level but will not be recognized by the Company until the end of the relevant commitment period (if at all). These tax distributions are not subject to clawback once distributed to the Company. Approximately $17.4 billion , or 54% , of the Company’s assets under management as of December 31, 2017 were subject to initial commitment periods of three years or longer. These assets under management include assets subject to three-year commitment periods in the Oz Master Fund and other multi-strategy funds, as well as assets in the Company’s opportunistic credit funds, CLOs, real estate funds and certain other funds. Incentive income related to these assets is based on the cumulative investment performance over a specified commitment period (in the case of CLOs, based on the excess cash flows available to the holders of the subordinated notes), and is not earned until it is no longer subject to repayment to the respective fund. The Company’s ability to earn incentive income on these longer-term assets is also subject to hurdle rates whereby the Company does not earn any incentive income until the investment returns exceed an agreed upon benchmark. For a portion of these assets subject to hurdle rates, once the investment performance has exceeded the hurdle rate, the Company may receive a preferential “catch-up” allocation, resulting in a potential recognition to the Company of a full 20% of the net profits attributable to investors in these assets. Other Revenues Other revenues consist primarily of interest income on investments in CLOs and cash and cash equivalents. Interest income is recognized on an effective yield basis. Additionally, prior to the sale of the Company’s aircraft in the first half of 2017, revenue related to non-business use of the corporate aircraft by certain executive managing directors was also included within other revenues. Revenues earned from non-business use of the corporate aircraft were recognized on an accrual basis based on actual flight hours. See Note 14 for additional information regarding non-business use of the corporate aircraft. Compensation and Benefits Compensation and benefits is comprised of salaries, benefits, payroll taxes, and discretionary and guaranteed cash bonus expense. The Company generally recognizes compensation and benefits expenses over the related service period. Bonus Compensation On an annual basis, compensation and benefits comprise a significant portion of total expenses, with discretionary cash bonuses generally comprising a significant portion of total compensation and benefits. The Company accrues minimum annual discretionary cash bonus on a straight-line basis during the year. Prior to 2017, annual discretionary bonuses were generally determined and expensed in the fourth quarter of each year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year. Equity-Based Compensation Compensation expense related to equity-classified share-based payments related to RSUs and Group A Units, is based on the grant-date fair value and recognized on a straight-line basis over the requisite service period for awards with both cliff vesting and graded vesting. The Company accounts for forfeitures on share-based compensation arrangements as they occur. Additionally, the Company recognizes all income tax effects of awards within consolidated and comprehensive net income when the awards vest or are settled. For liability-classified share-based payments, the Company recognizes compensation expense over the requisite service period adjusted to the fair value as of the end of the reporting period. Compensation expense related to equity-classified share-based payments related to Group P Units, which include both a service and a market condition, is based on the estimated fair value of the awards at the date of grant, using graded vesting, which separately considers each requisite service period for each tranche. See Note 10 for additional information on the Company’s equity-based compensation plans. Group D Units The Group D Units are not considered equity under GAAP, and therefore no equity-based compensation expense is recognized related to these units when they are granted. Distributions to holders of Group D Units are included within compensation and benefits in the consolidated statements of comprehensive income (loss). These distributions are accrued in the quarter in which the related income was earned and are paid out the following quarter at the same time distributions on the Group A Units and dividends on the Company’s Class A Shares are paid. A Group D Unit converts into a Group A Unit to the extent the Company determines that it has become economically equivalent to a Group A Unit. Upon the conversion of Group D Units into Group A Units, we recognize a one-time charge for the grant-date fair value of the vested units and begin to amortize the grant-date fair value of the unvested units over the vesting period. Profit Sharing Arrangements The Company also has profit-sharing arrangements whereby certain employees and executive managing directors are entitled to a share of incentive income distributed by certain funds. This incentive income is typically paid to the Company and a portion paid to the participant as investments held by these funds are realized. The Company defers the recognition of any portion of this incentive income to the extent it is subject to clawback (see “—Incentive Income” above). To the extent that the payments to the employees and executive managing directors are probable and reasonably estimable, the Company accrues these payments as compensation expense for GAAP purposes, which may occur prior to the recognition of the related incentive income. Deferred Cash Interests (DCIs) DCIs are granted to certain employees and executive managing directors as a form of compensation. DCIs reflect notional fund investments made by the Company on behalf of an employee or executive managing director. DCIs generally vest over a three year period, subject to an employee’s or executive managing director’s continued service. Upon vesting, the Company pays the employee or executive managing director an amount in cash equal to the notional investment represented by the DCIs, as adjusted for notional fund performance. Except as otherwise provided in the relevant deferred cash interest plan or in an award agreement, in the event of a termination of the employee’s or executive managing director’s service, any portion of the DCIs that are unvested as of the date of termination will be forfeited. The Company recognizes the total notional investment, as adjusted for notional fund performance, over the related service period. Income Taxes Deferred income tax assets and liabilities resulting from temporary differences between the GAAP and tax bases of assets and liabilities are measured at the balance sheet date using enacted income tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The Company offsets deferred income tax assets and liabilities for presentation in its consolidated balance sheets when such assets and liabilities are within the same legal entity and related to the same taxing jurisdiction. The realization of deferred income tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the enacted tax law in the applicable tax jurisdiction. A valuation allowance is established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether a valuation allowance should be established, as well as the amount of such allowance. On December 22, 2017, the Tax Cuts and Jobs Act (“the TCJA”) was signed into law. The TCJA includes a broad range of tax reforms including a reduction in the corporate income tax rate to 21% from 35%, effective January 1, 2018. GAAP requires companies to recognize the income tax accounting effects of changes in tax law or rates (including retroactive changes) in the period of enactment . Future events such as changes in tax legislation could have an impact on the provision for income taxes and the effective income tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The Company records interest and penalties related to income taxes within income taxes in the consolidated statements of comprehensive income (loss). Reorganization Expenses Prior to the Company’s 2007 initial public offering (“IPO”), the Company completed a reorganization of its business (the “Reorganization”). As part of the Reorganization, Mr. Och’s equity interests, the other executive managing directors’ non-equity interests and the Ziffs’ profit sharing interests were reclassified as Group A Units. The reclassification was accounted for as share-based payments. These units, which were amortized through Reorganization expenses in the consolidated statements of comprehensive income (loss), generally vested over the five-year period beginning on the date of the IPO, with a small number of units vesting through 2015. Cash and Cash Equivalents The Company considers highly-rated liquid investments that have an original maturity of three months or less from the date of purchase to be cash equivalents. Cash equivalents are recorded at amortized cost plus accrued interest. As of December 31, 2017 , the majority of the Company’s cash and cash equivalents were held with one major financial institution, which exposes the Company to a certain degree of credit risk concentration. The Company records cash and cash equivalents of consolidated funds within other assets of consolidated funds in the consolidated balance sheets. Investments Investments in CLOs The Company elected to measure its investments in notes issued by CLOs managed by the Company at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method, and includes this income within other revenues in the consolidated statements of comprehensive income (loss). Investments in Other Funds The Company’s equity investments into funds are accounted for under the equity method of accounting, and the Company recognizes its share of earnings within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss). Investments in United States Government Obligations The Company invests in United States government obligations to manage excess liquidity. These investments are carried at fair value, as the Company has elected the fair value option in order to include any gains or losses within consolidated net income (loss). These inv |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | NONCONTROLLING INTERESTS AND OZ OPERATING GROUP OWNERSHIP Noncontrolling interests represent ownership interests in the Company’s subsidiaries held by parties other than the Company, and primarily relate to the Group A Units held by the Company’s executive managing directors and fund investors’ interests in the consolidated funds. Net income (loss) attributable to the Group A Units is driven by the earnings (losses) of the Oz Operating Group. Net income attributable to fund investors’ interests in consolidated funds is driven by the earnings of those funds. The following table presents the components of the net income (loss) attributable to noncontrolling interests: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Group A Units $ 130,730 $ (195,087 ) $ 136,449 Consolidated funds — 262 54,357 Other 900 1,068 371 $ 131,630 $ (193,757 ) $ 191,177 The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: December 31, 2017 December 31, 2016 (dollars in thousands) Group A Units $ 353,791 $ 166,521 Consolidated funds — — Other 4,111 5,408 $ 357,902 $ 171,929 The Preferred Units and fund investors’ interests in certain consolidated funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests: Year Ended December 31, 2017 2016 2015 Consolidated Funds Preferred Units Total Consolidated Funds Preferred Units Total Consolidated Funds (dollars in thousands) Beginning balance $ 21,621 $ 262,500 $ 284,121 $ 832,284 $ — $ 832,284 $ 545,771 Deconsolidation of funds on adoption of ASU 2015-02 — — — (813,116 ) — (813,116 ) — Change in redemption value of Preferred Units — 7,446 7,446 — 16,043 16,043 — Preferred Units issuance, net of issuance costs — 150,054 150,054 — 246,457 246,457 — Capital contributions 2,329 — 2,329 3 — 3 338,437 Capital distributions — — — — — — (2,320 ) Comprehensive income (loss) 1,667 — 1,667 2,450 — 2,450 (49,604 ) Ending Balance $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 $ 832,284 Oz Operating Group Ownership The Company’s equity interest in the Oz Operating Group increased to 41.5% as of December 31, 2017 , from 38.3% as of December 31, 2016 , (excluding Group P Units, as they are not yet participating in the economics of the Oz Operating Group). Changes in the Company’s interest in the Oz Operating Group have historically been, and in the future may be, driven by the following: (i) the exchange of Group A Units and Group P Units for an equal number of Class A Shares, at which time the related Class B Shares are also canceled; (ii) the issuance of Class A Shares under the Company’s Amended and Restated 2007 Equity Incentive Plan and 2013 Incentive Plan related to the settlement of RSUs; (iii) the forfeiture of Group A Units and Group P Units by a departing executive managing director; and (iv) the repurchase of Class A Shares and Group A Units. The Company’s interest in the Oz Operating Group is expected to continue to increase over time as additional Class A Shares are issued upon the exchange of Group A Units and Group P Units, as well as the settlement of vested RSUs. These increases will be offset upon any conversion by an executive managing director of Group D Units, which are not considered equity for GAAP purposes, into Group A Units, at which time an equal number of Class B Shares is also issued to the executive managing director. Additionally, the Company’s economic interest in the Oz Operating Group will decline when Group P Units begin to participate, as described in Note 10 . Relinquishment of Group A Units Oz Corp and Oz Holding, as the general partners of the Oz Operating Partnerships (collectively, the “General Partners”), entered into a Relinquishment Agreement with Daniel S. Och and certain family trusts over which Mr. Och has investment control (the “Och Trusts”) effective as of March 1, 2017 (the “Relinquishment Agreement”). Pursuant to the Relinquishment Agreement, Mr. Och and the Och Trusts agreed to cancel, in the aggregate, 30.0 million of their vested Group A Units. The Company accounted for the transaction as a repurchase of Group A Units for no consideration. A corresponding number of Class B Shares were also canceled. The Relinquishment Agreement provides that if any of the Group D Units granted to James S. Levin on March 1, 2017 are forfeited, such forfeited units (up to an aggregate amount of 30.0 million ) shall be reallocated to Mr. Och and the Och Trusts pursuant to the terms of the Limited Partnership Agreements; however, in February 2018, Mr. Och announced that he is disclaiming his right to receive any forfeited units and instead the Group D Units forfeited by James S. Levin as described above have been canceled and it is expected that Mr. Och will direct the General Partners to issue up to a corresponding number of new Group Units or RSUs in the future for strategic hires and/or other business initiatives. Dilution of Proceeds from Tax Receivable Agreement Waiver In September 2016, the Company amended the tax receivable agreement to provide that no amounts will be due or payable under the tax receivable agreement by Oz Corp, one of the Company’s wholly owned intermediate holding companies, with respect to the 2015 and 2016 taxable years. During the first quarter of 2017, Oz Corp contributed to the Oz Operating Group the cash previously set aside for such payments, which resulted in a reallocation of such contribution between the Company’s paid-in capital and the paid-in capital of the Group A Units (including within noncontrolling interests). Group A Unit Repurchase On October 28, 2015, the Company repurchased approximately 4.6 million vested Group A Units from former executive managing directors at a price per unit of $5.00 , for an aggregate of $22.8 million . These units were canceled upon their repurchase, and an equal number of Class B Shares were also canceled. As a result, the Company recorded a decrease to paid-in capital and shareholders’ equity attributable to non-controlling interests. The repurchase resulted in $2.3 million of additional deferred income tax assets derived from goodwill recognized for tax purposes that is expected to be subsequently amortized and result in future taxable deductions and cash savings to the Company. This increase in deferred income tax assets was recorded as an increase to paid-in capital in connection with the repurchase. |
Investments and Fair Value Disc
Investments and Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | INVESTMENTS AND FAIR VALUE DISCLOSURES The following table presents the components of the Company’s investments as reported in the consolidated balance sheets: December 31, 2017 December 31, 2016 (dollars in thousands) United States government obligations, at fair value (1) $ 12,973 $ — CLOs, at fair value 211,749 21,341 Other funds and joint ventures, equity method 14,252 16,639 Total Investments $ 238,974 $ 37,980 _______________ (1) Held by the Oz Operating Group and matures on March 1, 2018 . Fair Value Disclosures Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Assets and liabilities measured at fair value are classified into one of the following categories: • Level I – Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives. • Level II – Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives. • Level III – Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations and investments in affiliated credit funds. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair Value Measurements Categorized within the Fair Value Hierarchy The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2017 : As of December 31, 2017 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 99,704 $ — $ — $ 99,704 Included within investments: United States government obligations $ 12,973 $ — $ — $ 12,973 CLOs (1) $ — $ — $ 211,749 $ 211,749 Investments of consolidated funds: Bank debt $ — $ 24,559 $ 18,807 $ 43,366 _______________ (1) As of December 31, 2017 , investments in CLOs had contractual principal amounts of $189.2 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2016 : As of December 31, 2016 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 139,974 $ — $ — $ 139,974 Included within investments: CLOs (1) $ — $ — $ 21,341 $ 21,341 Investments of consolidated funds: Bank debt $ — $ 19,534 $ 18,127 $ 37,661 _______________ (1) As of December 31, 2016 , investment in CLO had contractual principal amounts of $21.3 million outstanding. Reconciliation of Fair Value Measurements Categorized within Level III The Company assumes that any transfers between Level I, Level II or Level III occur at the beginning of the reporting period presented. Gains and losses, excluding those of the consolidated funds are recorded within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss), and gains and losses of the consolidated funds are recorded within net gains (losses) of consolidated funds. Amounts related to the deconsolidation of the Company’s funds upon the adoption of ASU 2015-02 on January 1, 2016, and deconsolidation of the CLO in the third quarter of 2017 (as further described in Note 5 ) are included within investment sales. Amounts related to the initial consolidation of the CLO in the second quarter of 2017 are included within investment purchases. The following table summarizes the changes in the Company’s Level III investments for the year ended December 31, 2017 : December 31, 2016 Transfers Transfers Investment Investment Gains / Losses December 31, 2017 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 21,341 $ — $ — $ 185,404 $ (647 ) $ 5,651 $ 211,749 Investments of consolidated funds: Bank debt $ 18,127 $ 587 $ (17,311 ) $ 89,225 $ (73,069 ) $ 1,248 $ 18,807 The following table summarizes the changes in the Company’s Level III investments for the year ended December 31, 2016 : December 31, 2015 Transfers Transfers Investment Investment Gains / Losses December 31, 2016 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ — $ — $ — $ 21,462 $ — $ (121 ) $ 21,341 Investments of consolidated funds: Bank debt $ 1,998,423 $ — $ — $ 80,317 $ (2,061,719 ) $ 1,106 $ 18,127 Real estate investments 719,957 — — — (719,957 ) — — Residential mortgage-backed securities 323,571 — — — (323,571 ) — — Collateralized debt obligations 83,759 — — — (83,759 ) — — Energy and natural resources limited partnerships 70,604 — — — (70,604 ) — — Commercial real estate debt 18,295 — — — (18,295 ) — — Asset-backed securities 23,739 — — — (23,739 ) — — Commercial mortgage-backed securities 13,803 — — — (13,803 ) — — Other investments (including derivatives, net) 1,938 — — — (1,938 ) — — $ 3,254,089 $ — $ — $ 80,317 $ (3,317,385 ) $ 1,106 $ 18,127 Transfers out of Level III presented in the tables above resulted from the fair values of certain securities becoming market observable, with fair value determined using independent pricing services. Transfers into Level III presented in the table above resulted from the valuation of certain investments with decreased market observability, with fair values determined using broker quotes or independent pricing services. There were no transfers between Levels I and II during the periods presented above. The table below summarizes the net change in unrealized gains and losses on the Company’s Level III investments held as of the reporting date. These gains and losses are included within net gains of consolidated funds in the Company’s consolidated statements of comprehensive income (loss): Year Ended December 31, 2017 2016 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 5,651 $ (121 ) Investments of consolidated funds: Bank debt $ 97 $ 425 Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III Investments in CLOs and bank debt are valued using independent pricing services and thus there are no unobservable valuation inputs used in determining their fair value to disclose. The Company elected to measure its investments in CLOs at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method. As further discussed in Note 5 , the Company consolidated a CLO warehouse vehicle beginning in the second quarter of 2017, which was then deconsolidated during the third quarter of 2017. The Company elected to measure the debt obligations of the consolidated CLO at fair value through consolidated net income (loss) in order to mitigate the accounting mismatch between the carrying values of the assets and liabilities of the consolidated CLO. For the period the CLO was consolidated, changes in fair value of these assets and liabilities were included within net gains (losses) of consolidated funds in the consolidated statements of comprehensive income (loss). The Company accrued interest income and interest expense of the consolidated CLO using the effective interest method. Valuation Process for Fair Value Measurements Categorized within Level III The Company has established a Valuation Committee to provide oversight of the monthly valuation results of the investments held by the Company and the funds. The Valuation Committee has assigned the responsibility of performing price verification and related quality controls in accordance with the Valuation Policy to the Valuation Controls Group. The Valuation Controls Group performs price verification procedures on all of the investments which include, but are not limited to the following: reviewing independent pricing provided by third-party valuation vendors, reviewing and collecting broker quotes and reviewing valuation models. The Valuation Controls Group performs additional quality controls to support valuation techniques including but not limited to: back testing, stale pricing reviews, and vendor due diligence. When pricing or verification sources cannot be obtained from external sources or if external prices are deemed unreliable, additional procedures are performed by the Valuation Controls Group, which may include comparing unobservable inputs to observable inputs for similar positions, reviewing subsequent market activities, performing comparisons of actual versus projected performance indicators, and reviewing the valuation methodology and key inputs. Independent third party valuation firms may be used to corroborate internal valuations. Fair Value of Other Financial Instruments Management estimates that the carrying value of the Company’s other financial instruments, including its debt obligations, approximated their fair values as of December 31, 2017 . The Senior Notes are categorized as Level II and the CLO Investments Loans (as defined in Note 8 ) are categorized as Level III within the fair value hierarchy. The fair value of the Senior Notes and the CLO Investments Loans were determined using independent pricing services. Assets Measured at Fair Value on a Non-Recurring Basis The Company recognizes loans held for sale at the lower of cost or fair value. The Company had $29.1 million and $8.2 million of loans held for sale as of December 31, 2017 and 2016 , respectively. As of December 31, 2017 , $26.7 million and $2.4 million of the loans held for sale are categorized as Level II and Level III within the fair value hierarchy, respectively. As of December 31, 2016 loans held for sale are categorized as Level II within the fair value hierarchy. The fair value for the loans was determined using independent pricing services. As of December 31, 2016 , the Company measured its aircraft held for sale at fair value, less cost to sell, or $56.3 million . The fair value of the aircraft was categorized as Level III within the fair value hierarchy. The fair value for the aircraft was determined using recent market sales for comparable aircraft and bids received, and the Company assessed whether recent bids were supportive of transactions seen in recent sales for similar aircraft. The Company sold its aircraft during the year ended December 31, 2017 . See Note 6 for additional information on the aircraft sale. Loans Sold to CLOs Managed by the Company During the year ended December 31, 2017 , the Company sold $71.3 million of loans to CLOs managed by the Company. These loans were previously purchased by the Company in the open market, and were sold for cash at cost to the CLOs. The loans were accounted for as transfers of financial assets and met the criteria for derecognition under GAAP. As of December 31, 2017 and 2016 , the outstanding principal amount on the loans that have been sold to the CLOs was $51.7 million and $17.9 million , respectively. As of December 31, 2017 , there were no delinquencies or credit losses related to the loans sold. The Company invests in senior secured and subordinated notes issued by certain CLOs to which it sold the loans discussed above. These investments represent retained interests to the Company and are in the form of a 5% vertical strip (i.e., 5% of each of the senior and subordinated tranches of notes issues by each CLO). The retained interests are reported within investments on the Company’s consolidated balance sheet. During the years ended December 31, 2017 and 2016 , the Company made investments of $45.4 million and $21.5 million , respectively, related to these retained interests. As of December 31, 2017 and 2016 , the Company’s investments in these retained interests had a fair value of $70.4 million and $21.3 million , respectively. The Company is subject to risks associated with the performance of the underlying collateral and the market yield of the assets. The Company’s risk of loss from retained interest is limited to its investments in these interests. The Company receives quarterly payments of interests and principal, as applicable, on these retained interests. In the year ended December 31, 2017 , the Company received $647 thousand of interest payments related to the retained interests. The Company had not received any principal payments in 2017 and no interest or principal payments in 2016 related to the retained interests. The Company uses independent pricing services to value its investments in the CLOs, and therefore the only key assumption is the price provided by such service. A corresponding adverse change of 10% or 20% on price would have a corresponding impact on the fair value of the Company’s investments in CLOs. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES In the ordinary course of business, the Company sponsors the formation of funds that are considered VIEs. See Note 2 for a discussion of entities that are VIEs and the evaluation of those entities for consolidation by the Company. In the second quarter of 2017, the Company consolidated one of the CLOs it manages as a result of increasing its investment in the vehicle, which provided the Company with a controlling financial interest in the VIE. In the third quarter of 2017, the CLO emerged from warehouse and the Company’s interest in the CLO was limited to a 5% vertical strip. Due to the reconsideration event, the Company deconsolidated the CLO in the third quarter of 2017. No gains or losses were recognized as a result of the deconsolidation. The table below presents the assets and liabilities of VIEs consolidated by the Company: December 31, 2017 December 31, 2016 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ 43,366 $ 37,661 Other assets of consolidated funds 13,331 17,544 Total Assets $ 56,697 $ 55,205 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 11,340 15,197 Total Liabilities $ 11,340 $ 15,197 The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability. The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, insignificant direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 15 . The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated. The table below presents the net assets of VIEs in which the Company has variable interests along with the maximum risk of loss as a result of the Company’s involvement with VIEs: December 31, 2017 December 31, 2016 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 8,300,163 $ 4,069,617 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 144,124 96,409 Income and fees receivable 24,953 13,074 Investments in funds 222,192 35,868 Maximum Exposure to Loss $ 391,269 $ 145,351 |
Other Assets, Net
Other Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets, Net | OTHER ASSETS, NET The following table presents the components of other assets, net as reported in the consolidated balance sheets: December 31, 2017 December 31, 2016 (dollars in thousands) Fixed Assets: Leasehold improvements $ 53,419 $ 54,414 Computer hardware and software 44,190 40,093 Furniture, fixtures and equipment 8,571 8,919 Corporate aircraft held for sale — 56,251 Accumulated depreciation and amortization (58,671 ) (49,890 ) Fixed assets, net 47,509 109,787 Loans held for sale 29,110 8,204 Goodwill 22,691 22,691 Prepaid expenses 12,862 12,753 Other 4,189 16,549 Total Other Assets, Net $ 116,361 $ 169,984 In 2017, the Company sold its corporate aircraft for $57.6 million . As a result, the Company recognized a net gain on sale of $1.3 million in the period. The gain is included within other revenues in the consolidated statements of comprehensive income (loss). |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES The following table presents the components of other liabilities as reported in the consolidated balance sheets: December 31, 2017 December 31, 2016 (dollars in thousands) Loan trades payable $ 29,110 $ 10,391 Accrued expenses 21,955 30,728 Deferred rent credit 8,283 15,046 Interest payable 2,970 2,654 Other 12,804 20,096 Total Other Liabilities $ 75,122 $ 78,915 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Debt Instruments [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS As of December 31, 2017 , the Company’s outstanding indebtedness was primarily comprised of senior notes (the “Senior Notes”) and secured loans to finance the purchase of the Company’s investments in CLOs (“CLO Investments Loans”). The table below presents scheduled principal payments on the Company’s debt obligations for each of the next five years. Scheduled Payments (dollars in thousands) 2018 $ — 2019 $ 400,000 2020 $ — 2021 $ — 2022 $ — Senior Notes On November 20, 2014, the Company issued $400.0 million of Senior Notes due November 20, 2019 , unless earlier redeemed or repurchased. The Senior Notes were issued at a price of 99.417% of the aggregate principal amount and bear interest at a rate per annum of 4.50% payable semiannually in arrears. The Senior Notes are unsecured and unsubordinated obligations issued by a subsidiary of the Company, Och-Ziff Finance Co. LLC (“Oz Finance”), and are fully and unconditionally guaranteed, jointly and severally, on an unsecured and unsubordinated basis by OZ Management LP, OZ Advisors LP and OZ Advisors II LP (collectively, the “Senior Notes Guarantors”). The Senior Notes may be redeemed from time to time at the Company’s option, in whole or in part, at a redemption price equal to the greater of 100% of the principal amount to be redeemed and a make-whole redemption price (as defined in the Senior Notes indenture), in either case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the Company will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount, plus any accrued and unpaid interest. The Senior Notes do not have any financial maintenance covenants. However, the Senior Notes include certain covenants, including limitations on Oz Finance’s and, as applicable, the Senior Notes Guarantors’ ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of their respective subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all assets. The Senior Notes also provide for customary events of default, bankruptcy, insolvency or reorganization that may cause the Senior Notes to become immediately due and payable, plus any accrued and unpaid interest. Revolving Credit Facility On November 20, 2014, the Company entered into a $150.0 million , 5 -years unsecured Revolving Credit Facility, which was subsequently amended on December 29, 2015 and on June 13, 2017, the proceeds of which may be used for working capital, general corporate purposes or other liquidity needs. The facility matures on November 20, 2019 . The borrower under the Revolving Credit Facility is OZ Management LP and the facility is guaranteed by OZ Advisors LP, OZ Advisors II LP and Oz Finance. The Company is able to increase the maximum amount of credit available under the facility to $225.0 million if certain conditions are satisfied. In March 2017, the Company repaid its outstanding obligation under the Revolving Credit Facility in full, and as a result has $150.0 million available under the facility as of December 31, 2017 . The Company is subject to a fee of 0.10% to 0.25% per annum on undrawn commitments during the term of the Revolving Credit Facility. Outstanding borrowings will bear interest at a rate per annum of LIBOR plus 1.00% to 2.00% , or a base rate plus 0% to 1.00% . The commitment fees and the spreads over LIBOR or the base rate are based on OZ Management LP’s credit rating throughout the term of the facility. As of December 31, 2017 , the current rates for borrowings would be LIBOR plus 2.00% , and the undrawn commitment fee was 0.25% . The Revolving Credit Facility includes two financial maintenance covenants. The first covenant prohibits total fee-paying assets under management as of the last day of any fiscal quarter to be less than $22.0 billion for two successive quarters. The second covenant prohibits the economic income leverage ratio (as defined in the Revolving Credit Facility) from exceeding: (i) 4.00 to 1.00 for each fiscal quarter ending on or prior to December 31, 2017; (ii) 3.50 to 1.00 for each fiscal quarter ending on or after March 31, 2018 but on or prior to December 31, 2018; and (iii) 3.00 to 1.00 for each fiscal quarter ending on or after March 31, 2019. As of December 31, 2017 , the Company was in compliance with the financial maintenance covenants. The Revolving Credit Facility allows a limited right to cure an event of default resulting from noncompliance with the economic income leverage ratio test with an equity contribution made to the borrower, OZ Management LP. Such cure right may not be used more than two times in any four-quarter period or more than three times during the term of the facility. The Revolving Credit Facility includes provisions that restrict or limit, among other things, the ability of the Oz Operating Group from: • Incurring certain additional indebtedness or issuing certain equity interest. • Creating liens. • Paying dividends or making certain other payments when there is a default or event of default under the Revolving Credit Facility. • Merging, consolidating, selling or otherwise disposing of its assets. • Engaging in certain transactions with shareholders or affiliates. • Engaging in a substantially different line of business. • Amending its organizational documents in a manner materially adverse to the lenders. The Revolving Credit Facility permits the Oz Operating Group to incur, among other things, up to $150.0 million of indebtedness, up to an additional $400.0 million of indebtedness for financing of investments in CLOs in order to comply with risk retention regulatory requirements, and additional indebtedness so long as, after giving effect to the incurrence of such indebtedness, it is in compliance with an economic income leverage ratio as described above and no default or event of default has occurred and is continuing. The facility also permits the Oz Operating Group to create liens to, among other things, secure indebtedness related to financing of CLO risk retention investments, as described above, as well as other indebtedness and obligations of up to $50.0 million . Aircraft Loan In February 2014, the Company entered into the Aircraft Loan to finance installment payments towards the purchase of a corporate aircraft. In March 2017, the Company sold the aircraft and repaid the outstanding principal balance in the amount of $46.4 million . CLO Investments Loans The Company enters into loans to finance portions of its investments in CLOs (collectively “the CLO Investments Loans”). These loans are collateralized by the investments in CLOs held by the Company. In general, the Company will make interest and principal payments on the loans at such time interest payments are received on its investments in the CLOs, and will make principal payments on the loans to the extent principal payments are received on its investments in the CLOs, with any remaining balance due upon maturity. The loans are subject to customary events of default and covenants and include terms that require the Company’s continued involvement with the CLOs. The CLO Investment Loans do not have any financial maintenance covenants. The table below presents information related to CLO Investments Loans as of December 31, 2017 and 2016 . Carrying values presented below are net of discounts, if any, and unamortized deferred financing costs. The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or the date at which the Company no longer holds a risk retention investment in the respective CLO. Borrowing Date Contractual Rate Final Maturity Date Carrying Value December 2017 December 2016 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ 18,041 $ 15,801 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,217 — July 21, 2017 LIBOR plus 1.43% January 22, 2029 21,709 — August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,686 — August 17, 2017 LIBOR plus 1.43% April 30, 2030 22,922 — September 14, 2017 LIBOR plus 1.41% April 22, 2030 25,468 — September 14, 2017 EURIBOR plus 2.21% September 14, 2024 19,561 — November 21, 2017 LIBOR plus 1.34% May 15, 2030 26,202 — $ 172,806 $ 15,801 |
Preferred Units
Preferred Units | 12 Months Ended |
Dec. 31, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Units | PREFERRED UNITS Pursuant to a securities purchase agreement, dated September 29, 2016 (the “Purchase Agreement”), certain of the Company’s executive managing directors, including Daniel S. Och (the “EMD Purchasers”), agreed to purchase up to a total of 400,000 Preferred Units for an aggregate amount of up to $400.0 million . On October 5, 2016, the Company completed a $250.0 million issuance and sale of 250,000 Preferred Units. On January 23, 2017, the Company completed an additional $150.0 million issuance and sale of 150,000 Preferred Units. As of December 31, 2017 , 400,000 Preferred Units remained issued and outstanding. Distributions on the Preferred Units are payable on the liquidation preference amount and on a cumulative basis at an initial distribution rate of 0% per annum until February 19, 2020 (the “Step-up Date”), after which the distribution rate will increase in stages thereafter to a maximum of 10% per annum on and after the eighth anniversary of the Step-up Date. Subject to certain exceptions, unless distributions on the Preferred Units are declared and paid in cash for the then current distribution period and all preceding periods after the initial closing, the Oz Operating Partnerships may not declare or pay distributions on or repurchase any of their equity securities that rank equal with or junior to the Preferred Units. Following the occurrence of a change of control event, the Oz Operating Partnerships will redeem the Preferred Units at a redemption price equal to the liquidation preference plus all accumulated but unpaid distributions (collectively, the “liquidation value”). For so long as the Oz Operating Partnerships do not redeem all of the outstanding Preferred Units, the distribution rate will increase by 7% per annum, beginning on the 31 st day following such change in control. The Oz Operating Partnerships will not be required to effect such redemption until the earlier of (i) 91 days after the maturity date of the Revolving Credit Facility and (ii) the payment in full of all loans and other obligations and the termination of all commitments thereunder. The Oz Operating Partnerships may, at their option, redeem the Preferred Units at a price equal to: (i) 105% of the liquidation value until the day immediately prior to the Step-up Date; (ii) 103% of the liquidation value thereafter until the day immediately prior to the first anniversary of the Step-up Date; (iii) 101% of the liquidation value thereafter until the day immediately prior to the second anniversary of the Step-up Date; and (iv) thereafter at a price equal to the liquidation value. In addition, from and after March 31, 2020, if the amounts that were distributed to partners of the Oz Operating Partnerships in respect of their equity interests in the Oz Operating Partnerships (other than amounts distributed in respect of tax distributions or certain other distributions) or utilized for repurchase of units by such entities (or which were available but not used for such purposes) for the immediately preceding fiscal year were in excess of $100 million in the aggregate, then an amount equal to 20% of such excess shall be utilized to redeem Preferred Units on a pro rata basis for an amount equal to the liquidation value. Furthermore, if the average closing price of the Company’s Class A Shares exceeds $15.00 per share for the previous 20 trading days, the Oz Operating Partnerships have agreed to use their reasonable best efforts to redeem all of the outstanding Preferred Units as promptly as practicable. If such event occurs prior to February 19, 2020, the Company has agreed to use its reasonable best efforts to obtain consents from its lenders in order to redeem the Preferred Units as promptly as practicable. Although the Preferred Units do not have voting rights, the consent of the holders’ committee, which initially consists of Daniel S. Och as sole member, is required to effect (i) any amendment to or waiver of the terms of the Preferred Units or (ii) any amendment to the limited partnership agreements of the Oz Operating Partnerships that would have an adverse effect on any holder of the Preferred Units. Under the terms of the Preferred Units, the Oz Operating Partnerships are prohibited from issuing any equity securities (or any debt or other securities convertible into equity securities of such entity) that rank equally with, or senior to, the Preferred Units, without the prior written consent of the holders’ committee. |
Equity-Based Compensation Expen
Equity-Based Compensation Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation Expenses | EQUITY-BASED COMPENSATION EXPENSES The Company grants equity-based compensation in the form of RSUs, Group A Units, Group P Units and Class A Shares to its executive managing directors, employees and the independent members of the Board under the terms of the 2007 Equity Incentive Plan and the 2013 Incentive Plan. The following table presents information regarding the impact of equity-based compensation grants on the Company’s consolidated statements of comprehensive income (loss): Year Ended December 31, 2017 2016 2015 (dollars in thousands) Expense recorded within compensation and benefits $ 84,169 $ 75,217 $ 112,639 Corresponding tax benefit $ 4,720 $ 3,116 $ 9,032 Restricted Share Units (RSUs) An RSU entitles the holder to receive a Class A Share, or cash equal to the fair value of a Class A Share at the election of the Board, upon completion of the requisite service period. All of the RSUs granted to date accrue dividend equivalents equal to the dividend amounts paid on the Company’s Class A Shares. To date, these dividend equivalents have been awarded in the form of additional RSUs that also accrue additional dividend equivalents. As a result, dividend equivalents declared on equity-classified RSUs are recorded similar to a stock dividend, resulting in (i) increases in the Company’s accumulated deficit and the accumulated deficit component of noncontrolling interests on the same pro rata basis as earnings of the Oz Operating Group are allocated and (ii) increases in the Company’s paid-in capital and the paid-in capital component of noncontrolling interests on the same pro rata basis. No compensation expense is recognized related to these dividend equivalents. Delivery of dividend equivalents on outstanding RSUs is contingent upon the vesting of the underlying RSUs. The following table presents information related to the settlement of RSUs: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 13,016 $ 12,675 $ 42,118 Fair value of RSUs settled in cash $ 130 $ — $ 6,074 Fair value of RSUs withheld to satisfy tax withholding obligations $ 7,577 $ 7,960 $ 15,865 Number of RSUs withheld to satisfy tax withholding obligations 2,802,689 2,228,562 2,064,106 The following table presents activity related to the Company’s unvested RSUs for the year ended December 31, 2017 : Equity-Classified Awards Unvested RSUs Weighted-Average Grant-Date Fair Value Beginning of Year 11,367,733 $ 7.05 Granted 14,585,657 $ 3.16 Vested (7,975,255 ) $ 5.29 Canceled or forfeited (3,447,533 ) $ 4.68 End of Year 14,530,602 $ 4.67 The weighted-average grant-date fair value of equity-classified RSUs granted was $3.16 , $4.36 and $10.33 for the years ended December 31, 2017 , 2016 and 2015 , respectively. As of December 31, 2017 , total unrecognized compensation expense related to equity-classified RSUs was approximately $49.1 million with a weighted-average amortization period of 2.1 years. Group A Units The Company recognizes compensation expense for Group A Units equal to the market value of the Company’s Class A Shares at the date of grant, less a 5% discount for transfer restrictions that remain in place after vesting. The following table presents the activity related to unvested Group A Units granted to executive managing directors that are being amortized through compensation and benefits for the year ended December 31, 2017 : Unvested Weighted-Average Grant-Date Fair Value Beginning of Year 9,899,244 $ 9.86 Granted 172,459 $ 2.19 Vested (1,661,040 ) $ 9.53 End of Year 8,410,663 $ 9.77 The weighted-average grant-date fair value of Group A Units granted subsequent to the IPO was $2.19 , $4.12 and $11.69 for the years ended December 31, 2017 , 2016 and 2015 , respectively. As of December 31, 2017 , total unrecognized compensation expense related to these units totaled $67.7 million with a weighted-average amortization period of 4.6 years. Group P Units In March 2017, the Company granted 71.9 million Group P Units (“Incentive Award”), at the average fair value of $1.25 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 35.7% , dividend rate of 10.0% , and risk-free discount rate of 2.2% . The Company used historical volatility in its estimate of the expected volatility. The requisite service period for these Incentive Awards was estimated to be 3.7 years at the time of the grant. As of December 31, 2017 , total unrecognized compensation expense related to these units totaled $68.7 million with a weighted-average amortization period of 2.7 years. There were no additional grants, vests, forfeits or expirations of Group P Units as of December 31, 2017 . A grant of Group P Units will conditionally vest upon the applicable executive managing directors satisfying a service condition (the “Service Condition”) and certain market performance-based targets, expressed as percentages (the “Performance Condition”) being satisfied, as follows: 20% of Units vest upon a Performance Condition of 25% being achieved (i.e., total shareholder return from the contractually determined reference price of $3.21 ); an additional 40% (for a total of 60% ) of Units vest upon a Performance Condition of 50% being achieved; an additional 20% (for a total of 80% ) of Units vest upon a Performance Condition of 75% being achieved; and an additional 20% (for a total of 100% ) of the Units vest upon a Performance Condition of 125% being achieved. Achievement of the applicable Performance Conditions earlier than estimated can materially affect the amount of equity-based compensation expense recognized by the Company in any given period. Executive managing directors will be entitled to receive distributions on their Group P Units only after satisfaction of the Service Condition and the Performance Condition, from which time the executive managing director will be entitled to receive the same distributions per Unit on each Group P Unit as holders of Group A Units and Group D Units. If a holder of an Incentive Award has not satisfied both the Service Condition and the applicable Performance Condition has not been met with respect to the units comprising such Incentive Award by the sixth anniversary of the respective grant date, such units will be forfeited and canceled immediately. Upon satisfaction of the Service Condition and the Performance Condition, Group P Units may be exchanged at the executive managing director’s discretion for Class A Shares (or the cash value thereof, as determined by the Board) provided that sufficient Appreciation (as defined in the Limited Partnership Agreements) has occurred for each Group P Unit to have become economically equivalent to a Group A Unit. Upon the exchange of a Group P Unit for a Class A Share (or the cash equivalent), the exchanging executive managing director will have a right to potential future payments owed to him or her under the tax receivable agreement. Limited Partnership Agreements Amendments Effective March 1, 2017, the Board of Directors approved amendments to the Limited Partnership Agreements of the Oz Operating Partnerships that, in addition to the events discussed above, adjust the measurement thresholds used in determining whether sufficient Appreciation has taken place for Group D Units issued prior to March 1, 2017, to have become economically equivalent to Group A Units. This amendment makes it more likely that outstanding Group D Units will convert to Group A Units. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The TCJA includes a broad range of tax reforms including a reduction in the corporate income tax rate to 21% from 35% effective January 1, 2018. GAAP requires companies to recognize the income tax accounting effects of changes in tax law or rates (including retroactive changes) in the period of enactment. The Company recognized the tax effects of the TCJA during the three months ended December 31, 2017, and recorded $280.8 million in deferred tax expense related solely to the impact of the TCJA. This increase in tax expense is comprised of $190.4 million of deferred tax expense due to the remeasurement of deferred tax assets at the 21% tax rate, and $90.4 million of additional tax expense related to the change in the tax receivable agreement liability as a result of the reduction in the corporate tax rate. As a result of the complexities involved in accounting for the full effect of the TCJA, the SEC permits companies to record provisional amounts in the current year. The Company considers all amounts recorded as a result of the TCJA to be provisional and subject to revision. The Company’s provisional amounts, including the remeasurement of the Company’s deferred income tax assets and related tax receivable agreement liability, are based on reasonable and supportable assumptions as of December 31, 2017. Any such revisions will be treated in accordance with the measurement period guidance allowing for a period of up to one year after the enactment date of the TCJA to finalize the recording of the related tax impacts. The Registrant and each of the Oz Operating Group entities are partnerships for U.S. federal income tax purposes. Due to the Company’s legal structure, only a portion of the income earned by the Company is subject to corporate-level income taxes in the United States and in foreign jurisdictions. The following table presents the components of the Company’s provision for income taxes: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Current: Federal income taxes $ 103 $ 19 $ (151 ) State and local income taxes 2,172 4,885 13,241 Foreign income taxes 2,520 3,746 3,374 4,795 8,650 16,464 Deferred: Federal income taxes 322,162 7,760 40,510 State and local income taxes (9,828 ) (6,131 ) 73,898 Foreign income taxes 430 607 1,352 312,764 2,236 115,760 Total Provision for Income Taxes $ 317,559 $ 10,886 $ 132,224 The foreign income tax provision was calculated on $21.3 million , $(3.6) million and $11.6 million of pre-tax income (loss) generated in foreign jurisdictions for the years ended December 31, 2017 , 2016 and 2015 , respectively. Deferred income tax assets and liabilities represent the tax effects of the temporary differences between the GAAP bases and tax bases of the Company’s assets and liabilities. The following table presents the Company’s deferred income tax assets and liabilities before the impact of offsetting deferred income tax assets and liabilities within the same legal entity and tax jurisdiction: December 31, 2017 December 31, 2016 (dollars in thousands) Deferred Income Tax Assets: Tax goodwill $ 272,636 $ 583,707 Net operating loss 76,100 86,935 Tax credit carryforwards 16,102 20,931 Investments in partnerships 20,440 11,173 Employee compensation 626 780 Other 2,145 227 388,049 703,753 Valuation allowance (12,028 ) (7,955 ) Total Deferred Income Tax Assets $ 376,021 $ 695,798 Total Deferred Income Tax Liabilities $ 1,167 $ 655 The majority of the Company’s deferred income tax assets relate to tax goodwill in the United States that arose in connection with the Company’s IPO and concurrent private Class A Share offering in 2007 (collectively, the “2007 Offerings”), as well as subsequent exchanges of Group A Units for Class A Shares. These deferred income tax assets are derived from goodwill recognized for tax purposes that are subsequently amortized and result in future taxable deductions and cash savings to the Company. The Company entered into a tax receivable agreement to pay a portion of these tax savings to the Company’s executive managing directors and the Ziffs. The tax goodwill amounts presented above include the increases that these tax receivable agreement payments will have on future tax goodwill. See Note 15 for additional information regarding the tax receivable agreement. As of December 31, 2017 , the Company had federal income tax credit carryforwards of approximately $16.1 million , the majority of which will begin to expire in 2018 . As of December 31, 2017 , the Company had $269.0 million of net operating losses available to offset future taxable income for federal income tax purposes that will expire between 2030 and 2037 , and $146.0 million for state and $142.4 million for local income tax purposes that will expire between 2035 and 2037 . The Company has determined that it may not realize certain foreign income tax credits within the limited carryforward period available. Accordingly, a valuation allowance for $12.0 million and $8.0 million as of December 31, 2017 and 2016 , respectively, has been established for these items. The following is a reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate: Year Ended December 31, 2017 2016 2015 Statutory U.S. federal income tax rate 35.00 % 35.00 % 35.00 % Impact of federal tax reform 40.34 % — % — % Income passed through to noncontrolling interests -10.40 % -23.10 % -16.34 % Nondeductible fines and penalties — % -12.78 % — % Income not subject to entity level tax -4.54 % -3.01 % 2.44 % State and local income taxes due to enacted change in tax laws — % — % 23.14 % Other state and local income taxes 4.42 % 0.56 % 4.66 % Changes in tax receivable agreement liability — % — % -6.94 % Foreign income taxes 0.63 % -0.96 % 1.24 % Other, net 1.84 % 0.72 % 0.94 % Effective Income Tax Rate 67.29 % -3.57 % 44.14 % The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The income tax years under examination vary by jurisdiction. In general, the Company is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2014 ; however, certain subsidiaries are no longer subject to income tax examinations for years prior to 2012 for state and local and 2007 for foreign jurisdictions. The Company recognizes tax benefits for amounts that are “more likely than not” to be sustained upon examination by tax authorities. For uncertain tax positions in which the benefit to be realized does not meet the “more likely than not” threshold, the Company establishes a liability, which is included within other liabilities in the consolidated balance sheets. The Company did not accrue interest or penalties related to uncertain tax positions. In 2014, the Company recorded a liability for unrecognized tax benefits of $7.0 million . There was no change to the liability through December 31, 2017 . As of December 31, 2017 , the Company does not believe that there will be a significant change to the uncertain tax positions during the next 12 months. The amount of the Company’s total unrecognized tax benefits that, if recognized, would affect its effective tax rate was $4.5 million as of December 31, 2017 . There are no unremitted earnings with respect to the foreign subsidiaries of the Company due to the flow through nature of these entities. |
General, Administrative and Oth
General, Administrative and Other | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
General, Administrative and Other | GENERAL, ADMINISTRATIVE AND OTHER The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss): Year Ended December 31, 2017 2016 2015 (dollars in thousands) Professional services $ 43,343 $ 74,859 $ 72,969 Occupancy and equipment 33,358 35,998 34,358 Information processing and communications 28,274 34,485 31,971 Recurring placement and related service fees 20,153 38,424 48,702 Insurance 7,609 15,333 16,719 Business development 6,685 13,440 15,707 Other expenses 12,649 21,828 19,565 152,071 234,367 239,991 Settlements expense — 412,101 — Total General, Administrative and Other $ 152,071 $ 646,468 $ 239,991 |
Earnings (Loss) Per Class A Sha
Earnings (Loss) Per Class A Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Class A Share | EARNINGS (LOSS) PER CLASS A SHARE Basic earnings (loss) per Class A Share is computed by dividing the net income (loss) attributable to Class A Shareholders by the weighted-average number of Class A Shares outstanding for the period. For the years ended December 31, 2017 , 2016 and 2015 the Company included 1,103,733 , 1,144,614 and 1,016,694 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted earnings (loss) per Class A Share. The Company did not include the Group P Units in the calculations of dilutive earnings (loss) per Class A Share, as the applicable Performance Condition has not yet been met as of December 31, 2017 . The following tables present the computation of basic and diluted earnings (loss) per Class A Share: Year Ended December 31, 2017 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ 18,222 186,423,793 $ 0.10 Effect of dilutive securities: Group A Units — — 272,301,466 RSUs — 757,967 — Diluted $ 18,222 187,181,760 $ 0.10 Year Ended December 31, 2016 Net Loss Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Loss Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ (130,762 ) 182,670,173 $ (0.72 ) Effect of dilutive securities: Group A Units (219,109 ) 297,317,095 — RSUs — — 14,343,302 Diluted $ (349,871 ) 479,987,268 $ (0.73 ) Year Ended December 31, 2015 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ 25,740 177,935,977 $ 0.14 Effect of dilutive securities: Group A Units — — 301,064,047 RSUs — 2,957,970 — Diluted $ 25,740 180,893,947 $ 0.14 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Due from Related Parties Amounts due from related parties relate primarily to amounts due from the funds for expenses paid on their behalf. These amounts are reimbursed to the Company on an ongoing basis. Due to Related Parties Amounts due to related parties relate primarily to future payments owed to the Company’s executive managing directors under the tax receivable agreement, as discussed further in Note 15 . The Company made no made no payments under the tax receivable agreement in the years ended December 31, 2017 and 2016 , and payment totaling $53.5 million were made in the year ended December 31, 2015 . The Company earns substantially all of its management fees and incentive income from the funds, which are considered related parties as the Company manages the operations of and makes investment decisions for these funds. Management Fees and Incentive Income Earned from Related Parties and Waived Fees As of December 31, 2017 and 2016 , respectively, approximately $2.8 billion and $2.7 billion , of the Company’s assets under management represented investments by the Company, its executive managing directors, employees and certain other related parties in the Company’s funds. As of December 31, 2017 and 2016 , approximately 71% and 51% , respectively, of these affiliated assets under management were not charged management fees and were not subject to an incentive income calculation. The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 10,574 $ 18,243 $ 20,297 Incentive income $ 14,052 $ 12,266 $ 3,819 Corporate Aircraft The Company’s corporate aircraft were sold in the first half of 2017. Until that time, they were used primarily for business purposes. Prior to the sale of the aircraft, from time to time, certain executive managing directors used the aircraft for personal use. For the years ended December 31, 2017 , 2016 and 2015 the Company charged $360 thousand , $744 thousand and $1.2 million , respectively, for personal use of the aircraft by certain executive managing directors. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Tax Receivable Agreement The purchase of Group A Units from the executive managing directors and the Ziffs with the proceeds from the 2007 Offerings, and subsequent taxable exchanges by them of Partner Equity Units for Class A Shares on a one-for-one basis (or, at the Company’s option, a cash equivalent), resulted, and, in the case of future exchanges, are anticipated to result, in an increase in the tax basis of the tangible and intangible assets of the Oz Operating Group that would not otherwise have been available. As a result, the Company expects that its future tax liability will be reduced. Pursuant to the tax receivable agreement entered into among the Company, the executive managing directors and the Ziffs, the Company has agreed to pay to the executive managing directors and the Ziffs 85% of the amount of tax savings, if any, actually realized by the Company. The Company recorded its initial estimate of future payments under the tax receivable agreement as a decrease to paid-in capital and an increase in amounts due to related parties in the consolidated financial statements. Subsequent adjustments to the liability for future payments under the tax receivable agreement related to changes in estimated future tax rates or state income tax apportionment are recognized through current period earnings in the consolidated statements of comprehensive income (loss). In connection with the departure of certain former executive managing directors since the IPO, the right to receive payments under the tax receivable agreement by those former executive managing directors was contributed to the Oz Operating Group. As a result, the Company expects to pay to the remaining executive managing directors and the Ziffs approximately 78% (from 85% at the time of the IPO) of the amount of cash savings, if any, in federal, state and local income taxes in the United States that the Company actually realizes as a result of the increases in tax basis. The estimate of the timing and the amount of future payments under the tax receivable agreement involves several assumptions that do not account for the significant uncertainties associated with these potential payments, including an assumption that Oz Corp will have sufficient taxable income in the relevant tax years to utilize the tax benefits that would give rise to an obligation to make payments. The actual timing and amount of any actual payments under the tax receivable agreement will vary based upon these and a number of other factors. As of December 31, 2017 , the estimated future payment under the tax receivable agreement was $280.0 million , which is recorded in due to related parties on the consolidated balance sheets. In 2017, the Company reduced its tax receivable agreement liability due to the decrease in future U.S. Federal corporate income tax rates pursuant to the TCJA. See Note 11 . In September 2016, the Company amended the tax receivable agreement to provide that no amounts will be due or payable under the agreement with respect to the 2015 and 2016 taxable years. As a result, the Company released $72.6 million of previously accrued tax receivable agreement liability, which reduced its deferred income tax assets by $33.4 million . The net impact of $39.2 million was recognized as an increase to shareholders’ equity in 2016. As a result of finalizing the 2016 tax returns in 2017, the Company released an additional $18.0 million of previously accrued tax receivable agreement liability, which reduced its deferred income tax assets by $7.5 million . The net impact of $10.5 million was recognized as an increase to shareholders’ equity in 2017. The table below presents the maximum amounts that would be payable under the tax receivable agreement assuming that the Company will have sufficient taxable income each year to fully realize the expected tax savings. In light of the numerous factors affecting the Company’s obligation to make such payments, the timing and amounts of any such actual payments may differ materially from those presented in the table. The impact of any net operating losses is included in the “Thereafter” amount in the table below. Potential Payments Under Tax Receivable Agreement (dollars in thousands) 2018 $ 43,211 2019 29,254 2020 28,980 2021 29,619 2022 30,871 Thereafter 118,055 Total Payments $ 279,990 Lease Obligations The Company has non-cancelable operating leases for its headquarters in New York expiring in 2029 and various other operating leases for its offices in London, Hong Kong, Mumbai, Beijing, Shanghai, Houston and other locations, expiring on various dates through 2024 . The Company recognizes expense related to its operating leases on a straight-line basis over the lease term taking into account any rent holiday periods. The following table presents minimum operating lease payments as of December 31, 2017 . Future minimum lease payments for capital leases were not material as of December 31, 2017 . Operating Leases (dollars in thousands) 2018 $ 21,241 2019 17,466 2020 20,234 2021 20,045 2022 19,989 Thereafter 116,835 Total Payments $ 215,810 For the years ended December 31, 2017 , 2016 and 2015 , the Company recorded rent expense on a straight-line basis of $17.8 million , $22.5 million , and $22.1 million , respectively, within general, administrative and other expenses in the consolidated statements of comprehensive income (loss). Litigation From time to time, the Company is involved in litigation and claims incidental to the conduct of the Company’s business. The Company is also subject to extensive scrutiny by regulatory agencies globally that have, or may in the future have, regulatory authority over the Company and its business activities. This has resulted, or may in the future result, in regulatory agency investigations, litigation and subpoenas and costs related to each. On May 5, 2014, a purported class of shareholders filed a lawsuit against the Company in the U.S. District Court for the Southern District of New York ( Menaldi v. Och-Ziff Capital Mgmt., et al. ). The amended complaint asserted claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from February 9, 2012 to August 22, 2014. Daniel Och, Joel Frank and Michael Cohen were also named as defendants. On March 16, 2015, all defendants moved to dismiss the amended complaint. On February 17, 2016, the court entered an order granting in part the motion to dismiss filed by the Company and Messrs. Och and Frank and dismissing Mr. Cohen from the action. On March 23, 2016, the Company and Messrs. Och and Frank filed their answer to the amended complaint. On November 18, 2016, plaintiffs filed a second amended complaint asserting claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from November 18, 2011 to April 11, 2016. The second amended complaint alleges, among other things, breaches of certain disclosure obligations with respect to matters that were under investigation by the SEC and the DOJ, and names the Company and Messrs. Och, Frank and Cohen as defendants. On November 23, 2016, Mr. Cohen objected to being named as a defendant in the second amended complaint on procedural grounds. On December 21, 2016, the court directed the plaintiffs to file a motion for permission to renew their claims against Mr. Cohen. Plaintiffs filed their motion on January 7, 2017. On January 11, 2017, the Company filed a motion to dismiss those portions of the second amended complaint that seek to revive dismissed claims or assert new claims against it, and Messrs. Och and Frank filed motions to dismiss as well. On September 29, 2017, the Court granted the Company’s motion to dismiss in its entirety and dismissed Plaintiffs’ revived claims and new claims against the Company and Messrs. Och and Frank. The Court also dismissed Mr. Cohen from the case entirely and denied Plaintiffs’ request to file a further amended complaint. The Company believes the pending case is without merit and intends to defend it vigorously. The Company is unable to reasonably estimate the amount of loss or range of loss possible for this case. In addition, in U.S. v. Oz Africa Management GP, LLC , Cr. No. 16-515 (NGG) (EDNY), certain former shareholders of a Canadian mining company filed a letter with the court stating they plan to seek restitution at the sentencing hearing for Oz Africa Management GP, LLC. The Company believes the threatened claim is without merit and intends to defend it vigorously. Unearned Incentive Income The Company receives incentive income distributions from certain funds that are subject to clawback in the event of future losses in the respective fund. The Company recognizes this incentive income when it is no longer subject to clawback. These clawback contingencies will be resolved as remaining investments in the respective funds are realized, the timing of which is uncertain. The following table presents the activity in the Company’s unearned incentive income liability: Year Ended December 31, 2017 2016 (dollars in thousands) Beginning of Year $ 96,079 $ — Deconsolidation of funds on adoption of ASU 2015-02 — 81,972 Incentive income collected but subject to clawback 53,915 22,557 Incentive income recognized (6,284 ) (8,450 ) End of Year $ 143,710 $ 96,079 Investment Commitments From time to time, certain funds consolidated by the Company may have commitments to fund investments. These commitments are funded through contributions from investors in those funds, including the Company if it is an investor in the relevant fund. The Company has unfunded capital commitments of $30.7 million to certain funds it manages. It expects to fund these commitments over the next three years. In addition, certain related parties of the Company, collectively, have unfunded capital commitments to funds managed by the Company of up to $46.8 million . The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company’s executive managing directors individually. Other Contingencies The Company may purchase an asset and make an additional payment in order to resolve a potential commercial dispute. The Company has not accrued any liability in connection with the dispute and estimates that the possible loss may range from zero to $25.0 million . In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company’s operating segments are the Oz Funds segment and the Company’s real estate business. The Oz Funds segment, which provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles, is currently the Company’s only reportable operating segment under GAAP. The Company’s real estate business, which provides asset management services to its real estate funds, is included in the Other Operations, as it does not meet the threshold of a reportable operating segment under GAAP. In addition to analyzing the Company’s results on a GAAP basis, management also reviews its results on an “Economic Income” basis. Economic Income excludes the adjustments described below that are required for presentation of the Company’s results on a GAAP basis, but that management does not consider when evaluating operating performance in any given period. Management uses Economic Income as the basis on which it evaluates the Company’s financial performance and makes resource allocation and other operating decisions. Management considers it important that investors review the same operating information that it uses. Economic Income is a measure of pre-tax operating performance that excludes the following from the Company’s results on a GAAP basis: • Income allocations to the Company’s executive managing directors on their direct interests in the Oz Operating Group. Management reviews operating performance at the Oz Operating Group level, where the Company’s operations are performed, prior to making any income allocations. • Equity-based compensation expenses, depreciation and amortization expenses, changes in the tax receivable agreement liability, gains and losses on fixed assets and investments in funds, and reorganization expenses related to the IPO, as management does not consider these items to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement. • Amounts related to the consolidated funds, including the related eliminations of management fees and incentive income, as management reviews the total amount of management fees and incentive income earned in relation to total assets under management and fund performance. In addition, expenses related to incentive income profit-sharing arrangements are generally recognized at the same time the related incentive income revenue is recognized, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Further, deferred cash compensation is expensed in full in the year granted for Economic Income, rather than over the service period for GAAP. Finally, management reviews Economic Income revenues by presenting management fees net of recurring placement and related service fees, rather than considering these fees an expense, and by excluding the impact of eliminations related to the consolidated funds. Management does not regularly review assets by operating segment in assessing operating segment performance and the allocation of company resources; therefore, the Company does not present total assets by operating segment. Substantially all interest income and all interest expense related to outstanding indebtedness is allocated to the Oz Funds segment. The Company’s investigation-related settlements were all allocated to the Oz Funds segment. Oz Funds Segment Results Year Ended December 31, 2017 2016 2015 (dollars in thousands) Oz Funds Segment: Economic Income Revenues $ 805,634 $ 700,950 $ 821,905 Economic Income $ 332,603 $ (217,006 ) $ 340,157 Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues Year Ended December 31, 2017 2016 2015 (dollars in thousands) Total consolidated revenues $ 858,337 $ 770,364 $ 1,322,981 Adjustment to management fees (1) (20,151 ) (38,424 ) (1,804 ) Adjustment to incentive income (2) — — 17,449 Adjustment to other revenues (3) (1,097 ) — — Other Operations revenues (27,353 ) (29,228 ) (27,371 ) Income of consolidated funds (4,102 ) (1,762 ) (489,350 ) Economic Income Revenues - Oz Funds Segment $ 805,634 $ 700,950 $ 821,905 _______________ (1) Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. (2) Adjustment to exclude the impact of eliminations related to the consolidated funds. (3) Adjustment to exclude realized gains on sale of fixed assets. Reconciliation of Oz Funds Segment Economic Income to Net Income (Loss) Attributable to Class A Shareholders Year Ended December 31, 2017 2016 2015 (dollars in thousands) Net Income (Loss) Attributable to Class A Shareholders—GAAP $ 18,222 $ (130,762 ) $ 25,740 Change in redemption value of Preferred Units 2,853 6,082 — Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP $ 21,075 $ (124,680 ) $ 25,740 Net income (loss) attributable to Group A Units 130,730 (195,087 ) 136,449 Equity-based compensation, net of RSUs settled in cash 84,039 75,217 106,565 Adjustment to recognize deferred cash compensation in the period of grant (28,893 ) (1,851 ) — Income taxes 317,559 10,886 132,224 Adjustment for incentive income allocations from consolidated funds subject to clawback — — (45,077 ) Allocations to Group D Units 6,674 — 12,675 Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance 22,967 6,752 8,612 Reorganization expenses — — 14,064 Changes in tax receivable agreement liability (222,859 ) 1,663 (55,852 ) Depreciation, amortization and net gains and losses on fixed assets 10,334 19,882 11,331 Other adjustments (3,891 ) (4,357 ) (1,515 ) Other Operations (5,132 ) (5,431 ) (5,059 ) Economic Income - Oz Funds Segment $ 332,603 $ (217,006 ) $ 340,157 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Dividend On February 16, 2018 , the Company announced a cash dividend of $0.07 per Class A Share. The dividend is payable on March 5, 2018 , to holders of record as of the close of business on February 26, 2018 . Shares and Units Transactions Subsequent to December 31, 2017 and through the date of this filing, the Company has had various compensation and other related transactions, resulting in the following number of units and shares outstanding: Number Outstanding Class A Shares 190,781,536 Group A Units 261,489,478 Group P Units 42,850,000 Group D Units 35,233,213 RSUs 52,934,167 PSUs 10,000,000 See Notes 1, 2 and 10 for additional information regarding the Company’s Class A Shares, Group A Units, Group D Units, Group P Units and RSUs. Beginning in 2018, the Company began issuing PSUs. The PSUs granted to-date vest subject to continued and uninterrupted service (“PSU Service Condition”) until the third anniversary of the grant date and the meeting of a performance threshold of the total shareholder return on Class A Shares of the Company (“PSU Performance Condition”). The PSU Performance Condition is defined as follows: 20% of PSUs vest if a total shareholder return of 25% is achieved; an additional 40% of PSUs vest if a total shareholder return of 50% is achieved; an additional 20% of PSUs vest if a total shareholder return of 75% is achieved; and the final 20% of PSUs vest if a total shareholder return of 125% is achieved. In each case, the PSU Performance Condition must be met for each threshold by the six th anniversary of the grant date. If the PSU grant has not satisfied both the PSU Service Condition and the PSU Performance Condition by the sixth anniversary of the grant date, it will be forfeited and canceled immediately. Investments in CLOs and CLO Investments Loans Subsequent to December 31, 2017 and through the date of this filing, the Company made additional investments in notes of CLOs it manages of $74.8 million , these investments were in part financed by borrowings of $61.8 million . The loans are subject to customary events of default and covenants, and include terms that require the Company’s continued involvement with the CLOs. The CLO Investments Loans do not have any financial maintenance covenants. See Note 8 for additional information regarding CLO Investments Loans. |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements of the Company. The most critical of these estimates are related to (i) fair value measurements of the assets and liabilities of the funds, which impacts the Company’s management fees and incentive income; (ii) the accounting treatment for variable interest entities; and (iii) the estimate of future taxable income, which impacts the carrying amount of the Company’s deferred income tax assets. While management believes that the estimates utilized in preparing the consolidated financial statements are reasonable and prudent, actual results could differ materially from those estimates. |
Reclassifications | Reclassifications The Company has reclassified the changes in tax receivable agreement liability from general, administrative and other expenses to other income (loss) in the consolidated statements of comprehensive income (loss). The Company also reclassified its investments in funds, joint ventures and United States government obligations from other assets, net to investments in the Company’s consolidated balance sheets. In addition, the Company reclassified unearned incentive from other liabilities to a stand-alone line item in the Company’s consolidated balance sheets, which had a corresponding reclassification in the consolidated statements of cash flows. These reclassifications had no impact on the Company’s financial position or results of operations, and prior period amounts have been reclassified to conform to the current year presentation. |
Foreign Currency | Foreign Currency The functional currency of substantially all of the Company’s consolidated subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars at the closing rates of exchange on the balance sheet date. Gains and losses on transactions denominated in foreign currencies due to changes in exchange rates are recorded as other expenses within general, administrative and other in the consolidated statements of comprehensive income (loss). |
Consolidation | Consolidation Policies The Company adopted Accounting Standards Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis as of January 1, 2016 using the modified retrospective method of transition, which resulted in a cumulative effect adjustment to opening equity on the date of adoption. The Company did not restate prior-period results. The impact to the Company’s opening retained earnings in 2016 was driven by the cumulative effect of a change in incentive income recognition for the funds no longer consolidated, net of deferred income tax effects. Incentive income from funds not consolidated is generally recognized at the end of the applicable commitment period when the amounts are contractually payable and when no longer subject to clawback. Prior to deconsolidation, incentive income from these previously consolidated funds was recognized by allocating a portion of the net income of these funds to the Company rather than to the fund investors (noncontrolling interests) based on the contractual terms of the relevant fund agreements. This resulted in incentive income being allocated to the Company that was subject to clawback in the event of future losses in the respective funds. The deconsolidation of the majority of the Company’s previously consolidated funds resulted in a substantial decrease in assets of consolidated funds, liabilities of consolidated funds, redeemable noncontrolling interests, appropriated retained deficit and shareholders’ equity attributable to noncontrolling interests in the Company’s consolidated balance sheet. Additionally, the deconsolidation has caused a significant decrease in the amount of income of consolidated funds, expenses of consolidated funds, and net gains of consolidated funds in the Company’s consolidated statements of comprehensive income (loss). The Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds are generally organized using a “master-feeder” structure. Fund investors, including the Company’s executive managing directors, employees and other related parties, to the extent they invest in a given fund, generally invest directly into the feeder funds. These feeder funds are typically limited partnerships or limited companies that hold direct or indirect interests in a master fund. The master fund, together with its subsidiaries, is the primary investment vehicle for its feeder funds. The Company generally collects its management fees and incentive income from the feeder funds or subsidiaries of the feeder funds (“intermediate funds”), and generally does not collect any management fees or incentive income directly from the master funds. The Company also organizes certain funds (e.g., its real estate funds and closed-end opportunistic credit funds) without the use of a master-feeder structure. These are typically organized as limited partnerships, in which the Company is the general partner and collects management fees and incentive income directly from these entities; however, in the case of the real estate funds, the Company collects management fees directly from those funds’ investors. Finally, CLOs are collateralized financing vehicles that issue notes to investors and use those proceeds to acquire various types of credit-related investments that serve as collateral for the notes. Senior notes issued by these vehicles make periodic payments based on a stated interest rate, while the most subordinated notes have no stated interest rate but receive periodic payments from excess cash flows remaining after periodic payments have been made to the other notes and for fees and expenses due. The Company generally directs the activities of its funds through its role as general partner or as the investment manager or CLO collateral manager with decision-making rights. The consolidated financial statements include the accounts of the Registrant and entities in which it, directly or indirectly, is determined to have a controlling financial interest under the following set of guidelines: • Variable Interest Entities (“VIEs”)— The Company determines whether, if by design, an entity has any of the following characteristics: (i) equity investors who lack the characteristics of a controlling financial interest; (ii) the entity does not have sufficient equity at risk to finance its expected activities without additional subordinated financial support from other parties; or (iii) substantially all of the activities of the entity are performed on behalf of a party with disproportionately few voting rights. An entity with any one of these characteristics is a VIE. Partnerships, and similarly structured entities, will be considered as VIEs where a simple majority of third party investors with equity at risk are not able to exercise substantive kick-out or participating rights over the general partner. • Voting Interest Entities (“VOEs”)— Where an entity does not have the characteristics of a VIE, it will be a VOE. The determination of whether a fund is a VIE or a VOE is based on the facts and circumstances for each individual fund in accordance with the guidelines described below. Classification of such entities is reassessed where there is a substantive change in the governing documents or contractual arrangements of the entity, to the capital structure of the entity or in the activities of the entity. The Company continuously reassesses whether it should consolidate a VIE or VOE. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Under ASU 2015-02, beginning in 2016, fee arrangements are no longer considered variable interests when they are commensurate with the level of effort required to provide services and include only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length, and where the Company does not hold other interests in the entity that would absorb more than an insignificant amount of the variability of the entity. Where the Company does not have a variable interest in the entity, it will not consolidate the entity. Where the Company has a variable interest, it is required to determine whether the entity will be considered as a VIE or VOE, the classification of which will determine the analysis that the Company is required to perform when determining whether it should consolidate the entity. Funds that are VIEs Funds that are VIEs are generally VIEs because fund investors are deemed to lack the characteristics of a controlling financial interest or the entity does not have sufficient equity at risk. The party identified as the primary beneficiary of a VIE is required to consolidate the entity. The Company is the primary beneficiary of a VIE where it has a controlling financial interest in the entity, which is defined as (i) the power to direct the activities of the entity that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Where the Company does not have a controlling financial interest, but is part of a related party group under common control that collectively has characteristics of a controlling financial interest, the Company may be required to determine which party within the related party group is more closely associated with the VIE and would therefore consolidate a VIE. This assessment would also be performed where power is shared within a related party group that collectively has characteristics of a controlling financial interest. The types of funds that are VIEs and not consolidated are generally (i) master funds and intermediate fund vehicles for the Company’s multi-strategy funds, as well as opportunistic credit, real estate and certain other fund vehicles, as third party investors in these entities have not been granted substantive removal rights; and (ii) CLOs, as they lack sufficient equity at risk to finance their expected activities without additional subordinated financial support from other parties. The Company does not consolidate VIEs where it does not have a controlling financial interest. The types of funds that are VIEs consolidated by the Company are certain new funds that the Company has seeded and generally expects to deconsolidate when the fund has a certain level of additional third party capital. For the purposes of determining whether it is the primary beneficiary of a fund that is a VIE, the Company considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. Funds that are VOEs Funds that are corporations, or similarly structured entities that are not VIEs, would be consolidated by the Company where the Company has an equity investment of greater than 50% and has control over significant operating, financial and investing decisions of the entity. The Company will generally not consolidate partnerships, or similarly structured entities that are not VIEs, where a single investor or simple majority of third party investors with equity have the ability to exercise substantive kick-out or participating rights over the entity. The types of funds that are VOEs and not consolidated by the Company are generally feeder funds of the Company’s multi-strategy funds, as third party fund investors in these entities have been granted substantive removal rights. The Company does not currently consolidate any funds that are VOEs. |
Allocations of Oz Operating Group Earnings and Capital | Allocations of Oz Operating Group Earnings and Capital The Company consolidates the Oz Operating Group. Earnings of the Oz Operating Group are allocated on a pro rata basis between the Group A Units, which interests are reflected within net income (loss) attributable to noncontrolling interests, and Group B Units, which interests are reflected within net income (loss) attributable to Och-Ziff Capital Management Group LLC, in the consolidated statements of comprehensive income (loss). Paid-in capital of the Oz Operating Group is also allocated pro rata between the Group A Units, which interests are reflected within noncontrolling interests, and Group B Units, which interests are reflected within the Company’s paid-in capital, in the consolidated balance sheets. As of December 31, 2017 , Group P Units are not participating in the earnings of the Oz Operating Group, as certain service and performance conditions, as described in Note 10 , have not been met as of the reporting period end. See Note 3 for additional information regarding the Company’s interest in the Oz Operating Group. |
Noncontrolling Interests and Appropriated Retained Earnings (Deficit) | Noncontrolling Interests and Appropriated Retained Earnings (Deficit) The Group A Units represent interests in the Oz Operating Group not held by the Company, and amounts attributable to these units are presented as noncontrolling interests in the consolidated balance sheets. Prior to the adoption of ASU 2015-02, the Company consolidated certain funds in which it held a controlling financial interest and in which fund investors were not able to redeem their interests until the funds liquidated or is otherwise wound-up. Ownership interests in these consolidated funds that are not held by the Company were also presented as noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests are reflected within net income (loss) attributable to noncontrolling interests in the consolidated statements of comprehensive income (loss). Additionally, the Company consolidates certain credit funds that it manages, wherein investors are able to redeem their interests after an initial lock-up period of up to three years. Amounts relating to these fund investors’ interests in these funds are presented as redeemable noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests are presented as net income (loss) attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss). The Company also consolidated the CLOs it managed prior to adoption of ASU 2015-02. The Company elected the fair value option for the notes and loans payable of the consolidated CLOs upon the initial consolidation of each CLO. The recognition of the initial difference between the fair value of assets and liabilities of consolidated CLOs was treated as an adjustment to appropriated retained earnings (deficit). Net changes in the fair value of consolidated CLO assets and liabilities and related income and expenses were allocated to noncontrolling interests in the statements of comprehensive income (loss). These allocations are then reclassified from noncontrolling interests to appropriated retained earnings (deficit) in the consolidated balance sheets. Such amounts were reclassified, as the holders of each CLO’s beneficial interests, as opposed to the Company, received the benefits or absorbed the losses of the CLO’s assets. See Note 3 for additional information regarding noncontrolling interests. |
Preferred Units | Preferred Units The Company reports Preferred Units as redeemable noncontrolling interests, outside of permanent equity on the Company’s consolidated balance sheet, as the redemption of the Preferred Units may be effected in a manner not solely in control of the Company. The Company recorded the proceeds from the issuance and sale net of transactions costs. As the redemption of the Preferred Units is outside of the control of the Company, the carrying value of the Preferred Units is their current full redemption value. The change in redemption value was treated as a reduction of the common equity holders’ interests in the Oz Operating Group. The pro rata share of the change in redemption value that was allocable to the Registrant was treated as a reduction of net income (loss) attributable to Class A Shareholder when calculating earnings (loss) per Class A Share. See Note 9 for additional information on the Preferred Units. |
Revenue Recognition, Management Fees and Incentive Income | Revenue Recognition Policies The Company has two principal sources of revenues: management fees and incentive income. These revenues are derived from the Company’s agreements with the funds. The agreements are generally automatically renewed on an annual basis unless the agreements are terminated by the general partner or directors of the respective funds. Certain investments held by employees, executive managing directors and other related parties in the funds are not subject to management fees or incentive income charges. See Note 14 for additional information regarding these waived fees. Management Fees Management fees for the Company’s multi-strategy funds typically range from 0.97% to 2.50% annually of assets under management based on the net asset value of these funds. For the Company’s opportunistic credit funds, management fees typically range from 0.75% to 1.75% based on the net asset value of these funds. Management fees for the Company’s CLOs within Institutional Credit Strategies are generally range from 0.43% to 0.50% based on the par value of the collateral and cash held in the CLOs. Management fees for the Company’s real estate funds typically range from 0.75% to 1.50% annually based on the amount of capital committed or invested during the investment period, and on the amount of invested capital after the investment period. Management fees are recognized over the period during which the related services are performed. Management fees are generally calculated and paid to the Company on a quarterly basis in advance, based on the amount of assets under management at the beginning of the quarter. Management fees are prorated for capital inflows and redemptions during the quarter. Accordingly, changes in the Company’s management fee revenues from quarter to quarter are driven by changes in the quarterly opening balances of assets under management, the relative magnitude and timing of inflows and redemptions during the respective quarter, as well as the impact of differing management fee rates charged on those inflows and redemptions. Incentive Income The Company earns incentive income based on the cumulative performance of the funds over a commitment period. Incentive income is typically equal to 20% of the realized and unrealized profits, net of management fees, attributable to each fund investor in the Company’s multi-strategy funds, open-end opportunistic credit funds and certain other funds, but it excludes unrealized gains and losses attributable to investments that the Company, as investment manager, believes lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance (“Special Investments”). For the Company’s closed-end opportunistic credit funds, real estate funds and certain other funds, incentive income is typically equal to 20% of the realized profits, net of management fees, attributable to each fund investor. For CLOs, incentive income is typically 20% of the excess cash flows available to the holders of the subordinated notes. The Company’s ability to earn incentive income from some of its funds may be impacted by hurdle rates as further discussed below. Incentive income is generally recognized at the end of the applicable commitment period when the amounts are contractually payable, or “crystallized,” and when no longer subject to clawback. Additionally, all of the Company’s multi-strategy funds and open-end opportunistic credit funds are subject to a perpetual loss carry forward, or perpetual “high-water mark,” meaning the Company will not be able to earn incentive income with respect to positive investment performance it generates for a fund investor in any year following negative investment performance until that loss is recouped, at which point a fund investor’s investment surpasses the high-water mark. The Company earns incentive income on any net profits in excess of the high-water mark. The commitment period for most of the Company’s multi-strategy assets under management is for a period of one year on a calendar-year basis, and therefore it generally crystallizes incentive income annually on December 31. The Company may also recognize incentive income related to fund investor redemptions at other times during the year, as well as on assets under management subject to commitment periods that are longer than one year. The Company may also recognize incentive income for tax distributions related to these assets. Tax distributions are amounts distributed to the Company to cover tax liabilities related to incentive income that has been accrued at the fund level but will not be recognized by the Company until the end of the relevant commitment period (if at all). These tax distributions are not subject to clawback once distributed to the Company. Approximately $17.4 billion , or 54% , of the Company’s assets under management as of December 31, 2017 were subject to initial commitment periods of three years or longer. These assets under management include assets subject to three-year commitment periods in the Oz Master Fund and other multi-strategy funds, as well as assets in the Company’s opportunistic credit funds, CLOs, real estate funds and certain other funds. Incentive income related to these assets is based on the cumulative investment performance over a specified commitment period (in the case of CLOs, based on the excess cash flows available to the holders of the subordinated notes), and is not earned until it is no longer subject to repayment to the respective fund. The Company’s ability to earn incentive income on these longer-term assets is also subject to hurdle rates whereby the Company does not earn any incentive income until the investment returns exceed an agreed upon benchmark. For a portion of these assets subject to hurdle rates, once the investment performance has exceeded the hurdle rate, the Company may receive a preferential “catch-up” allocation, resulting in a potential recognition to the Company of a full 20% of the net profits attributable to investors in these assets. |
Other Revenues | Other Revenues Other revenues consist primarily of interest income on investments in CLOs and cash and cash equivalents. Interest income is recognized on an effective yield basis. Additionally, prior to the sale of the Company’s aircraft in the first half of 2017, revenue related to non-business use of the corporate aircraft by certain executive managing directors was also included within other revenues. Revenues earned from non-business use of the corporate aircraft were recognized on an accrual basis based on actual flight hours. See Note 14 for additional information regarding non-business use of the corporate aircraft. |
Compensation and Benefits | Compensation and Benefits Compensation and benefits is comprised of salaries, benefits, payroll taxes, and discretionary and guaranteed cash bonus expense. The Company generally recognizes compensation and benefits expenses over the related service period. Bonus Compensation On an annual basis, compensation and benefits comprise a significant portion of total expenses, with discretionary cash bonuses generally comprising a significant portion of total compensation and benefits. The Company accrues minimum annual discretionary cash bonus on a straight-line basis during the year. Prior to 2017, annual discretionary bonuses were generally determined and expensed in the fourth quarter of each year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year. Equity-Based Compensation Compensation expense related to equity-classified share-based payments related to RSUs and Group A Units, is based on the grant-date fair value and recognized on a straight-line basis over the requisite service period for awards with both cliff vesting and graded vesting. The Company accounts for forfeitures on share-based compensation arrangements as they occur. Additionally, the Company recognizes all income tax effects of awards within consolidated and comprehensive net income when the awards vest or are settled. For liability-classified share-based payments, the Company recognizes compensation expense over the requisite service period adjusted to the fair value as of the end of the reporting period. Compensation expense related to equity-classified share-based payments related to Group P Units, which include both a service and a market condition, is based on the estimated fair value of the awards at the date of grant, using graded vesting, which separately considers each requisite service period for each tranche. See Note 10 for additional information on the Company’s equity-based compensation plans. Group D Units The Group D Units are not considered equity under GAAP, and therefore no equity-based compensation expense is recognized related to these units when they are granted. Distributions to holders of Group D Units are included within compensation and benefits in the consolidated statements of comprehensive income (loss). These distributions are accrued in the quarter in which the related income was earned and are paid out the following quarter at the same time distributions on the Group A Units and dividends on the Company’s Class A Shares are paid. A Group D Unit converts into a Group A Unit to the extent the Company determines that it has become economically equivalent to a Group A Unit. Upon the conversion of Group D Units into Group A Units, we recognize a one-time charge for the grant-date fair value of the vested units and begin to amortize the grant-date fair value of the unvested units over the vesting period. Profit Sharing Arrangements The Company also has profit-sharing arrangements whereby certain employees and executive managing directors are entitled to a share of incentive income distributed by certain funds. This incentive income is typically paid to the Company and a portion paid to the participant as investments held by these funds are realized. The Company defers the recognition of any portion of this incentive income to the extent it is subject to clawback (see “—Incentive Income” above). To the extent that the payments to the employees and executive managing directors are probable and reasonably estimable, the Company accrues these payments as compensation expense for GAAP purposes, which may occur prior to the recognition of the related incentive income. Deferred Cash Interests (DCIs) DCIs are granted to certain employees and executive managing directors as a form of compensation. DCIs reflect notional fund investments made by the Company on behalf of an employee or executive managing director. DCIs generally vest over a three year period, subject to an employee’s or executive managing director’s continued service. Upon vesting, the Company pays the employee or executive managing director an amount in cash equal to the notional investment represented by the DCIs, as adjusted for notional fund performance. Except as otherwise provided in the relevant deferred cash interest plan or in an award agreement, in the event of a termination of the employee’s or executive managing director’s service, any portion of the DCIs that are unvested as of the date of termination will be forfeited. The Company recognizes the total notional investment, as adjusted for notional fund performance, over the related service period. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities resulting from temporary differences between the GAAP and tax bases of assets and liabilities are measured at the balance sheet date using enacted income tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The Company offsets deferred income tax assets and liabilities for presentation in its consolidated balance sheets when such assets and liabilities are within the same legal entity and related to the same taxing jurisdiction. The realization of deferred income tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the enacted tax law in the applicable tax jurisdiction. A valuation allowance is established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether a valuation allowance should be established, as well as the amount of such allowance. On December 22, 2017, the Tax Cuts and Jobs Act (“the TCJA”) was signed into law. The TCJA includes a broad range of tax reforms including a reduction in the corporate income tax rate to 21% from 35%, effective January 1, 2018. GAAP requires companies to recognize the income tax accounting effects of changes in tax law or rates (including retroactive changes) in the period of enactment . Future events such as changes in tax legislation could have an impact on the provision for income taxes and the effective income tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The Company records interest and penalties related to income taxes within income taxes in the consolidated statements of comprehensive income (loss). |
Reorganization Expenses | Reorganization Expenses Prior to the Company’s 2007 initial public offering (“IPO”), the Company completed a reorganization of its business (the “Reorganization”). As part of the Reorganization, Mr. Och’s equity interests, the other executive managing directors’ non-equity interests and the Ziffs’ profit sharing interests were reclassified as Group A Units. The reclassification was accounted for as share-based payments. These units, which were amortized through Reorganization expenses in the consolidated statements of comprehensive income (loss), generally vested over the five-year period beginning on the date of the IPO, with a small number of units vesting through 2015. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly-rated liquid investments that have an original maturity of three months or less from the date of purchase to be cash equivalents. Cash equivalents are recorded at amortized cost plus accrued interest. As of December 31, 2017 , the majority of the Company’s cash and cash equivalents were held with one major financial institution, which exposes the Company to a certain degree of credit risk concentration. The Company records cash and cash equivalents of consolidated funds within other assets of consolidated funds in the consolidated balance sheets. |
Investments | Investments Investments in CLOs The Company elected to measure its investments in notes issued by CLOs managed by the Company at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method, and includes this income within other revenues in the consolidated statements of comprehensive income (loss). Investments in Other Funds The Company’s equity investments into funds are accounted for under the equity method of accounting, and the Company recognizes its share of earnings within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss). Investments in United States Government Obligations The Company invests in United States government obligations to manage excess liquidity. These investments are carried at fair value, as the Company has elected the fair value option in order to include any gains or losses within consolidated net income (loss). These investments are recorded in the consolidated balance sheet within cash and cash equivalents for investments with an original maturity from the date of purchase of three months or less, and within investments for those longer than three months. Changes in fair value of these investments were immaterial for the years ended December 31, 2017 , 2016 and 2015 . |
Transfers of Financial Assets | Transfers of Financial Assets From time to time, the Company purchases loans in the open market and sells the loans at cost to CLOs it manages. The Company accounts for the transfer of these loans as a sale upon meeting the following requirements: (i) the transferred assets are legally isolated from the Company; (ii) holder of the notes issued by the CLO (other than the Company) must have the right to sell or pledge their notes; and (iii) the Company may not maintain effective control over the transferred loans. The Company continues to recognize acquired loans until the requirements are met. Any loans for which the requirements above have not been met are classified as held for sale and measured at the lower of cost or fair value. See Note 4 for additional information. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost less accumulated depreciation and amortization within other assets, net in the consolidated balance sheets. The Company evaluates fixed assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be fully recovered. Depreciation and amortization of fixed assets are calculated using the straight-line method over the following depreciable lives: 15.0 years for corporate aircraft (sold in the first half of 2017), the shorter of the related lease term or expected useful life for leasehold improvements and 3.0 years to 7.0 years for all other fixed assets. If a fixed asset is reclassified as held for sale, it is carried at the lower of existing carrying value or its estimated net selling price, and the asset is no longer depreciated. |
Goodwill | Goodwill Goodwill is included within other assets, net in the Company’s consolidated balance sheets and relates to the Company’s 2007 acquisition of an additional 25% interest in its domestic real estate operations from one of its former joint venture partners. The Company tests goodwill for impairment on an annual basis or more frequently if events or circumstances justify conducting an interim test. |
Policies of Consolidated Funds | Policies of Consolidated Funds The funds are considered investment companies for GAAP purposes. Pursuant to specialized accounting guidance for investment companies and the retention of that guidance in the Company’s consolidated financial statements, the investments held by the consolidated funds’ are reflected in the consolidated financial statements at their estimated fair values. |
Income of Consolidated Funds | Income of Consolidated Funds Income of consolidated funds consists of interest income, dividend income and other miscellaneous items. Interest income is recorded on an accrual basis. The consolidated funds may place debt obligations, including bank debt and other participation interests, on non-accrual status and, when necessary, reduce current interest income by charging off any interest receivable when collection of all or a portion of such accrued interest has become doubtful. The balance of non-accrual investments as of December 31, 2017 and 2016 , and the impact of such investments for the years ended December 31, 2017 , 2016 and 2015 , were not material. Dividend income is recorded on the ex-dividend date, net of withholding taxes, if applicable. Premiums and discounts are amortized and accreted, respectively, to income of consolidated funds in the consolidated statements of comprehensive income (loss). |
Expenses of Consolidated Funds | Expenses of Consolidated Funds Expenses of consolidated funds consist of interest expense and other miscellaneous expenses. Interest expense is recorded on an accrual basis. |
Investments of Consolidated Funds, at Fair Value | Investments of Consolidated Funds, at Fair Value Investments of consolidated funds, at fair value include the consolidated funds’ investments in securities, investment companies and other investments. Securities transactions are recorded on a trade-date basis. Realized gains and losses on sales of investments of the funds are determined on a specific identification basis and are included within net gains (losses) of consolidated funds in the consolidated statements of comprehensive income (loss). The fair value of investments held by the consolidated funds is based on observable market prices when available. Such values are generally based on the last reported sales price as of the reporting date. In the absence of readily ascertainable market values, the determination of the fair value of investments held by the consolidated funds may require significant judgment or estimation. For information regarding the valuation of these assets, see Note 4 . |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . The requirements of ASU 2016-09 were effective for the Company beginning in the first quarter of 2017. As permitted under the new guidance, the Company has made an accounting policy election to account for forfeitures on share-based compensation arrangements as they occur. Prior to the adoption of ASU 2016-09, the Company was required to estimate forfeitures. The decision to no longer estimate forfeitures was not material to the financial statements. Additionally, the Company will recognize all income tax effects of awards within consolidated and comprehensive net income when the awards vest or are settled. Prior to the adoption of ASU 2016-09, excess tax benefits were recorded to paid-in capital, while tax deficiencies were recorded in consolidated and comprehensive net income to the extent in excess of previously recorded excess tax benefits. The amendments related to the recognition of excess tax benefits and tax deficiencies in the statement of comprehensive income were applied prospectively. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties that Are under Common Control. The guidance was effective for the Company beginning in the first quarter of 2017. ASU 2016-17 amended the consolidation guidance with respect to a single decision maker’s evaluation of interests held through related parties that are under common control when it is determining whether it is the primary beneficiary of a variable interest entity (“VIE”). Under the amended guidance, a reporting entity considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. The adoption of ASU 2016-17 did not have a material impact on the Company’s consolidated financial statements. None of the other changes to GAAP that went into effect in the year ended December 31, 2017 has had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605-Revenue Recognition and most industry-specific revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company will adopt ASU 2014-09 using a modified retrospective application approach in the first quarter of 2018. The Company is in the process of implementing the new revenue guidance and has determined that it will be required to recognize incentive income earlier than as prescribed under the current guidance. Specifically, under the new guidance, the Company will recognize incentive income when such amounts are probable of not significantly reversing, which is a lower recognition threshold than under the previous guidance. The Company expects to recognize a significant amount of incentive income through shareholders equity upon adoption of the standard with the largest impact coming from certain of its closed-end funds. Finally, the ASU introduces new qualitative and quantitative disclosure requirements that require further disaggregation of revenue information. Such disclosures will be presented in the notes to the Company’s consolidated financial statements upon adoption of the standard. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 significantly changes accounting for lease arrangements, in particular from the perspective of the lessee. The Company is not currently a lessor in any significant lease arrangements, but is a lessee in several lease arrangements that would be impacted by the ASU. The Company has determined that most of its operating leases will be reported as lease obligations, along with offsetting right to use assets on its consolidated balance sheet at their present value, and will continue to recognize associated expenses within consolidated net income (loss) in a manner similar to the existing accounting for leases (i.e., on a straight-line basis over the lease term). Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The requirements of ASU 2016-02 are effective for the Company beginning in the first quarter of 2019. See Note 15 for details related to the Company’s existing operating lease obligations. None of the other changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements. |
Fair Value Disclosure | Fair Value Disclosures Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Assets and liabilities measured at fair value are classified into one of the following categories: • Level I – Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives. • Level II – Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives. • Level III – Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations and investments in affiliated credit funds. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Components of Net Income (Loss) Attributable to Noncontrolling Interests | The following table presents the components of the net income (loss) attributable to noncontrolling interests: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Group A Units $ 130,730 $ (195,087 ) $ 136,449 Consolidated funds — 262 54,357 Other 900 1,068 371 $ 131,630 $ (193,757 ) $ 191,177 |
Components of Shareholders' Equity Attributable to Noncontrolling Interests | The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: December 31, 2017 December 31, 2016 (dollars in thousands) Group A Units $ 353,791 $ 166,521 Consolidated funds — — Other 4,111 5,408 $ 357,902 $ 171,929 |
Redeemable Noncontrolling Interests Roll Forward | The Preferred Units and fund investors’ interests in certain consolidated funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests: Year Ended December 31, 2017 2016 2015 Consolidated Funds Preferred Units Total Consolidated Funds Preferred Units Total Consolidated Funds (dollars in thousands) Beginning balance $ 21,621 $ 262,500 $ 284,121 $ 832,284 $ — $ 832,284 $ 545,771 Deconsolidation of funds on adoption of ASU 2015-02 — — — (813,116 ) — (813,116 ) — Change in redemption value of Preferred Units — 7,446 7,446 — 16,043 16,043 — Preferred Units issuance, net of issuance costs — 150,054 150,054 — 246,457 246,457 — Capital contributions 2,329 — 2,329 3 — 3 338,437 Capital distributions — — — — — — (2,320 ) Comprehensive income (loss) 1,667 — 1,667 2,450 — 2,450 (49,604 ) Ending Balance $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 $ 832,284 |
Investments and Fair Value Di26
Investments and Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Investments Summary | The following table presents the components of the Company’s investments as reported in the consolidated balance sheets: December 31, 2017 December 31, 2016 (dollars in thousands) United States government obligations, at fair value (1) $ 12,973 $ — CLOs, at fair value 211,749 21,341 Other funds and joint ventures, equity method 14,252 16,639 Total Investments $ 238,974 $ 37,980 _______________ (1) Held by the Oz Operating Group and matures on March 1, 2018 . |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2017 : As of December 31, 2017 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 99,704 $ — $ — $ 99,704 Included within investments: United States government obligations $ 12,973 $ — $ — $ 12,973 CLOs (1) $ — $ — $ 211,749 $ 211,749 Investments of consolidated funds: Bank debt $ — $ 24,559 $ 18,807 $ 43,366 _______________ (1) As of December 31, 2017 , investments in CLOs had contractual principal amounts of $189.2 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2016 : As of December 31, 2016 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 139,974 $ — $ — $ 139,974 Included within investments: CLOs (1) $ — $ — $ 21,341 $ 21,341 Investments of consolidated funds: Bank debt $ — $ 19,534 $ 18,127 $ 37,661 _______________ (1) As of December 31, 2016 , investment in CLO had contractual principal amounts of $21.3 million outstanding. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in the Company’s Level III investments for the year ended December 31, 2017 : December 31, 2016 Transfers Transfers Investment Investment Gains / Losses December 31, 2017 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 21,341 $ — $ — $ 185,404 $ (647 ) $ 5,651 $ 211,749 Investments of consolidated funds: Bank debt $ 18,127 $ 587 $ (17,311 ) $ 89,225 $ (73,069 ) $ 1,248 $ 18,807 The following table summarizes the changes in the Company’s Level III investments for the year ended December 31, 2016 : December 31, 2015 Transfers Transfers Investment Investment Gains / Losses December 31, 2016 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ — $ — $ — $ 21,462 $ — $ (121 ) $ 21,341 Investments of consolidated funds: Bank debt $ 1,998,423 $ — $ — $ 80,317 $ (2,061,719 ) $ 1,106 $ 18,127 Real estate investments 719,957 — — — (719,957 ) — — Residential mortgage-backed securities 323,571 — — — (323,571 ) — — Collateralized debt obligations 83,759 — — — (83,759 ) — — Energy and natural resources limited partnerships 70,604 — — — (70,604 ) — — Commercial real estate debt 18,295 — — — (18,295 ) — — Asset-backed securities 23,739 — — — (23,739 ) — — Commercial mortgage-backed securities 13,803 — — — (13,803 ) — — Other investments (including derivatives, net) 1,938 — — — (1,938 ) — — $ 3,254,089 $ — $ — $ 80,317 $ (3,317,385 ) $ 1,106 $ 18,127 |
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | The table below summarizes the net change in unrealized gains and losses on the Company’s Level III investments held as of the reporting date. These gains and losses are included within net gains of consolidated funds in the Company’s consolidated statements of comprehensive income (loss): Year Ended December 31, 2017 2016 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 5,651 $ (121 ) Investments of consolidated funds: Bank debt $ 97 $ 425 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | The table below presents the assets and liabilities of VIEs consolidated by the Company: December 31, 2017 December 31, 2016 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ 43,366 $ 37,661 Other assets of consolidated funds 13,331 17,544 Total Assets $ 56,697 $ 55,205 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 11,340 15,197 Total Liabilities $ 11,340 $ 15,197 The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability. The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, insignificant direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 15 . The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated. The table below presents the net assets of VIEs in which the Company has variable interests along with the maximum risk of loss as a result of the Company’s involvement with VIEs: December 31, 2017 December 31, 2016 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 8,300,163 $ 4,069,617 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 144,124 96,409 Income and fees receivable 24,953 13,074 Investments in funds 222,192 35,868 Maximum Exposure to Loss $ 391,269 $ 145,351 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Other Assets | The following table presents the components of other assets, net as reported in the consolidated balance sheets: December 31, 2017 December 31, 2016 (dollars in thousands) Fixed Assets: Leasehold improvements $ 53,419 $ 54,414 Computer hardware and software 44,190 40,093 Furniture, fixtures and equipment 8,571 8,919 Corporate aircraft held for sale — 56,251 Accumulated depreciation and amortization (58,671 ) (49,890 ) Fixed assets, net 47,509 109,787 Loans held for sale 29,110 8,204 Goodwill 22,691 22,691 Prepaid expenses 12,862 12,753 Other 4,189 16,549 Total Other Assets, Net $ 116,361 $ 169,984 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Components of Other Liabilities | The following table presents the components of other liabilities as reported in the consolidated balance sheets: December 31, 2017 December 31, 2016 (dollars in thousands) Loan trades payable $ 29,110 $ 10,391 Accrued expenses 21,955 30,728 Deferred rent credit 8,283 15,046 Interest payable 2,970 2,654 Other 12,804 20,096 Total Other Liabilities $ 75,122 $ 78,915 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Instruments [Abstract] | |
Schedule of Maturities of Long-term Debt | The table below presents scheduled principal payments on the Company’s debt obligations for each of the next five years. Scheduled Payments (dollars in thousands) 2018 $ — 2019 $ 400,000 2020 $ — 2021 $ — 2022 $ — |
CLO Investments Loans Table | The table below presents information related to CLO Investments Loans as of December 31, 2017 and 2016 . Carrying values presented below are net of discounts, if any, and unamortized deferred financing costs. The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or the date at which the Company no longer holds a risk retention investment in the respective CLO. Borrowing Date Contractual Rate Final Maturity Date Carrying Value December 2017 December 2016 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ 18,041 $ 15,801 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,217 — July 21, 2017 LIBOR plus 1.43% January 22, 2029 21,709 — August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,686 — August 17, 2017 LIBOR plus 1.43% April 30, 2030 22,922 — September 14, 2017 LIBOR plus 1.41% April 22, 2030 25,468 — September 14, 2017 EURIBOR plus 2.21% September 14, 2024 19,561 — November 21, 2017 LIBOR plus 1.34% May 15, 2030 26,202 — $ 172,806 $ 15,801 |
Equity-Based Compensation Exp31
Equity-Based Compensation Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The Company grants equity-based compensation in the form of RSUs, Group A Units, Group P Units and Class A Shares to its executive managing directors, employees and the independent members of the Board under the terms of the 2007 Equity Incentive Plan and the 2013 Incentive Plan. The following table presents information regarding the impact of equity-based compensation grants on the Company’s consolidated statements of comprehensive income (loss): Year Ended December 31, 2017 2016 2015 (dollars in thousands) Expense recorded within compensation and benefits $ 84,169 $ 75,217 $ 112,639 Corresponding tax benefit $ 4,720 $ 3,116 $ 9,032 |
Settlement of Restricted Share Units | The following table presents information related to the settlement of RSUs: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 13,016 $ 12,675 $ 42,118 Fair value of RSUs settled in cash $ 130 $ — $ 6,074 Fair value of RSUs withheld to satisfy tax withholding obligations $ 7,577 $ 7,960 $ 15,865 Number of RSUs withheld to satisfy tax withholding obligations 2,802,689 2,228,562 2,064,106 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table presents activity related to the Company’s unvested RSUs for the year ended December 31, 2017 : Equity-Classified Awards Unvested RSUs Weighted-Average Grant-Date Fair Value Beginning of Year 11,367,733 $ 7.05 Granted 14,585,657 $ 3.16 Vested (7,975,255 ) $ 5.29 Canceled or forfeited (3,447,533 ) $ 4.68 End of Year 14,530,602 $ 4.67 |
Group A Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The Company recognizes compensation expense for Group A Units equal to the market value of the Company’s Class A Shares at the date of grant, less a 5% discount for transfer restrictions that remain in place after vesting. The following table presents the activity related to unvested Group A Units granted to executive managing directors that are being amortized through compensation and benefits for the year ended December 31, 2017 : Unvested Weighted-Average Grant-Date Fair Value Beginning of Year 9,899,244 $ 9.86 Granted 172,459 $ 2.19 Vested (1,661,040 ) $ 9.53 End of Year 8,410,663 $ 9.77 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The following table presents the components of the Company’s provision for income taxes: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Current: Federal income taxes $ 103 $ 19 $ (151 ) State and local income taxes 2,172 4,885 13,241 Foreign income taxes 2,520 3,746 3,374 4,795 8,650 16,464 Deferred: Federal income taxes 322,162 7,760 40,510 State and local income taxes (9,828 ) (6,131 ) 73,898 Foreign income taxes 430 607 1,352 312,764 2,236 115,760 Total Provision for Income Taxes $ 317,559 $ 10,886 $ 132,224 |
Schedule of Deferred Tax Assets and Liabilities | The following table presents the Company’s deferred income tax assets and liabilities before the impact of offsetting deferred income tax assets and liabilities within the same legal entity and tax jurisdiction: December 31, 2017 December 31, 2016 (dollars in thousands) Deferred Income Tax Assets: Tax goodwill $ 272,636 $ 583,707 Net operating loss 76,100 86,935 Tax credit carryforwards 16,102 20,931 Investments in partnerships 20,440 11,173 Employee compensation 626 780 Other 2,145 227 388,049 703,753 Valuation allowance (12,028 ) (7,955 ) Total Deferred Income Tax Assets $ 376,021 $ 695,798 Total Deferred Income Tax Liabilities $ 1,167 $ 655 |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate: Year Ended December 31, 2017 2016 2015 Statutory U.S. federal income tax rate 35.00 % 35.00 % 35.00 % Impact of federal tax reform 40.34 % — % — % Income passed through to noncontrolling interests -10.40 % -23.10 % -16.34 % Nondeductible fines and penalties — % -12.78 % — % Income not subject to entity level tax -4.54 % -3.01 % 2.44 % State and local income taxes due to enacted change in tax laws — % — % 23.14 % Other state and local income taxes 4.42 % 0.56 % 4.66 % Changes in tax receivable agreement liability — % — % -6.94 % Foreign income taxes 0.63 % -0.96 % 1.24 % Other, net 1.84 % 0.72 % 0.94 % Effective Income Tax Rate 67.29 % -3.57 % 44.14 % |
General, Administrative and O33
General, Administrative and Other (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Components of General, Administrative and Other Expenses | The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss): Year Ended December 31, 2017 2016 2015 (dollars in thousands) Professional services $ 43,343 $ 74,859 $ 72,969 Occupancy and equipment 33,358 35,998 34,358 Information processing and communications 28,274 34,485 31,971 Recurring placement and related service fees 20,153 38,424 48,702 Insurance 7,609 15,333 16,719 Business development 6,685 13,440 15,707 Other expenses 12,649 21,828 19,565 152,071 234,367 239,991 Settlements expense — 412,101 — Total General, Administrative and Other $ 152,071 $ 646,468 $ 239,991 |
Earnings (Loss) Per Class A S34
Earnings (Loss) Per Class A Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Class A Share | The following tables present the computation of basic and diluted earnings (loss) per Class A Share: Year Ended December 31, 2017 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ 18,222 186,423,793 $ 0.10 Effect of dilutive securities: Group A Units — — 272,301,466 RSUs — 757,967 — Diluted $ 18,222 187,181,760 $ 0.10 Year Ended December 31, 2016 Net Loss Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Loss Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ (130,762 ) 182,670,173 $ (0.72 ) Effect of dilutive securities: Group A Units (219,109 ) 297,317,095 — RSUs — — 14,343,302 Diluted $ (349,871 ) 479,987,268 $ (0.73 ) Year Ended December 31, 2015 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units Excluded from Diluted Calculation (dollars in thousands, except per share amounts) Basic $ 25,740 177,935,977 $ 0.14 Effect of dilutive securities: Group A Units — — 301,064,047 RSUs — 2,957,970 — Diluted $ 25,740 180,893,947 $ 0.14 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Management Fees and Incentive Income Earned from Related Parties | The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds: Year Ended December 31, 2017 2016 2015 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 10,574 $ 18,243 $ 20,297 Incentive income $ 14,052 $ 12,266 $ 3,819 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimated Future Maximum Payments Under Tax Receivable Agreement | The table below presents the maximum amounts that would be payable under the tax receivable agreement assuming that the Company will have sufficient taxable income each year to fully realize the expected tax savings. In light of the numerous factors affecting the Company’s obligation to make such payments, the timing and amounts of any such actual payments may differ materially from those presented in the table. The impact of any net operating losses is included in the “Thereafter” amount in the table below. Potential Payments Under Tax Receivable Agreement (dollars in thousands) 2018 $ 43,211 2019 29,254 2020 28,980 2021 29,619 2022 30,871 Thereafter 118,055 Total Payments $ 279,990 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents minimum operating lease payments as of December 31, 2017 . Future minimum lease payments for capital leases were not material as of December 31, 2017 . Operating Leases (dollars in thousands) 2018 $ 21,241 2019 17,466 2020 20,234 2021 20,045 2022 19,989 Thereafter 116,835 Total Payments $ 215,810 |
Unearned Incentive Income Roll Forward | The Company receives incentive income distributions from certain funds that are subject to clawback in the event of future losses in the respective fund. The Company recognizes this incentive income when it is no longer subject to clawback. These clawback contingencies will be resolved as remaining investments in the respective funds are realized, the timing of which is uncertain. The following table presents the activity in the Company’s unearned incentive income liability: Year Ended December 31, 2017 2016 (dollars in thousands) Beginning of Year $ 96,079 $ — Deconsolidation of funds on adoption of ASU 2015-02 — 81,972 Incentive income collected but subject to clawback 53,915 22,557 Incentive income recognized (6,284 ) (8,450 ) End of Year $ 143,710 $ 96,079 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Oz Funds Segment Results | Oz Funds Segment Results Year Ended December 31, 2017 2016 2015 (dollars in thousands) Oz Funds Segment: Economic Income Revenues $ 805,634 $ 700,950 $ 821,905 Economic Income $ 332,603 $ (217,006 ) $ 340,157 |
Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues | Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues Year Ended December 31, 2017 2016 2015 (dollars in thousands) Total consolidated revenues $ 858,337 $ 770,364 $ 1,322,981 Adjustment to management fees (1) (20,151 ) (38,424 ) (1,804 ) Adjustment to incentive income (2) — — 17,449 Adjustment to other revenues (3) (1,097 ) — — Other Operations revenues (27,353 ) (29,228 ) (27,371 ) Income of consolidated funds (4,102 ) (1,762 ) (489,350 ) Economic Income Revenues - Oz Funds Segment $ 805,634 $ 700,950 $ 821,905 _______________ (1) Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. (2) Adjustment to exclude the impact of eliminations related to the consolidated funds. (3) Adjustment to exclude realized gains on sale of fixed assets. |
Reconciliation of Oz Funds Economic Income to Net Income (Loss) Attributable to Class A Shareholders | Reconciliation of Oz Funds Segment Economic Income to Net Income (Loss) Attributable to Class A Shareholders Year Ended December 31, 2017 2016 2015 (dollars in thousands) Net Income (Loss) Attributable to Class A Shareholders—GAAP $ 18,222 $ (130,762 ) $ 25,740 Change in redemption value of Preferred Units 2,853 6,082 — Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP $ 21,075 $ (124,680 ) $ 25,740 Net income (loss) attributable to Group A Units 130,730 (195,087 ) 136,449 Equity-based compensation, net of RSUs settled in cash 84,039 75,217 106,565 Adjustment to recognize deferred cash compensation in the period of grant (28,893 ) (1,851 ) — Income taxes 317,559 10,886 132,224 Adjustment for incentive income allocations from consolidated funds subject to clawback — — (45,077 ) Allocations to Group D Units 6,674 — 12,675 Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance 22,967 6,752 8,612 Reorganization expenses — — 14,064 Changes in tax receivable agreement liability (222,859 ) 1,663 (55,852 ) Depreciation, amortization and net gains and losses on fixed assets 10,334 19,882 11,331 Other adjustments (3,891 ) (4,357 ) (1,515 ) Other Operations (5,132 ) (5,431 ) (5,059 ) Economic Income - Oz Funds Segment $ 332,603 $ (217,006 ) $ 340,157 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Event [Line Items] | |
Units and Shares Table | Subsequent to December 31, 2017 and through the date of this filing, the Company has had various compensation and other related transactions, resulting in the following number of units and shares outstanding: Number Outstanding Class A Shares 190,781,536 Group A Units 261,489,478 Group P Units 42,850,000 Group D Units 35,233,213 RSUs 52,934,167 PSUs 10,000,000 |
Overview - Additional Informati
Overview - Additional Information (Detail) | Dec. 31, 2017$ / shares |
Share Transactions [Line Items] | |
Preferred Units liquidation preference | $ 1,000 |
Oz Operating Group [Member] | |
Share Transactions [Line Items] | |
Group D Unit Interest in Operating Group | 14.50% |
Basis of Presentation and Sum40
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2007 | |
Summary of Significant Accounting Policies [Line Items] | ||
Amount Of Assets Under Management With Longer Than One Year Commitment Periods | $ 17.4 | |
Percentage Of Assets Under Management With Longer Than One Year Commitment Periods | 54.00% | |
Corporate Aircraft | ||
Summary of Significant Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
2007 Domestic Real Estate Acquisition | ||
Summary of Significant Accounting Policies [Line Items] | ||
Acquisition of an Additional Interest in Domestic Real Estate, percentage | 25.00% | |
Minimum | Other Fixed Assets | ||
Summary of Significant Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Maximum | Other Fixed Assets | ||
Summary of Significant Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Multi-Strategy Funds | Minimum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 0.97% | |
Multi-Strategy Funds | Maximum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 2.50% | |
Closed-End Credit and Real Estate Funds | ||
Summary of Significant Accounting Policies [Line Items] | ||
Incentive Income Rate | 20.00% | |
CLOs | ||
Summary of Significant Accounting Policies [Line Items] | ||
Incentive Income Rate | 20.00% | |
CLOs | Minimum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 0.43% | |
CLOs | Maximum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 0.50% | |
Credit Funds | Minimum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 0.75% | |
Credit Funds | Maximum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 1.75% | |
Real Estate Funds | Minimum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 0.75% | |
Real Estate Funds | Maximum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Management Fee Rates | 1.50% | |
Multi-Strategy and Open-End Credit Funds [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Incentive Income Rate | 20.00% |
Noncontrolling Interests - Com
Noncontrolling Interests - Components of Net Income (Loss) Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Noncontrolling Interests | $ 131,630 | $ (193,757) | $ 191,177 |
Group A Units | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Noncontrolling Interests | 130,730 | (195,087) | 136,449 |
Consolidated funds | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Noncontrolling Interests | 0 | 262 | 54,357 |
Other | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Noncontrolling Interests | $ 900 | $ 1,068 | $ 371 |
Noncontrolling Interests - C42
Noncontrolling Interests - Components of Shareholders' Equity Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 357,902 | $ 171,929 |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | 353,791 | 166,521 |
Consolidated funds | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | 0 | 0 |
Other | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 4,111 | $ 5,408 |
Noncontrolling Interests - Red
Noncontrolling Interests - Redeemable Noncontrolling Interest (Detail) - USD ($) $ in Thousands | Jan. 23, 2017 | Oct. 05, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | $ 284,121 | $ 832,284 | $ 545,771 | ||
Cumulative Effect Of New Accounting Principle In Period Of Adoption on Redeemable Noncontrolling Interests | 0 | (813,116) | 0 | ||
Change in redemption value of Preferred Units | 7,446 | 16,043 | 0 | ||
Issuance and sale of Preferred Units, net of issuance costs | $ 150,000 | $ 250,000 | 150,054 | 246,457 | 0 |
Capital contributions | 2,329 | 3 | 338,437 | ||
Capital distributions | 0 | 0 | (2,320) | ||
Comprehensive income (loss) | 1,667 | 2,450 | (49,604) | ||
Ending Balance | 445,617 | 284,121 | 832,284 | ||
Consolidated funds | |||||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 21,621 | 832,284 | |||
Cumulative Effect Of New Accounting Principle In Period Of Adoption on Redeemable Noncontrolling Interests | 0 | (813,116) | |||
Change in redemption value of Preferred Units | 0 | 0 | |||
Issuance and sale of Preferred Units, net of issuance costs | 0 | 0 | |||
Capital contributions | 2,329 | 3 | |||
Capital distributions | 0 | 0 | |||
Comprehensive income (loss) | 1,667 | 2,450 | |||
Ending Balance | 25,617 | 21,621 | 832,284 | ||
Preferred Units | |||||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||||
Beginning balance | 262,500 | 0 | |||
Cumulative Effect Of New Accounting Principle In Period Of Adoption on Redeemable Noncontrolling Interests | 0 | 0 | |||
Change in redemption value of Preferred Units | 7,446 | 16,043 | |||
Issuance and sale of Preferred Units, net of issuance costs | 150,054 | 246,457 | |||
Capital contributions | 0 | 0 | |||
Capital distributions | 0 | 0 | |||
Comprehensive income (loss) | 0 | 0 | |||
Ending Balance | $ 420,000 | $ 262,500 | $ 0 |
Noncontrolling Interests - Add
Noncontrolling Interests - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Oct. 28, 2015 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Noncontrolling Interest [Line Items] | ||||
Number of Group A Units Canceled Pursuant to the Relinquishment Agreement | 30 | |||
Number of Operating Group D Units Reallocated If Forfeited | 30 | |||
Group A Units | ||||
Noncontrolling Interest [Line Items] | ||||
Group A Unit repurchase, Shares | 4.6 | |||
Group A Unit Repurchased, Price Per Share | $ 5 | |||
Group A Unit repurchase, Values | $ 22.8 | |||
Group A Unit Repurchase, Additional Deferred Tax Asset | $ 2.3 | |||
Oz Operating Group [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of ownership in entity | 41.50% | 38.30% |
Investments and Fair Value Di45
Investments and Fair Value Disclosures - Schedule of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
United States government obligations, at fair value | $ 12,973 | $ 0 |
CLOs, at fair value | 211,749 | 21,341 |
Other funds and joint ventures, equity method | 14,252 | 16,639 |
Investments | $ 238,974 | $ 37,980 |
Investments and Fair Value Di46
Investments and Fair Value Disclosures - Schedule of Investments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Included Within Investments [Abstract] | ||
United States government obligations | $ 12,973 | $ 0 |
CLOs | 211,749 | 21,341 |
Management company related | Fair Value, Measurements, Recurring | ||
Included Within Cash And Cash Equivalents [Abstract] | ||
United States government obligations | 99,704 | 139,974 |
Included Within Investments [Abstract] | ||
United States government obligations | 12,973 | |
CLOs | 211,749 | 21,341 |
Management company related | Fair Value, Measurements, Recurring | Level I | ||
Included Within Cash And Cash Equivalents [Abstract] | ||
United States government obligations | 99,704 | 139,974 |
Included Within Investments [Abstract] | ||
United States government obligations | 12,973 | |
CLOs | 0 | 0 |
Management company related | Fair Value, Measurements, Recurring | Level II | ||
Included Within Cash And Cash Equivalents [Abstract] | ||
United States government obligations | 0 | 0 |
Included Within Investments [Abstract] | ||
United States government obligations | 0 | |
CLOs | 0 | 0 |
Management company related | Fair Value, Measurements, Recurring | Level III | ||
Included Within Cash And Cash Equivalents [Abstract] | ||
United States government obligations | 0 | 0 |
Included Within Investments [Abstract] | ||
United States government obligations | 0 | |
CLOs | 211,749 | 21,341 |
Consolidated funds | Fair Value, Measurements, Recurring | ||
Investments of Consolidated Funds [Abstract] | ||
Bank debt | 43,366 | 37,661 |
Consolidated funds | Fair Value, Measurements, Recurring | Level I | ||
Investments of Consolidated Funds [Abstract] | ||
Bank debt | 0 | 0 |
Consolidated funds | Fair Value, Measurements, Recurring | Level II | ||
Investments of Consolidated Funds [Abstract] | ||
Bank debt | 24,559 | 19,534 |
Consolidated funds | Fair Value, Measurements, Recurring | Level III | ||
Investments of Consolidated Funds [Abstract] | ||
Bank debt | 18,807 | 18,127 |
CLOs | Management company related | ||
Investments of Consolidated Funds [Abstract] | ||
Contractual principal on investments in CLOs | $ 189,200 | $ 21,300 |
Investments and Fair Value Di47
Investments and Fair Value Disclosures - Schedule of Changes in Company's Level III Investments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Management company related | CLOs | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 21,341 | $ 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Investment Purchases / Issuances | 185,404 | 21,462 |
Investment Sales / Settlements | (647) | 0 |
Gains / Losses | 5,651 | (121) |
Ending Balance | 211,749 | 21,341 |
Consolidated funds | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 18,127 | 3,254,089 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 80,317 | |
Investment Sales / Settlements | (3,317,385) | |
Gains / Losses | 1,106 | |
Ending Balance | 18,127 | |
Consolidated funds | Bank debt | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 18,127 | 1,998,423 |
Transfers In | 587 | 0 |
Transfers Out | (17,311) | 0 |
Investment Purchases / Issuances | 89,225 | 80,317 |
Investment Sales / Settlements | (73,069) | (2,061,719) |
Gains / Losses | 1,248 | 1,106 |
Ending Balance | 18,807 | 18,127 |
Consolidated funds | Real estate investments | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 719,957 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (719,957) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Residential mortgage-backed securities | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 323,571 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (323,571) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Collateralized debt obligations | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 83,759 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (83,759) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Energy and natural resources limited partnerships | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 70,604 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (70,604) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Commercial real estate debt | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 18,295 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (18,295) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Asset-backed securities | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 23,739 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (23,739) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Commercial mortgage-backed securities | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 13,803 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (13,803) | |
Gains / Losses | 0 | |
Ending Balance | 0 | |
Consolidated funds | Other investments (including derivatives, net) | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 0 | 1,938 |
Transfers In | 0 | |
Transfers Out | 0 | |
Investment Purchases / Issuances | 0 | |
Investment Sales / Settlements | (1,938) | |
Gains / Losses | 0 | |
Ending Balance | $ 0 |
Investments and Fair Value Di48
Investments and Fair Value Disclosures - Schedule of Net Unrealized Gains (Losses) on Company's Level III Assets and Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Management company related | CLOs | ||
Fair Value, Investments Measured On Recurring Basis [Line Items] | ||
Unrealized gains (losses) on Level III assets and liabilities held as of the balance sheet date | $ 5,651 | $ (121) |
Consolidated funds | Bank debt | ||
Fair Value, Investments Measured On Recurring Basis [Line Items] | ||
Unrealized gains (losses) on Level III assets and liabilities held as of the balance sheet date | $ 97 | $ 425 |
Investments and Fair Value Di49
Investments and Fair Value Disclosures - Fair Value of Other Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Nonrecurring Basis | ||
Loans held for sale | $ 29,110 | $ 8,204 |
Corporate aircraft held for sale | 0 | $ 56,251 |
Nonrecurring Fair Value Measurements | Level II | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis | ||
Loans held for sale | 26,700 | |
Nonrecurring Fair Value Measurements | Level III | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis | ||
Loans held for sale | $ 2,400 |
Investments and Fair Value Di50
Investments and Fair Value Disclosures - Loans Sold to CLOs Managed by the Company - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Assets And Liabilities Measured On Nonrecurring Basis | ||
Cash Flows Between Transferor and Transferee, Proceeds from New Transfers | $ 71,300 | |
Cash Flows Between Transferor and Transferee, Beneficial Interest | $ 45,400 | $ 21,500 |
Risk retention percentage | 5.00% | |
Transferor's Interests in Transferred Financial Assets, Fair Value | $ 70,400 | 21,300 |
Proceeds from Collection of Retained Interest in Securitized Receivables | 647 | |
CLOs | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis | ||
Continuing Involvement with Transferred Financial Assets, Principal Amount Outstanding | $ 51,700 | $ 17,900 |
Variable Interest Entities - A
Variable Interest Entities - Assets and Liabilities of Funds that are VIEs and Consolidated by Company (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Risk retention percentage | 5.00% | |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | $ 43,366 | $ 37,661 |
Other assets of consolidated funds | 13,331 | 17,544 |
Total Assets | 1,639,433 | 1,485,555 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 11,340 | 15,197 |
Total Liabilities | 1,289,745 | 1,495,526 |
Funds | Variable Interest Entity, Primary Beneficiary | ||
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 43,366 | 37,661 |
Other assets of consolidated funds | 13,331 | 17,544 |
Total Assets | 56,697 | 55,205 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 11,340 | 15,197 |
Total Liabilities | $ 11,340 | $ 15,197 |
Variable Interest Entities -52
Variable Interest Entities - Assets and Liabilities Related to VIEs that are Not Consolidated (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Maximum risk of loss as a result of the Company's involvement with VIEs | ||
Income and fees receivable | $ 354,456 | $ 176,638 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Net assets of unconsolidated VIEs in which the Company has a variable interest | 8,300,163 | 4,069,617 |
Maximum risk of loss as a result of the Company's involvement with VIEs | ||
Unearned revenues | 144,124 | 96,409 |
Income and fees receivable | 24,953 | 13,074 |
Investments in funds | 222,192 | 35,868 |
Maximum Exposure to Loss | $ 391,269 | $ 145,351 |
Other Assets, Net - Components
Other Assets, Net - Components of Other Assets (Detail) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fixed Assets: | ||
Leasehold improvements | $ 53,419,000 | $ 54,414,000 |
Computer hardware and software | 44,190,000 | 40,093,000 |
Furniture, fixtures and equipment | 8,571,000 | 8,919,000 |
Corporate aircraft held for sale | 0 | 56,251,000 |
Accumulated depreciation and amortization | (58,671,000) | (49,890,000) |
Fixed assets, net | 47,509,000 | 109,787,000 |
Loans held for sale | 29,110,000 | 8,204,000 |
Goodwill | 22,691,000 | 22,691,000 |
Prepaid expenses | 12,862,000 | 12,753,000 |
Other | 4,189,000 | 16,549,000 |
Total Other Assets, Net | $ 116,361,000 | $ 169,984,000 |
Other Assets, Net - Additional
Other Assets, Net - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Net proceeds from sale of corporate aircraft | $ 57.6 |
Net gain on sale of aircraft | $ 1.3 |
Other Liabilities - Components
Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Loan trades payable | $ 29,110 | $ 10,391 |
Accrued expenses | 21,955 | 30,728 |
Deferred rent credit | 8,283 | 15,046 |
Interest payable | 2,970 | 2,654 |
Other | 12,804 | 20,096 |
Total Other Liabilities | $ 75,122 | $ 78,915 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Debt Principal Payments (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
Long-term Debt, Maturities, Repayments of Principal in the Year One | $ 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 400,000 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | $ 0 |
Debt Obligations - Debt Obliga
Debt Obligations - Debt Obligations Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Repayments of debt obligations | $ 167,516 | $ 3,667 | $ 3,089 | |
Borrowings Outstanding | 569,379 | $ 577,128 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | $ 400,000 | |||
Debt Instrument, Maturity Date | Nov. 20, 2019 | |||
Notes Issuance Price | 99.417% | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||
Debt Instrument, Redemption Price, Change in Control, Percentage | 101.00% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Maturity Date | Nov. 20, 2019 | |||
Line of Credit Facility, Current Borrowing Capacity | $ 150,000 | |||
Weighted-Average Maturity in Years | 5 years | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 225,000 | |||
Undrawn Commitment Fee | 0.25% | |||
Interest rate spread over basis | 2.00% | |||
Fee-Paying Assets Under Management Covenant Amount | $ 22,000,000 | |||
Indebtedness Permitted Under Credit Facility Agreement | 150,000 | |||
Additional Indebtedness Permitted Under Credit Facility Agreement for CLO Risk Retention Investments | 400,000 | |||
Other Liens Permitted Under Credit Facility Agreement | $ 50,000 | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Undrawn Commitment Fee | 0.25% | |||
Interest rate spread over basis | 2.00% | |||
Debt Instrument, Basis Spread over Base Rate, Percentage | 1.00% | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Undrawn Commitment Fee | 0.10% | |||
Interest rate spread over basis | 1.00% | |||
Debt Instrument, Basis Spread over Base Rate, Percentage | 0.00% | |||
Aircraft Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt obligations | $ 46,400 | |||
On or prior to December 31, 2017 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Economic Income leverage ratio | 4 | |||
On or after March 31, 2018 but on or prior to December 31, 2018 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Economic Income leverage ratio | 3.50 | |||
On or after March 31, 2019 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Economic Income leverage ratio | 3 |
Debt Obligations - Schedule 58
Debt Obligations - Schedule of CLO Investments Loans (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Borrowings Outstanding | $ 569,379 | $ 577,128 |
November 28, 2016 CLO Loan 1 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 15, 2023 | |
Borrowings Outstanding | $ 18,041 | 15,801 |
Interest rate spread over basis | 2.23% | |
June 07, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Nov. 16, 2029 | |
Borrowings Outstanding | $ 17,217 | 0 |
Interest rate spread over basis | 1.48% | |
July 21, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Jan. 22, 2029 | |
Borrowings Outstanding | $ 21,709 | 0 |
Interest rate spread over basis | 1.43% | |
August 02, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Jan. 21, 2030 | |
Borrowings Outstanding | $ 21,686 | 0 |
Interest rate spread over basis | 1.41% | |
August 17, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Apr. 30, 2030 | |
Borrowings Outstanding | $ 22,922 | 0 |
Interest rate spread over basis | 1.43% | |
September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Apr. 22, 2030 | |
Borrowings Outstanding | $ 25,468 | 0 |
Interest rate spread over basis | 1.41% | |
September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Sep. 14, 2024 | |
Borrowings Outstanding | $ 19,561 | 0 |
Interest rate spread over basis | 2.21% | |
November 21, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | May 15, 2030 | |
Borrowings Outstanding | $ 26,202 | 0 |
Interest rate spread over basis | 1.34% | |
Total CLO Investments Loans | ||
Debt Instrument [Line Items] | ||
Borrowings Outstanding | $ 172,806 | $ 15,801 |
Preferred Units - Additional I
Preferred Units - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jan. 23, 2017 | Oct. 05, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Temporary Equity [Line Items] | |||||
Issuance and sale of Preferred Units, gross | $ 150,000 | $ 250,000 | $ 150,054 | $ 246,457 | $ 0 |
Preferred Units, units issued | 150,000 | 250,000 | |||
Preferred Units, units outstanding | 400,000 | ||||
Number of Days After a Change in Control That An Increase in Distribution Rate Occurs | 31 days | ||||
Number of Days after the Maturity Date of the Revolving Credit Facility (a Condition to Effect Redemption) | 91 days | ||||
Threshold of Average Closing Price of Class A Shares | $ 15 | ||||
Number of Trading Days | 20 days | ||||
Maximum | |||||
Temporary Equity [Line Items] | |||||
Aggregate amount of Preferred Units subject to the Purchase Agreement | 400,000 | ||||
Issuance and sale of Preferred Units, gross | $ 400,000 | ||||
Preferred Unit, Distribution Rate, Percentage | 10.00% | ||||
Minimum | |||||
Temporary Equity [Line Items] | |||||
Preferred Unit, Distribution Rate, Percentage | 0.00% | ||||
Through 02/18/2020 | |||||
Temporary Equity [Line Items] | |||||
Preferred Unit Price as a Percent of Liquidation Value | 105.00% | ||||
Beginning 31 days after change in control event | |||||
Temporary Equity [Line Items] | |||||
Increase in Distribution Rate on Preferred Units | 7.00% | ||||
From 02/19/2020 until 2/18/2021 | |||||
Temporary Equity [Line Items] | |||||
Preferred Unit Price as a Percent of Liquidation Value | 103.00% | ||||
From 02/19/2021 until 02/18/2022 | |||||
Temporary Equity [Line Items] | |||||
Preferred Unit Price as a Percent of Liquidation Value | 101.00% | ||||
From and after March 31, 2020 | |||||
Temporary Equity [Line Items] | |||||
Threshold of Distributions That Would Cause a Portion to Be Used for Redemption | $ 100,000 | ||||
Percent of the Excess Over Threshold That Would Cause Redemption | 20.00% |
Equity-Based Compensation Exp60
Equity-Based Compensation Expenses - Equity-Based Compensation Expense Summary (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expense recorded within compensation and benefits | $ 84,169 | $ 75,217 | $ 112,639 |
Corresponding tax benefit | $ 4,720 | $ 3,116 | $ 9,032 |
Equity-Based Compensation Exp61
Equity-Based Compensation Expenses - Settlement of RSUs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs withheld to satisfy tax withholding obligations | $ 7,577 | $ 7,960 | $ 15,865 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs settled in Class A Shares | 13,016 | 12,675 | 42,118 |
Fair value of RSUs settled in cash | 130 | 0 | 6,074 |
Fair value of RSUs withheld to satisfy tax withholding obligations | $ 7,577 | $ 7,960 | $ 15,865 |
Number of RSUs withheld to satisfy tax withholding obligations | 2,802,689 | 2,228,562 | 2,064,106 |
Equity-Based Compensation Exp62
Equity-Based Compensation Expenses - Activity Related to Unvested RSUs (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 11,367,733 | ||
Unvested Units, Granted | 14,585,657 | ||
Unvested Units, Vested | (7,975,255) | ||
Unvested Units, Canceled or Forfeited | (3,447,533) | ||
Unvested Units, End of Year | 14,530,602 | 11,367,733 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 7.05 | ||
Weighted-Average Grant-Date Fair Value, Granted | 3.16 | $ 4.36 | $ 10.33 |
Weighted-Average Grant-Date Fair Value, Vested | 5.29 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 4.68 | ||
Weighted-Average Grant-Date Fair Value, End of Year | $ 4.67 | $ 7.05 | |
Group A Units | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 9,899,244 | ||
Unvested Units, Granted | 172,459 | ||
Unvested Units, Vested | (1,661,040) | ||
Unvested Units, End of Year | 8,410,663 | 9,899,244 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 9.86 | ||
Weighted-Average Grant-Date Fair Value, Granted | 2.19 | $ 4.12 | $ 11.69 |
Weighted-Average Grant-Date Fair Value, Vested | 9.53 | ||
Weighted-Average Grant-Date Fair Value, End of Year | $ 9.77 | $ 9.86 | |
Group P Units | |||
Unvested Units | |||
Unvested Units, Granted | 71,900,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-Average Grant-Date Fair Value, Granted | $ 1.25 |
Equity-Based Compensation Exp63
Equity-Based Compensation Expenses - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-Average Grant-Date Fair Value, Granted | $ 3.16 | $ 4.36 | $ 10.33 |
Unrecognized Compensation Expense | $ 49.1 | ||
Weighted-Average Amortization Period | 2 years 1 month | ||
Group A Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-Average Grant-Date Fair Value, Granted | $ 2.19 | $ 4.12 | $ 11.69 |
Unrecognized Compensation Expense | $ 67.7 | ||
Weighted-Average Amortization Period | 4 years 7 months | ||
Discount for Transfer Restrictions | 5.00% |
Equity-Based Compensation Exp64
Equity-Based Compensation Expenses - Group P Units, 2017 Incentive Program and Limited Partnership Agreements Amendments (Details) - Group P Units $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested Units, Granted | shares | 71.9 |
Weighted-Average Grant-Date Fair Value, Granted | $ 1.25 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 35.70% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 10.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.20% |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 3 years 8 months |
Performance Reference Price per Share | $ 3.21 |
Unrecognized Compensation Expense | $ | $ 68.7 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 8 months |
P Units vest - 20% incremental and total | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percent of Performance Condition for Units vesting | 25.00% |
P Units vest - 40% incremental and 60% total | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percent of Performance Condition for Units vesting | 50.00% |
P Unit vest - 20% incremental and 80% total | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percent of Performance Condition for Units vesting | 75.00% |
P Unit vest - 20% incremental and 100% total | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percent of Performance Condition for Units vesting | 125.00% |
Performance threshold - 25% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% |
Performance threshold - 50% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Incremental Percent of Units Vested Once Performance Threshold is Met | 40.00% |
Aggregate Percent of Units Vested Once Performance Threshold Is Met | 60.00% |
Performance threshold - 75% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% |
Aggregate Percent of Units Vested Once Performance Threshold Is Met | 80.00% |
Performance threshold - 125% | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% |
Aggregate Percent of Units Vested Once Performance Threshold Is Met | 100.00% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | $ 21,300 | $ (3,600) | $ 11,600 |
Current: | |||
Federal income taxes, Current | 103 | 19 | (151) |
State and local income taxes, Current | 2,172 | 4,885 | 13,241 |
Foreign income taxes, Current | 2,520 | 3,746 | 3,374 |
Provision for Income Taxes, Current | 4,795 | 8,650 | 16,464 |
Deferred: | |||
Federal income taxes, Deferred | 322,162 | 7,760 | 40,510 |
State and local income taxes, Deferred | (9,828) | (6,131) | 73,898 |
Foreign income taxes, Deferred | 430 | 607 | 1,352 |
Provision for Income Taxes, Deferred | 312,764 | 2,236 | 115,760 |
Total Provision for Income Taxes | $ 317,559 | $ 10,886 | $ 132,224 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Income Tax Assets: | ||
Tax goodwill | $ 272,636 | $ 583,707 |
Net operating loss | 76,100 | 86,935 |
Tax credit carryforwards | 16,102 | 20,931 |
Investments in partnerships | 20,440 | 11,173 |
Employee compensation | 626 | 780 |
Deferred Tax Assets, Other | 2,145 | 227 |
Deferred Income Tax Assets | 388,049 | 703,753 |
Valuation allowance | (12,028) | (7,955) |
Total Deferred Income Tax Assets | 376,021 | 695,798 |
Deferred Income Tax Liabilities: | ||
Total Deferred Income Tax Liabilities | $ 1,167 | $ 655 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory U.S. Federal Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 35.00% | 35.00% | 35.00% |
Impact of federal tax reform | 40.34% | 0.00% | 0.00% |
Income passed through to noncontrolling interests | (10.40%) | (23.10%) | (16.34%) |
Nondeductible fines and penalties | 0.00% | (12.78%) | 0.00% |
Income not subject to entity level tax | (4.54%) | (3.01%) | 2.44% |
State and local income taxes due to enacted change in tax laws | 0.00% | 0.00% | 23.14% |
Other state and local income taxes | 4.42% | 0.56% | 4.66% |
Changes in tax receivable agreement liability | 0.00% | 0.00% | (6.94%) |
Foreign income taxes | 0.63% | (0.96%) | 1.24% |
Other, net | 1.84% | 0.72% | 0.94% |
Effective Income Tax Rate | 67.29% | (3.57%) | 44.14% |
Income Taxes - Additional Info
Income Taxes - Additional Information (Detail) 10-K - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards | |||
Impact of TCJA from Revaluation of Deferred Income Tax Assets | $ 190,400 | ||
Impact of TCJA on TRA Liability | 90,400 | ||
Deferred income taxes | 312,764 | $ 2,236 | $ 115,760 |
Valuation allowance pertaining to state and local tax credit carryforwards | $ 12,028 | 7,955 | |
Open Tax Year | 2,014 | ||
Unrecognized tax benefits | $ 7,000 | ||
Unrecognized tax benefits that would impact effective tax rate | 4,500 | ||
Foreign Country | |||
Operating Loss Carryforwards | |||
Valuation allowance pertaining to state and local tax credit carryforwards | $ 12,000 | $ 8,000 | |
Open Tax Year | 2,007 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Open Tax Year | 2,012 | ||
Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards | $ 16,100 | ||
Operating loss carryforwards | 269,000 | ||
State Income Tax | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards | 146,000 | ||
Local Income Tax | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards | $ 142,400 | ||
Minimum | State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2035 | ||
Minimum | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards expiration date | Dec. 31, 2018 | ||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2030 | ||
Maximum | State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2037 | ||
Maximum | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2037 | ||
Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Impact of TCJA on Deferred Income Tax Assets | $ 280,800 |
General, Administrative and O69
General, Administrative and Other - Components of General, Administrative and Other Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Professional services | $ 43,343 | $ 74,859 | $ 72,969 |
Occupancy and equipment | 33,358 | 35,998 | 34,358 |
Information processing and communications | 28,274 | 34,485 | 31,971 |
Recurring placement and related service fees | 20,153 | 38,424 | 48,702 |
Insurance | 7,609 | 15,333 | 16,719 |
Business development | 6,685 | 13,440 | 15,707 |
Other expenses | 12,649 | 21,828 | 19,565 |
General and Administrative Expense before Settlements Expense, if any | 152,071 | 234,367 | 239,991 |
Settlements expense | 0 | 412,101 | 0 |
Total General, Administrative and Other | $ 152,071 | $ 646,468 | $ 239,991 |
Earnings (Loss) Per Class A S70
Earnings (Loss) Per Class A Share - Computation of Basic and Diluted Earnings (Loss) Per Class A Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings (Loss) Per Share [Line Items] | |||
Net Income (Loss) Attributable to Class A Shareholders | $ 18,222 | $ (130,762) | $ 25,740 |
Net Income (Loss) Attributable to Class A Shareholders, Diluted | $ 18,222 | $ (349,871) | $ 25,740 |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 186,423,793 | 182,670,173 | 177,935,977 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 187,181,760 | 479,987,268 | 180,893,947 |
Income (Loss) Per Class A Share, Basic (in dollars per share) | $ 0.10 | $ (0.72) | $ 0.14 |
Income (Loss) Per Class A Share, Diluted (in dollars per share) | $ 0.10 | $ (0.73) | $ 0.14 |
Group A Units | |||
Earnings (Loss) Per Share [Line Items] | |||
Net Income (Loss) Attributable to Class A Shareholders, Effect of dilutive securities | $ 0 | $ (219,109) | $ 0 |
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 297,317,095 | 0 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 272,301,466 | 0 | 301,064,047 |
RSUs | |||
Earnings (Loss) Per Share [Line Items] | |||
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 757,967 | 0 | 2,957,970 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 0 | 14,343,302 | 0 |
Earnings (Loss) Per Class A S71
Earnings (Loss) Per Class A Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RSUs | |||
Earnings (Loss) Per Share [Line Items] | |||
Vested RSUs included in weighted-average Class A Shares outstanding | 1,103,733 | 1,144,614 | 1,016,694 |
Related Party Transactions - M
Related Party Transactions - Management Fees and Incentive Income Earned from Related Parties and Waived Fees (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Payments under Tax Receivable Agreement | $ 53,500 | ||
Amount of related parties assets under management | $ 2,800,000 | $ 2,700,000 | |
Percent of assets under management not charged management and incentive fees | 71.00% | 51.00% | |
Management fees | $ 319,458 | $ 533,156 | 643,991 |
Incentive income | 528,000 | 233,440 | 187,563 |
Fees charged on investments held by related parties: | |||
Related Party Transaction [Line Items] | |||
Management fees | 10,574 | 18,243 | 20,297 |
Incentive income | $ 14,052 | $ 12,266 | $ 3,819 |
Related Party Transactions - A
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |||
Payments under Tax Receivable Agreement | $ 53,500 | ||
Fees charged for use of corporate aircraft | $ 360 | $ 744 | $ 1,200 |
Commitments and Contingencies -
Commitments and Contingencies - Estimated Potential Payments Under Tax Receivable Agreement (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Nov. 19, 2007 | |
Tax Receivable Agreement [Abstract] | |||
Tax Receivable Agreement Future Maximum Payments Due in the Next Fiscal Year | $ 43,211 | ||
Tax Receivable Agreement Future Maximum Payments Due In Two Year | 29,254 | ||
Tax Receivable Agreement Future Maximum Payments Due In Three Years | 28,980 | ||
Tax Receivable Agreement Future Maximum Payments Due In Four Years | 29,619 | ||
Tax Receivable Agreement Future Maximum Payments Due In Five Years | 30,871 | ||
Tax Receivable Agreement Future Maximum Payments Due Thereafter | $ 118,055 | ||
Percentage of tax savings to be paid under Tax Receivable Agreement | 78.00% | 85.00% | |
Estimated future payments under tax receivable agreement | $ 279,990 | ||
Decrease in deferred income tax asset due to Tax Receivable Agreement liability waiver | 18,000 | $ 72,600 | |
Reduction in tax receivable liability due to waiver of payments | 7,500 | 33,400 | |
Increase in paid in capital as a result of waiver of certain payments due under the Tax Receivable Agreement | $ 10,500 | $ 39,200 |
Commitments and Contingencies75
Commitments and Contingencies - Schedule of Operating Lease Commitments (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Schedule of Operating Lease Commitments [Abstract] | |
Operating Leases, Future Minimum Payments Due 2018 | $ 21,241 |
Operating Leases, Future Minimum Payments, Due in 2019 | 17,466 |
Operating Leases, Future Minimum Payments, Due 2020 | 20,234 |
Operating Leases, Future Minimum Payments, Due in 2021 | 20,045 |
Operating Leases, Future Minimum Payments, Due in 2022 | 19,989 |
Operating Leases, Future Minimum Payments, Due Thereafter | 116,835 |
Operating Leases, Future Minimum Payments Due | $ 215,810 |
Commitments and Contingencies
Commitments and Contingencies - Unearned Incentive Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unearned Incentive Income Rollforward | ||
Beginning of Year | $ 96,079 | $ 0 |
Deconsolidation of funds on adoption of ASU 2015-02 | 81,972 | |
Incentive income collected but subject to clawback | 53,915 | 22,557 |
Incentive income recognized | (6,284) | (8,450) |
End of Year | $ 143,710 | $ 96,079 |
Commitments and Contingencies77
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 19, 2007 | |
Loss Contingencies [Line Items] | ||||
Operating leases, rent expense | $ 17,800,000 | $ 22,500,000 | $ 22,100,000 | |
Percentage of tax savings to be paid under Tax Receivable Agreement | 78.00% | 85.00% | ||
Estimated future payments under tax receivable agreement | $ 279,990,000 | |||
Unfunded capital commitments of the Company to funds managed | 30,700,000 | |||
Unfunded capital commitments of certain related parties to funds managed | $ 46,800,000 | |||
New York | ||||
Loss Contingencies [Line Items] | ||||
Non cancelable lease expiration year | 2,029 | |||
Other Locations | ||||
Loss Contingencies [Line Items] | ||||
Non cancelable lease expiration year | 2,024 | |||
Minimum | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss for a contingency | $ 0 | |||
Maximum | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss for a contingency | $ 25,000,000 |
Segment Information - Oz Funds
Segment Information - Oz Funds Segment Results (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Oz Funds Segment: | |||
Revenues | $ 858,337 | $ 770,364 | $ 1,322,981 |
Operating Segments | Oz Funds Segment | |||
Oz Funds Segment: | |||
Revenues | 805,634 | 700,950 | 821,905 |
Economic Income | $ 332,603 | $ (217,006) | $ 340,157 |
Segment Information - Reconcil
Segment Information - Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 858,337 | $ 770,364 | $ 1,322,981 | |
Income of consolidated funds | (4,102) | (1,762) | (489,350) | |
Material Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Adjustment to management fees | [1] | (20,151) | (38,424) | (1,804) |
Adjustment to incentive income | [2] | 0 | 0 | 17,449 |
Adjustment to other revenue | [3] | (1,097) | 0 | 0 |
Other Operations revenues | (27,353) | (29,228) | (27,371) | |
Income of consolidated funds | (4,102) | (1,762) | (489,350) | |
Operating Segments | Oz Funds Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 805,634 | $ 700,950 | $ 821,905 | |
[1] | Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated funds is also removed. | |||
[2] | Adjustment to exclude the impact of eliminations related to the consolidated funds. | |||
[3] | Adjustment to exclude realized gains on sale of fixed assets. |
Segment Information - Reconc80
Segment Information - Reconciliation of Oz Funds Economic Income to Net Income Attributable to Class A Shareholders (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Net Income (Loss) Attributable to Class A Shareholders—GAAP | $ 18,222 | $ (130,762) | $ 25,740 |
Change in redemption value of Preferred Units | 2,853 | 6,082 | 0 |
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP | 21,075 | (124,680) | 25,740 |
Income taxes | 317,559 | 10,886 | 132,224 |
Reorganization expenses | 14,064 | ||
Changes in tax receivable agreement liability | (222,859) | 1,663 | (55,852) |
Depreciation, amortization and net gains and losses on fixed assets | 10,334 | 19,882 | 11,331 |
Material Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Net income (loss) attributable to Group A Units | 130,730 | (195,087) | 136,449 |
Equity-based compensation, net of RSUs settled in cash | 84,039 | 75,217 | 106,565 |
Adjustment to recognize deferred cash compensation in the period of grant | (28,893) | (1,851) | 0 |
Income taxes | 317,559 | 10,886 | 132,224 |
Adjustment for incentive income allocations from consolidated funds subject to clawback | 0 | 0 | (45,077) |
Allocations to Group D Units | 6,674 | 0 | 12,675 |
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 22,967 | 6,752 | 8,612 |
Reorganization expenses | 0 | 0 | 14,064 |
Changes in tax receivable agreement liability | (222,859) | 1,663 | (55,852) |
Depreciation, amortization and net gains and losses on fixed assets | 10,334 | 19,882 | 11,331 |
Other adjustments | (3,891) | (4,357) | (1,515) |
Other Operations | (5,132) | (5,431) | (5,059) |
Operating Segments | Oz Funds Segment | |||
Segment Reporting Information [Line Items] | |||
Economic Income - Oz Funds Segment | $ 332,603 | $ (217,006) | $ 340,157 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Feb. 16, 2018 | Feb. 05, 2018 | Feb. 22, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||||||
Additional investments in notes of CLOs | $ 165,519 | $ 40,920 | $ 2,826 | |||
Borrowings to finance investments in CLOs | $ 154,490 | $ 135,951 | $ 3,606 | |||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Dividends announcement date | Feb. 16, 2018 | |||||
Cash dividend (in dollars per share) | $ 0.07 | |||||
Dividends payable date | Mar. 5, 2018 | |||||
Dividends record date | Feb. 26, 2018 | |||||
Additional investments in notes of CLOs | $ 74,800 | |||||
Borrowings to finance investments in CLOs | $ 61,800 | |||||
PSUs | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Threshold Period for Forfeiture and Cancellation | 6 years | |||||
PSUs | Subsequent Event | Performance threshold - 25% | ||||||
Subsequent Event [Line Items] | ||||||
Aggregate Percent of Units Vested Once Performance Threshold Is Met | 20.00% | |||||
PSUs | Subsequent Event | Performance threshold - 50% | ||||||
Subsequent Event [Line Items] | ||||||
Incremental Percent of Units Vested Once Performance Threshold is Met | 40.00% | |||||
PSUs | Subsequent Event | Performance threshold - 75% | ||||||
Subsequent Event [Line Items] | ||||||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | |||||
PSUs | Subsequent Event | Performance threshold - 125% | ||||||
Subsequent Event [Line Items] | ||||||
Incremental Percent of Units Vested Once Performance Threshold is Met | 20.00% | |||||
PSUs | Subsequent Event | PSU units vest - 20% incremental and total | ||||||
Subsequent Event [Line Items] | ||||||
Percent of Performance Condition for Units vesting | 25.00% | |||||
PSUs | Subsequent Event | PSU Units vest - 40% incremental and 60% total | ||||||
Subsequent Event [Line Items] | ||||||
Percent of Performance Condition for Units vesting | 50.00% | |||||
PSUs | Subsequent Event | PSU Units vest - 20% incremental and 80% total | ||||||
Subsequent Event [Line Items] | ||||||
Percent of Performance Condition for Units vesting | 75.00% | |||||
PSUs | Subsequent Event | PSU Units vest - 20% incremental and 100% total | ||||||
Subsequent Event [Line Items] | ||||||
Percent of Performance Condition for Units vesting | 125.00% |
Subsequent Events - Units and
Subsequent Events - Units and Shares Transactions (Details) - shares | Feb. 23, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Group D Units | 35,233,213 | ||||
Group A Units | |||||
Subsequent Event [Line Items] | |||||
Equity Units Outstanding | 8,410,663 | 9,899,244 | |||
Group A Units | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Equity Units Outstanding | 261,489,478 | ||||
Group P Units | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Equity Units Outstanding | 42,850,000 | ||||
RSUs | |||||
Subsequent Event [Line Items] | |||||
Equity Units Outstanding | 14,530,602 | 11,367,733 | |||
RSUs | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Equity Units Outstanding | 52,934,167 | ||||
PSUs | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Equity Units Outstanding | 10,000,000 | ||||
Class A Shares | |||||
Subsequent Event [Line Items] | |||||
Class A Shares | 189,573,210 | 184,843,255 | 181,026,455 | 175,946,555 | |
Class A Shares | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Class A Shares | 190,781,536 |