Cover page
Cover page - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 19, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K/A | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-33805 | ||
Entity Registrant Name | SCULPTOR CAPITAL MANAGEMENT, INC. | ||
Entity Central Index Key | 0001403256 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-0354783 | ||
Entity Address, Address Line One | 9 West 57th Street | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10019 | ||
City Area Code | 212 | ||
Local Phone Number | 790-0000 | ||
Title of 12(b) Security | Class A Shares | ||
Trading Symbol | SCU | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 459,200 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive proxy statement for the 2020 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K. The registrant's definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Class A Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 21,911,815 | ||
Class B Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 29,208,952 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 240,938 | $ 315,809 |
Restricted cash | 4,501 | 8,075 |
Investments (includes assets measured at fair value of $329,435 and $361,378, including assets sold under agreements to repurchase of $98,085 and $62,186 as of December 31, 2019, and December 31, 2018, respectively) | 411,426 | 389,897 |
Income and fees receivable | 215,395 | 82,843 |
Due from related parties | 15,355 | 20,754 |
Deferred income tax assets | 310,557 | 355,025 |
Operating lease assets | 115,810 | 0 |
Other assets, net | 82,608 | 82,403 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 0 | 171,495 |
Other assets of consolidated funds | 649 | 21,090 |
Total Assets | 1,397,239 | 1,447,391 |
Liabilities | ||
Compensation payable | 187,180 | 105,036 |
Unearned incentive income | 60,798 | 61,397 |
Due to related parties | 211,915 | 281,821 |
Operating lease liabilities | 128,043 | 0 |
Debt obligations | 286,728 | 289,987 |
Securities sold under agreements to repurchase | 97,508 | 62,801 |
Other liabilities | 59,217 | 63,603 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 389 | 14,541 |
Total Liabilities | 1,031,778 | 879,186 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interests | 150,000 | 577,660 |
Shareholders’ Equity (Deficit) | ||
Additional paid-in capital | 117,936 | 3,135,841 |
Accumulated deficit | (343,759) | (3,564,727) |
Shareholders’ deficit attributable to Class A Shareholders | (225,318) | (428,886) |
Shareholders’ equity attributable to noncontrolling interests | 440,779 | 419,431 |
Total Shareholders’ Equity (Deficit) | 215,461 | (9,455) |
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity (Deficit) | 1,397,239 | 1,447,391 |
Class A Shares | ||
Shareholders’ Equity (Deficit) | ||
Value of stock | 213 | 0 |
Class B Shares | ||
Shareholders’ Equity (Deficit) | ||
Value of stock | $ 292 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments measured at fair value | $ 329,435 | $ 361,378 |
Assets sold under agreements to repurchase at fair value | $ 98,085 | $ 62,186 |
Class A Shares | ||
Common stock, par value per share | $ 0.01 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 21,284,945 | 19,905,126 |
Common stock, shares outstanding | 21,284,945 | 19,905,126 |
Class B Shares | ||
Common stock, par value per share | $ 0.01 | |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 29,208,952 | 29,458,948 |
Common stock, shares outstanding | 29,208,952 | 29,458,948 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Other revenues | $ 15,982 | $ 15,976 | $ 6,777 |
Income of consolidated funds | 6,732 | 6,489 | 4,102 |
Total Revenues | 597,346 | 507,223 | 858,337 |
Expenses | |||
Compensation and benefits | 418,349 | 312,723 | 436,549 |
Interest expense | 24,900 | 24,179 | 23,191 |
General, administrative and other | 149,961 | 181,977 | 152,071 |
Expenses of consolidated funds | 646 | 406 | 9,391 |
Total Expenses | 593,856 | 519,285 | 621,202 |
Other Income (Loss) | |||
Changes in tax receivable agreement liability | 4,776 | 2,218 | 222,859 |
Net losses on early retirement of debt | (6,375) | (14,303) | 0 |
Net gains (losses) on investments | 8,068 | (7,055) | 3,465 |
Net gains (losses) of consolidated funds | 3,768 | (5,200) | 8,472 |
Total Other Income (Loss) | 10,237 | (24,340) | 234,796 |
Income (Loss) Before Income Taxes | 13,727 | (36,402) | 471,931 |
Income taxes | 34,112 | 12,500 | 317,559 |
Consolidated and Comprehensive Net (Loss) Income | (20,385) | (48,902) | 154,372 |
Less: Net loss (income) attributable to noncontrolling interests | 36,184 | 24,909 | (131,630) |
Less: Net income attributable to redeemable noncontrolling interests | (8,745) | (291) | (1,667) |
Net Income (Loss) Attributable to Sculptor Capital Management, Inc. | 7,054 | (24,284) | 21,075 |
Change in redemption value of Preferred Units | 44,364 | 0 | (2,853) |
Net Income (Loss) Attributable to Class A Shareholders | $ 51,418 | $ (24,284) | $ 18,222 |
Earnings (Loss) per Class A Share | |||
Earnings (Loss) Per Class A Share, Basic (in dollars per share) | $ 2.48 | $ (1.26) | $ 0.98 |
Earnings (Loss) Per Class A Share, Diluted (in dollars per share) | $ 1.57 | $ (1.26) | $ 0.97 |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 20,773,493 | 19,270,929 | 18,642,379 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 46,300,690 | 19,270,929 | 18,718,176 |
Management fees | |||
Revenues | |||
Investment management revenues | $ 253,011 | $ 281,862 | $ 319,458 |
Incentive income | |||
Revenues | |||
Investment management revenues | $ 321,621 | $ 202,896 | $ 528,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Class A Shares | Class B Shares | Common Stock Par ValueClass A Shares | Common Stock Par ValueClass B Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Deficit Attributable to Class A Shareholders | Shareholders’ Equity Attributable to Noncontrolling Interests |
Dividends Paid per Class A Share (in dollars per share) | $ 0.70 | ||||||||
Balance at Beginning of Period (shares) at Dec. 31, 2016 | 18,484,326 | 29,731,702 | |||||||
Balance at Beginning of Period (values) at Dec. 31, 2016 | $ 0 | $ 0 | $ 3,097,431 | $ (3,563,452) | $ 171,929 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Equity-based compensation | 472,995 | 17,246 | |||||||
Relinquishment of Group A Units (shares) | (3,000,000) | ||||||||
Class B Shares granted to holders of Group P Units | 7,185,000 | ||||||||
Equity-based compensation, net of taxes | 0 | 0 | 31,411 | 45,174 | |||||
Reclassification upon corporate conversion | 0 | 0 | 0 | 0 | |||||
Dividend equivalents on Class A restricted share units | 556 | (556) | |||||||
Impact of changes in Sculptor Operating Group ownership | (14,092) | 14,092 | |||||||
Reallocation of equity and income tax effects of Recapitalization | 0 | 0 | |||||||
Amendment to tax receivable agreement | $ 10,520 | 10,840 | (320) | ||||||
Dilution of proceeds from tax receivable agreement amendment (Note 4) | (21,219) | 21,219 | |||||||
Change in redemption value of Preferred Units | 7,446 | (2,853) | (4,593) | ||||||
Cash dividends declared on Class A Shares | (12,972) | ||||||||
Comprehensive net income, excluding amounts attributable to redeemable noncontrolling interests | 21,075 | 131,630 | |||||||
Capital contributions | 1,297 | ||||||||
Capital distributions | (22,526) | ||||||||
Balance at End of Period (shares) at Dec. 31, 2017 | 18,957,321 | 33,933,948 | |||||||
Balance at End of Period (values) at Dec. 31, 2017 | $ (95,929) | 0 | 0 | 3,102,074 | (3,555,905) | $ (453,831) | 357,902 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Impact of adoption of ASU 2014-09 | 41,922 | 75,062 | |||||||
Dividends Paid per Class A Share (in dollars per share) | $ 1.30 | ||||||||
Equity-based compensation | 947,805 | (4,125,000) | |||||||
Relinquishment of Group A Units (shares) | (350,000) | ||||||||
Class B Shares granted to holders of Group P Units | 0 | ||||||||
Equity-based compensation, net of taxes | 0 | 0 | 33,575 | 45,260 | |||||
Reclassification upon corporate conversion | 0 | 0 | 0 | 0 | |||||
Dividend equivalents on Class A restricted share units | 1,618 | (1,618) | |||||||
Impact of changes in Sculptor Operating Group ownership | (1,426) | 1,426 | |||||||
Reallocation of equity and income tax effects of Recapitalization | 0 | 0 | |||||||
Amendment to tax receivable agreement | $ 0 | 0 | 0 | ||||||
Dilution of proceeds from tax receivable agreement amendment (Note 4) | 0 | 0 | |||||||
Change in redemption value of Preferred Units | 0 | 0 | 0 | ||||||
Cash dividends declared on Class A Shares | (24,842) | ||||||||
Comprehensive net income, excluding amounts attributable to redeemable noncontrolling interests | (24,284) | (24,909) | |||||||
Capital contributions | 1,733 | ||||||||
Capital distributions | (37,043) | ||||||||
Balance at End of Period (shares) at Dec. 31, 2018 | 19,905,126 | 29,458,948 | |||||||
Balance at End of Period (values) at Dec. 31, 2018 | $ (9,455) | 0 | 0 | 3,135,841 | (3,564,727) | (428,886) | 419,431 | ||
Dividends Paid per Class A Share (in dollars per share) | $ 0.95 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Equity-based compensation | 1,379,819 | (249,996) | |||||||
Relinquishment of Group A Units (shares) | 0 | ||||||||
Class B Shares granted to holders of Group P Units | 0 | ||||||||
Equity-based compensation, net of taxes | 8 | 0 | 83,061 | 37,853 | |||||
Reclassification upon corporate conversion | 205 | 292 | (3,235,728) | 3,235,231 | |||||
Dividend equivalents on Class A restricted share units | 1,739 | (1,739) | |||||||
Impact of changes in Sculptor Operating Group ownership | (124) | 124 | |||||||
Reallocation of equity and income tax effects of Recapitalization | 37,816 | (39,086) | |||||||
Amendment to tax receivable agreement | $ 50,967 | 50,967 | 0 | ||||||
Dilution of proceeds from tax receivable agreement amendment (Note 4) | 0 | 0 | |||||||
Change in redemption value of Preferred Units | (101,406) | 44,364 | 57,042 | ||||||
Cash dividends declared on Class A Shares | (19,578) | ||||||||
Comprehensive net income, excluding amounts attributable to redeemable noncontrolling interests | 7,054 | (36,184) | |||||||
Capital contributions | 2,606 | ||||||||
Capital distributions | (1,007) | ||||||||
Balance at End of Period (shares) at Dec. 31, 2019 | 21,284,945 | 29,208,952 | |||||||
Balance at End of Period (values) at Dec. 31, 2019 | $ 215,461 | $ 213 | $ 292 | $ 117,936 | $ (343,759) | $ (225,318) | $ 440,779 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | ||||
Consolidated net (loss) income | $ (20,385) | $ (48,902) | $ 154,372 | |
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | ||||
Amortization of equity-based compensation | 127,505 | 87,130 | 84,169 | |
Depreciation, amortization and net gains and losses on fixed assets | 8,449 | 10,308 | 10,334 | |
Net losses on early retirement of debt | 6,375 | 14,303 | 0 | |
Deferred income taxes | 26,935 | 8,599 | 312,764 | |
Non-cash lease expense | 21,222 | 0 | 0 | |
Net (gains) losses on investments, net of dividends | (4,577) | 11,350 | (3,465) | |
Operating cash flows due to changes in: | ||||
Income and fees receivable | (132,552) | 300,450 | (177,819) | |
Due from related parties | 5,399 | 7,448 | (7,708) | |
Other assets, net | 7,733 | 30,607 | (6,388) | |
Compensation payable | 79,290 | (106,645) | 2,658 | |
Unearned incentive income | (599) | 17,109 | 47,631 | |
Due to related parties | (2,674) | 266 | (222,563) | |
Operating lease liabilities | (18,286) | 0 | 0 | |
Other liabilities | 1,107 | (11,144) | (3,869) | |
Consolidated funds related items: | ||||
Net (gains) losses of consolidated funds | (3,768) | 5,200 | (8,472) | |
Purchases of investments | (128,917) | (378,626) | (423,147) | |
Proceeds from sale of investments | 263,505 | 245,309 | 184,783 | |
Other assets of consolidated funds | (31,832) | (7,769) | (307,379) | |
Other liabilities of consolidated funds | 8,041 | 3,203 | 80,421 | |
Net Cash Provided by (Used in) Operating Activities | 211,971 | 188,196 | (283,678) | |
Cash Flows from Investing Activities | ||||
Purchases of fixed assets | (1,935) | (5,830) | (4,990) | |
Proceeds from sale of fixed assets | 0 | 0 | 57,599 | |
Purchases of United States government obligations | (400,766) | (293,183) | (112,400) | |
Maturities of United States government obligations | 437,574 | 129,781 | 100,000 | |
Investments in funds | (110,650) | (179,930) | (165,519) | |
Return of investments in funds | 60,957 | 180,415 | 6,959 | |
Net Cash Used in Investing Activities | (14,820) | (168,747) | (118,351) | |
Cash Flows from Financing Activities | ||||
Issuance and sale of Preferred Units, net of issuance costs | 0 | 0 | 150,054 | |
Contributions from noncontrolling and redeemable noncontrolling interests | 6,353 | 148,950 | 3,629 | |
Distributions to noncontrolling and redeemable noncontrolling interests | (104,098) | (52,506) | (22,526) | |
Dividends on Class A Shares | (19,578) | (24,842) | (12,972) | |
Proceeds from debt obligations, net of issuance costs | 3,423 | 301,558 | 154,490 | |
Repayment of debt obligations, including prepayment costs | (192,790) | (595,463) | (167,516) | |
Proceeds from securities sold under agreements to repurchase, net of issuance costs | 36,134 | 63,099 | 0 | |
Proceeds from debt obligations of consolidated CLO | 0 | 0 | 666,711 | |
Repayment of debt obligations of consolidated CLO | 0 | 0 | 222,434 | |
Other, net | (5,040) | (5,874) | (7,707) | |
Net Cash (Used in) Provided by Financing Activities | (275,596) | (165,078) | 541,729 | |
Net change in cash and cash equivalents and restricted cash | (78,445) | (145,629) | 139,700 | |
Cash and Cash Equivalents and Restricted Cash, Beginning of Period | 323,884 | 469,513 | 329,813 | |
Cash and Cash Equivalents and Restricted Cash, End of Period | 245,439 | 323,884 | 469,513 | $ 329,813 |
Cash paid during the period: | ||||
Interest | 11,583 | 28,472 | 20,904 | |
Income taxes | 4,978 | 2,930 | 4,156 | |
Non-cash transactions: | ||||
Assets related to the initial consolidation of CLO | 0 | 0 | 100,156 | |
Liabilities related to the initial consolidation of CLO | 0 | 0 | 99,878 | |
Increase in paid-in capital as a result of tax receivable agreement amendment | 50,967 | 0 | 10,520 | $ 39,200 |
Assets related to funds deconsolidated | 92,946 | 0 | 653,629 | |
Liabilities related to funds deconsolidated | 49,588 | 0 | 629,282 | |
Reconciliation of cash and cash equivalents and restricted cash | ||||
Cash and Cash Equivalents, at Carrying Value | 240,938 | 315,809 | 469,513 | |
Restricted cash | $ 4,501 | $ 8,075 | $ 0 |
Overview
Overview | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | OVERVIEW Sculptor Capital Management, Inc. (the “Registrant”), formerly Och-Ziff Capital Management Group Inc., a Delaware corporation, together with its consolidated subsidiaries (collectively, the “Company” or “Sculptor Capital”), is a global alternative asset management firm providing investment products in a range of areas, including multi-strategy, credit and real estate. With offices in New York, London, Hong Kong and Shanghai, the Company serves global clients through commingled funds, separate accounts and specialized products (collectively, the “funds”). Sculptor Capital’s distinct investment process seeks to generate attractive and consistent risk-adjusted returns across market cycles through a combination of bottom-up fundamental analysis, a high degree of flexibility, a collaborative team and integrated risk management. The Company’s capabilities span all major geographies, in strategies including fundamental equities, corporate credit, real estate debt and equity, merger arbitrage, structured credit and private investments. The Company 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”), aircraft securitizations, collateralized bond obligations (“CBOs”), commingled products 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. Prior to the fourth quarter of 2019, the Company had two operating segments: Sculptor Funds and Real Estate. In the fourth quarter of 2019, the Company combined these into one operating and reportable segment, which is reflective of how the chief operating decision makers review operating results of the Company and make resource allocation decisions. The Company generates substantially all of its revenues in the United States. The Company conducts its operations through Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP (collectively, the “Sculptor Operating Partnerships” and collectively with their consolidated subsidiaries, the “Sculptor Operating Group”). The Registrant holds its interests in the Sculptor Operating Group indirectly through Sculptor Capital Holding Corporation (“Sculptor Corp”), a wholly owned subsidiary of the Registrant. References to the Company’s “executive managing directors” include the current executive managing directors of the Company, and, except where the context requires otherwise, also include certain executive managing directors who are no longer active in the Company’s business. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business. The Registrant, certain of its subsidiaries and the Company’s founder, Daniel S. Och, entered into a letter agreement dated December 5, 2018, providing for the implementation of certain transactions (the letter agreement together with the term sheet attached thereto, as amended, collectively, the “Letter Agreement”). The Letter Agreement provided for, among other things, the preparation and execution of further agreements (the “Implementing Agreements”) and other actions to implement the transactions contemplated by the Letter Agreement (collectively, the “Recapitalization”). In February 2019, the Company completed the Recapitalization. See Note 3 for additional details. Company Structure As of December 31, 2019, the Registrant is a holding company that, through Sculptor Corp, holds equity ownership interests in the Sculptor Operating Group. The Registrant had 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 on the Class A Shares by the Registrant’s Board of Directors (the “Board”). • Class B Shares —Class B Shares are held by executive managing directors, as further discussed below. 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 Sculptor Operating Group through their direct ownership in the Sculptor Operating Group, subject to the Distribution Holiday discussed below. The Company conducts its operations through the Sculptor Operating Group. The following is a list of the outstanding units of the Sculptor Operating Partnerships as of December 31, 2019: • Group A Units —Group A Units are limited partner interests issued to certain executive managing directors. Beginning on the final day of the Distribution Holiday (as defined in Note 3), each executive managing director may exchange his or her vested and booked-up (as defined below) Group A Units for an equal number of Class A Shares (or the cash equivalent thereof) over a period of two years in three equal installments commencing upon the final day of the Distribution Holiday and on each of the first and second anniversary thereof (or, for units that become vested and booked-up Group A Units after the final day of the Distribution Holiday, from the later of the date on which they would have been exchangeable in accordance with the foregoing and the date on which they become vested and booked-up Group A Units) (and thereafter such units will remain exchangeable), in each case, subject to certain restrictions. A “book-up” is achieved when sufficient appreciation has occurred to meet a prescribed capital account book-up target under the terms of the Sculptor Operating Partnership limited partnership agreements. Holders of Group A Units do not receive distributions during the Distribution Holiday. Group A Unit grants are accounted for as equity-based compensation. See Note 14 for additional information. In connection with the Recapitalization, each Group A Unit outstanding on the Recapitalization date was recapitalized into 0.65 Group A Units and 0.35 Group A-1 Units. • Group A-1 Units —Group A-1 Units are limited partner interests into which 0.35 of each Group A Unit was recapitalized in connection with the reallocation that was effectuated by the Recapitalization. The Group A-1 Units will be canceled at such time and to the extent that the Group E Units granted in connection with the Recapitalization vest and achieve a book-up. Group A-1 Units are not eligible to receive distributions at any time and do not participate in the net income (loss) of the Sculptor Operating Group. However, the holders of Group A-1 Units shall participate in any sale, change of control or other liquidity event that takes place prior to cancellation of the Group A-1 Units. In the Recapitalization, the holders of the 2016 Preferred Units (as defined below) forfeited an additional 749,813 Group A Units, which were recapitalized into Group A-1 Units. • Group B Units —Sculptor Corp holds a general partner interest and Group B Units in each Sculptor Operating Partnership. Sculptor Corp owns all of the Group B Units, which represent equity interest in the Sculptor Operating Partnerships. Except during the Distribution Holiday as described above, the Group B Units are economically identical to the Group A Units held by executive managing directors but are not exchangeable for Class A Shares and are not subject to vesting, forfeiture or minimum retained ownership requirements. • Group E Units —Group E Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group E Unit converts into a Group A Unit and becomes exchangeable for one Class A Share (or the cash equivalent thereof) to the extent there has been a sufficient amount of appreciation for a Group E Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group E Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right , in a change of control transaction or other liquidity event only to the extent of their relative positive capital accounts (if any). In connection with the Recapitalization, all outstanding Group D Units, which were non-equity profits interests, converted into Group E Units on a one-for-one basis. Holders of Group E Units do not receive distributions during the Distribution Holiday. See Note 3 for additional information. Group E Unit grants are accounted for as equity-based compensation. See Note 14 for additional information. • Group P Units —Group P Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group P Unit becomes exchangeable for one Class A Share (or the cash equivalent thereof), in each case upon satisfaction of certain service and performance conditions at such time and, with respect to exchanges, to the extent there has been sufficient appreciation for a Group P Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group P Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right , in a change of control transaction or other liquidity event only to the extent that certain performance conditions are met and to the extent of their relative positive capital accounts (if any). 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 14 for additional information. • Preferred Units — The Preferred Units are non-voting preferred equity interests in the Sculptor Operating Partnerships. Preferred Units issued in 2016 and 2017 are collectively referred to as the “2016 Preferred Units.” The Preferred Units issued in 2019 are referred to as the “2019 Preferred Units.” See Note 10 for additional information. Executive managing directors hold a number of Class B Shares equal to the number of Group A Units, Group A-1 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 Sculptor Corp. One Class B Share will be issued to each holder of Group E Units upon the vesting of each such holder’s Group E Unit, at which time a corresponding number of Class B Shares held by holders of Group A-1 Units will be canceled. The following table presents the number of shares and units (excluding Preferred Units) of the Registrant and the Sculptor Operating Partnerships, respectively, that were outstanding as of December 31, 2019: As of December 31, 2019 Sculptor Capital Management, Inc. Class A Shares 21,284,945 Class B Shares 29,208,952 Sculptor Operating Partnerships Group A Units 16,019,506 Group A-1 Units 9,779,446 Group B Units 21,284,945 Group E Units 13,450,821 Group P Units 3,410,000 In addition, the Company grants Class A restricted share units (“RSUs”) and performance-based RSUs (“PSUs”) to its employees and executive managing directors as a form of compensation. RSU and PSU grants are accounted for as equity-based compensation. See Note 14 for additional information. Reverse Share Split At the close of trading on January 3, 2019, the Company effectuated a 1-for-10 reverse share split (the “Reverse Share Split”) of the Class A Shares. As a result of the Reverse Share Split, every ten issued and outstanding Class A Shares were combined into one Class A Share. In addition, corresponding adjustments were made to the Class B Shares, Group A Units, Group B Units, Group D Units, Group P Units, RSUs and PSUs. All prior period share, unit, per share and per unit amounts have been restated to give retroactive effect to the Reverse Share Split. Corporate Conversion The Company changed its tax classification from a partnership to a corporation effective April 1, 2019 (the “Corporate Classification Change”), and subsequently converted from a Delaware limited liability company into a Delaware corporation effective May 9, 2019. Upon the Corporate Classification Change, the Company reclassified the negative equity balance as of such date to accumulated deficit. Name Change Effective September 12, 2019, the Company changed its name to Sculptor Capital Management, Inc. The Company’s Class A Shares now trade on the New York Stock Exchange under the symbol “SCU.” Also effective September 12, 2019, Och-Ziff Holding Corporation changed its name to Sculptor Capital Holding Corporation, and in its capacity as the general partner of the Sculptor Operating Partnerships, changed the names of OZ Management LP, OZ Advisors LP and OZ Advisors II LP to Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP, respectively. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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 U.S. generally accepted accounting principles (“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 determination of whether to recognize incentive income; (iii) the determination of whether or not to consolidate a variable interest entity; and (iv) 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. 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 impact to the Company’s opening retained earnings in 2016 was driven by the cumulative effect of a change in the incentive income recognition methodology for the funds no longer consolidated by the Company, net of deferred income tax effects. 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, investment manager, or CLO collateral manager. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Fee arrangements are not 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 Variable Interest Entity (“VIE”) or Voting Interest Entity (“VOE”), the classification of which will determine the analysis that the Company is required to perform when determining whether it should consolidate the entity. 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: • 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. • VOEs— Where an entity does not have the characteristics of a VIE, it is 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. 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. A party 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 holds a variable interest in an entity, it is required to determine whether it should consolidate 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. 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. 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. 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 a majority equity investment 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. 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 Sculptor Operating Group Earnings and Capital Prior to the Recapitalization, the attribution of net income (loss) of each Sculptor Operating Partnership was based on the relative ownership percentages of the Group A Units (noncontrolling interests) and the Group B Units (indirectly held by the Registrant). In applying the substantive profit-sharing arrangements in the Sculptor Operating Partnership limited partnership agreements to our consolidated financial statements, for periods subsequent to the Recapitalization and for the duration of the Distribution Holiday, we will allocate net income of each Sculptor Operating Partnership in any fiscal year solely to the Group B Units and any net loss on a pro rata basis based on the relative ownership percentages of the Group A Units and Group B Units. To the extent a Sculptor Operating Partnership incurs a net loss in an interim period, any net income recognized in a subsequent interim period in the same fiscal year is allocated on a pro rata basis to the extent of previously allocated net loss. Conversely, to the extent a Sculptor Operating Partnership recognizes net income in an interim period, any net loss incurred in a subsequent interim period in the same fiscal year is allocated solely to the Group B Units to the extent of previously allocated net income. As of December 31, 2019, Group P Units are not participating in the earnings of the Sculptor Operating Group, as certain service and performance conditions, as described in Note 14, have not been met as of the reporting period end. See Note 4 for additional information regarding the Company’s interest in the Sculptor Operating Group. Noncontrolling Interests The Group A Units represent interests in the Sculptor Operating Group not held by the Company, and amounts attributable to these units are presented as noncontrolling interests in the consolidated balance sheets, and allocations to these interests are presented as net income (loss) attributable to noncontrolling interests in the consolidated statements of comprehensive income (loss). Additionally, until the third quarter of 2019, the Company consolidated certain credit funds that it manages, wherein investors were able to redeem their interests on a monthly basis. Amounts relating to these fund investors’ interests in these funds were presented as redeemable noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests were presented as net income (loss) attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss). See Note 4 for additional information regarding noncontrolling interests. Preferred Units The Company presents 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 Sculptor Operating Group. The pro rata share of the change in redemption value that was allocable to the Registrant was treated as an adjustment to net income (loss) attributable to Class A Shareholder when calculating earnings (loss) per Class A Share. See Note 10 for additional information on the Preferred Units. Revenue Recognition Policies The Company provides asset management services to its customers, including certain administrative services related to the funds’ operations, in exchange for management and incentive fees, which are included in the Company’s agreements with its customers. The services provided in connection with the identified performance obligations are satisfied over time. 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. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which 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 to in exchange for those goods or services. The Company adopted ASU 2014-09 using a modified retrospective application approach as of the beginning of the first quarter of 2018 to all contracts within the scope of the standard as of the date of adoption. As a result of the adoption of ASU 2014-09, the Company now recognizes certain incentive income earlier than as prescribed under guidance in effect for prior years as the threshold for recognition of incentive income under ASU 2014-09 is lower than under the previous standard. The Company recognized an opening adjustment in 2018 to shareholders’ equity of $117.0 million, of which $41.9 million was attributable to Class A shareholders. Management Fees Management fees for the Company’s multi-strategy funds typically range from 0.95% to 2.25% 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 0.50% to 2.00% annually based on the net asset value of these funds. Management fees for Institutional Credit Strategies, which primarily relate to CLOs, generally range from 0.30% to 0.50% annually 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 0.50% 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. The Company considers management fees to be a form of variable consideration, as the amount earned each quarter may depend on various contingencies, such as the value of assets under management, capital inflows and outflows during the period, or changes in committed or invested capital. Management fees, however, are generally recognized at the end of each reporting period and are not subject to clawback and, therefore, the value of the management fees the Company is entitled to receive at the end of each quarter is generally no longer subject to the constraint. Incentive Income The Company earns incentive income based on the cumulative performance of the funds over a commitment period. Prior to the adoption of new revenue recognition accounting guidance in 2018, incentive income was recognized at the end of the applicable commitment period when the amounts were contractually payable, or “crystallized,” and when no longer subject to clawback. Beginning in 2018, as a result of the adoption of the new revenue recognition accounting guidance, the Company recognizes incentive income when such amounts are probable of not significantly reversing. 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. Incentive income 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, whereby the Company is not entitled to 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, equal to a full 20% of the net profits attributable to investors in these assets. 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 profits, net of management fees, 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 with incentive income recognized annually on December 31. The Company may also recognize incentive income related to fund investor redemptions at other times during the year, and on assets under management subject to commitment periods that are longer than one year where the commitment period expires during the year. The Company may also recognize incentive income for tax distributions that the Company is entitled to that cover estimated tax obligations of the Company related to the management of certain funds, as such distributions are not subject to clawback once distributed to the Company. Incentive income is considered variable consideration, the recognition of which is subject to constraint. Incentive income is no longer constrained when it is probable that a significant reversal will not occur. Determining the amount of incentive income to record is subject to qualitative and quantitative factors including, where a fund is in its life-cycle, whether the Company has received or is entitled to receive incentive income distributions and potential sales of fund investments. The Company continuously evaluates whether there are additional considerations that could potentially impact the recognition of incentive income. To the extent that distributions have been received, but for which the recognition of incentive income is not appropriate, the Company will recognize a liability for unearned incentive income. See Note 13 for additional information regarding the Company’s revenues. Other Revenues Other revenues consist primarily of interest income on investments in CLOs and cash and cash equivalents and subrental income. Interest income is recognized on an effective yield basis. Subrental income is recognized on a straight-line basis over the lease term. 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. 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 during the first three quarters of each year, 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 with a service condition 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 for awards subject to service conditions. For awards that are also subject to market or performance conditions, the Company includes an estimate of forfeitures as of each reporting date. The Company recognizes all income tax effects of awards within consolidated net income (loss) 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 with market or performance conditions is based on the estimated fair value of the awards at the date of grant, using graded vesting, which separately considers and recognizes compensation expense over the requisite service period for each tranche. For awards with post-vesting performance conditions, at each reporting date, compensation expense is updated to reflect the fair value per share at the grant date, using the most probable outcome related to the underlying performance conditions. See Note 14 for additional information on the Company’s equity-based compensation plans. Group D Units Prior to 2019, the Company issued Group D Units to executive managing directors. Group D Units were not considered equity under GAAP, and therefore no equity-based compensation expense was recognized for these units when they were granted. Distributions to holders of Group D Units were included within compensation and benefits in the consolidated statements of comprehensive income (loss). Upon the conversion of Group D Units into Group E Units in connection with the Recapitalization, the Company recognized a one-time charge for the grant-date fair value of the vested units and began to amortize the grant-date fair value of the unvested units over the service 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 to the Company by certain funds. To the extent that the payments made by the Company to the employees and executive managing directors are probable and reasonably estimable, the Company accrues these payments as compensation expense, 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 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 in specified funds represented by the DCIs, as adjusted for fund performance over the service period. 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 compensation expense, 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. The Company recognizes 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). Cash and Cash Equivalents and Restricted Cash 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 (excluding investments in United States government obligations, as discussed below) are recorded at amortized cost plus accrued interest. As of December 31, 2019, excluding investments in United States government obligations, substantially all 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. Restricted cash represents amounts that are restricted as to usage due to regulatory reasons. 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 (losses) gains on investments 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 in funds are accounted for under the equity method of accounting. The Company recognizes its share of earnings within net (losses) gains on investments 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, 2019, 2018 and 2017. 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 5 for additional information. Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , as amended, as of January 1, 2019 (“ASC 842”). The Company applied ASC 842 to lease arrangements outstanding as of the date of adoption. The Company did not restate prior periods and there were no adjustments to retained earnings upon adoption of ASC 842. The Company applied the package of practical expedients permitted under the transition guidance within the new standard, including carrying forward the historical lease classification and not reassessing whether certain costs capitalized under the prior guidance are eligible for capitalization under ASC 842. Adoption of ASC 842 resulted in the recognition of $126.0 million and $135.9 million of operating lease assets and liabilities, respectively, with the net of these amounts offsetting the deferred rent credit liability in existence immediately prior to adoption. The Company determines if an arrangement is a lease at inception. Right-of-use lease assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Right-of-use lease assets represent the Company’s right to use a leased asset for the lease term and lease liabilities represent the Company’s obligation to make |
Recapitalization
Recapitalization | 12 Months Ended |
Dec. 31, 2019 | |
Recapitalization [Abstract] | |
Recapitalization | RECAPITALIZATIONOn February 7, 2019, the Company completed the Recapitalization, which included a series of transactions that involved the reallocation of certain ownership interests in the Sculptor Operating Partnerships to existing members of senior management, a “Distribution Holiday” on interests held by active and former executive managing directors, an amendment to the tax receivable agreement, a “Cash Sweep” to pay down the 2018 Term Loan (as defined in Note 8) and 2019 Preferred Units, and various other related transactions. In addition, (i) $200.0 million of the 2016 Preferred Units was restructured into the Debt Securities (as defined in Note 8) and (ii) $200.0 million of the 2016 Preferred Units was restructured into the 2019 Preferred Units. Reallocation of Equity In connection with the Recapitalization, holders of Group A Units collectively reallocated 35% of their Group A Units to existing members of senior management and for potential grants to new hires. The reallocation was effected by (i) recapitalizing such Group A Units into Group A-1 Units and (ii) creating and making grants to existing members of senior management (and reserving for future grants to active managing directors and new hires) of Group E Units. An equivalent number of Group A-1 Units will be canceled at such time and to the extent that Group E Units vest and achieve a book-up. Upon vesting, holders of Group E Units will be entitled to vote a corresponding number of Class B Shares previously allocated to Group A-1 Units. Until such time as the relevant Group E Units become vested, the Class B Shares corresponding to the Group A-1 Units will be voted pro rata in accordance with the vote of the Class A Shares held by non-affiliates. In connection with the Recapitalization, the holders of the 2016 Preferred Units forfeited an additional 749,813 Group A Units (which were recapitalized into Group A-1 Units). Distribution Holiday The Sculptor Operating Partnerships initiated a distribution holiday (the “Distribution Holiday”) on the Group A Units, Group D Units, Group E Units and Group P Units and on certain RSUs that will terminate on the earlier of (x) 45 days after the last day of the first calendar quarter as of which the achievement of $600.0 million of Distribution Holiday Economic Income (as defined in the Sculptor Operating Partnerships’ limited partnership agreements) is realized and (y) April 1, 2026. During the Distribution Holiday, (i) the Sculptor Operating Partnerships shall only make distributions with respect to Group B Units, (ii) the performance thresholds of Group P Units and PSUs shall be adjusted to take into account performance and distributions during such period, and (iii) RSUs will continue to receive dividend equivalents in respect of dividends or distributions paid on the Class A Shares. For executive managing directors that have received Group E Units, distributions on Group P Units, RSUs and PSUs is limited to an aggregate amount not to exceed $4.00 per Group P Unit, PSU or RSU, as applicable, cumulatively during the Distribution Holiday. Following the termination of the Distribution Holiday, Group A Units and Group E Units (whether vested or unvested) shall receive distributions even if such units have not been booked-up. The Distribution Holiday was effective retroactively to October 1, 2018. As a result, the Company recorded an adjustment to additional paid-in capital and noncontrolling interests to reallocate a portion of pre-Recapitalization earnings and related income tax effects from noncontrolling interests to the Company’s additional paid-in capital. Such adjustment is recorded within Recapitalization adjustment in the consolidated statement of shareholders’ equity (deficit). Liquidity Redemption In connection with his transition from the Company, the Company’s founder, Mr. Daniel S. Och submitted redemption notices for substantially all liquid balances of Mr. Och and his related parties (other than their liquid balances in the Sculptor Credit Opportunities Master Fund) — half of which was redeemed effective as of December 31, 2018 and the remainder effective March 31, 2019. The receipt by Mr. Och and his related parties of redemption proceeds associated with these redemptions is referred to as the “Liquidity Redemption.” Redemptions are generally paid in the month following the effective date of the redemption. The Liquidity Redemption was completed as of April 29, 2019. Mr. Och and his related parties have also redeemed substantially all of their liquid balances in the Sculptor Credit Opportunities Master Fund effective September 30, 2019. Cash Sweep As part of the Recapitalization, the Company instituted a “Cash Sweep” with regards to the paydowns of the 2018 Term Loan and the 2019 Preferred Units. During the Distribution Holiday, on a quarterly basis, for each of the first three quarters of the year 100% of all Economic Income (subject to certain adjustments described in the 2019 Preferred Unit Designations as defined in Note 10) will be applied to repay the 2018 Term Loan and then to redeem the 2019 Preferred Units, in each case, together with accrued interest. The Cash Sweep will not apply to the extent that it would result in the Sculptor Operating Group having a minimum “Free Cash Balance” (as defined in the 2019 Preferred Unit Designations) of less than $200.0 million except in certain specified circumstances. In the fourth quarter of each year, an amount equal to the excess of the Free Cash Balance over the minimum Free Cash Balance of $200.0 million, will be used to repay the 2018 Term Loan and redeem the 2019 Preferred Units. In addition, without duplication of the Cash Sweep, (i) certain of the proceeds resulting from the realization of incentive income from certain longer term assets under management described in the 2019 Preferred Units Designations (“Designated Accrued Unrecognized Incentive”) and (ii) 85% of the net cash proceeds from any Asset Sales (as defined in the 2019 Preferred Units Designations), will be used to repay the 2018 Term Loan and redeem the 2019 Preferred Units. As long as the Cash Sweep is in effect, the Sculptor Operating Group may only use funds from a cumulative discretionary one-time basket of up to $50.0 million in the aggregate, or reserve up to $17.0 million in the aggregate annually (the “Discretionary Basket”), to engage in certain “Restricted Activities” (as defined below) or any other activities related to the strategic expansion of the Sculptor Operating Group, and may not use any other funds of the Sculptor Operating Group to fund such activities, subject to certain exceptions. The Discretionary Basket will not be subject to the Distribution Holiday or the Cash Sweep and, subject to certain exceptions, may only be used to fund new firm investments or new firm products or to fund share buybacks (including RSU cash settlements in excess of permitted amounts) in an aggregate amount not to exceed $25.0 million (the “Restricted Activities”). The Discretionary Basket may not be used to fund employee compensation payments. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | NONCONTROLLING INTERESTS 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 executive managing directors. Prior to the Recapitalization, the attribution of net income (loss) of each Sculptor Operating Partnership was based on the relative ownership percentages of the Group A Units (noncontrolling interests) and the Group B Units (indirectly held by the Registrant). In applying the substantive profit-sharing arrangements in the Sculptor Operating Partnerships limited partnership agreements to the Company’s consolidated financial statements, for periods subsequent to the Recapitalization and for the duration of the Distribution Holiday, the Company will allocate net income of each Sculptor Operating Partnership in any fiscal year solely to the Group B Units and any net loss on a pro rata basis based on the relative ownership percentages of the Group A Units and Group B Units. To the extent a Sculptor Operating Partnership incurs a net loss in an interim period, any net income recognized in a subsequent interim period in the same fiscal year is allocated on a pro rata basis to the extent of previously allocated net loss. Conversely, to the extent a Sculptor Operating Partnership recognizes net income in an interim period, any net loss incurred in a subsequent interim period in the same fiscal year is allocated solely to the Group B Units to the extent of previously allocated net income. The table below sets forth the calculation of noncontrolling interests related to the Group A Units for each Sculptor Operating Partnership (rounding differences may occur). The blended participation percentages presented below take into account ownership changes throughout the periods presented. In addition, the blended participation percentages in 2019 take into account the difference in methodology described above for the period prior to the Recapitalization Date compared to the period following the Recapitalization Date. For example, Sculptor Capital Advisors LP had net income in the period prior to the Recapitalization Date, and as a result, allocates a portion of its net income for the year ended December 31, 2019 to the Group A Units. Year Ended December 31, 2019 2018 2017 (dollars in thousands) Sculptor Capital LP Net (loss) $ (101,557) $ (80,279) $ (37,353) Blended participation percentage 43 % 57 % 58 % Net (Loss) Attributable to Group A Units $ (43,612) $ (45,833) $ (21,765) Sculptor Capital Advisors LP Net income $ 37,667 $ 17,379 $ 89,395 Blended participation percentage 18 % 56 % 59 % Net Income Attributable to Group A Units $ 6,695 $ 9,670 $ 52,344 Sculptor Capital Advisors II LP Net income $ 56,953 $ 18,510 $ 170,668 Blended participation percentage 0 % 56 % 59 % Net Income Attributable to Group A Units $ — $ 10,447 $ 100,151 Total Sculptor Operating Group Net (loss) income $ (6,937) $ (44,390) $ 222,710 Blended participation percentage n/m 58 % 59 % Net (Loss) Income Attributable to Group A Units $ (36,917) $ (25,716) $ 130,730 _______________ n/m not meaningful The following table presents the components of the net (loss) income attributable to noncontrolling interests: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Group A Units $ (36,917) $ (25,716) $ 130,730 Other 733 807 900 $ (36,184) $ (24,909) $ 131,630 The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: December 31, 2019 December 31, 2018 (dollars in thousands) Group A Units $ 434,943 $ 415,928 Other 5,836 3,503 $ 440,779 $ 419,431 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 tables present the activity in redeemable noncontrolling interests: Year Ended December 31, 2019 2018 2017 Funds Preferred Units Total Funds Preferred Units Total Funds Preferred Units Total (dollars in thousands) Beginning balance $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 Fair value of Debt Securities exchanged for 2016 Preferred Units — (167,799) (167,799) — — — — — — Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units — (137,759) (137,759) — — — — — — Issuance of 2019 Preferred Units, net of issuance costs — 136,964 136,964 — — — — — — Preferred Units issuance, net of issuance costs — — — — — — — 150,054 150,054 Change in redemption value of Preferred Units — (101,406) (101,406) — — — — 7,446 7,446 Capital contributions 3,747 — 3,747 147,217 — 147,217 2,329 — 2,329 Capital distributions (126,778) — (126,778) (15,465) — (15,465) — — — Funds deconsolidation (43,374) — (43,374) — — — — — — Comprehensive income 8,745 — 8,745 291 — 291 1,667 — 1,667 Ending Balance $ — $ 150,000 $ 150,000 $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 Relinquishment of Group A Units Sculptor Corp and Och-Ziff Holdings LLC., as the general partners of the Sculptor 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, 3.0 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 3.0 million) shall be reallocated to Mr. Och and the Och Trusts pursuant to the terms of the Sculptor Operating Partnerships’ 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 have been canceled. In the third quarter of 2018, a former executive managing director of the Company relinquished 350,000 Group A Units and an equal number of Class B Shares. Dilution of Proceeds from Tax Receivable Agreement Amendment 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 Sculptor 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, Sculptor Corp contributed to the Sculptor 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 (included within noncontrolling interests). |
Investments and Fair Value Disc
Investments and Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Investments and 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, 2019 December 31, 2018 (dollars in thousands) United States government obligations, at fair value $ 146,565 $ 179,510 CLOs, at fair value 182,870 181,868 Other investments, equity method 81,991 28,519 Total Investments $ 411,426 $ 389,897 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 CLOs, 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 an 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, 2019: As of December 31, 2019 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 97,034 $ — $ — $ 97,034 Included within investments: United States government obligations $ 146,565 $ — $ — $ 146,565 CLOs (1) $ — $ — $ 182,870 $ 182,870 _______________ (1) As of December 31, 2019, investments in CLOs had contractual principal amounts of $170.0 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, 2018: As of December 31, 2018 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 58,054 $ — $ — $ 58,054 Included within investments: United States government obligations $ 179,510 $ — $ — $ 179,510 CLOs (1) $ — $ — $ 181,868 $ 181,868 Investments of consolidated funds: Bank debt $ — $ 91,345 $ 75,613 $ 166,958 Corporate bonds $ — $ 4,537 $ — $ 4,537 Total Investments of Consolidated Funds $ — $ 95,882 $ 75,613 $ 171,495 _______________ (1) As of December 31, 2018, investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. Reconciliation of Fair Value Measurements Categorized within Level III Gains and losses, excluding those of the consolidated funds are recorded within net gains (losses) on investments 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. Certain funds were deconsolidated in the third quarter 2019; amounts related to these funds are included within investment sales. Amortization of premium, accretion of discount and foreign exchange gains and losses on non-U.S. Dollar investments are also included within gains and losses in the tables below. The following table summarizes the changes in the Company’s Level III assets and liabilities for the year ended December 31, 2019: December 31, 2018 Transfers Transfers Investment Investment Gains / Losses December 31, 2019 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 181,868 $ — $ — $ 31,816 $ (27,778) $ (3,036) $ 182,870 Investments of consolidated funds: Bank debt $ 75,613 $ 7,982 $ (40,272) $ 29,601 $ (73,772) $ 848 $ — Corporate bonds $ — $ — $ — $ 987 $ (981) $ (6) $ — The following table summarizes the changes in the Company’s Level III assets and liabilities for the year ended December 31, 2018: December 31, 2017 Transfers Transfers Investment Investment Gains / Losses December 31, 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 211,749 $ — $ — $ 157,099 $ (175,272) $ (11,708) $ 181,868 Investments of consolidated funds: Bank debt $ 18,807 $ 1,671 $ (1,244) $ 146,658 $ (88,600) $ (1,679) $ 75,613 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 tables above resulted from the valuation of certain investments with decreased market observability, with fair values determined using independent pricing services. 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: Year Ended December 31, 2019 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ (2,877) $ (9,998) Investments of consolidated funds: Bank debt $ — $ (2,160) Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III Investments in CLOs, bank debt and corporate bonds are valued using independent pricing services, and therefore the Company does not have transparency into the significant inputs used by such services. 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 the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method. Fair Value of Other Financial Instruments Management estimates that the carrying value of the Company’s other financial instruments, including its debt obligations and repurchase agreements, approximated their fair values as of December 31, 2019. The fair value measurements for the Company’s debt obligations and repurchase agreements are categorized as Level III within the fair value hierarchy and were determined using independent pricing services. Loans Sold to CLOs Managed by the Company In the year ended December 31, 2018, the Company sold $29.8 million of loans to CLOs managed by the Company. No loans were sold in the year ended December 31, 2019. 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. 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 issued by each CLO). The retained interests are reported within investments on the Company’s consolidated balance sheet. In the year ended December 31, 2018, the Company made $24.9 million of investments related to these retained interests. No investments related to these retained interests were made in the year ended December 31, 2019. As of December 31, 2019 and 2018, the Company’s investments in these retained interests had a fair value of $88.2 million and $89.4 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 interest and principal, as applicable, on these retained interests. In the years ended December 31, 2019 and 2018, the Company received $3.8 million and $6.4 million, respectively, of interest and principal payments related to the retained interests. The Company uses independent pricing services to value its investments in the CLOs, including the retained interests, 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, 2019 | |
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. The table below presents the assets and liabilities of VIEs consolidated by the Company. In the third quarter of 2019, the Company redeemed its investments in certain funds it manages, which resulted in the Company no longer holding a controlling financial interest, and therefore deconsolidated the funds. No gain or loss was recognized as a result of the deconsolidation. December 31, 2019 December 31, 2018 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ — $ 171,495 Other assets of consolidated funds 649 21,090 Total Assets $ 649 $ 192,585 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 389 14,541 Total Liabilities $ 389 $ 14,541 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 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 19. 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, 2019 December 31, 2018 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 8,805,128 $ 10,236,438 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 63,337 62,038 Income and fees receivable 21,841 31,658 Investments 200,215 190,674 Maximum Exposure to Loss $ 285,393 $ 284,370 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company has non-cancelable operating leases for its headquarters in New York and its offices in London, Hong Kong, Shanghai, and various other locations and data centers. The Company does not have renewal options, other than a three-year renewal option for its lease in Hong Kong, which was not included in the determination of the related lease asset and liability. The Company also subleases a portion of its office space in London through the end of the lease term. Finally, the Company has finance leases for computer hardware. Year Ended December 31, 2019 (dollars in thousands) Lease Cost Operating lease cost $ 20,579 Short-term lease cost 58 Finance lease cost - amortization of leased assets 548 Finance lease cost - imputed interest on lease liabilities 94 Less: Sublease income (1,522) Net Lease Cost $ 19,757 Year Ended December 31, 2019 (dollars in thousands) Supplemental Lease Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 18,669 Operating cash flows for finance leases $ 7 Finance cash flows for finance leases $ 611 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 126,007 Finance leases $ 1,702 December 31, 2019 Lease Term and Discount Rate Weighted average remaining lease term Operating leases 9.3 years Finance leases 2.1 years Weighted average discount rate Operating leases 7.9 % Finance leases 7.9 % Operating Finance (dollars in thousands) Maturity of Lease Liabilities 2020 $ 22,610 $ 618 2021 21,108 618 2022 19,918 — 2023 19,192 — 2024 15,353 — Thereafter 82,234 — Total Lease Payments 180,415 1,236 Imputed interest (52,372) (58) Total Lease Liabilities $ 128,043 $ 1,178 As of December 31, 2019, the Company has pledged collateral related to its lease obligations of $6.2 million, which is included within investments in the consolidated balance sheets. Operating Leases (dollars in thousands) Sublease Rent Payments Receivable 2020 $ 1,972 2021 1,578 2022 1,578 2023 1,235 2024 — Thereafter — Total Sublease Rent Payments Receivable $ 6,363 Prior to Adoption of ASC 842 Prior to adoption of ASC 842 on January 1, 2019, the Company accounted for leases under ASC 840, and had the following future minimum lease payments as of December 31, 2018. Future minimum lease payments for capital leases were not material as of December 31, 2018. Operating Leases (dollars in thousands) 2019 $ 16,516 2020 23,324 2021 21,826 2022 19,807 2023 19,095 Thereafter 97,587 Total Payments $ 198,155 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Debt Instruments [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS Debt Securities 2018 Term Loan CLO Investments Loans Total (dollars in thousands) Maturity of Debt Obligations 2020 $ — $ — $ — $ — 2021 — — 3,464 3,464 2022 40,000 — — 40,000 2023 40,000 45,000 — 85,000 2024 40,000 — 18,301 58,301 Thereafter 80,000 — 39,201 119,201 Total Payments 200,000 45,000 60,966 305,966 Unamortized discounts & deferred financing costs (18,002) (895) (341) (19,238) Total Debt Obligations $ 181,998 $ 44,105 $ 60,625 $ 286,728 Debt Securities In connection with the Recapitalization, the Sculptor Operating Partnerships, each as a borrower, entered into an unsecured senior subordinated term loan credit and guaranty agreement (the “Subordinated Credit Agreement”) under which $200.0 million of Debt Securities were issued in exchange for an equal amount of 2016 Preferred Units. The Debt Securities mature on the earlier of (i) the fifth anniversary of the date on which all obligations under the 2019 Preferred Unit Designations have been paid in full and (ii) April 1, 2026. Commencing February 1, 2020, the Debt Securities will bear interest at a per annum rate equal to, at the borrower’s option, one, three or six-month (or twelve-month with the consent of each lender) LIBOR plus 4.75%, or a base rate plus 3.75%. Commencing on the earlier of (i) the first anniversary of the date on which all 2019 Preferred Units are paid in full and (ii) March 31, 2022, the Debt Securities amortize in quarterly installments each in a principal amount equal to 5% of the aggregate principal amount of the Debt Securities of the applicable borrower on the effective date of the Subordinated Credit Agreement or, in the case of incremental Debt Securities of such borrower, the date 2019 Preferred Units are exchanged for incremental Debt Securities; provided that in no event shall amortization payments in any fiscal year be required to exceed $40.0 million. For a period of nine months after the repayment of the 2019 Preferred Units, the borrowers will have the option to voluntarily repay the initial Debt Securities at a 5% discount. The Subordinated Credit Agreement contains customary representations and warranties and covenants for a transaction of this type and financial covenants consistent with those described below for the 2018 Term Loan. The Subordinated Credit Agreement also requires prepayment of loans under the 2018 Term Loan and the 2019 Preferred Units in accordance with the Cash Sweep, and restricts the incurrence of indebtedness for borrowed money and certain liens, in each case subject to exceptions set forth in the Implementing Agreements. The Subordinated Credit Agreement contains customary events of default for a transaction of this type and is based on substantially the same terms as the 2018 Term Loan. If an event of default under the Subordinated Credit Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding a majority of the Debt Securities, upon notice by the Subordinated Credit Agreement Administrative Agent to the borrowers, the obligations under the Subordinated Credit Agreement shall become immediately due and payable. In addition, if the Sculptor Operating Partnerships or any of their material subsidiaries become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Subordinated Credit Agreement will automatically become immediately due and payable. 2018 Term Loan On April 10, 2018 (the “Closing Date”), Sculptor Capital LP, as borrower, (the “Senior Credit Agreement Borrower”), and certain other subsidiaries of the Company, as guarantors, entered into a senior secured credit and guaranty agreement (the “Senior Credit Agreement”) consisting of (i) a $250.0 million term loan facility (the “2018 Term Loan”) and (ii) a $100.0 million revolving credit facility (the “2018 Revolving Credit Facility”). Effective as of February 7, 2019, the Company terminated in full the commitments under the 2018 Revolving Credit Facility. At the time of such termination, no borrowings were outstanding under the 2018 Revolving Credit Facility. In connection with the Recapitalization, the Company entered into Amendment No. 1 (the “Senior Credit Agreement Amendment”) to the Senior Credit Agreement (the Senior Credit Agreement, as amended by the Senior Credit Agreement Amendment, the “Amended Senior Credit Agreement”). In accordance with the Amended Senior Credit Agreement, indebtedness outstanding under the 2018 Term Loan will be payable in accordance with the provisions of the Cash Sweep described in Note 3. The 2018 Term Loan matures April 10, 2023. The maturity date of the 2018 Term Loan may be extended pursuant to the terms of the Amended Senior Credit Agreement. In connection with the Recapitalization and the Senior Credit Agreement Amendment, the Company repaid $100.0 million of amounts outstanding under the 2018 Term Loan. In accordance with the Cash Sweep, the Company repaid an additional $55.0 million during 2019 and another $27.0 million on February 13, 2020. The 2018 Term Loan bears interest at a per annum rate equal to, at the Company’s option, one, three or six months (or twelve months with the consent of each lender) LIBOR plus 4.75%, or a base rate plus 3.75%. Prior to the termination of the 2018 Revolving Credit Facility in February 2019, the Company was required to pay an undrawn commitment fee at a rate per annum equal to 0.20% to 0.75% of the undrawn portion of the commitments under the 2018 Revolving Credit Facility, computed on a daily basis. The obligations under the Amended Senior Credit Agreement are guaranteed by the Sculptor Operating Partnerships and are secured by a lien on substantially all of the Sculptor Operating Partnerships’ assets, subject to certain exclusions. The Amended Senior Credit Agreement contains two financial maintenance covenants. The first financial maintenance covenant states that the Company’s total fee-paying assets under management as of the last day of any fiscal quarter must be greater than $20.0 billion, and the second states that the total net leverage ratio (as defined in the Amended Senior Credit Agreement, which excludes the Debt Securities) as of the last day of any fiscal quarter must be less than (i) 3.00 to 1.00, or (ii) following the third anniversary of the Closing Date, 2.50 to 1.00. As of December 31, 2019, the Company was in compliance with the financial maintenance covenants. The Amended Senior Credit Agreement requires compliance with the provisions of the Implementing Agreements that impose restrictions on distributions, including certain tax distributions, during the Distribution Holiday, requiring prepayment of loans under the Amended Senior Credit Agreement with excess cash above a certain threshold, and restricting the incurrence of indebtedness for borrowed money and certain liens, in each case subject to exceptions set forth in the Implementing Agreements. In the event the Amended Senior Credit Agreement remains outstanding on or after March 31, 2022, the Amended Senior Credit Facility allows for the issuance of an additional $200.0 million of incremental Debt Securities in exchange for the remaining Preferred Units at that time. The Amended Senior Credit Agreement also allows restricted payments for preferred dividends of up to $12.0 million per year. The Amended Senior Credit Agreement contains customary events of default. If an event of default under the Amended Senior Credit Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding a majority of the commitments and loans, upon notice by the administrative agent to the Senior Credit Agreement Borrower, the obligations under the Amended Senior Credit Agreement shall become immediately due and payable. In addition, if the Senior Credit Agreement Borrower or any of its material subsidiaries becomes the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Amended Senior Credit Agreement will automatically become immediately due and payable. CLO Investments Loans The Company entered into loans to finance portions of investments in certain CLOs (collectively, the “CLO Investments Loans”). 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 also include terms that require the Company’s continued involvement with the CLOs. The CLO Investments Loans do not have any financial maintenance covenants and are secured by the related investments in CLOs, which investments had fair values of $65.9 million and $112.8 million as of December 31, 2019 and 2018, respectively. Carrying amounts presented in the table 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. Initial Borrowing Date Contractual Rate Final Maturity Date Carrying Value December 31, 2019 December 31, 2018 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ — $ 17,235 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,245 17,224 August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,679 21,674 September 14, 2017 EURIBOR plus 2.21% September 14, 2024 18,237 18,614 February 21, 2018 LIBOR plus 1.27% February 21, 2019 — 21,060 August 1, 2019 EURIBOR plus 1.15% June 29, 2021 3,464 — $ 60,625 $ 95,807 |
Securities Sold under Agreement
Securities Sold under Agreements to Repurchase | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Securities sold under agreements to repurchase | SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE On May 29, 2018, the Company entered into a €100.0 million master credit facility agreement (the “CLO Financing Facility”) to finance a portion of the risk retention investments in certain European CLOs managed by the Company. Subject to the terms and conditions of the CLO Financing Facility, the Company and the counterparty may enter into repurchase agreements on such terms agreed upon by the parties. Each transaction entered into under the CLO Financing Facility will bear interest at a rate based on the weighted average effective interest rate of each class of securities that have been sold plus a spread to be agreed upon by the parties. As of December 31, 2019, €12.3 million of the CLO Financing Facility remained available. Each transaction entered into under the CLO Financing Facility provides for payment netting and, in the case of a default or similar event with respect to the counterparty to the CLO Financing Facility, provides for netting across transactions. Generally, upon a counterparty default, the Company can terminate all transactions under the CLO Financing Facility and offset amounts it owes in respect of any one transaction against collateral it has received in respect of any other transactions under the CLO Financing Facility; provided, however, that in the case of certain defaults, the Company may only be able to terminate and offset solely with respect to the transaction affected by the default. During the term of a transaction entered into under the CLO Financing Facility, the Company will deliver cash or additional securities acceptable to the counterparty if the securities sold are in default. Upon termination of a transaction, the Company will repurchase the previously sold securities from the counterparty at a previously determined repurchase price. The CLO Financing Facility may be terminated at any time upon certain defaults or circumstances agreed upon by the parties. The repurchase agreements may result in credit exposure in the event the counterparty to the transaction is unable to fulfill its contractual obligations. The Company minimizes the credit risk associated with these activities by monitoring counterparty credit exposure and collateral values. Other than margin requirements, the Company is not subject to additional terms or contingencies which would expose the Company to additional obligations based upon the performance of the securities pledged as collateral. The table below presents securities sold under agreements to repurchase that are offset, if any, as well as securities transferred to counterparties related to such transactions (capped so that the net amount presented will not be reduced below zero). No other material financial instruments were subject to master netting agreements or other similar agreements: Securities Sold under Agreements to Repurchase Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities in the Consolidated Balance Sheet Securities Transferred Net Amount (dollars in thousands) As of December 31, 2019 $ 97,508 $ — $ 97,508 $ 97,508 $ — As of December 31, 2018 $ 62,801 $ — $ 62,801 $ 62,186 $ 615 The securities sold under agreements to repurchase have a set scheduled maturity date that corresponds to the maturities of the securities sold under such transaction. The table below presents the remaining final contractual maturity of the securities sold under agreement to repurchase by class of collateral pledged: Investments in CLOs Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total (dollars in thousands) As of December 31, 2019 $ — $ — $ — $ 97,508 $ 97,508 As of December 31, 2018 $ — $ — $ — $ 62,801 $ 62,801 |
Preferred Units
Preferred Units | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Units | PREFERRED UNITS 2016 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 $400.0 million of 2016 Preferred Units, all of which remained issued and outstanding as of December 31, 2018. As of February 7, 2019, all of the 2016 Preferred Units were restructured into the 2019 Preferred Units and Debt Securities, as described in Note 3. 2019 Preferred Units Pursuant to the 2019 Preferred Unit Designations, the Sculptor Operating Partnerships issued 2019 Preferred Units with an aggregate liquidation preference of $200.0 million, in exchange for $200.0 million of the 2016 Preferred Units. Other than following the occurrence of a Discount Termination Event (as defined in the 2019 Preferred Unit Designations), the Sculptor Operating Partnerships have the option to redeem the 2019 Preferred Units at a 25% discount until March 31, 2021, and then at a 10% discount at any time between April 1, 2021 and March 30, 2022. Any mandatory payments as a result of the Cash Sweep will be entitled to the same discount. To the extent that the 2019 Preferred Units are not repaid in full prior to March 31, 2022, at the option of the holder thereof, all or any portion of the 2019 Preferred Units will be converted into Debt Securities in an aggregate principal amount equal to the Liquidation Value (as defined below) of such 2019 Preferred Units, with such Debt Securities having the same terms as the existing $200.0 million of Debt Securities. Pursuant to the 2019 Preferred Unit Designations, distributions on the 2019 Preferred Units will be payable on the liquidation preference amount 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 to 6% per annum from the Step Up Date until the sixth anniversary of the Step Up Date, then continuing to increase in stages thereafter to a maximum of 10% per annum on and after the eighth anniversary of the Step Up Date. In addition, following the occurrence of a change of control event, the Sculptor Operating Partnerships will redeem the 2019 Preferred Units at a redemption price equal to the liquidation preference plus all accumulated but unpaid distributions (collectively, the “Liquidation Value”). If the Sculptor Operating Partnerships fail to redeem all of the outstanding 2019 Preferred Units after such change of control event, the distribution rate will increase by 7% per annum, beginning on the 31st day following such event. Pursuant to the 2019 Preferred Unit Designations, the Sculptor Operating Partnerships will not be required to effect such redemption until the earlier of (i) the date that is 20 days following such change of control event and (ii) the payment in full of all loans and other obligations and the termination of all commitments under the 2018 Term Loan. From and after March 31, 2022, if the amounts distributed to partners of the Sculptor Operating Partnerships in respect of their equity interests in the Sculptor Operating Partnerships (other than amounts distributed in respect of tax distributions or certain other distributions) or used for repurchase of units by such entities (or which were available but not used for such purposes) for the immediately preceding fiscal year exceed $100.0 million in the aggregate, then an amount equal to 20% of such excess shall be used to redeem the 2019 Preferred Units on a pro rata basis at a redemption price equal to the Liquidation Value. Furthermore, if the average closing price of the Company’s Class A Shares exceeds $150.00 per share for the previous 20 trading days from and after the Recapitalization Closing, the Sculptor Operating Partnerships have agreed to use their reasonable best efforts to redeem all of the outstanding 2019 Preferred Units as promptly as practicable. If such event occurs prior to the maturity date of the 2018 Term Loan and all obligations under the 2018 Term Loan have not been prepaid in accordance with the terms thereof, the Company has agreed to use its reasonable best efforts to obtain consents from its lenders in order to redeem the 2019 Preferred Units as promptly as practicable. |
Other Assets, Net
Other Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 (dollars in thousands) Fixed Assets: Leasehold improvements $ 52,798 $ 54,257 Computer hardware and software 47,361 48,178 Furniture, fixtures and equipment 8,411 8,373 Accumulated depreciation and amortization (73,730) (67,558) Fixed assets, net 34,840 43,250 Goodwill 22,691 22,691 Prepaid expenses 18,507 11,629 Other 6,570 4,833 Total Other Assets, Net $ 82,608 $ 82,403 |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 (dollars in thousands) Accrued expenses $ 19,275 $ 27,683 Legal provision (1) 19,100 — Uncertain tax positions 8,250 7,000 Unused trade commissions 5,192 8,615 Deferred rent credit — 6,231 Trades payable — 4,978 Other 7,400 9,096 Total Other Liabilities $ 59,217 $ 63,603 _______________ (1) Legal provision represents accrual for certain contingencies discussed in Note 19. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES The following table presents management fees and incentive income recognized as revenues for the years ended December 31, 2019, 2018, and 2017: Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017 Management Fees Incentive Income Management Fees Incentive Income Management Fees Incentive Income (dollars in thousands) Multi-strategy funds $ 134,404 $ 240,517 $ 168,902 $ 71,972 $ 214,116 $ 409,823 Credit Opportunistic credit funds 43,729 48,526 41,035 89,182 44,753 99,308 Institutional Credit Strategies 57,877 — 50,212 — 35,381 — Real estate funds 16,111 32,578 19,307 40,811 21,027 7,603 Other 890 — 2,406 931 4,181 11,266 Total $ 253,011 $ 321,621 $ 281,862 $ 202,896 $ 319,458 $ 528,000 A liability for unearned incentive income is generally recognized when the Company receives incentive income distributions from its funds, primarily its real estate funds, whereby the distributions received have not yet met the recognition threshold of being probable that a significant reversal of cumulative revenue will not occur. The following table presents the activity in the Company’s unearned incentive income for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Beginning of Period $ 61,397 $ 143,710 $ 96,079 Effects of adoption of ASU 2014-09 — (99,422) — Amounts collected during the period 24,946 54,538 53,915 Amounts recognized during the period (25,545) (37,429) (6,284) End of Period $ 60,798 $ 61,397 $ 143,710 The Company recognizes management fees over the period in which the performance obligation is satisfied. The Company records incentive income when it is probable that a significant reversal of income will not occur. The majority of management fees and incentive income receivable at each balance sheet date is generally collected during the following quarter. The following table presents the composition of the Company’s income and fees receivable as of December 31, 2019 and 2018: December 31, 2019 December 31, 2018 (dollars in thousands) Management fees $ 25,726 $ 20,368 Incentive income 189,669 62,475 Income and Fees Receivable $ 215,395 $ 82,843 |
Equity-Based Compensation Expen
Equity-Based Compensation Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation Expenses | EQUITY-BASED COMPENSATION EXPENSES The Company grants equity-based compensation in the form of RSUs, PSUs, Group A Units, Group E Units and Group P Units 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, 2019 2018 2017 (dollars in thousands) Expense recorded within compensation and benefits $ 127,505 $ 87,130 $ 84,169 Corresponding tax benefit $ 7,738 $ 2,811 $ 4,720 The following tables present activity related to the Company’s unvested equity awards for the year ended December 31, 2019: Equity-Classified RSUs Liability-Classified RSUs PSUs Unvested RSUs Weighted-Average Unvested RSUs Weighted-Average Unvested PSUs Weighted-Average December 31, 2018 3,784,536 $ 30.00 433,133 $ 66.75 1,000,000 $ 11.82 Granted 1,890,579 15.33 65,277 15.25 — — Vested (1,621,849) 27.86 (113,857) 64.11 — — Canceled or forfeited (283,431) 25.64 — — — — December 31, 2019 3,769,835 $ 23.94 384,553 $ 58.44 1,000,000 $ 11.82 Group A Units Group E Units Group P Units Unvested Group A Units Weighted-Average Unvested Group E Units Weighted-Average Unvested Group P Units Weighted-Average December 31, 2018 74,962 $ 105.26 — $ — 3,660,000 $ 12.46 Granted — — 13,684,124 8.61 225,000 5.94 Vested (24,271) 105.26 (3,889,242) 8.63 (225,000) 5.94 Canceled or forfeited (26,421) 105.26 (233,303) 8.12 (475,000) 12.46 December 31, 2019 24,270 $ 105.26 9,561,579 $ 8.62 3,185,000 $ 12.46 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 Sculptor Operating Group are allocated and (ii) increases in the Company’s additional 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. In 2018, a certain executive managing director forfeited 600,000 Group A Units and 2,900,000 Group P Units for RSUs and certain other profit-sharing interests. The forfeiture of these units was accounted for as a modification to 640,797 equity-classified RSUs and 734,599 liability-classified RSUs, and other awards. The fair value of the modified awards was $63.62 per RSU and was based on the fair value of the original awards immediately before they were modified. The Company will continue to recognize at least the minimum compensation expense that would have been previously recognized prior to the modification. As a result of the Recapitalization, the Company modified certain RSUs provided to certain executive managing directors to cap the cumulative distributions that the RSUs would be entitled to receive during the Distribution Holiday. As the resulting fair value of the RSUs was lower than the original grant fair value, the Company continues to recognize the compensation expense that would have been previously recognized prior to the modification. The weighted-average grant-date fair value of equity-classified RSUs granted was $15.33, $23.34 and $31.60 for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, total unrecognized compensation expense related to equity-classified RSUs totaled $61.5 million, with a weighted-average amortization period of 2.3 years. The weighted-average grant-date fair value of liability-classified RSUs granted was $15.25 and $15.00 for the years ended December 31, 2019 and 2018, respectively. No liability-classified RSUs were granted in 2017. As of December 31, 2019, total unrecognized compensation expense related to liability-classified RSUs totaled $22.5 million, with a weighted-average amortization period of 3.0 years. The following table presents information related to the settlement of RSUs: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 24,131 $ 12,044 $ 13,016 Fair value of RSUs settled in cash $ 2,570 $ 3,879 $ 130 Fair value of RSUs withheld to satisfy tax withholding obligations $ 3,727 $ 4,436 $ 7,577 Number of RSUs withheld to satisfy tax withholding obligations 300,714 329,591 280,269 PSUs In 2018, the Company began granting PSUs. A PSU 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 of Directors, upon completion of the requisite service period, as well as satisfying certain performance conditions based on achievement of targeted total shareholder return on Class A Shares. PSUs do not begin to accrue dividend equivalents until the requisite service period has been completed and performance conditions have been achieved. In the year ended December 31, 2018, the Company granted 1,000,000 PSUs, with a weighted-average grant-date fair value of $11.82 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 35%, dividend rate of 10%, and risk-free discount rate of 2.6%. The requisite service period for these awards was estimated to be 3.1 years at the time of the grant. The Company used historical volatility in its estimate of the expected volatility. As of December 31, 2019, total unrecognized compensation expense related to these units totaled $4.5 million, with weighted-average amortization period of 1.2 years. 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 market 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 sixth 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. 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 weighted-average grant-date fair value of Group A Units was $21.85 for the year ended December 31, 2017. There were no grants for the years ended December 31, 2019 and 2018. As of December 31, 2019, total unrecognized compensation expense related to the Group A Units totaled $740 thousand with a weighted-average amortization period of 0.3 years. Group E Units As a part of the Recapitalization described in Note 3, the Company granted Group E Units. The Group E Units are not entitled to participate in distributions during the Distribution Holiday. The right of the Group E Units to participate in distributions is considered a performance condition that does not affect vesting. The Company is required to recognize compensation cost based on the grant-date fair value of Group E Units where the performance condition is probable of being met. The fair value of the Group E Units was calculated using the price of the Company’s Class A Shares at the date of grant, adjusted to reflect that Group E Units are not entitled to participate in distributions during the Distribution Holiday and for post-vesting transfer restrictions. As of December 31, 2019, total unrecognized compensation expense related to these units totaled $53.8 million with a weighted-average amortization period of 2.1 years. Expense for the Group E Units is recognized on an accelerated basis (i.e., each tranche will be recognized over its respective service period), as the value of the award is dependent at least in part on a performance condition. Group P Units In March 2017, the Company granted 7,185,000 Group P Units (“Incentive Award”), with the weighted-average grant-date fair value of $12.50 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 36%, dividend rate of 10%, 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 awards was estimated to be 3.7 years at the time of the grant. As of December 31, 2019, total unrecognized compensation expense related to the Group P Units totaled $8.4 million, with a weighted-average amortization period of 1.0 year. There have been no other grants of Group P Units. 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”). The Performance Condition is considered a market condition for accounting purposes as its achievement is dependent on the return provided to shareholders during a specified period, which is defined as follows: 20% of P Units vest if a total shareholder return of 25% is achieved; an additional 40% of P Units vest if a total shareholder return of 50% is achieved; an additional 20% of P Units vest if a total shareholder return of 75% is achieved; and the final 20% of P Units vest if a total shareholder return of 125% is 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 holder. 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 Sculptor Operating Partnerships’ 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 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Sculptor Operating Partnerships are partnerships for U.S. federal income tax purposes. The Registrant was a partnership for U.S. federal income tax purposes until the Corporate Classification Change on April 1, 2019. Prior to the Corporate Classification Change, only a portion of the income the Company earned has been subject to corporate-level income taxes in the United States and foreign jurisdictions. As a result of the Corporate Classification Change, the Company recognized an initial $5.6 million of additional tax expense during the second quarter of 2019. Had the Company been treated as a corporation in prior periods presented herein, there would not have been a material change in income tax expense. Following the Corporate Classification Change, generally all of the income the Registrant earns will be subject to corporate-level income taxes in the United States allowing us to realize a portion of our deferred tax assets on an accelerated basis as compared to under our prior structure. The amount of incentive income the Company earns in a given year, the resultant flow of revenues and expenses through the Company’s legal entity structure, the effect that changes in the Class A Share price may have on the ultimate deduction the Company is able to take related to the settlement of RSUs, and any change in future enacted income tax rates may have a significant impact on the Company’s income tax provision and effective income tax rate. The Company’s income tax provision and related income tax assets and liabilities are based on, among other things, an estimate of the impact of the Corporate Classification Change, inclusive of an analysis of tax basis and state tax implications of certain partnerships and their underlying assets and liabilities as of April 1, 2019. The Company’s estimate is based on the most recent information available; however, the impact of the conversion cannot be finally determined until the Company’s 2019 tax returns have been finalized. The Company does not currently expect such information to become available until 2020. The tax basis and state impact of the partnerships and their underlying assets and liabilities are based on estimates subject to finalization of the Company’s tax returns, and the impact of the Corporate Classification Change may differ, possibly materially, from the current estimates described herein. 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. 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. The $280.8 million in deferred tax expense recorded in 2017 related to the TCJA was 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. Accounting for the TCJA was completed as of December 31, 2018, there were no material adjustments recorded in 2018 related to the original impact recorded for the TCJA in 2017. The following table presents the components of the Company’s provision for income taxes: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Current: Federal income taxes $ (370) $ 1 $ 103 State and local income taxes 1,702 1,165 2,172 Foreign income taxes 5,845 2,735 2,520 7,177 3,901 4,795 Deferred: Federal income taxes 16,621 3,304 322,162 State and local income taxes 10,272 5,736 (9,828) Foreign income taxes 42 (441) 430 26,935 8,599 312,764 Total Provision for Income Taxes $ 34,112 $ 12,500 $ 317,559 The foreign income tax provision was calculated on $17.7 million, $8.2 million and $21.3 million of pre-tax income generated in foreign jurisdictions for the years ended December 31, 2019, 2018 and 2017, 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, 2019 December 31, 2018 (dollars in thousands) Deferred Income Tax Assets: Tax goodwill $ 176,244 $ 234,437 Net operating loss 86,644 96,524 Investments in partnerships 41,865 19,607 Tax credit carryforwards 15,160 15,550 Employee compensation 1,183 1,027 Other 1,624 869 322,720 368,014 Valuation allowance (11,083) (11,959) Total Deferred Income Tax Assets $ 311,637 $ 356,055 Total Deferred Income Tax Liabilities $ 1,080 $ 1,030 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 initial public offering 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 (as defined in Note 18). The tax goodwill amounts presented above include the increases that these tax receivable agreement payments will have on future tax goodwill. See Note 19 for additional information regarding the tax receivable agreement. The following table presents changes in the Company’s deferred tax asset valuation allowance for the periods indicated: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Beginning balance $ 11,959 $ 12,028 $ 7,798 Additions charged to income taxes expense — 497 6,592 Deductions (876) (566) (2,362) Ending Balance $ 11,083 $ 11,959 $ 12,028 The Company has determined that it may not realize certain foreign income tax credits within the limited carryforward period available. Accordingly, a valuation allowance has been established for these items. For the periods presented above, additions relate to changes to the Company’s forecasted realizability of existing foreign tax credits and deductions are a result of a reduction in available foreign income tax credits. As of December 31, 2019, the Company had federal income tax credit carryforwards of approximately $14.7 million that, if not used, will expire between 2020 and 2026. As of December 31, 2019, the Company had $243.1 million of net operating losses available to offset future taxable income for federal income tax purposes that will expire between 2030 and 2037, and $71.4 million of net operating losses available to be carried forward without expiration. Additionally, $153.5 million of net operating losses are available to offset future taxable income for state income tax purposes and $149.7 million for local income tax purposes that will expire between 2035 and 2039. 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, 2019 2018 2017 Statutory U.S. federal income tax rate 21.00 % 21.00 % 35.00 % Income passed through to noncontrolling interests -14.68 % -15.92 % -11.13 % Nondeductible amortization of Partner Equity Units 108.30 % -1.09 % 0.73 % State and local income taxes 69.91 % -16.53 % 4.42 % RSU excess deferred income tax write-off 28.58 % -11.33 % 0.50 % Foreign income taxes 42.89 % -6.32 % 0.63 % Income not subject to entity level tax -19.04 % 4.21 % -4.54 % Return-to-provision adjustment -2.41 % -3.57 % -0.30 % Tax effects of income recorded to equity in connection with the Recapitalization -11.80 % — % — % Nondeductible transaction costs 15.91 % -3.52 % — % Nondeductible interest expense 21.54 % — % — % Foreign tax credits and deductions -11.85 % -0.77 % 1.88 % Impact of federal tax reform — % — % 40.34 % Other, net 0.15 % -0.50 % -0.24 % Effective Income Tax Rate 248.50 % -34.34 % 67.29 % 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 has not been subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2014; however, certain subsidiaries have not been 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. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the year ended December 31, 2019 is as follows: December 31, 2019 (dollars in thousands) Beginning balance $ 7,000 Additions for tax benefits related to prior years 1,250 Ending balance $ 8,250 The Company did not accrue interest or penalties related to uncertain tax positions. As of December 31, 2019, 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 $4.8 million as of December 31, 2019. |
General, Administrative and Oth
General, Administrative and Other | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 (dollars in thousands) Professional services $ 42,370 $ 52,163 $ 43,343 Occupancy and equipment 30,281 28,769 33,358 Information processing and communications 21,443 25,917 28,274 Recurring placement and related service fees 14,034 16,247 20,153 Insurance 8,658 7,391 7,609 Business development 4,048 4,075 6,685 Foreign exchange (gains) and losses (451) 2,766 (726) Other expenses 10,478 12,899 13,375 130,861 150,227 152,071 Legal settlements and provisions 19,100 31,750 — Total General, Administrative and Other $ 149,961 $ 181,977 $ 152,071 |
Earnings (Loss) Per Class A Sha
Earnings (Loss) Per Class A Share | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, 2018 and 2017, the Company included 180,444, 142,512 and 110,373 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. When calculating dilutive earnings (loss) per Class A Share, the Company applies the treasury stock method to unvested RSUs and the if-converted method to vested Group A Units and Group E Units. The Company applies the treasury stock method to unvested Group A Units and Group E Units and the if-converted method on the resulting number of units that would be issued. The Company did not include the Group P Units or PSUs in the calculations of dilutive earnings (loss) per Class A Share, as the applicable market performance conditions have not yet been met as of December 31, 2019. The following tables present the computation of basic and diluted earnings per Class A Share: Year Ended December 31, 2019 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 $ 51,418 20,773,493 $ 2.48 Effect of dilutive securities: Group A Units 21,469 16,976,983 — Group E Units — 7,817,696 — RSUs — 732,518 — Diluted $ 72,887 46,300,690 $ 1.57 Year Ended December 31, 2018 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 $ (24,284) 19,270,929 $ (1.26) Effect of dilutive securities: Group A Units — — 26,073,057 RSUs — — 4,826,130 Diluted $ (24,284) 19,270,929 $ (1.26) 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 18,642,379 $ 0.98 Effect of dilutive securities: Group A Units — — 27,230,147 RSUs — 75,797 — Diluted $ 18,222 18,718,176 $ 0.97 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
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 current and former executive managing directors and Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons (the “Ziffs”) under the tax receivable agreement, as discussed further in Note 19. The Company made no payments under the tax receivable agreement in the years ended December 31, 2019, 2018 and 2017. Management Fees and Incentive Income Earned from Related Parties and Waived Fees 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. As of December 31, 2019 and 2018, respectively, approximately $930.1 million and $1.9 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, 2019 and 2018, approximately 41% and 29%, of these assets under management were not charged management fees or incentive income. The following table presents management fees and incentive income charged on investments held by the Company’s executive managing directors, employees and certain other related parties: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 7,324 $ 14,017 $ 10,574 Incentive income $ 8,749 $ 7,530 $ 14,052 Other In connection with the Recapitalization, the Company paid for Mr. Och’s expenses incurred in connection with these transactions in the amount of $5.0 million, of which $4.5 million was incurred in the fourth quarter of 2018 and the remainder in |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Tax Receivable Agreement The purchase of Group A Units from current and former 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 assets of the Sculptor Operating Group that would not otherwise have been available. The Company anticipates that any such tax basis adjustment resulting from an exchange will be allocated principally to certain intangible assets of the Sculptor Operating Group, and the Company will derive its tax benefits principally through amortization of these intangibles over a 15-year period. Consequently, these tax basis adjustments will increase, for tax purposes, the Company’s depreciation and amortization expenses and will therefore reduce the amount of tax that Sculptor Corp and any other future corporate taxpaying entities that acquire Group B Units in connection with an exchange, if any, would otherwise be required to pay in the future. Accordingly, pursuant to the tax receivable agreement, such corporate taxpaying entities (including Sculptor Capital Management, Inc. once it became treated as a corporate taxpayer following the Corporate Classification Change) have agreed to pay the executive managing directors and the Ziffs a percentage of the amount of cash savings, if any, in federal, state and local income taxes in the United States that these entities actually realize related to their units as a result of such increases in tax basis. For tax years prior to 2019, such percentage was 85% of such annual cash savings under the tax receivable agreement. In connection with the Recapitalization, the Company amended the tax receivable agreement to provide that, conditioned on Sculptor Capital Management, Inc. electing to be classified as, or converting into, a corporation for U.S. tax purposes, (i) no amounts are due or payable with respect to the 2017 tax year, (ii) only partial payments equal to 85% of the excess of such cash savings that would otherwise be due over 85% of such cash savings determined assuming that taxable income equals Economic Income are due and payable in respect of the 2018 tax year and (iii) the percentage of cash savings required to be paid with respect to the 2019 tax year and thereafter, as well as with respect to cash savings from subsequent exchanges, is reduced to 75%. The amendment to the tax receivable agreement was effective on April 1, 2019, the date on which the Registrant changed its tax classification from a partnership to a corporation. As a result of the amendment to the tax receivable agreement, the Company released $67.2 million of previously accrued tax receivable agreement liability, which reduced its deferred income tax assets by $16.3 million. The net impact of $51.0 million was recognized as an increase to additional paid-in capital. In connection with the departure of certain former executive managing directors since the 2007 Offerings, the right to receive payments under the tax receivable agreement by those former executive managing directors was contributed to the Sculptor Operating Group. As a result, the Company expects to pay to the other executive managing directors and the Ziffs approximately 69% of the amount of cash savings, if any, in federal, state and local income taxes in the United States that the Company realizes as a result of such increases in tax basis with respect to future tax years. To the extent that the Company does not realize any cash savings, it would not be required to make corresponding payments under the tax receivable agreement. The Company recorded its initial estimate of future payments under the tax receivable agreement as a decrease to additional 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). 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 Sculptor 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, 2019, the estimated future payment under the tax receivable agreement was $205.8 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 15. In 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 management’s estimate as of December 31, 2019, of 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) 2020 $ 30,305 2021 26,370 2022 25,447 2023 32,628 2024 25,803 Thereafter 65,199 Total Payments $ 205,752 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. 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 U.S. District Court for the Eastern District of New York stating they plan to seek restitution at the sentencing hearing for Oz Africa Management GP, LLC. On August 29, 2019, the court filed a Memorandum & Order in which it found that the claimants qualify as “victims” under the Mandatory Victims Restitution Act and directed the parties to submit briefs regarding the calculation of restitution, how to apportion the amount among OZ Africa Management GP, LLC and others, and whether the effort to arrive at a restitution amount is overly complex such that restitution should not be awarded. OZ Africa Management GP, LLC has recorded a $19.1 million accrual, which is included in the consolidated financial statements of the Company. This accrual has been based on a detailed analysis performed by the Company, with assistance from external advisors. Claimants have taken the position that they are owed a minimum of $290.4 million in restitution. In addition, the U.S. Department of Justice (the “DOJ”) has not expressed a view as to the appropriate amount of restitution, but has indicated that the full value of the mining rights, and not the specific portion held by the Canadian mining company in which the Claimants were shareholders, could be as high as $188.7 million. The Company does not agree with the analysis underlying these positions and will continue to vigorously defend the matter. It is possible that its losses in this matter may exceed the accrued amount and a reasonable estimate of possible additional loss cannot be made at this time. 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 $55.8 million to certain funds it manages. It expects to fund these commitments over the next eight years. In addition, certain current and former executive managing directors of the Company, collectively, have unfunded capital commitments to funds managed by the Company of up to $49.6 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 During the second quarter of 2018, the Company recorded a $3.0 million legal provision to resolve a commercial dispute. The Company resolved this matter in the third quarter of 2018 and will not incur any additional loss related to this matter. 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Dividend On February 13, 2020, the Company announced a cash dividend of $0.53 per Class A Share. The dividend is payable on March 3, 2020, to holders of record as of the close of business on February 25, 2020. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“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 determination of whether to recognize incentive income; (iii) the determination of whether or not to consolidate a variable interest entity; and (iv) 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. |
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 impact to the Company’s opening retained earnings in 2016 was driven by the cumulative effect of a change in the incentive income recognition methodology for the funds no longer consolidated by the Company, net of deferred income tax effects. 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, investment manager, or CLO collateral manager. Where the Company holds a variable interest in an entity, it is required to determine whether it should consolidate the entity. Fee arrangements are not 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 Variable Interest Entity (“VIE”) or Voting Interest Entity (“VOE”), the classification of which will determine the analysis that the Company is required to perform when determining whether it should consolidate the entity. 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: • 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. • VOEs— Where an entity does not have the characteristics of a VIE, it is 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. 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. A party 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 holds a variable interest in an entity, it is required to determine whether it should consolidate 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. 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. 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. 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 a majority equity investment 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. 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 Sculptor Operating Group Earnings and Capital | Allocations of Sculptor Operating Group Earnings and Capital Prior to the Recapitalization, the attribution of net income (loss) of each Sculptor Operating Partnership was based on the relative ownership percentages of the Group A Units (noncontrolling interests) and the Group B Units (indirectly held by the Registrant). In applying the substantive profit-sharing arrangements in the Sculptor Operating Partnership limited partnership agreements to our consolidated financial statements, for periods subsequent to the Recapitalization and for the duration of the Distribution Holiday, we will allocate net income of each Sculptor Operating Partnership in any fiscal year solely to the Group B Units and any net loss on a pro rata basis based on the relative ownership percentages of the Group A Units and Group B Units. To the extent a Sculptor Operating Partnership incurs a net loss in an interim period, any net income recognized in a subsequent interim period in the same fiscal year is allocated on a pro rata basis to the extent of previously allocated net loss. Conversely, to the extent a Sculptor Operating Partnership recognizes net income in an interim period, any net loss incurred in a subsequent interim period in the same fiscal year is allocated solely to the Group B Units to the extent of previously allocated net income. As of December 31, 2019, Group P Units are not participating in the earnings of the Sculptor Operating Group, as certain service and performance conditions, as described in Note 14, have not been met as of the reporting period end. See Note 4 for additional information regarding the Company’s interest in the Sculptor Operating Group. |
Noncontrolling Interests | Noncontrolling Interests The Group A Units represent interests in the Sculptor Operating Group not held by the Company, and amounts attributable to these units are presented as noncontrolling interests in the consolidated balance sheets, and allocations to these interests are presented as net income (loss) attributable to noncontrolling interests in the consolidated statements of comprehensive income (loss). Additionally, until the third quarter of 2019, the Company consolidated certain credit funds that it manages, wherein investors were able to redeem their interests on a monthly basis. Amounts relating to these fund investors’ interests in these funds were presented as redeemable noncontrolling interests in the consolidated balance sheets. Profits and losses attributable to these interests were presented as net income (loss) attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss). See Note 4 for additional information regarding noncontrolling interests. |
Preferred Units | Preferred Units The Company presents 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 |
Revenue Recognition | Revenue Recognition Policies The Company provides asset management services to its customers, including certain administrative services related to the funds’ operations, in exchange for management and incentive fees, which are included in the Company’s agreements with its customers. The services provided in connection with the identified performance obligations are satisfied over time. 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. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which 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 to in exchange for those goods or services. The Company adopted ASU 2014-09 using a modified retrospective application approach as of the beginning of the first quarter of 2018 to all contracts within the scope of the standard as of the date of adoption. As a result of the adoption of ASU 2014-09, the Company now recognizes certain incentive income earlier than as prescribed under guidance in effect for prior years as the threshold for recognition of incentive income under ASU 2014-09 is lower than under the previous standard. The Company recognized an opening adjustment in 2018 to shareholders’ equity of $117.0 million, of which $41.9 million was attributable to Class A shareholders. Management Fees Management fees for the Company’s multi-strategy funds typically range from 0.95% to 2.25% 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 0.50% to 2.00% annually based on the net asset value of these funds. Management fees for Institutional Credit Strategies, which primarily relate to CLOs, generally range from 0.30% to 0.50% annually 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 0.50% 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. The Company considers management fees to be a form of variable consideration, as the amount earned each quarter may depend on various contingencies, such as the value of assets under management, capital inflows and outflows during the period, or changes in committed or invested capital. Management fees, however, are generally recognized at the end of each reporting period and are not subject to clawback and, therefore, the value of the management fees the Company is entitled to receive at the end of each quarter is generally no longer subject to the constraint. Incentive Income The Company earns incentive income based on the cumulative performance of the funds over a commitment period. Prior to the adoption of new revenue recognition accounting guidance in 2018, incentive income was recognized at the end of the applicable commitment period when the amounts were contractually payable, or “crystallized,” and when no longer subject to clawback. Beginning in 2018, as a result of the adoption of the new revenue recognition accounting guidance, the Company recognizes incentive income when such amounts are probable of not significantly reversing. 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. Incentive income 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, whereby the Company is not entitled to 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, equal to a full 20% of the net profits attributable to investors in these assets. 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 profits, net of management fees, 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 with incentive income recognized annually on December 31. The Company may also recognize incentive income related to fund investor redemptions at other times during the year, and on assets under management subject to commitment periods that are longer than one year where the commitment period expires during the year. The Company may also recognize incentive income for tax distributions that the Company is entitled to that cover estimated tax obligations of the Company related to the management of certain funds, as such distributions are not subject to clawback once distributed to the Company. Incentive income is considered variable consideration, the recognition of which is subject to constraint. Incentive income is no longer constrained when it is probable that a significant reversal will not occur. Determining the amount of incentive income to record is subject to qualitative and quantitative factors including, where a fund is in its life-cycle, whether the Company has received or is entitled to receive incentive income distributions and potential sales of fund investments. The Company continuously evaluates whether there are additional considerations that could potentially impact the recognition of incentive income. To the extent that distributions have been received, but for which the recognition of incentive income is not appropriate, the Company will recognize a liability for unearned incentive income. See Note 13 for additional information regarding the Company’s revenues. Other Revenues Other revenues consist primarily of interest income on investments in CLOs and cash and cash equivalents and subrental income. Interest income is recognized on an effective yield basis. Subrental income is recognized on a straight-line basis over the lease term. |
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. 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 during the first three quarters of each year, 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 with a service condition 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 for awards subject to service conditions. For awards that are also subject to market or performance conditions, the Company includes an estimate of forfeitures as of each reporting date. The Company recognizes all income tax effects of awards within consolidated net income (loss) 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 with market or performance conditions is based on the estimated fair value of the awards at the date of grant, using graded vesting, which separately considers and recognizes compensation expense over the requisite service period for each tranche. For awards with post-vesting performance conditions, at each reporting date, compensation expense is updated to reflect the fair value per share at the grant date, using the most probable outcome related to the underlying performance conditions. See Note 14 for additional information on the Company’s equity-based compensation plans. Group D Units Prior to 2019, the Company issued Group D Units to executive managing directors. Group D Units were not considered equity under GAAP, and therefore no equity-based compensation expense was recognized for these units when they were granted. Distributions to holders of Group D Units were included within compensation and benefits in the consolidated statements of comprehensive income (loss). Upon the conversion of Group D Units into Group E Units in connection with the Recapitalization, the Company recognized a one-time charge for the grant-date fair value of the vested units and began to amortize the grant-date fair value of the unvested units over the service 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 to the Company by certain funds. To the extent that the payments made by the Company to the employees and executive managing directors are probable and reasonably estimable, the Company accrues these payments as compensation expense, 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 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 in specified funds represented by the DCIs, as adjusted for fund performance over the service period. 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 compensation expense, 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. The Company recognizes 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). |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash 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 (excluding investments in United States government obligations, as discussed below) are recorded at amortized cost plus accrued interest. As of December 31, 2019, excluding investments in United States government obligations, substantially all 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. Restricted cash represents amounts that are restricted as to usage due to regulatory reasons. |
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 (losses) gains on investments 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 in funds are accounted for under the equity method of accounting. The Company recognizes its share of earnings within net (losses) gains on investments 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, 2019, 2018 and 2017. |
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 5 for additional information. |
Leases | Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , as amended, as of January 1, 2019 (“ASC 842”). The Company applied ASC 842 to lease arrangements outstanding as of the date of adoption. The Company did not restate prior periods and there were no adjustments to retained earnings upon adoption of ASC 842. The Company applied the package of practical expedients permitted under the transition guidance within the new standard, including carrying forward the historical lease classification and not reassessing whether certain costs capitalized under the prior guidance are eligible for capitalization under ASC 842. Adoption of ASC 842 resulted in the recognition of $126.0 million and $135.9 million of operating lease assets and liabilities, respectively, with the net of these amounts offsetting the deferred rent credit liability in existence immediately prior to adoption. The Company determines if an arrangement is a lease at inception. Right-of-use lease assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Right-of-use lease assets represent the Company’s right to use a leased asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company does not recognize right-of-use lease assets and lease liabilities for leases with an initial term of one year or less. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments. The Company gave consideration to its recently issued term loan, as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The operating lease assets include any lease payments made and excludes lease incentives. Lease terms include options to extend or terminate when it is reasonably certain that the Company will exercise that option. In addition, the Company separates lease and non-lease components embedded within lease agreements, except for data center leases. Right-of-use assets and liabilities related to operating leases are included within operating lease assets and operating lease liabilities, respectively, in the Company’s consolidated balance sheets. Right-of-use assets and liabilities related to finance leases are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets. Lease expense for operating lease payments, which is comprised of amortization of right-of-use assets and interest accretion on lease liabilities, is generally recognized on a straight-line basis over the lease term and included within general, administrative and other expenses in the consolidated statements of comprehensive income. Amortization of right-of-use lease assets related to finance leases is included within general, administrative and other expenses and interest accretion on lease liabilities related to finance leases is included within interest expense. |
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: the shorter of the related lease term or expected useful life for leasehold improvements and 3 years to 7 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. |
Debt | Debt Obligations Debt obligations are carried at amortized cost and are reported net of any debt issuance costs, discounts and premiums. Debt issuance costs, discounts and premiums are amortized to interest expense over the life of the instrument term using the effective interest method. Unamortized debt issuance costs, discounts and premiums are written off to net losses on early retirement of debt in the consolidated statements of comprehensive income (loss) when the Company prepays borrowings prior to maturity. |
Securities Sold Under Agreements to Repurchase | Securities Sold Under Agreements to Repurchase Securities sold under agreements to repurchase (“repurchase agreements”) are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. Securities transferred to counterparties under repurchase agreements are included within investments in the consolidated balance sheets. Cash received under a repurchase agreement is recognized as a liability within securities sold under agreements to repurchase in the consolidated balance sheets. Interest expense is recognized on an effective yield basis and is included within interest expense in the consolidated statements of comprehensive income (loss). See Note 9 for additional information. |
Policies of Consolidated Funds | Policies of Consolidated Funds Until the third quarter of 2019, the Company consolidated certain credit funds. These funds were 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’ were reflected in the consolidated financial statements at their estimated fair values. The Company continues to consolidate certain financing funds that are currently not material to the Company’s consolidated balance sheets. The policies below relate to the credit funds that were deconsolidated during the third quarter of 2019. Income of Consolidated Funds Income of consolidated funds consisted of interest income, dividend income and other miscellaneous items. Interest income was recorded on an accrual basis. Dividend income was recorded on the ex-dividend date, net of withholding taxes, if applicable. Premiums and discounts were 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 consisted of interest expense and other miscellaneous expenses. Interest expense was recorded on an accrual basis. Investments of Consolidated Funds, at Fair Value Investments of consolidated funds, at fair value included the consolidated funds’ investments in securities, investment companies and other investments. Securities transactions were recorded on a trade-date basis. Realized gains and losses on sales of investments of the funds were determined on a specific identification basis and were 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 was based on observable market prices when available. Such values were generally based on the last reported sales price as of each reporting date. In the absence of readily ascertainable market values, the determination of the fair value of investments held by the consolidated funds required significant judgment or estimation. For information regarding the valuation of these assets, see Note 5. |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements Other than the adoption of ASC 842 discussed above, none of the other changes to GAAP that went into effect in the year ended December 31, 2019 had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements No changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements. |
Fair Value Measurement, Policy | 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 CLOs, 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 an input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Overview (Tables)
Overview (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Shares and Operating Group Units | The following table presents the number of shares and units (excluding Preferred Units) of the Registrant and the Sculptor Operating Partnerships, respectively, that were outstanding as of December 31, 2019: As of December 31, 2019 Sculptor Capital Management, Inc. Class A Shares 21,284,945 Class B Shares 29,208,952 Sculptor Operating Partnerships Group A Units 16,019,506 Group A-1 Units 9,779,446 Group B Units 21,284,945 Group E Units 13,450,821 Group P Units 3,410,000 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Calculation of Noncontrolling Interests Attributable to Group A Units | The table below sets forth the calculation of noncontrolling interests related to the Group A Units for each Sculptor Operating Partnership (rounding differences may occur). The blended participation percentages presented below take into account ownership changes throughout the periods presented. In addition, the blended participation percentages in 2019 take into account the difference in methodology described above for the period prior to the Recapitalization Date compared to the period following the Recapitalization Date. For example, Sculptor Capital Advisors LP had net income in the period prior to the Recapitalization Date, and as a result, allocates a portion of its net income for the year ended December 31, 2019 to the Group A Units. Year Ended December 31, 2019 2018 2017 (dollars in thousands) Sculptor Capital LP Net (loss) $ (101,557) $ (80,279) $ (37,353) Blended participation percentage 43 % 57 % 58 % Net (Loss) Attributable to Group A Units $ (43,612) $ (45,833) $ (21,765) Sculptor Capital Advisors LP Net income $ 37,667 $ 17,379 $ 89,395 Blended participation percentage 18 % 56 % 59 % Net Income Attributable to Group A Units $ 6,695 $ 9,670 $ 52,344 Sculptor Capital Advisors II LP Net income $ 56,953 $ 18,510 $ 170,668 Blended participation percentage 0 % 56 % 59 % Net Income Attributable to Group A Units $ — $ 10,447 $ 100,151 Total Sculptor Operating Group Net (loss) income $ (6,937) $ (44,390) $ 222,710 Blended participation percentage n/m 58 % 59 % Net (Loss) Income Attributable to Group A Units $ (36,917) $ (25,716) $ 130,730 |
Components of Net Loss (Income) Attributable to Noncontrolling Interests | The following table presents the components of the net (loss) income attributable to noncontrolling interests: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Group A Units $ (36,917) $ (25,716) $ 130,730 Other 733 807 900 $ (36,184) $ (24,909) $ 131,630 |
Components of Shareholders' Equity Attributable to Noncontrolling Interests | The following table presents the components of the shareholders’ equity attributable to noncontrolling interests: December 31, 2019 December 31, 2018 (dollars in thousands) Group A Units $ 434,943 $ 415,928 Other 5,836 3,503 $ 440,779 $ 419,431 |
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 tables present the activity in redeemable noncontrolling interests: Year Ended December 31, 2019 2018 2017 Funds Preferred Units Total Funds Preferred Units Total Funds Preferred Units Total (dollars in thousands) Beginning balance $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 $ 21,621 $ 262,500 $ 284,121 Fair value of Debt Securities exchanged for 2016 Preferred Units — (167,799) (167,799) — — — — — — Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units — (137,759) (137,759) — — — — — — Issuance of 2019 Preferred Units, net of issuance costs — 136,964 136,964 — — — — — — Preferred Units issuance, net of issuance costs — — — — — — — 150,054 150,054 Change in redemption value of Preferred Units — (101,406) (101,406) — — — — 7,446 7,446 Capital contributions 3,747 — 3,747 147,217 — 147,217 2,329 — 2,329 Capital distributions (126,778) — (126,778) (15,465) — (15,465) — — — Funds deconsolidation (43,374) — (43,374) — — — — — — Comprehensive income 8,745 — 8,745 291 — 291 1,667 — 1,667 Ending Balance $ — $ 150,000 $ 150,000 $ 157,660 $ 420,000 $ 577,660 $ 25,617 $ 420,000 $ 445,617 |
Investments and Fair Value Di_2
Investments and Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 (dollars in thousands) United States government obligations, at fair value $ 146,565 $ 179,510 CLOs, at fair value 182,870 181,868 Other investments, equity method 81,991 28,519 Total Investments $ 411,426 $ 389,897 |
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, 2019: As of December 31, 2019 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 97,034 $ — $ — $ 97,034 Included within investments: United States government obligations $ 146,565 $ — $ — $ 146,565 CLOs (1) $ — $ — $ 182,870 $ 182,870 _______________ (1) As of December 31, 2019, investments in CLOs had contractual principal amounts of $170.0 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, 2018: As of December 31, 2018 Level I Level II Level III Total (dollars in thousands) Assets, at Fair Value Included within cash and cash equivalents: United States government obligations $ 58,054 $ — $ — $ 58,054 Included within investments: United States government obligations $ 179,510 $ — $ — $ 179,510 CLOs (1) $ — $ — $ 181,868 $ 181,868 Investments of consolidated funds: Bank debt $ — $ 91,345 $ 75,613 $ 166,958 Corporate bonds $ — $ 4,537 $ — $ 4,537 Total Investments of Consolidated Funds $ — $ 95,882 $ 75,613 $ 171,495 _______________ (1) As of December 31, 2018, investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in the Company’s Level III assets and liabilities for the year ended December 31, 2019: December 31, 2018 Transfers Transfers Investment Investment Gains / Losses December 31, 2019 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 181,868 $ — $ — $ 31,816 $ (27,778) $ (3,036) $ 182,870 Investments of consolidated funds: Bank debt $ 75,613 $ 7,982 $ (40,272) $ 29,601 $ (73,772) $ 848 $ — Corporate bonds $ — $ — $ — $ 987 $ (981) $ (6) $ — The following table summarizes the changes in the Company’s Level III assets and liabilities for the year ended December 31, 2018: December 31, 2017 Transfers Transfers Investment Investment Gains / Losses December 31, 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ 211,749 $ — $ — $ 157,099 $ (175,272) $ (11,708) $ 181,868 Investments of consolidated funds: Bank debt $ 18,807 $ 1,671 $ (1,244) $ 146,658 $ (88,600) $ (1,679) $ 75,613 |
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: Year Ended December 31, 2019 2018 (dollars in thousands) Assets, at Fair Value Included within investments: CLOs $ (2,877) $ (9,998) Investments of consolidated funds: Bank debt $ — $ (2,160) |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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. In the third quarter of 2019, the Company redeemed its investments in certain funds it manages, which resulted in the Company no longer holding a controlling financial interest, and therefore deconsolidated the funds. No gain or loss was recognized as a result of the deconsolidation. December 31, 2019 December 31, 2018 (dollars in thousands) Assets Assets of consolidated funds: Investments of consolidated funds, at fair value $ — $ 171,495 Other assets of consolidated funds 649 21,090 Total Assets $ 649 $ 192,585 Liabilities Liabilities of consolidated funds: Other liabilities of consolidated funds 389 14,541 Total Liabilities $ 389 $ 14,541 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 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 19. 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, 2019 December 31, 2018 (dollars in thousands) Net assets of unconsolidated VIEs in which the Company has a variable interest $ 8,805,128 $ 10,236,438 Maximum risk of loss as a result of the Company’s involvement with VIEs: Unearned revenues 63,337 62,038 Income and fees receivable 21,841 31,658 Investments 200,215 190,674 Maximum Exposure to Loss $ 285,393 $ 284,370 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease Cost | Year Ended December 31, 2019 (dollars in thousands) Lease Cost Operating lease cost $ 20,579 Short-term lease cost 58 Finance lease cost - amortization of leased assets 548 Finance lease cost - imputed interest on lease liabilities 94 Less: Sublease income (1,522) Net Lease Cost $ 19,757 Year Ended December 31, 2019 (dollars in thousands) Supplemental Lease Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 18,669 Operating cash flows for finance leases $ 7 Finance cash flows for finance leases $ 611 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 126,007 Finance leases $ 1,702 December 31, 2019 Lease Term and Discount Rate Weighted average remaining lease term Operating leases 9.3 years Finance leases 2.1 years Weighted average discount rate Operating leases 7.9 % Finance leases 7.9 % |
Maturity of Lease Liabilities | Operating Finance (dollars in thousands) Maturity of Lease Liabilities 2020 $ 22,610 $ 618 2021 21,108 618 2022 19,918 — 2023 19,192 — 2024 15,353 — Thereafter 82,234 — Total Lease Payments 180,415 1,236 Imputed interest (52,372) (58) Total Lease Liabilities $ 128,043 $ 1,178 |
Sublease Rent Payments Receivable | Operating Leases (dollars in thousands) Sublease Rent Payments Receivable 2020 $ 1,972 2021 1,578 2022 1,578 2023 1,235 2024 — Thereafter — Total Sublease Rent Payments Receivable $ 6,363 |
Schedule of Future Minimum Rental Payments for Operating Leases Prior to the Adoption of ASC 842 | Prior to adoption of ASC 842 on January 1, 2019, the Company accounted for leases under ASC 840, and had the following future minimum lease payments as of December 31, 2018. Future minimum lease payments for capital leases were not material as of December 31, 2018. Operating Leases (dollars in thousands) 2019 $ 16,516 2020 23,324 2021 21,826 2022 19,807 2023 19,095 Thereafter 97,587 Total Payments $ 198,155 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Instruments [Abstract] | |
Schedule of Maturities of Long-term Debt | Debt Securities 2018 Term Loan CLO Investments Loans Total (dollars in thousands) Maturity of Debt Obligations 2020 $ — $ — $ — $ — 2021 — — 3,464 3,464 2022 40,000 — — 40,000 2023 40,000 45,000 — 85,000 2024 40,000 — 18,301 58,301 Thereafter 80,000 — 39,201 119,201 Total Payments 200,000 45,000 60,966 305,966 Unamortized discounts & deferred financing costs (18,002) (895) (341) (19,238) Total Debt Obligations $ 181,998 $ 44,105 $ 60,625 $ 286,728 |
CLO Investments Loans Table | Carrying amounts presented in the table 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. Initial Borrowing Date Contractual Rate Final Maturity Date Carrying Value December 31, 2019 December 31, 2018 (dollars in thousands) November 28, 2016 EURIBOR plus 2.23% December 15, 2023 $ — $ 17,235 June 7, 2017 LIBOR plus 1.48% November 16, 2029 17,245 17,224 August 2, 2017 LIBOR plus 1.41% January 21, 2030 21,679 21,674 September 14, 2017 EURIBOR plus 2.21% September 14, 2024 18,237 18,614 February 21, 2018 LIBOR plus 1.27% February 21, 2019 — 21,060 August 1, 2019 EURIBOR plus 1.15% June 29, 2021 3,464 — $ 60,625 $ 95,807 |
Securities Sold under Agreeme_2
Securities Sold under Agreements to Repurchase (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Schedule of Repurchase Agreements Offsetting Disclosures | The table below presents securities sold under agreements to repurchase that are offset, if any, as well as securities transferred to counterparties related to such transactions (capped so that the net amount presented will not be reduced below zero). No other material financial instruments were subject to master netting agreements or other similar agreements: Securities Sold under Agreements to Repurchase Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities in the Consolidated Balance Sheet Securities Transferred Net Amount (dollars in thousands) As of December 31, 2019 $ 97,508 $ — $ 97,508 $ 97,508 $ — As of December 31, 2018 $ 62,801 $ — $ 62,801 $ 62,186 $ 615 |
Schedule of Remaining Contractual Maturity of Repurchase Agreements | The securities sold under agreements to repurchase have a set scheduled maturity date that corresponds to the maturities of the securities sold under such transaction. The table below presents the remaining final contractual maturity of the securities sold under agreement to repurchase by class of collateral pledged: Investments in CLOs Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total (dollars in thousands) As of December 31, 2019 $ — $ — $ — $ 97,508 $ 97,508 As of December 31, 2018 $ — $ — $ — $ 62,801 $ 62,801 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 (dollars in thousands) Fixed Assets: Leasehold improvements $ 52,798 $ 54,257 Computer hardware and software 47,361 48,178 Furniture, fixtures and equipment 8,411 8,373 Accumulated depreciation and amortization (73,730) (67,558) Fixed assets, net 34,840 43,250 Goodwill 22,691 22,691 Prepaid expenses 18,507 11,629 Other 6,570 4,833 Total Other Assets, Net $ 82,608 $ 82,403 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 (dollars in thousands) Accrued expenses $ 19,275 $ 27,683 Legal provision (1) 19,100 — Uncertain tax positions 8,250 7,000 Unused trade commissions 5,192 8,615 Deferred rent credit — 6,231 Trades payable — 4,978 Other 7,400 9,096 Total Other Liabilities $ 59,217 $ 63,603 _______________ (1) Legal provision represents accrual for certain contingencies discussed in Note 19. |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Management Fees and Incentive Income Recognized | The following table presents management fees and incentive income recognized as revenues for the years ended December 31, 2019, 2018, and 2017: Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017 Management Fees Incentive Income Management Fees Incentive Income Management Fees Incentive Income (dollars in thousands) Multi-strategy funds $ 134,404 $ 240,517 $ 168,902 $ 71,972 $ 214,116 $ 409,823 Credit Opportunistic credit funds 43,729 48,526 41,035 89,182 44,753 99,308 Institutional Credit Strategies 57,877 — 50,212 — 35,381 — Real estate funds 16,111 32,578 19,307 40,811 21,027 7,603 Other 890 — 2,406 931 4,181 11,266 Total $ 253,011 $ 321,621 $ 281,862 $ 202,896 $ 319,458 $ 528,000 |
Unearned Incentive Income Roll Forward | A liability for unearned incentive income is generally recognized when the Company receives incentive income distributions from its funds, primarily its real estate funds, whereby the distributions received have not yet met the recognition threshold of being probable that a significant reversal of cumulative revenue will not occur. The following table presents the activity in the Company’s unearned incentive income for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Beginning of Period $ 61,397 $ 143,710 $ 96,079 Effects of adoption of ASU 2014-09 — (99,422) — Amounts collected during the period 24,946 54,538 53,915 Amounts recognized during the period (25,545) (37,429) (6,284) End of Period $ 60,798 $ 61,397 $ 143,710 |
Income and Fees Receivable | The following table presents the composition of the Company’s income and fees receivable as of December 31, 2019 and 2018: December 31, 2019 December 31, 2018 (dollars in thousands) Management fees $ 25,726 $ 20,368 Incentive income 189,669 62,475 Income and Fees Receivable $ 215,395 $ 82,843 |
Equity-Based Compensation Exp_2
Equity-Based Compensation Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Equity-Based Compensation Expense | 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, 2019 2018 2017 (dollars in thousands) Expense recorded within compensation and benefits $ 127,505 $ 87,130 $ 84,169 Corresponding tax benefit $ 7,738 $ 2,811 $ 4,720 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following tables present activity related to the Company’s unvested equity awards for the year ended December 31, 2019: Equity-Classified RSUs Liability-Classified RSUs PSUs Unvested RSUs Weighted-Average Unvested RSUs Weighted-Average Unvested PSUs Weighted-Average December 31, 2018 3,784,536 $ 30.00 433,133 $ 66.75 1,000,000 $ 11.82 Granted 1,890,579 15.33 65,277 15.25 — — Vested (1,621,849) 27.86 (113,857) 64.11 — — Canceled or forfeited (283,431) 25.64 — — — — December 31, 2019 3,769,835 $ 23.94 384,553 $ 58.44 1,000,000 $ 11.82 Group A Units Group E Units Group P Units Unvested Group A Units Weighted-Average Unvested Group E Units Weighted-Average Unvested Group P Units Weighted-Average December 31, 2018 74,962 $ 105.26 — $ — 3,660,000 $ 12.46 Granted — — 13,684,124 8.61 225,000 5.94 Vested (24,271) 105.26 (3,889,242) 8.63 (225,000) 5.94 Canceled or forfeited (26,421) 105.26 (233,303) 8.12 (475,000) 12.46 December 31, 2019 24,270 $ 105.26 9,561,579 $ 8.62 3,185,000 $ 12.46 |
Settlement of Restricted Share Units | The following table presents information related to the settlement of RSUs: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Fair value of RSUs settled in Class A Shares $ 24,131 $ 12,044 $ 13,016 Fair value of RSUs settled in cash $ 2,570 $ 3,879 $ 130 Fair value of RSUs withheld to satisfy tax withholding obligations $ 3,727 $ 4,436 $ 7,577 Number of RSUs withheld to satisfy tax withholding obligations 300,714 329,591 280,269 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The following table presents the components of the Company’s provision for income taxes: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Current: Federal income taxes $ (370) $ 1 $ 103 State and local income taxes 1,702 1,165 2,172 Foreign income taxes 5,845 2,735 2,520 7,177 3,901 4,795 Deferred: Federal income taxes 16,621 3,304 322,162 State and local income taxes 10,272 5,736 (9,828) Foreign income taxes 42 (441) 430 26,935 8,599 312,764 Total Provision for Income Taxes $ 34,112 $ 12,500 $ 317,559 |
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, 2019 December 31, 2018 (dollars in thousands) Deferred Income Tax Assets: Tax goodwill $ 176,244 $ 234,437 Net operating loss 86,644 96,524 Investments in partnerships 41,865 19,607 Tax credit carryforwards 15,160 15,550 Employee compensation 1,183 1,027 Other 1,624 869 322,720 368,014 Valuation allowance (11,083) (11,959) Total Deferred Income Tax Assets $ 311,637 $ 356,055 Total Deferred Income Tax Liabilities $ 1,080 $ 1,030 |
Summary of Valuation Allowance | The following table presents changes in the Company’s deferred tax asset valuation allowance for the periods indicated: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Beginning balance $ 11,959 $ 12,028 $ 7,798 Additions charged to income taxes expense — 497 6,592 Deductions (876) (566) (2,362) Ending Balance $ 11,083 $ 11,959 $ 12,028 |
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, 2019 2018 2017 Statutory U.S. federal income tax rate 21.00 % 21.00 % 35.00 % Income passed through to noncontrolling interests -14.68 % -15.92 % -11.13 % Nondeductible amortization of Partner Equity Units 108.30 % -1.09 % 0.73 % State and local income taxes 69.91 % -16.53 % 4.42 % RSU excess deferred income tax write-off 28.58 % -11.33 % 0.50 % Foreign income taxes 42.89 % -6.32 % 0.63 % Income not subject to entity level tax -19.04 % 4.21 % -4.54 % Return-to-provision adjustment -2.41 % -3.57 % -0.30 % Tax effects of income recorded to equity in connection with the Recapitalization -11.80 % — % — % Nondeductible transaction costs 15.91 % -3.52 % — % Nondeductible interest expense 21.54 % — % — % Foreign tax credits and deductions -11.85 % -0.77 % 1.88 % Impact of federal tax reform — % — % 40.34 % Other, net 0.15 % -0.50 % -0.24 % Effective Income Tax Rate 248.50 % -34.34 % 67.29 % |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the year ended December 31, 2019 is as follows: December 31, 2019 (dollars in thousands) Beginning balance $ 7,000 Additions for tax benefits related to prior years 1,250 Ending balance $ 8,250 |
General, Administrative and O_2
General, Administrative and Other (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 (dollars in thousands) Professional services $ 42,370 $ 52,163 $ 43,343 Occupancy and equipment 30,281 28,769 33,358 Information processing and communications 21,443 25,917 28,274 Recurring placement and related service fees 14,034 16,247 20,153 Insurance 8,658 7,391 7,609 Business development 4,048 4,075 6,685 Foreign exchange (gains) and losses (451) 2,766 (726) Other expenses 10,478 12,899 13,375 130,861 150,227 152,071 Legal settlements and provisions 19,100 31,750 — Total General, Administrative and Other $ 149,961 $ 181,977 $ 152,071 |
Earnings (Loss) Per Class A S_2
Earnings (Loss) Per Class A Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) Per Class A Share | The following tables present the computation of basic and diluted earnings per Class A Share: Year Ended December 31, 2019 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 $ 51,418 20,773,493 $ 2.48 Effect of dilutive securities: Group A Units 21,469 16,976,983 — Group E Units — 7,817,696 — RSUs — 732,518 — Diluted $ 72,887 46,300,690 $ 1.57 Year Ended December 31, 2018 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 $ (24,284) 19,270,929 $ (1.26) Effect of dilutive securities: Group A Units — — 26,073,057 RSUs — — 4,826,130 Diluted $ (24,284) 19,270,929 $ (1.26) 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 18,642,379 $ 0.98 Effect of dilutive securities: Group A Units — — 27,230,147 RSUs — 75,797 — Diluted $ 18,222 18,718,176 $ 0.97 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 the Company’s executive managing directors, employees and certain other related parties: Year Ended December 31, 2019 2018 2017 (dollars in thousands) Fees charged on investments held by related parties: Management fees $ 7,324 $ 14,017 $ 10,574 Incentive income $ 8,749 $ 7,530 $ 14,052 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimated Future Maximum Payments Under Tax Receivable Agreement | The table below presents management’s estimate as of December 31, 2019, of 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) 2020 $ 30,305 2021 26,370 2022 25,447 2023 32,628 2024 25,803 Thereafter 65,199 Total Payments $ 205,752 |
Overview - Schedule of Shares a
Overview - Schedule of Shares and Operating Group Units (Detail) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Class A Shares | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 21,284,945 | 19,905,126 | 18,957,321 | 18,484,326 |
Class B Shares | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 29,208,952 | 29,458,948 | 33,933,948 | 29,731,702 |
Group A Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 16,019,506 | |||
Group A-1 Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 9,779,446 | |||
Group B Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 21,284,945 | |||
Group E Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 13,450,821 | |||
Group P Units | ||||
Class of Stock | ||||
Common stock and operating group units outstanding | 3,410,000 |
Overview - Additional Informati
Overview - Additional Information (Detail) | Feb. 07, 2019shares | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Ratio of Group A Units Recapitalized as Group A Units | 0.65 | |
Ratio of Group A Units Recapitalized as Group A-1 Units | 0.35 | |
Number of Group A Units forfeited in connection with Recapitalization | 749,813 | |
Reverse share split ratio | 0.10 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Effects of Adoption of New Accounting Policies (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | $ 115,810 | $ 0 | ||
Operating lease liabilities | $ 128,043 | $ 0 | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | $ 126,000 | |||
Operating lease liabilities | $ 135,900 | |||
Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Impact of adoption of ASU 2014-09 | $ 117,000 | |||
Accounting Standards Update 2014-09 | Shareholders’ Deficit Attributable to Class A Shareholders | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Impact of adoption of ASU 2014-09 | $ 41,900 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2007 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Incentive Income Rate | 20.00% | |
Acquisition of an additional interest in domestic real estate operations, percentage | 25.00% | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life of Fixed Assets | 3 years | |
Minimum | Multi-strategy funds | ||
Product Information [Line Items] | ||
Management Fee Rate | 0.95% | |
Minimum | Opportunistic credit funds | ||
Product Information [Line Items] | ||
Management Fee Rate | 0.50% | |
Minimum | Institutional Credit Strategies | ||
Product Information [Line Items] | ||
Management Fee Rate | 0.30% | |
Minimum | Real estate funds | ||
Product Information [Line Items] | ||
Management Fee Rate | 0.50% | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life of Fixed Assets | 7 years | |
Maximum | Multi-strategy funds | ||
Product Information [Line Items] | ||
Management Fee Rate | 2.25% | |
Maximum | Opportunistic credit funds | ||
Product Information [Line Items] | ||
Management Fee Rate | 2.00% | |
Maximum | Institutional Credit Strategies | ||
Product Information [Line Items] | ||
Management Fee Rate | 0.50% | |
Maximum | Real estate funds | ||
Product Information [Line Items] | ||
Management Fee Rate | 1.50% |
Recapitalization - Additional D
Recapitalization - Additional Details (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 07, 2019 | Dec. 31, 2019 |
Recapitalization [Abstract] | ||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200 | |
Amount of 2016 Preferred Units restructured as 2019 Preferred Units | $ 200 | |
Percent of Group A Units reallocated in connection with Recapitalization | 35.00% | |
Number of Group A Units forfeited in connection with Recapitalization | 749,813 | |
Number of days after the last day of the first quarter of achievement of the Distribution Holiday Economic Income target | 45 days | |
Distribution Holiday Economic Income target | $ 600 | |
Maximum distribution adjusted for Group P Units and credited on certain RSUs during Distribution Holiday | $ 4 | |
Percent of Economic Income to be swept as part of Cash Sweep during the Distribution Holiday | 100.00% | |
Minimum Free Cash Balance threshold to which the Cash Sweep will apply except in certain specified circumstances | $ 200 | |
Percent of net cash proceeds from any asset sale subject to Cash Sweep | 85.00% | |
Cash Sweep cumulative discretionary one-time basket | $ 50 | |
Amount of cash that can be reserved from Cash Sweep for Restricted Activities | 17 | |
Cash Sweep permitted Restricted Activities aggregate amount | $ 25 |
Noncontrolling Interests - Calc
Noncontrolling Interests - Calculation of Noncontrolling Interests Attributable to Group A Units (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ 7,054 | $ (24,284) | $ 21,075 |
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | (36,184) | (24,909) | 131,630 |
Sculptor Capital LP | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ (101,557) | $ (80,279) | $ (37,353) |
Blended Participation Percentage | 43.00% | 57.00% | 58.00% |
Sculptor Advisors LP | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ 37,667 | $ 17,379 | $ 89,395 |
Blended Participation Percentage | 18.00% | 56.00% | 59.00% |
Sculptor Advisors II LP | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ 56,953 | $ 18,510 | $ 170,668 |
Blended Participation Percentage | 0.00% | 56.00% | 59.00% |
Sculptor Operating Group | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ (6,937) | $ (44,390) | $ 222,710 |
Blended Participation Percentage | 58.00% | 59.00% | |
Group A Units | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | (36,917) | $ (25,716) | $ 130,730 |
Group A Units | Sculptor Capital LP | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | (43,612) | (45,833) | (21,765) |
Group A Units | Sculptor Advisors LP | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | 6,695 | 9,670 | 52,344 |
Group A Units | Sculptor Advisors II LP | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | 0 | 10,447 | 100,151 |
Group A Units | Sculptor Operating Group | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | $ (36,917) | $ (25,716) | $ 130,730 |
Noncontrolling Interests - Comp
Noncontrolling Interests - Components of Net (Loss) Income Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | $ (36,184) | $ (24,909) | $ 131,630 |
Group A Units | |||
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | (36,917) | (25,716) | 130,730 |
Other | |||
Noncontrolling Interest [Line Items] | |||
Net (Loss) Income Attributable to Noncontrolling Interests | $ 733 | $ 807 | $ 900 |
Noncontrolling Interests - Co_2
Noncontrolling Interests - Components of Shareholders' Equity Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 440,779 | $ 419,431 |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | 434,943 | 415,928 |
Other | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 5,836 | $ 3,503 |
Noncontrolling Interests - Rede
Noncontrolling Interests - Redeemable Noncontrolling Interest (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||
Redeemable Noncontrolling Interests | $ 577,660 | $ 445,617 | $ 284,121 |
Fair value of Debt Securities exchanged for 2016 Preferred Units | (167,799) | 0 | 0 |
Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units | (137,759) | 0 | 0 |
Issuance of 2019 Preferred Units, net of issuance costs | 136,964 | 0 | 0 |
Preferred Units issuance, net of issuance costs | 0 | 0 | 150,054 |
Change in redemption value of Preferred Units | (101,406) | 0 | 7,446 |
Capital contributions | 3,747 | 147,217 | 2,329 |
Capital distributions | (126,778) | (15,465) | 0 |
Funds deconsolidation | (43,374) | 0 | 0 |
Comprehensive income | 8,745 | 291 | 1,667 |
Redeemable Noncontrolling Interests | 150,000 | 577,660 | 445,617 |
Funds | |||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||
Redeemable Noncontrolling Interests | 157,660 | 25,617 | 21,621 |
Fair value of Debt Securities exchanged for 2016 Preferred Units | 0 | 0 | 0 |
Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units | 0 | 0 | 0 |
Issuance of 2019 Preferred Units, net of issuance costs | 0 | 0 | 0 |
Preferred Units issuance, net of issuance costs | 0 | ||
Change in redemption value of Preferred Units | 0 | 0 | 0 |
Capital contributions | 3,747 | 147,217 | 2,329 |
Capital distributions | (126,778) | (15,465) | 0 |
Funds deconsolidation | (43,374) | 0 | 0 |
Comprehensive income | 8,745 | 291 | 1,667 |
Redeemable Noncontrolling Interests | 0 | 157,660 | 25,617 |
Preferred Units | |||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | |||
Redeemable Noncontrolling Interests | 420,000 | 420,000 | 262,500 |
Fair value of Debt Securities exchanged for 2016 Preferred Units | (167,799) | 0 | 0 |
Fair value of 2019 Preferred Units exchanged for 2016 Preferred Units | (137,759) | 0 | 0 |
Issuance of 2019 Preferred Units, net of issuance costs | 136,964 | 0 | 0 |
Preferred Units issuance, net of issuance costs | 150,054 | ||
Change in redemption value of Preferred Units | (101,406) | 0 | 7,446 |
Capital contributions | 0 | 0 | 0 |
Capital distributions | 0 | 0 | 0 |
Funds deconsolidation | 0 | 0 | 0 |
Comprehensive income | 0 | 0 | 0 |
Redeemable Noncontrolling Interests | $ 150,000 | $ 420,000 | $ 420,000 |
Noncontrolling Interests - Addi
Noncontrolling Interests - Additional Information (Detail) - shares | 3 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | ||
Number of Group A Units canceled pursuant to the Relinquishment Agreement | 3,000,000 | |
Group A Units relinquished by former executive managing director | 350,000 |
Investments and Fair Value Di_3
Investments and Fair Value Disclosures - Schedule of Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
United States government obligations, at fair value | $ 146,565 | $ 179,510 |
CLOs, at fair value | 182,870 | 181,868 |
Other investments, equity method | 81,991 | 28,519 |
Total Investments | $ 411,426 | $ 389,897 |
Investments and Fair Value Di_4
Investments and Fair Value Disclosures - Schedule of Investments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | ||
Included Within Investments | ||||
United States government obligations | $ 146,565 | $ 179,510 | ||
CLOs, at fair value | 182,870 | 181,868 | ||
Investments of Consolidated Funds | ||||
Investments | 411,426 | 389,897 | ||
Management company related | Fair Value, Measurements, Recurring | ||||
Included Within Cash And Cash Equivalents | ||||
United States government obligations | 97,034 | 58,054 | ||
Included Within Investments | ||||
United States government obligations | 146,565 | 179,510 | ||
CLOs, at fair value | 182,870 | [1] | 181,868 | [2] |
Management company related | Fair Value, Measurements, Recurring | Level I | ||||
Included Within Cash And Cash Equivalents | ||||
United States government obligations | 97,034 | 58,054 | ||
Included Within Investments | ||||
United States government obligations | 146,565 | 179,510 | ||
CLOs, at fair value | 0 | [1] | 0 | [2] |
Management company related | Fair Value, Measurements, Recurring | Level II | ||||
Included Within Cash And Cash Equivalents | ||||
United States government obligations | 0 | 0 | ||
Included Within Investments | ||||
United States government obligations | 0 | 0 | ||
CLOs, at fair value | 0 | [1] | 0 | [2] |
Management company related | Fair Value, Measurements, Recurring | Level III | ||||
Included Within Cash And Cash Equivalents | ||||
United States government obligations | 0 | 0 | ||
Included Within Investments | ||||
United States government obligations | 0 | 0 | ||
CLOs, at fair value | 182,870 | [1] | 181,868 | [2] |
Funds | Fair Value, Measurements, Recurring | ||||
Investments of Consolidated Funds | ||||
Bank Debt Fair Value Disclosure | 166,958 | |||
Corporate Bonds Fair Value Disclosure | 4,537 | |||
Investments | 171,495 | |||
Funds | Fair Value, Measurements, Recurring | Level I | ||||
Investments of Consolidated Funds | ||||
Bank Debt Fair Value Disclosure | 0 | |||
Corporate Bonds Fair Value Disclosure | 0 | |||
Investments | 0 | |||
Funds | Fair Value, Measurements, Recurring | Level II | ||||
Investments of Consolidated Funds | ||||
Bank Debt Fair Value Disclosure | 91,345 | |||
Corporate Bonds Fair Value Disclosure | 4,537 | |||
Investments | 95,882 | |||
Funds | Fair Value, Measurements, Recurring | Level III | ||||
Investments of Consolidated Funds | ||||
Bank Debt Fair Value Disclosure | 75,613 | |||
Corporate Bonds Fair Value Disclosure | 0 | |||
Investments | 75,613 | |||
CLOs | Management company related | ||||
Investments of Consolidated Funds | ||||
Contractual principal on investments in CLOs | $ 170,000 | $ 171,500 | ||
[1] | As of December 31, 2019, investments in CLOs had contractual principal amounts of $170.0 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments | |||
[2] | As of December 31, 2018, investments in CLOs had contractual principal amounts of $171.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments |
Investments and Fair Value Di_5
Investments and Fair Value Disclosures - Schedule of Changes in Company's Level III Investments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Management company related | CLOs | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 181,868 | $ 211,749 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3 | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 0 | 0 |
Investment Purchases / Issuances | 31,816 | 157,099 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | (27,778) | (175,272) |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings | (3,036) | (11,708) |
Ending Balance | 182,870 | 181,868 |
Funds | Bank Debt | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 75,613 | 18,807 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3 | 7,982 | 1,671 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | (40,272) | (1,244) |
Investment Purchases / Issuances | 29,601 | 146,658 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | (73,772) | (88,600) |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings | 848 | (1,679) |
Ending Balance | 0 | 75,613 |
Funds | Corporate bonds | ||
Fair Value, Investments Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3 | 0 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 0 | |
Investment Purchases / Issuances | 987 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | (981) | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings | (6) | |
Ending Balance | $ 0 | $ 0 |
Investments and Fair Value Di_6
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, 2019 | Dec. 31, 2018 | |
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 | $ (2,877) | $ (9,998) |
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 | $ 0 | $ (2,160) |
Investments and Fair Value Di_7
Investments and Fair Value Disclosures - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Loans sold to CLOs | $ 0 | $ 29.8 |
Risk retention percentage | 5.00% | |
Retained interest investments made | $ 0 | 24.9 |
Fair value of investments in retained interests | 88.2 | 89.4 |
Cash flows from retained interests | $ 3.8 | $ 6.4 |
Variable Interest Entities - As
Variable Interest Entities - Assets and Liabilities of Funds that are VIEs and Consolidated by Company (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | $ 0 | $ 171,495 |
Other assets of consolidated funds | 649 | 21,090 |
Total Assets | 1,397,239 | 1,447,391 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 389 | 14,541 |
Total Liabilities | 1,031,778 | 879,186 |
Variable Interest Entity, Primary Beneficiary | ||
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 0 | 171,495 |
Other assets of consolidated funds | 649 | 21,090 |
Total Assets | 649 | 192,585 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 389 | 14,541 |
Total Liabilities | $ 389 | $ 14,541 |
Variable Interest Entities - _2
Variable Interest Entities - Assets and Liabilities Related to VIEs that are Not Consolidated (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Maximum risk of loss as a result of the Company’s involvement with VIEs: | ||
Income and fees receivable | $ 215,395 | $ 82,843 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Net assets of unconsolidated VIEs in which the Company has a variable interest | 8,805,128 | 10,236,438 |
Maximum risk of loss as a result of the Company’s involvement with VIEs: | ||
Unearned revenues | 63,337 | 62,038 |
Income and fees receivable | 21,841 | 31,658 |
Investments | 200,215 | 190,674 |
Maximum Exposure to Loss | $ 285,393 | $ 284,370 |
Leases - Lease Cost (Detail)
Leases - Lease Cost (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 20,579 |
Short-term lease cost | 58 |
Finance lease cost - amortization of leased assets | 548 |
Finance lease cost - imputed interest on lease liabilities | 94 |
Less: Sublease income | (1,522) |
Net Lease Cost | $ 19,757 |
Leases - Supplemental Lease Cas
Leases - Supplemental Lease Cash Flow Information (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 18,669 |
Operating cash flows for finance leases | 7 |
Finance cash flows for finance leases | 611 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 126,007 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 1,702 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Detail) | Dec. 31, 2019 |
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 9 years 3 months 18 days |
Finance Lease, Weighted Average Remaining Lease Term | 2 years 1 month 6 days |
Operating Lease, Weighted Average Discount Rate, Percent | 7.90% |
Finance Lease, Weighted Average Discount Rate, Percent | 7.90% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 22,610 | |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 21,108 | |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 19,918 | |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 19,192 | |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 15,353 | |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 82,234 | |
Lessee, Operating Lease, Liability, Payments, Due | 180,415 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (52,372) | |
Operating lease liabilities | 128,043 | $ 0 |
Finance Lease, Liability, Payments, Due Next Twelve Months | 618 | |
Finance Lease, Liability, Payments, Due Year Two | 618 | |
Finance Lease, Liability, Payments, Due Year Three | 0 | |
Finance Lease, Liability, Payments, Due Year Four | 0 | |
Finance Lease, Liability, Payments, Due Year Five | 0 | |
Finance Lease, Liability, Payments, Due after Year Five | 0 | |
Finance Lease, Liability, Payment, Due | 1,236 | |
Imputed interest | (58) | |
Finance Lease, Liability | 1,178 | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 16,516 | |
Operating Leases, Future Minimum Payments, Due in Two Years | 23,324 | |
Operating Leases, Future Minimum Payments, Due in Three Years | 21,826 | |
Operating Leases, Future Minimum Payments, Due in Four Years | 19,807 | |
Operating Leases, Future Minimum Payments, Due in Five Years | 19,095 | |
Operating Leases, Future Minimum Payments, Due Thereafter | 97,587 | |
Operating Leases, Future Minimum Payments Due | $ 198,155 | |
Lessor, Operating Lease, Payments to be Received, Thereafter | $ 0 |
Leases Sublease Rent Payments R
Leases Sublease Rent Payments Receivable (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Lessor, Operating Lease, Payments to be Received, Next Twelve Months | $ 1,972 |
Lessor, Operating Lease, Payments to be Received, Two Years | 1,578 |
Lessor, Operating Lease, Payments to be Received, Three Years | 1,578 |
Lessor, Operating Lease, Payments to be Received, Four Years | 1,235 |
Lessor, Operating Lease, Payments to be Received, Five Years | 0 |
Lessor, Operating Lease, Payments to be Received, Thereafter | 0 |
Lessor, Operating Lease, Payments to be Received | $ 6,363 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Lease collateral | $ 6,200 | ||
Operating Leases, Rent Expense | $ 19,500 | $ 17,800 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Debt Principal Payments (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 10, 2018 |
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 3,464 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 40,000 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 85,000 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 58,301 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 119,201 | ||
Borrowings outstanding | 305,966 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (19,238) | ||
Debt obligations | 286,728 | $ 289,987 | |
Debt Securities | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 40,000 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 40,000 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 40,000 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 80,000 | ||
Borrowings outstanding | 200,000 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (18,002) | ||
Debt obligations | 181,998 | ||
2018 Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 45,000 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 0 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 0 | ||
Borrowings outstanding | 45,000 | $ 250,000 | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (895) | ||
Debt obligations | 44,105 | ||
CLO Investments Loans | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 0 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 3,464 | ||
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 | 18,301 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 39,201 | ||
Borrowings outstanding | 60,966 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (341) | ||
Debt obligations | $ 60,625 | $ 95,807 |
Debt Obligations - Schedule o_2
Debt Obligations - Schedule of CLO Investments Loans (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 286,728 | $ 289,987 |
CLO Investments Loans | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 60,625 | 95,807 |
CLO Investments Loans | November 28, 2016 | ||
Debt Instrument [Line Items] | ||
Maturity date | Dec. 15, 2023 | |
Borrowings outstanding | $ 0 | 17,235 |
CLO Investments Loans | November 28, 2016 | EURIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 2.23% | |
CLO Investments Loans | June 07, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Nov. 16, 2029 | |
Borrowings outstanding | $ 17,245 | 17,224 |
CLO Investments Loans | June 07, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.48% | |
CLO Investments Loans | August 02, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Jan. 21, 2030 | |
Borrowings outstanding | $ 21,679 | 21,674 |
CLO Investments Loans | August 02, 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.41% | |
CLO Investments Loans | September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Maturity date | Sep. 14, 2024 | |
Borrowings outstanding | $ 18,237 | 18,614 |
CLO Investments Loans | September 14, 2017 | EURIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 2.21% | |
CLO Investments Loans | February 21, 2018 | ||
Debt Instrument [Line Items] | ||
Maturity date | Feb. 21, 2019 | |
Borrowings outstanding | $ 0 | 21,060 |
CLO Investments Loans | February 21, 2018 | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.27% | |
CLO Investments Loans | August 1, 2019 | ||
Debt Instrument [Line Items] | ||
Maturity date | Jun. 29, 2021 | |
Borrowings outstanding | $ 3,464 | $ 0 |
CLO Investments Loans | August 1, 2019 | EURIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread over basis | 1.15% |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 13, 2020 | Feb. 07, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 10, 2018 |
Debt Instrument [Line Items] | ||||||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200,000 | |||||
Borrowings outstanding | $ 305,966 | |||||
Repayment of debt obligations | 192,790 | $ 595,463 | $ 167,516 | |||
Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200,000 | |||||
Maturity date | Apr. 1, 2026 | |||||
Percent of original principal amount amortized in quarterly installments | 5.00% | |||||
Maximum annual amortization payments | $ 40,000 | |||||
Percent discount on repayment within nine months of repayment of 2019 Preferred Units | 5.00% | |||||
Borrowings outstanding | $ 200,000 | |||||
2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Apr. 10, 2023 | |||||
Borrowings outstanding | $ 45,000 | $ 250,000 | ||||
Repayment of debt obligations | $ 100,000 | 55,000 | ||||
Fee-paying assets under management covenant amount | $ 20,000,000 | |||||
Economic income ratio through third anniversary of closing date | 300.00% | |||||
Economic income ratio following third anniversary of closing date | 250.00% | |||||
Amount of additional Debt Securities that can be issued | $ 200,000 | |||||
Restricted payment basket for preferred dividends | $ 12,000 | |||||
2018 Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility borrowing capacity | $ 100,000 | |||||
2018 Revolving Credit Facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Undrawn commitment fee | 0.20% | |||||
2018 Revolving Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Undrawn commitment fee | 0.75% | |||||
CLO Investments Loans | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings outstanding | $ 60,966 | |||||
Collateral on CLO Investments Loans | $ 65,900 | $ 112,800 | ||||
LIBOR | Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
LIBOR | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 4.75% | |||||
Base Rate | Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 3.75% | |||||
Base Rate | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread over basis | 3.75% | |||||
Subsequent Event | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of debt obligations | $ 27,000 |
Securities Sold under Agreeme_3
Securities Sold under Agreements to Repurchase - Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Transfers and Servicing of Financial Assets [Abstract] | ||
Gross Amounts of Recognized Liabilities | $ 97,508 | $ 62,801 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities in the Consolidated Balance Sheet | 97,508 | 62,801 |
Securities Transferred | 97,508 | 62,186 |
Net Amount | $ 0 | $ 615 |
Securities Sold under Agreeme_4
Securities Sold under Agreements to Repurchase - Remaining Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | $ 97,508 | $ 62,801 |
CLOs | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 97,508 | 62,801 |
CLOs | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 0 | 0 |
CLOs | Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 0 | 0 |
CLOs | 30-90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | 0 | 0 |
CLOs | Greater Than 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Net Amounts of Liabilities in the Consolidated Balance Sheet | $ 97,508 | $ 62,801 |
Securities Sold under Agreeme_5
Securities Sold under Agreements to Repurchase - Additional Details (Details) - Repurchase agreements credit facility € in Millions | Dec. 31, 2019EUR (€) |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |
Repurchase agreements credit facility borrowing capacity | € 100 |
Repurchase agreements credit facility undrawn balance | € 12.3 |
Preferred Units - Additional In
Preferred Units - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Feb. 07, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Noncontrolling Interest [Line Items] | |||
Amount of 2016 Preferred Units restructured as 2019 Preferred Units | $ 200 | ||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200 | ||
2016 Preferred Units | |||
Noncontrolling Interest [Line Items] | |||
Preferred Units, amount outstanding | $ 400 | ||
2019 Preferred Units | |||
Noncontrolling Interest [Line Items] | |||
Preferred Units, amount outstanding | $ 200 | ||
Amount of 2016 Preferred Units restructured as 2019 Preferred Units | $ 200 | ||
Discount on early redemption of 2019 Preferred Units through March 31, 2021 | 25.00% | ||
Discount on early redemption of 2019 Preferred Units April 1, 2021 and the day prior to March 30, 2022 | 10.00% | ||
Preferred Units, Distribution Rate through Step Up Date | 0.00% | ||
Preferred Units, Distribution Rate After Step Up Date through Eighth Anniversary of Step Up Date | 6.00% | ||
Preferred Units, Maximum Distribution Rate per Annum Following Eighth Anniversary of Step Up Date | 10.00% | ||
Per Annum Increase in Distribution Rate Following a Change of Control Event | 7.00% | ||
Number of Days After a Change in Control That an Increase In Distribution Rate Occurs | 31 days | ||
Number of Days Following Change in Control Redemption Not Required | 20 days | ||
Threshold of Distributions That Would Cause A Portion To Be Used For Redemption | $ 100 | ||
Percent of the Excess Over Threshold That Would Cause Redemption | 20.00% | ||
Threshold of Average Closing Price of Class A Shares | $ 150 | ||
Number of Trading Days of Average Trading Price Exceeding Threshold for Redemption | 20 days | ||
Debt Securities | |||
Noncontrolling Interest [Line Items] | |||
Amount of 2016 Preferred Units Restructured as Debt Securities | $ 200 |
Other Assets, Net - Components
Other Assets, Net - Components of Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fixed Assets: | ||
Leasehold improvements | $ 52,798 | $ 54,257 |
Computer hardware and software | 47,361 | 48,178 |
Furniture, fixtures and equipment | 8,411 | 8,373 |
Accumulated depreciation and amortization | (73,730) | (67,558) |
Fixed assets, net | 34,840 | 43,250 |
Goodwill | 22,691 | 22,691 |
Prepaid expenses | 18,507 | 11,629 |
Other | 6,570 | 4,833 |
Total Other Assets, Net | $ 82,608 | $ 82,403 |
Other Liabilities - Components
Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |||
Accrued expenses | $ 19,275 | $ 27,683 | |
Legal provision | [1] | 19,100 | 0 |
Uncertain tax positions | 8,250 | 7,000 | |
Unused trade commissions | 5,192 | 8,615 | |
Deferred rent credit | 0 | 6,231 | |
Trades payable | 0 | 4,978 | |
Other | 7,400 | 9,096 | |
Total Other Liabilities | $ 59,217 | $ 63,603 | |
[1] | Legal provision represents accrual for certain contingencies discussed in Note 19. |
Revenues - Management Fees and
Revenues - Management Fees and Incentive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | $ 321,621 | $ 202,896 | $ 528,000 |
Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 253,011 | 281,862 | 319,458 |
Multi-strategy funds | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 240,517 | 71,972 | 409,823 |
Multi-strategy funds | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 134,404 | 168,902 | 214,116 |
Opportunistic credit funds | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 48,526 | 89,182 | 99,308 |
Opportunistic credit funds | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 43,729 | 41,035 | 44,753 |
Institutional Credit Strategies | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 0 | 0 | 0 |
Institutional Credit Strategies | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 57,877 | 50,212 | 35,381 |
Real estate funds | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 32,578 | 40,811 | 7,603 |
Real estate funds | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 16,111 | 19,307 | 21,027 |
Other | Incentive income | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | 0 | 931 | 11,266 |
Other | Management fees | |||
Disaggregation of Revenue [Line Items] | |||
Investment management revenues | $ 890 | $ 2,406 | $ 4,181 |
Revenues - Unearned Incentive I
Revenues - Unearned Incentive Income Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | |||
Effect of Adoption of ASU 2014-09 on Unearned Incentive | $ (99,422) | ||
Beginning of Year | $ 61,397 | $ 143,710 | 96,079 |
Amounts collected during the period | 24,946 | 54,538 | 53,915 |
Amounts recognized during the period | (25,545) | (37,429) | (6,284) |
End of Period | $ 60,798 | $ 61,397 | $ 143,710 |
Revenues - Income and Fees Rece
Revenues - Income and Fees Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | $ 215,395 | $ 82,843 |
Management fees | ||
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | 25,726 | 20,368 |
Incentive income | ||
Income and Fees Receivable [Line Items] | ||
Income and fees receivable | $ 189,669 | $ 62,475 |
Equity-Based Compensation Exp_3
Equity-Based Compensation Expenses - Equity-Based Compensation Expense Summary (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Expense recorded within compensation and benefits | $ 127,505 | $ 87,130 | $ 84,169 |
Corresponding tax benefit | $ 7,738 | $ 2,811 | $ 4,720 |
Equity-Based Compensation Exp_4
Equity-Based Compensation Expenses - Activity Related to Unvested Equity Awards (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity-classified RSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 3,784,536 | ||
Granted | 1,890,579 | ||
Unvested Units, Vested | (1,621,849) | ||
Unvested Units, Canceled or Forfeited | (283,431) | ||
Unvested Units, End of Reporting Period | 3,769,835 | 3,784,536 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 30 | ||
Weighted-Average Grant-Date Fair Value, Granted | 15.33 | $ 23.34 | $ 31.60 |
Weighted-Average Grant-Date Fair Value, Vested | 27.86 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 25.64 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 23.94 | $ 30 | |
Liability-classified RSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 433,133 | ||
Granted | 65,277 | ||
Unvested Units, Vested | (113,857) | ||
Unvested Units, Canceled or Forfeited | 0 | ||
Unvested Units, End of Reporting Period | 384,553 | 433,133 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 66.75 | ||
Weighted-Average Grant-Date Fair Value, Granted | 15.25 | $ 15 | |
Weighted-Average Grant-Date Fair Value, Vested | 64.11 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 0 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 58.44 | $ 66.75 | |
PSUs | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 1,000,000 | ||
Granted | 0 | 1,000,000 | |
Unvested Units, Vested | 0 | ||
Unvested Units, Canceled or Forfeited | 0 | ||
Unvested Units, End of Reporting Period | 1,000,000 | 1,000,000 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 11.82 | ||
Weighted-Average Grant-Date Fair Value, Granted | 0 | $ 11.82 | |
Weighted-Average Grant-Date Fair Value, Vested | 0 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 0 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 11.82 | $ 11.82 | |
Group A Units | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 74,962 | ||
Granted | 0 | ||
Unvested Units, Vested | (24,271) | ||
Unvested Units, Canceled or Forfeited | (26,421) | ||
Unvested Units, End of Reporting Period | 24,270 | 74,962 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 105.26 | ||
Weighted-Average Grant-Date Fair Value, Granted | 0 | $ 21.85 | |
Weighted-Average Grant-Date Fair Value, Vested | 105.26 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 105.26 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 105.26 | $ 105.26 | |
Group E Units | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 0 | ||
Granted | 13,684,124 | ||
Unvested Units, Vested | (3,889,242) | ||
Unvested Units, Canceled or Forfeited | (233,303) | ||
Unvested Units, End of Reporting Period | 9,561,579 | 0 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 0 | ||
Weighted-Average Grant-Date Fair Value, Granted | 8.61 | ||
Weighted-Average Grant-Date Fair Value, Vested | 8.63 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 8.12 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 8.62 | $ 0 | |
Group P Units | |||
Unvested Units | |||
Unvested Units, Beginning of Year | 3,660,000 | ||
Granted | 225,000 | 7,185,000 | |
Unvested Units, Vested | (225,000) | ||
Unvested Units, Canceled or Forfeited | (475,000) | ||
Unvested Units, End of Reporting Period | 3,185,000 | 3,660,000 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant-Date Fair Value, Beginning of Year | $ 12.46 | ||
Weighted-Average Grant-Date Fair Value, Granted | 5.94 | $ 12.50 | |
Weighted-Average Grant-Date Fair Value, Vested | 5.94 | ||
Weighted-Average Grant-Date Fair Value, Canceled or Forfeited | 12.46 | ||
Weighted-Average Grant-Date Fair Value, End of Reporting Period | $ 12.46 | $ 12.46 |
Equity-Based Compensation Exp_5
Equity-Based Compensation Expenses - Settlement of RSUs (Detail) - RSUs - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs settled in Class A Shares | $ 24,131 | $ 12,044 | $ 13,016 |
Fair value of RSUs settled in cash | 2,570 | 3,879 | 130 |
Fair value of RSUs withheld to satisfy tax withholding obligations | $ 3,727 | $ 4,436 | $ 7,577 |
Number of RSUs withheld to satisfy tax withholding obligations | 300,714 | 329,591 | 280,269 |
Equity-Based Compensation Exp_6
Equity-Based Compensation Expenses - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity-classified RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 640,797 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 15.33 | $ 23.34 | $ 31.60 |
Unrecognized Compensation Expense | $ 61,500 | ||
Weighted-Average Amortization Period | 2 years 3 months 18 days | ||
Granted | 1,890,579 | ||
Liability-classified RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 734,599 | ||
Weighted-Average Grant-Date Fair Value, Modified | $ 63.62 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 15.25 | 15 | |
Unrecognized Compensation Expense | $ 22,500 | ||
Weighted-Average Amortization Period | 3 years | ||
Granted | 65,277 | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-Average Grant-Date Fair Value, Granted | $ 0 | $ 11.82 | |
Unrecognized Compensation Expense | $ 4,500 | ||
Weighted-Average Amortization Period | 1 year 2 months 12 days | ||
Granted | 0 | 1,000,000 | |
Expected Volatility Rate | 35.00% | ||
Expected Dividend Rate | 10.00% | ||
Risk Free Interest Rate | 2.60% | ||
Expected Term | 3 years 1 month 6 days | ||
PSUs | 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% | ||
PSUs | 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% | ||
PSUs | 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% | ||
PSUs | 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% | ||
PSUs | Incremental 20% Vest, Total 20% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 25.00% | ||
PSUs | Incremental 40% Vest, Total 60% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 50.00% | ||
PSUs | Incremental 20% Vest, Total 80% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 75.00% | ||
PSUs | Incremental 20% Vest, Total 100% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 125.00% | ||
Group A Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 600,000 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 0 | 21.85 | |
Unrecognized Compensation Expense | $ 740 | ||
Weighted-Average Amortization Period | 3 months 18 days | ||
Granted | 0 | ||
Discount for Post-vesting Restrictions | 5.00% | ||
Group E Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-Average Grant-Date Fair Value, Granted | $ 8.61 | ||
Unrecognized Compensation Expense | $ 53,800 | ||
Weighted-Average Amortization Period | 2 years 1 month 6 days | ||
Granted | 13,684,124 | ||
Group P Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested Units, Modified | 2,900,000 | ||
Weighted-Average Grant-Date Fair Value, Granted | $ 5.94 | $ 12.50 | |
Unrecognized Compensation Expense | $ 8,400 | ||
Weighted-Average Amortization Period | 1 year | ||
Granted | 225,000 | 7,185,000 | |
Expected Volatility Rate | 36.00% | ||
Expected Dividend Rate | 10.00% | ||
Risk Free Interest Rate | 2.20% | ||
Expected Term | 3 years 8 months 12 days | ||
Group P Units | 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% | ||
Group P Units | 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% | ||
Group P Units | 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% | ||
Group P Units | 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% | ||
Group P Units | Incremental 20% Vest, Total 20% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 25.00% | ||
Group P Units | Incremental 40% Vest, Total 60% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 50.00% | ||
Group P Units | Incremental 20% Vest, Total 80% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 75.00% | ||
Group P Units | Incremental 20% Vest, Total 100% Vest | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent Of Performance Condition For Units Vesting | 125.00% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal income taxes, Current | $ (370) | $ 1 | $ 103 |
State and local income taxes, Current | 1,702 | 1,165 | 2,172 |
Foreign income taxes, Current | 5,845 | 2,735 | 2,520 |
Provision for Income Taxes, Current | 7,177 | 3,901 | 4,795 |
Deferred: | |||
Federal income taxes, Deferred | 16,621 | 3,304 | 322,162 |
State and local income taxes, Deferred | 10,272 | 5,736 | (9,828) |
Foreign income taxes, Deferred | 42 | (441) | 430 |
Provision for Income Taxes, Deferred | 26,935 | 8,599 | 312,764 |
Total Provision for Income Taxes | $ 34,112 | $ 12,500 | $ 317,559 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Income Tax Assets: | ||||
Tax goodwill | $ 176,244 | $ 234,437 | ||
Net operating loss | 86,644 | 96,524 | ||
Investments in partnerships | 41,865 | 19,607 | ||
Tax credit carryforwards | 15,160 | 15,550 | ||
Employee compensation | 1,183 | 1,027 | ||
Deferred Tax Assets, Other | 1,624 | 869 | ||
Deferred Income Tax Assets | 322,720 | 368,014 | ||
Valuation allowance | (11,083) | (11,959) | $ (12,028) | $ (7,798) |
Total Deferred Income Tax Assets | 311,637 | 356,055 | ||
Deferred Income Tax Liabilities: | ||||
Total Deferred Income Tax Liabilities | $ 1,080 | $ 1,030 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation Allowance [Line Items] | ||||
Deferred Tax Assets, Valuation Allowance | $ 11,083 | $ 11,959 | $ 12,028 | $ 7,798 |
Additions charged to income taxes expense | 0 | 497 | 6,592 | |
Deductions | $ (876) | $ (566) | $ (2,362) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory U.S. Federal Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 35.00% |
Income passed through to noncontrolling interests | (14.68%) | (15.92%) | (11.13%) |
Nondeductible amortization of Partner Equity Units | 108.30% | (1.09%) | 0.73% |
State and local income taxes | 69.91% | (16.53%) | 4.42% |
RSU excess deferred income tax write-off | 28.58% | (11.33%) | 0.50% |
Foreign income taxes | 42.89% | (6.32%) | 0.63% |
Income not subject to entity level tax | (19.04%) | 4.21% | (4.54%) |
Return-to-provision adjustment | (2.41%) | (3.57%) | (0.30%) |
Tax effects of income recorded to equity in connection with the Recapitalization | (11.80%) | 0.00% | 0.00% |
Nondeductible transaction costs | 15.91% | (3.52%) | 0.00% |
Nondeductible interest expense | 21.54% | 0.00% | 0.00% |
Foreign tax credits and deductions | (11.85%) | (0.77%) | 1.88% |
Impact of federal tax reform | 0.00% | 0.00% | 40.34% |
Other, net | 0.15% | (0.50%) | (0.24%) |
Effective Income Tax Rate | 248.50% | (34.34%) | 67.29% |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits Roll Forward (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized Tax Benefits | $ 8,250 | $ 7,000 |
Additions for tax benefits related to prior years | $ 1,250 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards | |||
Open Tax Year | 2014 | ||
Impact of converting to a corporation | $ 5.6 | ||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 35.00% |
Impact of TCJA on Deferred Income Tax Assets | $ 280.8 | ||
Impact of TCJA from Revaluation of Deferred Income Tax Assets | 190.4 | ||
Impact of TCJA on TRA Liability | 90.4 | ||
Pre-tax income generated in foreign jurisdictions | $ 17.7 | $ 8.2 | $ 21.3 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 4.8 | ||
Foreign Country | |||
Operating Loss Carryforwards | |||
Open Tax Year | 2007 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Open Tax Year | 2012 | ||
Minimum | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards expiration date | Dec. 31, 2020 | ||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2030 | ||
Minimum | State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2035 | ||
Maximum | Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards expiration date | Dec. 31, 2026 | ||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2037 | ||
Maximum | State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2039 | ||
Internal Revenue Service (IRS) | |||
Operating Loss Carryforwards | |||
Tax credit carryforwards | $ 14.7 | ||
Operating loss carryforwards, subject to expiration | 243.1 | ||
Internal Revenue Service (IRS) | Minimum | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, not subject to expiration | 71.4 | ||
State Income Tax | Minimum | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, subject to expiration | 153.5 | ||
Local Income Tax | Minimum | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, subject to expiration | $ 149.7 |
General, Administrative and O_3
General, Administrative and Other - Components of General, Administrative and Other Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |||
Professional services | $ 42,370 | $ 52,163 | $ 43,343 |
Occupancy and equipment | 30,281 | 28,769 | 33,358 |
Information processing and communications | 21,443 | 25,917 | 28,274 |
Recurring placement and related service fees | 14,034 | 16,247 | 20,153 |
Insurance | 8,658 | 7,391 | 7,609 |
Business development | 4,048 | 4,075 | 6,685 |
Foreign exchange (gains) and losses | (451) | 2,766 | (726) |
Other expenses | 10,478 | 12,899 | 13,375 |
General and Administrative Expense before Legal Settlements and Provisions | 130,861 | 150,227 | 152,071 |
Legal settlements and provisions | 19,100 | 31,750 | 0 |
Total General, Administrative and Other | $ 149,961 | $ 181,977 | $ 152,071 |
Earnings (Loss) Per Class A S_3
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Line Items] | |||
Net Income (Loss) Attributable to Class A Shareholders | $ 51,418 | $ (24,284) | $ 18,222 |
Net Income (Loss) Attributable to Class A Shareholders, Diluted | $ 72,887 | $ (24,284) | $ 18,222 |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 20,773,493 | 19,270,929 | 18,642,379 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 46,300,690 | 19,270,929 | 18,718,176 |
Earnings (Loss) Per Class A Share, Basic (in dollars per share) | $ 2.48 | $ (1.26) | $ 0.98 |
Earnings (Loss) Per Class A Share, Diluted (in dollars per share) | $ 1.57 | $ (1.26) | $ 0.97 |
Group A Units | |||
Earnings Per Share [Line Items] | |||
Net Income (Loss) Attributable to Class A Shareholders, Effect of dilutive securities | $ 21,469 | $ 0 | $ 0 |
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 16,976,983 | 0 | 0 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 0 | 26,073,057 | 27,230,147 |
Group E Units | |||
Earnings Per Share [Line Items] | |||
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 7,817,696 | ||
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 0 | ||
RSUs | |||
Earnings Per Share [Line Items] | |||
Net Income (Loss) Attributable to Class A Shareholders, Effect of dilutive securities | $ 0 | $ 0 | $ 0 |
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 732,518 | 0 | 75,797 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 0 | 4,826,130 | 0 |
Earnings (Loss) Per Class A S_4
Earnings (Loss) Per Class A Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RSUs | |||
Earnings Per Share [Line Items] | |||
Vested RSUs included in weighted-average Class A Shares outstanding | 180,444 | 142,512 | 110,373 |
Related Party Transactions - Ma
Related Party Transactions - Management Fees and Incentive Income Earned from Related Parties and Waived Fees (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Management fees | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | $ 253,011 | $ 281,862 | $ 319,458 |
Incentive Income | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | 321,621 | 202,896 | 528,000 |
Fees charged on investments held by related parties: | Management fees | Executive Managing Directors, Employees and Other Related Parties | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | 7,324 | 14,017 | 10,574 |
Fees charged on investments held by related parties: | Incentive Income | Executive Managing Directors, Employees and Other Related Parties | |||
Related Party Transaction [Line Items] | |||
Investment management revenues | $ 8,749 | $ 7,530 | $ 14,052 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
General, administrative and other | $ 149,961 | $ 181,977 | $ 152,071 | ||
Executive Managing Directors, Employees and Other Related Parties | Amount of Related Party Assets Under Management | |||||
Related Party Transaction [Line Items] | |||||
Assets under management | $ 1,900,000 | $ 930,100 | $ 1,900,000 | ||
Executive Managing Directors, Employees and Other Related Parties | Percent of Related Party Assets Under Management Not Charged Fees | |||||
Related Party Transaction [Line Items] | |||||
Percent of assets under management not charged management and incentive fees | 29.00% | 41.00% | 29.00% | ||
Mr. Och | Reimbursement of Personal Recapitalization Expenses Incurred | |||||
Related Party Transaction [Line Items] | |||||
General, administrative and other | $ 4,500 | $ 5,000 |
Commitments and Contingencies -
Commitments and Contingencies - Estimated Potential Payments Under Tax Receivable Agreement (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Tax Receivable Agreement [Abstract] | |
Tax Receivable Agreement Future Maximum Payments, Due in the Next Fiscal Year | $ 30,305 |
Tax Receivable Agreement Future Maximum Payments, Due Year Two | 26,370 |
Tax Receivable Agreement Future Maximum Payments, Due Year Three | 25,447 |
Tax Receivable Agreement Future Maximum Payments, Due Year Four | 32,628 |
Tax Receivable Agreement Future Maximum Payments, Due Year Five | 25,803 |
Tax Receivable Agreement Future Maximum Payments, Due After Year Five | 65,199 |
Estimated future payments under tax receivable agreement | $ 205,752 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Percentage of tax savings to be paid under tax receivable agreement | 75.00% | 85.00% | |||
Reduction in tax receivable agreement liability due to amendment | $ 67,200 | $ 18,000 | $ 72,600 | ||
Decrease in deferred income tax asset due to tax receivable agreement amendment | 16,300 | 7,500 | 33,400 | ||
Increase in paid-in capital as a result of tax receivable agreement amendment | $ 50,967 | $ 0 | 10,520 | $ 39,200 | |
Percentage of tax savings to be paid under tax receivable agreement to remaining EMDs and Ziffs | 69.00% | ||||
Estimated future payments under tax receivable agreement | $ 205,752 | ||||
Unfunded capital commitments of the Company to funds managed | 55,800 | ||||
Capital commitments by EMDs | 49,600 | ||||
Loss Contingencies [Line Items] | |||||
Legal settlements and provisions | 19,100 | $ 31,750 | $ 0 | ||
Africo Litigation | |||||
Loss Contingencies [Line Items] | |||||
Legal settlements and provisions | 19,100 | ||||
Amounts claimants requesting | 290,400 | ||||
Value of mining rights submitted by DOJ | $ 188,700 | ||||
A Commercial Matter | |||||
Loss Contingencies [Line Items] | |||||
Legal settlements and provisions | $ 3,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event | Feb. 13, 2020$ / shares |
Subsequent Event [Line Items] | |
Dividends announcement date | Feb. 13, 2020 |
Cash dividend (in dollars per share) | $ 0.53 |
Dividends payable date | Mar. 3, 2020 |
Dividends record date | Feb. 25, 2020 |