Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 15, 2017 | Jun. 30, 2016 | |
Document Information [Line Items] | |||
Entity Registrant Name | MEDLEY MANAGEMENT INC. | ||
Entity Central Index Key | 1,611,110 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Trading Symbol | mdly | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 33,973,029 | ||
Common Class A [Member] | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 5,809,130 | ||
Common Class B [Member] | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 100 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 49,666 | $ 71,688 |
Restricted cash equivalents | 4,897 | 0 |
Investments, at fair value | 31,904 | 16,360 |
Management fees receivable | 12,630 | 16,172 |
Performance fees receivable | 4,961 | 2,518 |
Other assets | 18,311 | 13,015 |
Total assets | 122,369 | 119,753 |
Liabilities and Equity | ||
Loans payable | 52,178 | 100,871 |
Senior unsecured debt | 49,793 | 0 |
Accounts payable, accrued expenses and other liabilities | 36,270 | 34,746 |
Performance fee compensation payable | 985 | 1,823 |
Total liabilities | 139,226 | 137,440 |
Commitments and contingencies | ||
Redeemable Non-controlling Interests | 30,805 | 0 |
Equity | ||
Additional paid in capital (capital deficit) | 3,310 | 631 |
Accumulated other comprehensive income (loss) | 33 | 0 |
Retained earnings (accumulated deficit) | (5,254) | (730) |
Total stockholders' equity (deficit), Medley Management Inc. | (1,853) | (39) |
Total equity (deficit) | (47,662) | (17,687) |
Total liabilities, redeemable non-controlling interests and equity | 122,369 | 119,753 |
Consolidated Subsidiaries [Member] | ||
Equity | ||
Non-controlling interests | (1,717) | (459) |
Medley LLC [Member] | ||
Equity | ||
Non-controlling interests | (44,092) | (17,189) |
Common Class A [Member] | ||
Equity | ||
Common stock, value | 58 | 60 |
Common Class B [Member] | ||
Equity | ||
Common stock, value | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued (in shares) | 6,042,050 | 6,010,646 |
Common stock, shares outstanding (in shares) | 5,809,130 | 5,993,941 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 100 | 100 |
Common stock, shares outstanding (in shares) | 100 | 100 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Revenues | ||||
Management fees (includes Part I incentive fees of $14,209, $21,487 and $19,507, respectively) | $ 65,496 | $ 75,675 | $ 61,252 | |
Performance fees | 2,421 | (15,685) | 2,050 | |
Other revenues and fees | 8,111 | 7,436 | 8,871 | |
Total revenues | 76,028 | 67,426 | 72,173 | |
Expenses | ||||
Compensation and benefits | 27,800 | 26,768 | 20,322 | |
Performance fee compensation | (319) | (8,049) | (1,543) | |
General, administrative and other expenses | 28,540 | 16,836 | 16,312 | |
Total expenses | 56,021 | 35,555 | 36,761 | |
Other income (expense) | ||||
Dividend income | 1,304 | 886 | 886 | |
Interest expense | (9,226) | (8,469) | (5,520) | |
Other income (expenses), net | (1,070) | (1,641) | (1,773) | |
Total other income (expense), net | (8,992) | (9,224) | 36,516 | |
Income (loss) before income taxes | 11,015 | 22,647 | 71,928 | |
Provision for (benefit from) income taxes | 1,063 | 2,015 | 2,528 | |
Net income (loss) | 9,952 | 20,632 | 69,400 | |
Net income attributable to Medley Management Inc. | $ 997 | $ 3,111 | $ 1,695 | |
Dividends declared per Class A common stock (in dollars per share) | $ 0.8 | $ 0.60 | $ 0.20 | |
Net income per Class A common stock: | ||||
Net income per Class A common stock, Basic (in dollars per share) | 0.02 | 0.46 | 0.24 | [1] |
Net income per Class A common stock, Diluted (in dollars per share) | $ 0.02 | $ 0.46 | $ 0.24 | [1] |
Weighted average number of shares outstanding, Basic and Diluted (in shares) | 5,804,042 | 6,002,422 | 6,000,000 | |
Consolidated Fund [Member] | ||||
Expenses | ||||
Consolidated Funds expenses | $ 0 | $ 0 | $ 1,670 | |
Other income (expense) | ||||
Interest and other income of Consolidated Funds | 0 | 0 | 71,468 | |
Interest expense of Consolidated Funds | 0 | 0 | (9,951) | |
Net realized gain (loss) on investments of Consolidated Funds | 0 | 0 | 789 | |
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | 0 | 0 | (20,557) | |
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds | 0 | 0 | 1,174 | |
Net income (loss) attributable to non-controlling interests | 0 | 0 | 29,717 | |
Consolidated Subsidiaries [Member] | ||||
Other income (expense) | ||||
Net income (loss) attributable to non-controlling interests | 2,549 | (885) | 1,933 | |
Medley LLC [Member] | ||||
Other income (expense) | ||||
Net income (loss) attributable to non-controlling interests | $ 6,406 | $ 18,406 | $ 36,055 | |
[1] | Based on net income attributable to Medley Management Inc. for the period September 29, 2014 through December 31, 2014. |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Incentive fees | $ 14,209 | $ 21,487 | $ 19,507 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) | $ 9,952 | $ 20,632 | $ 69,400 |
Change in fair value of available-for-sale securities | 194 | 0 | 0 |
Total comprehensive income (loss) | 10,146 | 20,632 | 69,400 |
Comprehensive income attributable to Medley Management Inc. | 1,030 | 3,111 | 1,695 |
Consolidated Fund [Member] | |||
Comprehensive income (loss) attributable to non-controlling interests | 0 | 0 | 29,717 |
Consolidated Subsidiaries [Member] | |||
Comprehensive income (loss) attributable to non-controlling interests | 2,577 | (885) | 1,933 |
Medley LLC [Member] | |||
Comprehensive income (loss) attributable to non-controlling interests | $ 6,539 | $ 18,406 | $ 36,055 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity and Redeemable Non-controlling Interests - USD ($) $ in Thousands | Total | MOF I LP [Member] | MOF II LP [Member] | Noncontrolling Interest [Member]Consolidated Fund [Member] | Noncontrolling Interest [Member]MOF I LP [Member] | Noncontrolling Interest [Member]MOF II LP [Member] | Noncontrolling Interest [Member]Consolidated Subsidiaries [Member] | Noncontrolling Interest [Member]Medley LLC [Member] | Member Units [Member] | Common Stock [Member] | Common Stock [Member]Common Class A [Member] | Common Stock [Member]Common Class B [Member] | Additional Paid-in Capital [Member] | AOCI Including Portion Attributable to Noncontrolling Interest [Member] | Retained Earnings [Member] | Redeemable Non Controlling Interest [Member] |
Balance at Dec. 31, 2013 | $ 445,961 | $ 464,475 | $ 40 | $ 0 | $ (18,554) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Balance (in shares) at Dec. 31, 2013 | 0 | 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income (loss) | 69,400 | |||||||||||||||
Balance at Dec. 31, 2014 | 621,050 | 625,548 | 1,526 | (3,972) | 0 | 0 | $ 60 | (2,384) | 0 | 272 | 0 | |||||
Balance (in shares) at Dec. 31, 2014 | 6,000,000 | 100 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Balance | 475,608 | 585,007 | 3,023 | 0 | (112,422) | 0 | $ 0 | 0 | 0 | 0 | 0 | |||||
Effects of Reorganization and Offering | (112,422) | 112,422 | ||||||||||||||
Balance at Sep. 29, 2014 | 475,608 | 585,007 | 3,023 | (112,422) | 0 | 0 | $ 0 | 0 | 0 | 0 | 0 | |||||
Balance (in shares) at Sep. 29, 2014 | 0 | 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income (loss) | 17,690 | 6,815 | (122) | 9,302 | 1,695 | |||||||||||
Stock-based compensation | 894 | 894 | ||||||||||||||
Dividends declared on common stock | (1,423) | (1,423) | ||||||||||||||
Issuance of Class A shares in Initial Public Offering, net of underwriters discount (in shares) | 6,000,000 | |||||||||||||||
Issuance of Class A shares in Initial Public Offering, net of underwriters discount | 100,440 | $ 60 | 100,380 | |||||||||||||
Issuance of Class B shares (in shares) | 100 | |||||||||||||||
Initial Public Offering costs | (3,715) | (3,715) | ||||||||||||||
Dilution assumed with Initial Public Offering | 103,658 | (103,658) | ||||||||||||||
Contributions | 33,726 | 33,726 | ||||||||||||||
Distributions | (2,170) | (1,375) | (795) | |||||||||||||
Balance at Dec. 31, 2014 | 621,050 | 625,548 | 1,526 | (3,972) | 0 | 0 | $ 60 | (2,384) | 0 | 272 | 0 | |||||
Balance (in shares) at Dec. 31, 2014 | 6,000,000 | 100 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Deconsolidation | $ (15,321) | $ (610,227) | $ (15,321) | $ (610,227) | ||||||||||||
Net income (loss) | 20,632 | (885) | 18,406 | 3,111 | ||||||||||||
Stock-based compensation | 3,052 | 3,052 | ||||||||||||||
Dividends declared on common stock | (4,113) | (4,113) | ||||||||||||||
Excess tax benefit from dividends paid to RSU holders | 85 | 21 | 64 | |||||||||||||
Issuance of Class A common stock related to vesting of restricted stock units (shares) | 10,646 | |||||||||||||||
Repurchase of common stock | (101) | (101) | ||||||||||||||
Repurchase of common stock (in shares) | (16,705) | |||||||||||||||
Distributions | (32,744) | (1,100) | (31,644) | |||||||||||||
Balance at Dec. 31, 2015 | (17,687) | 0 | (459) | (17,189) | 0 | 0 | $ 60 | 631 | 0 | (730) | 0 | |||||
Balance (in shares) at Dec. 31, 2015 | 5,993,941 | 100 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income (loss) | 9,952 | (16) | 6,406 | 997 | ||||||||||||
Net income (loss) | 7,387 | |||||||||||||||
Net income (loss) | 2,565 | |||||||||||||||
Change in fair value of available-for-sale securities | 166 | 133 | 33 | |||||||||||||
Change in fair value of available-for-sale securities | 28 | |||||||||||||||
Stock-based compensation | 3,811 | 3,811 | ||||||||||||||
Dividends declared on common stock | (5,521) | (5,521) | ||||||||||||||
Excess tax benefit from dividends paid to RSU holders | 84 | 20 | 64 | |||||||||||||
Issuance of Class A common stock related to vesting of restricted stock units (shares) | 31,404 | |||||||||||||||
Repurchase of common stock | (1,198) | $ (2) | (1,196) | |||||||||||||
Repurchase of common stock (in shares) | (216,215) | |||||||||||||||
Contributions | 12 | 12 | 17,010 | |||||||||||||
Distributions | (22,662) | (1,547) | (21,115) | (994) | ||||||||||||
Reclassification of redeemable non-controlling interest | (12,196) | (41) | (12,155) | 12,196 | ||||||||||||
Issuance of non-controlling interests, at fair value | 142 | 334 | (192) | |||||||||||||
Balance at Dec. 31, 2016 | $ (47,662) | $ 0 | $ (1,717) | $ (44,092) | $ 0 | $ 0 | $ 58 | $ 3,310 | $ 33 | $ (5,254) | $ 30,805 | |||||
Balance (in shares) at Dec. 31, 2016 | 5,809,130 | 100 |
Consolidated Statement of Chan8
Consolidated Statement of Changes in Equity and Redeemable Non-controlling Interests (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Stockholders' Equity [Abstract] | |||
Dividends (in dollars per share) | $ 0.80 | $ 0.6 | $ 0.2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income (loss) | $ 9,952 | $ 20,632 | $ 69,400 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Non-cash stock-based compensation | 3,811 | 3,052 | 894 |
Amortization of debt issuance costs | 1,018 | 545 | 752 |
Accretion of debt discount | 958 | 776 | 604 |
Provision for (benefit from) deferred taxes | (267) | (904) | (483) |
Depreciation and amortization | 913 | 454 | 401 |
Net change in unrealized depreciation (appreciation) on investments | (27) | 885 | 272 |
Loss (income) from equity method investments | 93 | 12,578 | 0 |
Other non-cash amounts | 169 | 0 | 0 |
Provision for (benefit from) deferred taxes | (267) | (904) | (726) |
Changes in operating assets and liabilities: | |||
Management fees receivable | 3,542 | (999) | (6,252) |
Performance fees receivable | (2,443) | 3,055 | (2,234) |
Other assets | (1,617) | (4,915) | (1,671) |
Accounts payable, accrued expenses and other liabilities | (844) | (1,112) | 8,693 |
Performance fee compensation payable | (838) | (9,984) | (4,418) |
Net cash provided by (used in) operating activities | 14,420 | 24,063 | (196,426) |
Cash flows from investing activities | |||
Purchases of fixed assets | (1,935) | (795) | (521) |
Distributions received from equity method investments | 1,678 | 496 | 0 |
Purchases of available-for-sale securities | (16,815) | 0 | 0 |
Net cash provided by (used in) investing activities | (17,072) | (299) | (521) |
Cash flows from financing activities | |||
Repayment of debt obligations | (50,513) | (1,250) | (51,937) |
Proceeds from issuance of debt obligations | 52,588 | 0 | 123,900 |
Proceeds from Initial Public Offering | 0 | 0 | 100,440 |
Initial Public Offering costs | 0 | 0 | (3,715) |
Capital contributions from non-controlling interests in consolidated subsidiaries and redeemable non-controlling interests | 17,022 | 0 | 0 |
Distributions to members and redeemable non-controlling interests | (23,656) | (32,744) | (119,363) |
Debt issuance costs | (2,916) | 0 | (2,546) |
Dividends paid | (5,521) | (4,113) | 0 |
Repurchases of Class A common stock | (1,198) | (101) | 0 |
Capital contributions to equity method investments | (279) | (1,074) | 0 |
Net cash provided by (used in) financing activities | (14,473) | (39,282) | 278,758 |
Net increase (decrease) in cash, cash equivalents and restricted cash equivalents | (17,125) | (15,518) | 81,811 |
Cash, cash equivalents and restricted cash equivalents, beginning of period | 71,688 | 87,206 | 5,395 |
Cash, cash equivalents and restricted cash equivalents, end of period | 54,563 | 71,688 | 87,206 |
Reconciliation of cash, cash equivalents, and restricted cash equivalents reported on the consolidated balance sheets to the total of such amounts reported on the consolidated statements of cash flows | |||
Cash and cash equivalents | 49,666 | 71,688 | 87,206 |
Restricted cash equivalents | 4,897 | 0 | 0 |
Supplemental cash flow information | |||
Interest paid | 7,992 | 6,576 | 3,900 |
Income taxes paid | 2,085 | 4,982 | 2,411 |
Fixed assets | 2,293 | 0 | 0 |
Issuance of non-controlling interest, at fair value | 192 | 0 | 0 |
Reclassification of redeemable non-controlling interest | 12,155 | 0 | 0 |
Non-cash distribution to members | 0 | 0 | 3,428 |
Non-cash debt | 0 | 0 | 2,500 |
Dividends declared but not paid | 0 | 0 | 1,423 |
Transfer of membership interests to non-controlling interests in consolidated subsidiaries | 0 | 0 | 928 |
Consolidated Fund [Member] | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Accretion of debt discount | 0 | 0 | (1,760) |
Net change in unrealized depreciation (appreciation) on investments | 0 | 0 | 20,556 |
Provision for (benefit from) deferred taxes | 0 | 0 | (243) |
Interest income paid-in-kind | 0 | 0 | (5,264) |
Net realized (gain) loss on investments | 0 | 0 | (789) |
Net change in unrealized appreciation (depreciation) on secured borrowings of Consolidated Funds | 0 | 0 | (1,174) |
Changes in operating assets and liabilities: | |||
Other assets | 0 | 0 | (6,784) |
Accounts payable, accrued expenses and other liabilities | 0 | 0 | 4,539 |
Cash and cash equivalents | 0 | 0 | 22,244 |
Cost of investments purchased | 0 | 0 | (448,258) |
Proceeds from sales and repayments of investments | 0 | 0 | 154,549 |
Cash flows from financing activities | |||
Capital contributions from non-controlling interests in consolidated subsidiaries and redeemable non-controlling interests | 0 | 0 | 154,044 |
Distributions to non-controlling interest holders | 0 | 0 | (22,688) |
Proceeds from secured borrowings | 0 | 0 | 115,439 |
Repayments on secured borrowings | 0 | 0 | (14,816) |
MOF I LP [Member] | |||
Supplemental cash flow information | |||
Investments attributed to deconsolidation | 0 | 1,768 | 0 |
MOF II LP [Member] | |||
Supplemental cash flow information | |||
Investments attributed to deconsolidation | $ 0 | $ 10,474 | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ORGANIZATION AND BASIS OF PRESENTATION Medley Management Inc. is an asset management firm offering yield solutions to retail and institutional investors. The corporation’s national direct origination franchise provides capital to the middle market in the U.S. Medley Management Inc., through its consolidated subsidiary, Medley LLC, provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts and serves as the general partner to the private funds, which are generally organized as pass-through entities. Medley LLC is headquartered in New York City and has an office in San Francisco. The Company’s business is currently comprised of only one reportable segment, the investment management segment, and substantially all of the Company operations are conducted through this segment. The investment management segment provides investment management services to permanent capital vehicles, long-dated private funds and separately managed accounts. The Company conducts its investment management business in the U.S., where substantially all its revenues are generated. Initial Public Offering of Medley Management Inc. Medley Management Inc. was incorporated on June 13, 2014 and commenced operations on September 29, 2014 upon the completion of its initial public offering (“IPO”) of its Class A common stock. Medley Management Inc. raised $100.4 million , net of underwriting discount, through the issuance of 6,000,000 shares of Class A common stock at an offering price to the public of $18.00 per share. Medley Management Inc. used the offering proceeds to purchase 6,000,000 newly issued LLC Units (defined below) from Medley LLC. Prior to the IPO, Medley Management Inc. had not engaged in any business or other activities except in connection with its formation and IPO. In connection with the IPO, Medley Management Inc. issued 100 shares of Class B common stock to Medley Group LLC (“Medley Group”), an entity wholly owned by the pre-IPO members of Medley LLC. For as long as the pre-IPO members and then-current Medley personnel hold at least 10% of the aggregate number of shares of Class A common stock and LLC Units (defined below) (excluding those LLC Units held by Medley Management Inc.) then outstanding, the Class B common stock entitles Medley Group to a number of votes that is equal to 10 times the aggregate number of LLC Units held by all non-managing members of Medley LLC that do not themselves hold shares of Class B common stock and entitle each other holder of Class B common stock, without regard to the number of shares of Class B common stock held by such other holder, to a number of votes that is equal to 10 times the number of membership units held by such holder. The Class B common stock does not participate in dividends and does not have any liquidation rights. Medley LLC Reorganization In connection with the IPO, Medley LLC amended and restated its limited liability agreement to modify its capital structure by reclassifying the 23,333,333 interests held by the pre-IPO members into a single new class of units (“LLC Units”). The pre-IPO members also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right, subject to the terms of an exchange agreement, to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis , subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. In addition, pursuant to the amended and restated limited liability agreement, Medley Management Inc. became the sole managing member of Medley LLC. The pre-IPO owners are, subject to limited exceptions, prohibited from transferring any LLC Units held by them or any shares of Class A common stock received upon exchange of such LLC Units, until the third anniversary of the date of the closing of the IPO without the Company’s consent. Thereafter and prior to the fourth and fifth anniversaries of the closing of the IPO, such holders may not transfer more than 33 1/3% and 66 2/3%, respectively, of the number of LLC Units held by them, together with the number of any shares of Class A common stock received by them upon exchange therefor, without the Company’s consent. Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Medley Management Inc., Medley LLC and its consolidated subsidiaries (collectively, “Medley” or the “Company”) and, for the year ended December 31, 2014, certain funds (individually “Consolidated Funds,” collectively, the “Company”). The Consolidated Funds have been consolidated in the accompanying financial statements for the year ended December 31, 2014 in accordance with U.S. GAAP. Including the results of the Consolidated Funds significantly increases the reported amounts of the revenues, expenses and cash flows of the Company; however, the Consolidated Funds' results included herein have no direct effect on the net income attributable to members or on total equity. The economic ownership interests of the investors in the Consolidated Funds are reflected as “Non-controlling interests in Consolidated Funds” and as “Net income attributable to non-controlling interests in Consolidated Funds” in the accompanying consolidated financial statements. Prior to the Reorganization and IPO on September 29, 2014, all compensation for services rendered by senior Medley LLC professionals were reflected as distributions from members' capital rather than as compensation expense. Subsequent to the Reorganization and IPO, all guaranteed payments made to these senior professionals are recognized as compensation expense. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation , the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis , which changes the consolidation analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The Company elected to early adopt this new guidance using the modified retrospective method effective January 1, 2015. As a result of the adoption of ASU 2015-02, the Company determined that it is no longer the primary beneficiary of certain funds it manages. Therefore, the Company deconsolidated certain funds that had been consolidated under previous guidance effective January 1, 2015. For legal entities evaluated for consolidation, the Company must determine whether the interests that it holds and fees paid to it qualify as a variable interest in an entity. This includes an evaluation of the management fees and performance fees paid to the Company when acting as a decision maker or service provider to the entity being evaluated. Under the new guidance, if fees received by the Company are customary and commensurate with the level of services provided, and the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, the interest that the Company holds would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if fees are considered a variable interest. Prior to the adoption of the new consolidation guidance, these fees were considered variable interests by the Company. An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk have the right to direct the activities of the entity that most significantly impact the legal entity’s economic performance, (c) the voting rights of some investors are disproportionate to their obligation to absorb losses or rights to receive returns from a legal entity. Under the new guidance, for limited partnerships and other similar entities, non-controlling investors must have substantive rights to either dissolve the fund or remove the general partner (“kick-out rights”) in order to not qualify as a VIE. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company is generally deemed to have a controlling financial interest if it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances. However, quantitative information may also be considered in the analysis, as appropriate. These assessments require judgments. Each entity is assessed for consolidation on a case-by-case basis. For those entities evaluated under the voting interest model, the Company consolidates the entity if it has a controlling financial interest. The Company has a controlling financial interest in a voting interest entity (“VOE”) if it owns a majority voting interest in the entity. Prior to the new guidance, the Company consolidated VOE’s where it was the general partner and as such, was presumed to have control, regardless of its ownership interest. Consolidated Variable Interest Entities Medley Management Inc. is the sole managing member of Medley LLC and, as such, it operates and controls all of the business and affairs of Medley LLC and, through Medley LLC, conducts its business. Under ASC 810, Medley LLC meets the definition of a VIE because the equity of Medley LLC is not sufficient to permit activities without additional subordinated financial support. Medley Management Inc. has the obligation to absorb expected losses that could be significant to Medley LLC and holds 100% of the voting power, therefore Medley Management Inc. is considered to be the primary beneficiary of Medley LLC. As a result, Medley Management Inc. consolidates the financial results of Medley LLC and its subsidiaries and records a non-controlling interest for the economic interest in Medley LLC held by the non-managing members. Medley Management Inc.’s and the non-managing members’ economic interests in Medley LLC are 19.9% and 80.1% , respectively, as of December 31, 2016 and 20.4% and 79.6% , respectively, as of December 31, 2015 . Net income attributable to the non-controlling interests in Medley LLC on the consolidated statements of operations represents the portion of earnings attributable to the economic interest in Medley LLC held by its non-managing members. Non-controlling interests in Medley LLC on the consolidated balance sheets represents the portion of net assets of Medley LLC attributable to the non-managing members based on total LLC Units of Medley LLC owned by such non-managing members. As of December 31, 2016 , Medley LLC has three majority owned subsidiaries, SIC Advisors LLC, Medley Seed Funding I LLC and STRF Advisors LLC, all of which are consolidated VIEs. Each of these entities was organized as a limited liability company and was legally formed to either manage a designated fund or strategically invest capital as well as isolate business risk. As of December 31, 2016 , total assets and total liabilities, after eliminating entries, of these VIEs reflected in the consolidated balance sheets were $51.7 million and $22.8 million , respectively. As of December 31, 2015 , Medley had only one majority owned subsidiary, SIC Advisors LLC, which was a consolidated VIE. As of December 31, 2015 , total assets and total liabilities, after eliminating entries, of this VIE reflected in the consolidated balance sheets were $31.1 million and $21.2 million , respectively. Except to the extent of the assets of these VIEs that are consolidated, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company. Seed Investments The Company accounts for seed investments through the application of the voting interest model under ASC 810-10-25-1 through 25-14 and consolidates a seed investment when the investment advisor holds a controlling interest, which is, in general, 50% or more of the equity in such investment. For seed investments for which the Company does not hold a controlling interest, the Company accounts for such seed investment under the equity method of accounting, at its ownership percentage of such seed investment’s net asset value. Consolidated Funds With respect to the Consolidated Funds, which represent limited partnerships, Medley LLC earns a fixed management fee based on either (i) limited partners' capital commitments to the funds, (ii) invested capital, (III) net asset value (“NAV”), or (iv) lower of cost or market value of a fund's portfolio investments. In addition, Medley earns a performance fee based upon the investment returns in excess of a stated hurdle rate. The Company considered the accounting treatment under ASU 2010-10, Amendments for Certain Investment Funds, and determined that the funds were not VIEs for the year ended December 31, 2014. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, these funds were consolidated under the voting interest model in accordance with ASC 810-20, Control of Partnerships and Similar Entities , for the year ended December 31, 2014. Deconsolidated Funds Certain funds that have historically been consolidated in the financial statements are no longer consolidated. The Company had consolidated MOF I in its consolidated financial statements in accordance with ASC 810-20, as the Company was the general partner and the limited partners lacked substantive kick out or participating rights. Effective January 1, 2015, the Company completed its role as investment manager of this fund and transitioned the management of the residual assets of this fund to another asset manager. As a result of the transition, the Company deconsolidated the financial statements of this fund, on January 1, 2015. There was no gain or loss recognized upon deconsolidation. Prior to January 1, 2015, the Company had consolidated Medley Opportunity Fund II LP (“MOF II”) in its consolidated financial statements in accordance with ASC 810-20 as the Company was the general partner and the limited partners lacked kick out rights or participating rights. Under the guidance of ASU 2015-02, which the Company adopted effective as of January 1, 2015, the Company reconsidered the consolidation conclusion for MOF II and, as a result of the new guidance, determined that, although MOF II continues to be a VIE, the Company is no longer considered to be the primary beneficiary. Therefore, the Company deconsolidated MOF II at January 1, 2015 and records its investment in the entity under the equity method of accounting. See Note 3, “Investments.” Non-Consolidated Variable Interest Entities Beginning in November 2006, Medley held a variable interest in an investment fund which was formed under the laws of the Cayman Islands and organized to make investments in a diversified portfolio of corporate and asset-based investments. The equity holders (as a group) lack the direct and indirect ability through voting rights or similar rights to make decisions about this legal entity's activities that have a significant effect on the success of the legal entity. As such, this entity is considered to be a VIE under the guidance of ASU 2010-10. Medley had a variable interest in the fund through an investment management agreement pursuant to which Medley managed the investment activities of the fund, received and annual base management fee and was entitled to receive an incentive fee, subject to the underlying financial performance of the invesment fund. The Company did not consolidate this entity's expected losses or receive a majority of the entity's returns. Effective October 31, 2014, the investment management agreement was terminated and Medley transferred its responsibilities to a new investment manager and, therefore, no longer holds a variable interest in this entity. The Company received no management fees from this non-consolidated VIE for the years ended December 31, 2016 and 2015. For the year ended December 31, 2014, the Company received management fees from this entity of $1.1 million . As of December 31, 2016 and 2015, there were no assets recognized in the Company's consolidated balance sheets related to this non-consolidated VIE and Medley had no exposure to losses from the entity. The Company holds interests in certain VIEs that are not consolidated because the Company is not deemed the primary beneficiary. The Company's interest in these entities is in the form of insignificant equity interests and fee arrangements. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. As of December 31, 2016 , the Company recorded investments, at fair value, attributed to these non-consolidated VIEs of $5.1 million , receivables of $1.9 million included as a component of other assets and a clawback obligation of $7.1 million included as a component of accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. The clawback obligation assumes a hypothetical liquidation of a fund’s investments, at their then current fair values and a portion of tax distributions relating to performance fees which would need to be returned. As of December 31, 2015 , the Company recorded investments, at fair value of $5.9 million , receivables of $0.9 million included as a component of other assets and a clawback obligation of $7.1 million included as a component of accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. As of December 31, 2016 , the Company’s maximum exposure to losses from these entities is $7.0 million . Concentration of Credit and Market Risk In the normal course of business, the Company's underlying funds encounter significant credit and market risk. Credit risk is the risk of default on investments in debt securities, loans and derivatives that result from a borrower's or derivative counterparty's inability or unwillingness to make required or expected payments. Credit risk is increased in situations where the Company's underlying funds are investing in distressed assets or unsecured or subordinate loans or in securities that are a material part of its respective business. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors. The Company's underlying funds may make investments outside of the United States. These non-U.S. investments are subject to the same risks associated with U.S. investments, as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing the investments, potentially adverse tax consequences, and the burden of complying with a wide variety of foreign laws. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Significant estimates and assumptions by management affect the carrying value of investments, performance compensation payable and certain accrued liabilities. Actual results could differ from these estimates, and such differences could be material. Indemnification In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has not experienced any prior claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote. Non-Controlling Interests in Consolidated Entities Non-controlling interests in Consolidated Funds represent the component of equity in such consolidated entities held by third-parties. These interests are adjusted for general partner allocations and for subscriptions and redemptions that occur during the reporting period. Non-controlling interests in consolidated subsidiaries represent the component of equity in such consolidated entities held by third-parties. These interests are adjusted for contributions to and distributions from Medley entities and are allocated income from Medley entities based on their ownership percentages. Redeemable Non-Controlling Interests Redeemable non-controlling interests represents interests of certain third parties that are not mandatorily redeemable but redeemable for cash or other assets at a fixed or determinable price or a fixed or determinable date, at the option of the holder or upon the occurrence of an event that is not solely within the control of the issuer. These interests are classified in temporary equity. Cash and Cash Equivalents Cash and cash equivalents include liquid investments in money market funds and demand deposits. The Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits during the years ended December 31, 2016 and 2015. The Company monitors the credit standing of these financial institutions and has not experienced, and has no expectations of experiencing any losses with respect to such balances. Restricted Cash Equivalents Restricted cash equivalents consist of cash held at one of the Company's subsidiaries which was contributed by the Company and third-party investors. The restricted cash equivalents balance can only be used to purchase investments in new and existing Medley managed funds. Adoption of ASU 2016-15 Effective October 1, 2016, the Company early adopted ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. This guidance was issued to reduce the diversity in practice in how certain cash receipts and payments are classified in the statement of cash flows, including debt prepayment or extinguishment costs, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, and distributions from certain equity method investments. As a result of this guidance, the Company elected to treat distributions received from certain equity method investments using the cumulative earnings approach. Under the cumulative earnings approach, an investor would compare the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings would be considered a return on investment and classified in operating activities. Any excess distributions would be considered a return of investment and classified in investing activities. The early adoption of this new guidance did not have an impact to the presentation of the statement of cash flows for the prior years presented. Adoption of ASU 2016-18 Effective October 1, 2016, the Company early adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires that the statement of cash flows show the change in the total of cash, cash equivalents and restricted cash for the applicable period presented. This new guidance also requires entities to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. The Company early adopted this guidance using the retrospective transition method. The early adoption of this new guidance did not have an impact to the presentation of the statement of cash flows for the prior years presented as the Company did not have any restricted cash for those periods presented. Class A Earnings per Share The Company computes and presents earnings per share using the two-class method. Under the two-class method, the Company allocates earnings between common stock and participating securities. The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. For purposes of calculating earnings per share, the Company reduces its reported net earnings by the amount allocated to participating securities to arrive at the earnings allocated to Class A common stockholders. Earnings are then divided by the weighted average number of Class A common stock outstanding to arrive at basic earnings per share. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in our earnings. Participating securities consist of the Company's unvested restricted stock units that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in its basic and diluted calculations. Investments Investments include equity method investments that are not consolidated but over which the Company exerts significant influence. The Company measures the carrying value of its public non-traded equity method investment at NAV per share. The Company measures the carrying value of its privately-held equity method investments by recording its share of the underlying income or loss of these entities. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investments is reflected as a component of other income (expense) in the consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The carrying amounts of equity method investments are reflected in investments in the consolidated statements of financial condition. As the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Company’s equity method investments in such entities approximates fair value. The Company evaluates its equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Investments also include available-for-sale securities which consist of an investment in publicly traded common stock. The Company measures the carrying value of its publicly traded investment in available-for-sale securities at the quoted market price on the primary market or exchange on which they trade. Unrealized appreciation (depreciation) resulting from changes in fair value of available-for-sale securities is recorded in accumulated other comprehensive income, redeemable non-controlling interests and non-controlling interests in Medley LLC. Realized gains (losses) and declines in value determined to be other than temporary, if any, are reported in other income (expenses), net. The Company evaluates its investment in available-for-sale securities for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investment may not be recoverable. Prior to January 1, 2015, the Consolidated Funds reflected their investments at fair value with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net change in unrealized depreciation on investments of Consolidated Funds in the consolidated statements of operations. Fixed Assets Fixed assets consist primarily of furniture, fixtures, computer equipment, and leasehold improvements and are recorded at cost, less accumulated depreciation and amortization. The Company calculates depreciation expense for furniture, fixtures, and computer equipment using the straight-line method over the estimated useful life used for the respective assets, which generally ranges from three to seven years. Amortization of leasehold improvements is provided on a straight-line basis over the shorter of the remaining term of the underlying lease or estimated useful life of the improvement. Useful lives of leasehold improvements range from three to eight years. Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gain or loss is reflected in Other Expenses, net in the consolidated statements of operations. Debt Issuance Costs Debt issuance costs represent direct costs incurred with obtaining financing and are amortized over the term of the underlying debt using the effective interest method. Debt issuance costs, and the related amortization expense, are adjusted when any prepayments of principal are made to the related outstanding debt. Amortization of debt issuance costs is included as a component of interest expense in the Company's consolidated statement of operations. Adoption of ASU 2015-03 In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest , which updated ASU 2015-03 guidance to state that the SEC staff would not object to an entity deferring and presenting debt issuance costs relating to a line of credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit agreement. The Company adopted the new guidance and retrospectively presented debt issuance costs related to its long-term debt as a deduction from the carrying amount of the associated debt on its Consolidated Balance Sheets as of December 31, 2016 and 2015. As a result of the adoption, $1.7 million of debt issuance costs were reclassified from other assets to debt obligations as of December 31, 2015. The Company continues to present debt issuance costs related to its revolving credit facility as an asset on its Consolidated Balance Sheets as of December 31, 2016 and 2015. This change did not affect the Company’s consolidated statements of operations, cash flows or changes in equity. Revenues Management Fees Medley provides investment management services to both public and private investment vehicles. Management fees include base management fees, other management fees, and Part I incentive fees, as described below. Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) NAV or (v) lower of cost or market value of a fund’s portfolio investments. For the private funds, Medley receives base management fees during a specified period of time, which is generally ten years from the initial closing date. However, such termination date may be earlier in certain limited circumstances or later if extended for successive one -year periods, typically up to a maximum of two years. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided. Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the portfolio companies of the funds, as well as separately managed accounts. These fees are recognized when Medley becomes entitled to such fees. Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net interest income (excluding gains and losses) above a hurdle rate. Effective January 1, 2016, as it relates to Medley Capital Corporation (“MCC”), these fees are subject to netting against realized and unrealized losses. Part I incentive fees are paid quarterly and are recognized as earned over the period the services are provided. Performance Fees Performance fees consist principally of the allocation of profits from certain funds and separately managed accounts, to which Medley provides management services. Medley is generally entitled to an allocation of income as a performance fee after returning the invested capital plus a specified preferred return as set forth in each respective agreement. Medley recognizes revenues attributable to performance fees based upon the amount that would be due pursuant to the respective agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized in the Company's consolidated financial statements reflects Medley’s share of the gains and losses of the associated funds’ underlying investments measured at their current fair values. Performance fee revenue may include reversals of previously recognized performance fees due to a decrease in the net income of a particular fund that results in a decrease of cumulative performance fees earned to date. Since fund return hurdles are cumulative, previously recognized performance fees also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. During the year ended December 31, 2016, the Company did no t reverse previously recognized performance fees. During the year ended December 31, 2015, the Company reversed $24.0 million of previously recognized performance fees. For the year ended December 31, 2014, the Company reversed $4.4 million and $2.3 million of previously recognized performance fees on a standalone and consolidated basis, respectively. As of December 31, 2016 , the Company recognized cumulative performance fees of $7.1 million . Performance fees received in prior periods may be required to be returned by Medley in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, performance fees can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments, at their then current fair values, previously recognized and distributed performance fees would be required to be returned, a liability is established for the potential clawback obligation. As of December 31, 2016 , the Company had not received any performance fee distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of performance fees. Pursuant to the organizational documents of each respective fund, a portion of these tax distributions is subject to clawback. As of December 31, 2016 , the Company had accrued $7.1 million for clawback obligations that would need to be paid if the funds were liquidated at fair value as of the end of the reporting period. The Company’s actual obligation, however, would not become payable or realized until the end of a fund’s life. Other Revenues and Fees Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective fund agreements. These fees are recognized as revenue in the period administrative services are rendered. During the year ended December 31, 2014, included in other revenues and fees are reimbursements received by Medley from SIC under its investment advisory agreement. Expenses incurred by Medley under this agreement are recorded within general, administrative, and other expenses in the consolidated statements of operations. For additional information on these reimbursements, refer to Note 10. Performance Fee Compensation Medley has issued profit interests in certain subsidiaries to select employees. These profit-sharing arrangements are accounted for under ASC 710, Compensation — General, which requires compensation expense to be measured at fair value at the grant date and expensed over the vesting period, which is usually the period over which the service is provided. The fair value of the profit interests are re-mea |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Investments [Abstract] | |
Investments | INVESTMENTS The components of investments are as follows: As of December 31, 2016 2015 (Amounts in thousands) Equity method investments, at fair value $ 14,895 $ 16,360 Available-for-sale securities 17,009 — Total investments, at fair value $ 31,904 $ 16,360 Equity Method Investments Medley measures the carrying value of its public non-traded equity method investments at NAV per share. Unrealized appreciation (depreciation) resulting from changes in NAV per share is reflected as a component of other income (expense) in the consolidated statements of operations. The carrying value of the Company’s privately-held equity method investments is determined based on the amounts invested by the Company, adjusted for the equity in earnings or losses of the investee allocated based on the respective underlying agreements, less distributions received. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. During the year ended December 31, 2016, the Company assessed that the liquidation value of its investment in CK Pearl Fund was below its carrying value and that such decline led to an other than temporary impairment. As a result, the Company recorded a $0.5 million loss on its investment in CK Pearl Fund which is included as a component of other income (expenses), net on the consolidated statements of operations. There were no impairment losses recorded during the years ended December 31, 2015 and 2014. As of December 31, 2016 and 2015, the Company’s carrying value of its equity method investments was $14.9 million and $16.4 million , respectively. Included in this balance was $9.0 million as of December 31, 2016 and 2015 from the Company’s investment in publicly-held Sierra Income Corporation (“SIC”). The remaining balance as of December 31, 2016 and 2015 relates primarily to the Company’s investments in MOF II, Medley Opportunity Fund III LP (“MOF III”) and CK Pearl Fund. Available-For-Sale Securities As of December 31, 2016 , the Company’s carrying value of its available-for-sale securities was $17.0 million and consisted of 2,264,892 shares of MCC. The Company measures the carrying value of its investment in MCC at fair value based on the quoted market price on the exchange on which its shares trade. As of December 31, 2016 , the cumulative unrealized gains in redeemable non-controlling interests and non-controlling interests in Medley LLC on the Company's consolidated balance sheets was $0.2 million . There were no impairment charges recorded related to the Company’s investments in available-for-sale securities during the year ended December 31, 2016 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company follows the guidance set forth in ASC 820 for measuring the fair value of investments in available-for-sale securities. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. Financial instruments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows: • Level I – Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date. • Level II – Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in non-active markets including bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities. • Level III – Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets and liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence. When determining the fair value of publicly traded equity securities, the Company uses the quoted market price as of the valuation date on the primary market or exchange on which they trade. The Company’s investments in available-for-sale securities are categorized as Level I. As of December 31, 2016 and 2015, there were no financial instruments classified as Level II or Level III. Our equity method investments for which fair value is measured at NAV per share, or its equivalent, using the practical expedient, are not categorized in the fair value hierarchy. A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financials assets or liabilities. Reclassifications impacting all levels of the fair value hierarchy are reported as transfers in or out of Level I, II or III category as of the beginning of the quarter during which the reclassifications occur. There were no transfers between levels in the fair value hierarchy during the years ended December 31, 2016 and 2015. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | OTHER ASSETS The components of other assets are as follows: As of December 31, 2016 2015 (Amounts in thousands) Fixed assets, net of accumulated depreciation of $1,816 and $1,667, respectively $ 4,998 $ 1,708 Security deposits 1,975 3,034 Administrative fees receivable (Note 10) 2,068 1,654 Deferred tax assets (Note 12) 2,001 1,658 Due from affiliates (Note 10) 2,133 1,486 Prepaid expenses and taxes 3,078 2,293 Other 2,058 1,182 Total other assets $ 18,311 $ 13,015 |
LOANS PAYABLE
LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | LOANS PAYABLE The Company’s loans payable consist of the following: As of December 31, 2016 2015 (Amounts in thousands) Term loans under the Credit Suisse Term Loan Facility, net of unamortized discount and debt issuance costs of $1,207 and $2,489, respectively $ 43,593 $ 92,511 Non-recourse promissory notes, net of unamortized discount and debt issuance costs of $1,415 and $1,953, respectively 8,585 8,360 Total loans payable $ 52,178 $ 100,871 Credit Suisse Term Loan Facility On August 14, 2014 , the Company entered into a $110.0 million senior secured term loan credit facility (as amended, “Term Loan Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent thereunder, Credit Suisse Securities (USA) LLC, as bookrunner and lead arranger, and the lenders from time-to-time party thereto, which will mature on June 15, 2019 . Borrowings under the Term Loan Facility, bore interest, at the borrower’s option, at a rate equal to either a Eurodollar margin over an adjusted LIBOR (with a “floor” of 1.0% ) or a base rate margin over an adjusted base rate determined by reference to the highest of (i) the term loan administrative agent’s prime rate; (ii) the federal funds effective rate in effect on such day plus 0.5% ; and (iii) an adjusted LIBOR plus 1.0% . The applicable margins for the Term Loan Facility was 5.5% , in the case of Eurodollar loans and 4.5% , in the case of adjusted base rate loans. Outstanding borrowings under the Term Loan Facility bore interest at a rate of 6.5% as of December 31, 2016 and 2015. Borrowings were collateralized by substantially all of the equity interests in Medley LLC’s wholly owned subsidiaries. The Term Loan Facility required principal repayments in quarterly installments equal to $1.4 million (which amount may be adjusted as a result of prepayment or incremental term loans drawn), with the remaining amount payable at maturity. The Company can also make voluntary repayments, without penalty, at any time prior to August 14, 2016, not to exceed $33.0 million in the aggregate. As of December 31, 2016 and 2015, outstanding borrowings under this facility were $43.6 million and $92.5 million , respectively, which is reflected net of unamortized discount and debt issuance costs of $1.2 million and $2.5 million , respectively. Debt issuance costs and the discount under the term loans were being accreted, using the effective interest method, over the term of the notes. Total interest expense under this Term Loan Facility, including accretion of the note discount and amortization of debt issuance costs, was $6.7 million , $7.0 million and $2.8 million for of the years ended December 31, 2016 , 2015 and 2014, respectively. The fair value of the outstanding balance of Term Loan Facility approximated its par value as of December 31, 2016 . In August and October 2016, the Company voluntarily prepaid $23.5 million and $26.7 million , respectively, of outstanding term loans under this facility using the net proceeds from the offerings of senior unsecured debt (described in Note 7). The prepayments were applied against the remaining quarterly installments and a portion of the Term Loan Facility payable at maturity. The Term Loan Facility also contained a financial covenant that required the Company to maintain a Maximum Net Leverage Ratio of not greater than 3.5 to 1.0 , with which the Company is compliant. This ratio was calculated on a trailing twelve months basis and was the ratio of Total Net Debt, as defined, to Core EBITDA, as defined, and was calculated using the Company’s financial results and included the adjustments made to calculate Core EBITDA. Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the Term Loan Facility. The Term Loan Facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. In February 2017, borrowings under this facility were paid off using the proceeds from the issuance of additional senior unsecured debt which resulted in the termination of the Term Loan Facility. Refer to Note 17, “Subsequent Events”. CNB Credit Agreement On August 19, 2014 , the Company entered into a $15.0 million senior secured revolving credit facility with City National Bank (as amended, the “Revolving Credit Facility”). On May 3, 2016, the Revolving Credit Facility was amended to permit issuance of additional indebtedness by the Company. The amendment also provided for the creation and funding of certain future funds, as well as for certain other technical changes to the Revolving Credit Facility. The Company intends to use any proceeds from borrowings under the Revolving Credit Facility for general corporate purposes, including funding of its working capital needs. Borrowings under the Revolving Credit Facility bear interest at the option of the Company, either (i) at an Alternate Base Rate, as defined, plus an applicable margin not to exceed 3.25% or (ii) at an Adjusted LIBOR plus an applicable margin not to exceed 4.0% . As of and during the years ended December 31, 2016 and 2015, there were no amounts drawn under the Revolving Credit Facility. The Revolving Credit Facility also contains a financial covenant that requires the Company to maintain a Maximum Net Leverage Ratio of not greater than 3.5 to 1.0 , with which the Company is compliant. This ratio is calculated on a trailing twelve months basis and is the ratio of Total Net Debt, as defined, to Core EBITDA, as defined, and is calculated using the Company’s financial results and includes the adjustments made to calculate Core EBITDA. Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the Revolving Credit Facility. The Revolving Credit Facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency, dissolution, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties. There were no events of default under the Revolving Credit Facility as of December 31, 2016 . Non-Recourse Promissory Notes In April 2012, the Company borrowed $10.0 million under two non-recourse promissory notes. Proceeds from the borrowings were used to purchase 1,108,033 shares of common stock of SIC, which were pledged as collateral for the obligations. Interest on the notes is paid monthly and is equal to the dividends received by the Company related to the pledged shares. The Company may prepay the notes in whole or in part at any time without penalty and the lenders may call the notes if certain conditions are met. The notes are scheduled to mature in March 2019 . The proceeds from the notes were recorded net of issuance costs of $3.8 million and are being accreted, using the effective interest method, over the term of the non-recourse promissory notes. Total interest expense under these non-recourse promissory notes, including accretion of the note discount, was $1.4 million for each of the years ended December 31, 2016 , 2015 and 2014. The fair value of the outstanding balance of the notes was $10.2 million and $10.1 million as of December 31, 2016 and 2015, respectively. In March 2014, the Company issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carries no interest, has quarterly amortization payments of $0.3 million , and matured in March 2016. As of December 31, 2015 , the balance under this note was $0.3 million . Contractual Maturities of Loans Payable As of December 31, 2016 , $54.8 million of future principal payments will be due, relating to the loans payable, during the year ended December 31, 2019. There are no other future principal payments due under the loans payable. |
SENIOR UNSECURED DEBT
SENIOR UNSECURED DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Senior Unsecured Debt | SENIOR UNSECURED DEBT On August 9, 2016, Medley LLC completed a registered public offering of $25.0 million of an aggregate principal amount of 6.875% senior notes due 2026 at a public offering price of 100% of the principal amount. On October 18, 2016, Medley LLC completed a public offering of an additional $28.6 million in aggregate principal amount of 6.875% senior notes due 2026 at a public offering price of $24.45 for each $25.00 principal amount of notes. Together, the August 9, 2016 and the October 18, 2016 offerings compose the senior unsecured debt balance. The senior unsecured debt matures on August 15, 2026 and interest is payable quarterly commencing on November 15, 2016. The senior unsecured debt is subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after August 15, 2019 at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments. The senior unsecured debt is listed on the New York Stock Exchange and trades thereon under the trading symbol “MDLX.” As of December 31, 2016 , the outstanding senior unsecured debt balance was $49.8 million , which is reflected net of unamortized discount and debt issuance costs of $3.8 million . Debt issuance costs and the discount under the senior unsecured debt are being accreted, using the effective interest method, over the term of the senior unsecured debt. Total interest expense under the senior unsecured debt, including accretion of the discount and amortization of debt issuance costs, was $1.2 million for the year ended December 31, 2016 . Net proceeds from the issuance of the senior unsecured debt were used to repay a portion of the outstanding indebtedness under the Term Loan Facility. The fair value of the outstanding balance of senior unsecured debt was $51.6 million as of December 31, 2016 . In January and February 2017, Medley LLC completed additional registered offerings of senior unsecured debt. Refer to Note 17, “Subsequent Events.” |
ACCOUNTS PAYABLE, ACCRUED EXPEN
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Liabilities | ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES The components of accounts payable, accrued expenses and other liabilities are as follows: As of December 31, 2016 2015 (Amounts in thousands) Accrued compensation and benefits $ 7,978 $ 9,107 Due to affiliates (Note 10) 15,043 13,634 Revenue share payable (Note 9) 6,472 6,774 Accrued interest 558 1,304 Professional fees 858 614 Deferred rent 2,833 285 Deferred tax liabilities (Note 12) 202 127 Accounts payable and other accrued expenses 2,326 2,901 Total accounts payable, accrued expenses and other liabilities $ 36,270 $ 34,746 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating Leases Medley leases office space in New York City and San Francisco under non-cancelable lease agreements that expire at various times through September 2023 . Rent expense was $2.5 million for the year ended December 31, 2016 and $2.6 million for the years ended December 31, 2015 and 2014. Future minimum rental payments under non-cancelable leases are as follows as of December 31, 2016 (in thousands): 2017 $ 2,683 2018 2,704 2019 2,710 2020 2,833 2021 2,430 Thereafter 4,254 Total future minimum lease payments $ 17,614 Capital Commitments to Funds As of December 31, 2016 and 2015, the Company had aggregate unfunded commitments of $0.5 million and $0.3 million , respectively, to certain long-dated private funds. Other Commitments In April 2012, the Company entered into an obligation to pay a fixed percentage of management and incentive fees received by the Company from SIC. The agreement was entered into contemporaneously with the $10 million non-recourse promissory notes that were issued to the same parties (Note 6). The two transactions were deemed to be related freestanding contracts and the $10 million of loan proceeds were allocated to the contracts using their relative fair values. At inception, the Company recognized an obligation of $4.4 million representing the present value of the future cash flows expected to be paid under this agreement. As of December 31, 2016 and 2015, this obligation amounted to $6.5 million and $6.8 million , respectively, and is recorded as revenue share payable, a component of accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. The change in the estimated cash flows for this obligation is recorded in other income (expense) on the consolidated statements of operations. Legal Proceedings From time to time, the Company is involved in various legal proceedings, lawsuits and claims incidental to the conduct of its business. Its business is also subject to extensive regulation, which may result in regulatory proceedings against it. Except as described below, the Company is not currently party to any material legal proceedings. MCC Advisors LLC was named as a defendant in a lawsuit on May 29, 2015, by Moshe Barkat and Modern VideoFilm Holdings, LLC (“MVF Holdings”) against MCC, MOF II, MCC Advisors LLC, Deloitte Transactions and Business Analytics LLP A/K/A Deloitte ERG (“Deloitte”), Scott Avila (“Avila”), Charles Sweet, and Modern VideoFilm, Inc. (“MVF”). The lawsuit is pending in the California Superior Court, Los Angeles County, Central District, as Case No. BC 583437. The lawsuit was filed after MCC, as agent for the lender group, exercised remedies following a series of defaults by MVF and MVF Holdings on a secured loan with an outstanding balance at the time in excess of $65 million . The lawsuit sought damages in excess of $100 million . Deloitte and Avila have settled the claims against them in exchange for payment of $1.5 million . Following a separate lawsuit by Mr. Barkat against MVF’s D&O insurance carrier, the carrier, Charles Sweet and MVF have settled the claims against them. On June 6, 2016, the court granted the defendants’ demurrers on several counts and dismissed Mr. Barkat’s claims with prejudice except with respect to his claim for intentional interference with contract. MCC and the other defendants continue to dispute the remaining allegations and are vigorously defending the lawsuit while pursuing affirmative counterclaims against Mr. Barkat and MVF Holdings. On August 29, 2016, MVF Holdings filed another lawsuit in the California Superior Court, Los Angeles County, Central District, as Case No. BC 631888 (the “Derivative Action”), naming MCC Advisors LLC and certain of Medley’s employees as defendants, among others. In the Derivative Action, MVF Holdings reasserts substantially the same claims that were previously asserted in each of their three prior complaints. MCC Advisors LLC and the other defendants believe the outstanding claims for alleged interference with Mr. Barkat’s employment contract, and the other causes of action asserted in the Derivative Action are without merit and all defendants intend to continue to assert a vigorous defense. CK Pearl Fund, Ltd. and CK Pearl Fund, LP v. Rothstein Kass & Company, P.C., Rothstein-Kass P.A., Rothstein Kass & Co. LLC and Rothstein, Kass & Company (Cayman); Rothstein Kass & Company, P.C., Rothstein-Kass P.A., Rothstein Kass & Co. LLC and Rothstein, Kass & Company (Cayman) v. Medley Capital LLC, filed on September 19, 2016, in the Superior Court of New Jersey Law Division: Essex County, as Docket No. L-5196-15. On September 28, 2016, Rothstein Kass & Company, P.C., Rothstein-Kass P.A., Rothstein Kass & Co. LLC and Rothstein, Kass & Company (Cayman); Rothstein Kass & Company, P.C., Rothstein-Kass P.A. (the “Rothstein Companies”) notified Medley Capital LLC that they had filed a Third-Party Complaint naming Medley Capital LLC as an additional defendant in the pending lawsuit between CK Pearl Fund, Ltd. and CK Pearl Fund, LP (the “CK Pearl Funds”) and the Rothstein Companies. The CK Pearl Funds’ lawsuit against Rothstein Kass was commenced on July 23, 2015. Medley Capital LLC was not named as a defendant in the CK Pearl Funds’ lawsuit. In their First Amended Complaint, the CK Pearl Funds alleged that the Rothstein Companies failed to exercise reasonable care and diligence in conducting audits of the CK Pearl Funds’ financial statements from 2008 to 2013. More specifically, the CK Pearl Funds allege that asset valuations prepared by independent third-party valuation firms and Medley Capital LLC were overstated and the Rothstein Kass Companies should not have issued audit opinions stating that the CK Pearl Funds’ financial statements were fairly presented. The CK Pearl Funds alleged that, as a result, they paid Medley Capital LLC greater management fees than were otherwise due and that the CK Pearl Funds lost money on follow-on investments that they otherwise would not have made. The CK Pearl Funds’ complaint seeks damages in excess of $125 million . From 2007 through 2014, the CK Pearl Funds were named Medley Opportunity Fund Ltd and Medley Opportunity Fund LP and Medley Capital LLC acted as investment manager to the CK Pearl Funds. On September 19, 2016, the Rothstein Companies filed an answer denying the CK Pearl Funds’ allegations and a cross-complaint against the CK Pearl Funds and a third-party complaint against Medley Capital LLC. The complaints filed by the Rothstein Companies allege that the CK Pearl Funds and/or Medley Capital LLC were responsible for valuations and, if any financial statements or any valuations were overstated, the CK Pearl Funds and/or Medley Capital LLC, not the Rothstein Companies, were responsible. Medley Capital LLC is demanding indemnification pursuant to its contractual agreements with the CK Pearl Funds and contribution from both the CK Pearl Funds and their independent directors with respect to the claims asserted by the Rothstein Companies. Medley Capital LLC disputes the allegations and intends to defend the case vigorously. Medley Capital LLC v. CK Pearl Fund, Ltd., filed on November 28, 2016, in the Grand Court of the Cayman Islands in the Financial Services Division, as Cause No. FSD 196 of 2016. On November 28, 2016, Medley Capital LLC commenced a lawsuit against CK Pearl Fund Ltd. seeking declaratory relief with respect its right to indemnification in connection with the Rothstein litigation and advancement of its expenses in connection with defending the same. CK Pearl Fund Ltd. has indicated that it is prepared to acknowledge Medley Capital LLC's right to advancement of costs and expenses defending the Rothstein litigation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Substantially all of Medley’s revenue is earned through agreements with its consolidated and non-consolidated funds for which it collects management and performance fees for providing investment and management services. In April 2012, Medley entered into an investment advisory agreement (“IAA”) with SIC. Pursuant to the terms of the IAA, Medley agreed to bear all organization and offering expenses (“O&O Expenses”) related to SIC until the earlier of the end of the SIC offering period or such time that SIC has raised $300 million in gross proceeds in connection with the sale of shares of its common stock. The SIC IAA also required SIC to reimburse Medley for O&O Expenses incurred by Medley in an amount equal to 1.25% of the aggregate gross proceeds in connection with the sale of shares of its common stock until the earlier of the end of the SIC offering period, or Medley has been repaid in full. Effective June 2, 2014, Medley was no longer liable for these expenses as SIC had reached the $300 million in gross proceeds threshold. During the year ended December 31, 2014, Medley incurred O&O Expenses of $1.5 million , which were recorded within general, administrative, and other expenses in the consolidated statements of operations. Reimbursements of O&O were $3.8 million during the year ended December 31, 2014 and were recorded in other revenues and fees on the consolidated statements of operations. There were no O&O expenses or reimbursements of O&O during the years ended December 31, 2016 and 2015. In June 2012, Medley entered into an Expense Support and Reimbursement Agreement (“ESA”) with SIC. Under the ESA, until December 31, 2016, Medley will pay up to 100% of SIC’s operating expenses in order for SIC to achieve a reasonable level of expenses relative to its investment income. Pursuant to the ESA, SIC has a conditional obligation to reimburse Medley for any amounts they funded under the ESA if, within three years of the date on which Medley funded such amounts, SIC meets certain financial levels. For the years ended December 31, 2016 , 2015 and 2014 Medley recorded $16.1 million , $6.4 million and $5.0 million , respectively, for ESA expenses under this agreement. The ESA expenses are recorded within general, administrative, and other expense in the consolidated statements of operations. Amounts due to SIC under the ESA agreement were $7.9 million and $7.2 million as of December 31, 2016 and 2015, respectively. These amounts are included in accounts payable, accrued expenses and other liabilities as due to affiliates on the consolidated balance sheets. In January 2011, Medley entered into an administration agreement with MCC (the “MCC Admin Agreement”), whereby Medley agreed to provide administrative services necessary for the operations of MCC. MCC agreed to pay Medley for the costs and expenses incurred in providing such administrative services, including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of MCC’s officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the consolidated statements of operations. For the years ended December 31, 2016 , 2015 and 2014, the Company recorded $3.9 million , $4.0 million and $3.7 million , respectively, of revenue related to the MCC Admin Agreement. Amounts due from MCC under the MCC Admin Agreement was $0.9 million as of December 31, 2016 and 2015, respectively, and is included as a component of other assets on the consolidated balance sheets. In April 2012, Medley entered into an administration agreement with SIC (the “SIC Admin Agreement”), whereby Medley agreed to provide administrative services necessary for the operations of SIC. SIC agreed to pay Medley for the costs and expenses incurred in providing such administrative services including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of SIC’s officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the consolidated statement of operations. For the years ended December 31, 2016 , 2015 and 2014, the Company recorded $2.8 million , $2.1 million and $1.3 million , respectively, of revenue related to the SIC Admin Agreement. Amounts due from SIC under the SIC Admin Agreement was $0.9 million and $0.5 million as of December 31, 2016 and 2015, respectively, and is included as a component of other assets on the consolidated balance sheets. Additionally, Medley entered into administration agreements with other entities that it manages (the “Funds Admin Agreements”), whereby Medley agreed to provide administrative services necessary for the operations of these other vehicles. These other entities agreed to pay Medley for the costs and expenses incurred in providing such administrative services, including an allocable portion of Medley’s overhead expenses and an allocable portion of the cost of these other vehicles' officers and their respective staffs. Medley records these administrative fees as revenue in the period when the services are provided and are included in other revenues and fees on the consolidated statement of operations. For the years ended December 31, 2016 and 2015 the Company recorded $0.9 million and $0.2 million , respectively, of revenue related to the Funds Admin Agreements. There was no revenue related to the Funds Admin Agreement for the year ended December 31, 2014. Amounts due from these entities under the Funds Admin Agreements were $0.3 million and $0.2 million , respectively, as of December 31, 2016 and 2015, and are included as a component of other assets on the consolidated balance sheets. Equity Method Investments The Company holds equity method investments in SIC, MOF II, MOF III, CK Pearl Fund and other vehicles. As of December 31, 2016 and 2015, the Company’s carrying value of its equity method investments was $14.9 million and $16.4 million , respectively. Included in this balance was $9.0 million as of December 31, 2016 and 2015, from the Company’s investment in SIC. Available-For-Sale Securities As of December 31, 2016 , the Company’s carrying value of its available-for-sale securities was $17.0 million and consisted of 2,264,892 shares of MCC which were purchased on the open market for $16.8 million . As of December 31, 2016 , the Company recorded $0.2 million of cumulative unrealized gains in redeemable non-controlling interests and non-controlling interests in Medley LLC on the Company's consolidated balance sheets. Promissory Note In March 2014, the Company issued a promissory note in the amount of $2.5 million to a former Medley member in connection with the purchase of his membership interests. The promissory note carried no interest, had quarterly amortization payments of $0.3 million , and was paid down in full as of March 2016. As of December 31, 2015 , the balance under this note was $0.3 million . Exchange Agreement Prior to the completion of the Company's IPO, Medley LLC's limited liability agreement was restated among other things, to modify its capital structure by reclassifying the interests held by its existing owners (i.e. the members of Medley prior to the IPO) into the LLC Units. Medley’s existing owners also entered into an exchange agreement under which they (or certain permitted transferees thereof) have the right (subject to the terms of the exchange agreement as described therein), to exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis at fair value, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Tax Receivable Agreement Medley Management Inc. entered into a tax receivable agreement with the holders of LLC Units that provides for the payment by Medley Management Inc. to exchanging holders of LLC Units of 85% of the benefits, if any, that Medley Management Inc. is deemed to realize as a result of increases in tax basis of tangible and intangible assets of Medley LLC from the future exchange of LLC Units for shares of Class A common stock, as well as certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. The term of the tax receivable agreement will continue until all such tax benefits under the agreement have been utilized or have expired, unless Medley Management Inc. exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. As of December 31, 2016 , there were no transactions under this agreement. |
EARNINGS (LOSS) PER CLASS A SHA
EARNINGS (LOSS) PER CLASS A SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Class A Share | EARNINGS (LOSS) PER CLASS A SHARE The table below presents basic and diluted net income (loss) per share of Class A common stock using the two-class method for the years ended December 31, 2016 , 2015 and 2014: For the Year Ended December 31, 2016 2015 2014 (Amounts in thousands, except share and per share amounts) Basic and diluted net income per share: Numerator Net income attributable to Medley Management Inc. $ 997 $ 3,111 $ 1,695 Less: Allocation to participating securities (892 ) (353 ) (267 ) Net income (loss) available to Class A common stockholders $ 105 $ 2,758 $ 1,428 Denominator Weighted average shares of Class A common stock outstanding 5,804,042 6,002,422 6,000,000 Net income (loss) per Class A share $ 0.02 $ 0.46 $ 0.24 The Company declared a $0.20 dividend per share of Class A common stock on November 10, 2014, March 29, 2015, August 10, 2015, November 11, 2015, February 11, 2016, May 10, 2016, August 9, 2016 and November 10, 2016. The allocation to participating securities above generally represents dividends paid to holders of unvested restricted stock units which reduces net income available to common stockholders. The weighted average shares of Class A common stock is the same for both basic and diluted earnings per share as the diluted amount excludes the assumed conversion of 23,333,333 LLC Units to shares of Class A common stock, the impact of which would be antidilutive. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The provision for (benefit from) income taxes for the years ended December 31, 2016, 2015 and 2014 consist of the following: For the Years Ended December 31, 2016 2015 2014 (Amounts in thousands, except share and per share amounts) Current Federal $ 272 $ 1,546 $ 486 State 1,058 1,373 2,768 Total current provision 1,330 2,919 3,254 Deferred Federal 158 (454 ) 2 State and local (425 ) (450 ) (728 ) Total deferred provision (267 ) (904 ) (726 ) Provision for Income Taxes $ 1,063 $ 2,015 $ 2,528 Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. The significant components of the Company's deferred tax assets and liabilities included on its consolidated balance sheets are as follow: As of December 31, 2016 2015 (Amounts in thousands) Deferred tax assets Tax goodwill $ 605 $ 597 Basis difference in partnership interest 417 630 Unrealized losses 44 55 Stock-based compensation 216 101 Accrued expenses not currently deductible for tax purposes 7 86 New York City unincorporated business tax credit carryforward 512 — Other liabilities 200 189 Total deferred tax assets $ 2,001 $ 1,658 Deferred tax liabilities Accrued fee income $ 147 $ 68 Other 55 59 Total deferred tax liabilities 202 127 Net deferred tax assets $ 1,799 $ 1,531 The Company's effective tax rate includes a rate benefit attributable to the fact that the Company's subsidiaries operate as a limited liability companies, which are not subject to federal or state income tax. Accordingly, a portion of the Company's earnings attributable to the non-controlling interests are not subject to corporate level taxes. However, a portion of the limited liabilities income is subject to New York City’s unincorporated business tax. For the years ended December 31, 2016 and 2015 , the company was subject to federal, state and city corporate income taxes on its pre-tax income attributable to Medley Management Inc. A reconciliation of the federal statutory tax rate to the effective tax rates for the years ended December 31, 2016, 2015 and 2014 are as follows: For the Years Ended December 31, 2016 2015 2014 Federal statutory rate 34.0 % 34.0 % 34.0 % Income allocated to non-controlling interests (28.9 )% (26.8 )% (32.9 )% State and local corporate income taxes 1.2 % 1.0 % 0.2 % Partnership unincorporated business tax 4.2 % 1.7 % 2.6 % Permanent differences — % (2.9 )% (0.4 )% Other (0.8 )% 1.9 % — % Effective tax rate 9.7 % 8.9 % 3.5 % Interest expense and penalties related to income tax matters are recognized as a component of the provision for income taxes and were less than $0.1 million in 2016. There were no such amounts incurred during the years ended December 31, 2015 and 2014. As of and during the years ended December 31, 2016, 2015 and 2014, there were no uncertain tax positions taken that were not more likely than not to be sustained. Certain subsidiaries of the Company are no longer subject to tax examinations by taxing authorities for tax years prior to 2012. |
COMPENSATION EXPENSE
COMPENSATION EXPENSE | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Compensation Expense | COMPENSATION EXPENSE Compensation generally includes salaries, bonuses, and profit sharing awards. Bonuses and profit sharing awards are accrued over the service period to which they relate. Guaranteed payments made to our senior professionals who are members of Medley LLC are recognized as compensation expense. The guaranteed payments to the Company’s Co-Chief Executive Officers are performance based and are periodically set subject to maximums based on the Company’s total assets under management. Such maximums aggregated to $5.0 million for the year ended December 31, 2016 and $3.0 million for each of the years ended December 31, 2015 and 2014 . Commencing with the fourth quarter of 2014 and for the years ended December 31, 2016 and 2015 , neither of the Company’s Co-Chief Executive Officers received any guaranteed payments. Performance Fee Compensation In October 2010 and January 2014, the Company granted shares of vested profit interests in certain subsidiaries to select employees. These awards are viewed as a profit-sharing arrangement and are accounted for under ASC 710, which requires compensation expense to be recognized over the vesting period, which is usually the period over which service is provided. The shares were vested at grant date, subject to a divestiture percentage based on percentage of service completed from the award grant date to the employee’s termination date. The Company adjusts the related liability quarterly based on changes in estimated cash flows for the profit interests. In February 2015 and March 2016, the Company granted incentive cash bonus awards to select employees. These awards entitle employees to receive cash compensation based on distributed performance fees received by the Company from certain institutional funds. Eligibility to receive payments pursuant to these incentive awards is based on continued employment and ceases automatically upon termination of employment. Performance compensation expense is recorded based on the fair value of the incentive awards at the date of grant and is recognized on a straight-line basis over the expected requisite service period. The performance compensation liability is subject to re-measurement at the end of each reporting period and any changes in the liability are recognized in such reporting period. For the years ended December 31, 2016 , 2015 and 2014 , the Company recorded a reversal of performance fee compensation expense of $0.3 million , $8.0 million and $1.5 million , respectively. As of December 31, 2016 and 2015 , the total performance fee compensation payable for these awards was $1.0 million and $1.8 million , respectively. Retirement Plan The Company sponsors a defined-contribution 401(k) retirement plan that covers all employees. Employees are eligible to participate in the plan immediately, and participants are 100% vested from the date of eligibility. The Company makes contributions to the Plan of 3% of an employee’s eligible wages, up to a maximum limit as determined by the Internal Revenue Service. The Company also pays all administrative fees related to the plan. The Company's accrued contributions to the plan were $0.6 million for the year ended December 31, 2016 and $0.4 million for each of the years ended December 31, 2015 and 2014 . Stock-Based Compensation In connection with the IPO, the Company adopted the Medley Management Inc. 2014 Omnibus Incentive Plan (the “Plan”). The purpose of the Plan is to provide a means through which the Company may attract and retain key personnel and to provide a means whereby directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of the Company can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Medley Management Inc.’s Class A common stock or Medley LLC’s unit interests, thereby strengthening their commitment to the welfare of the Company and aligning their interests with those of the Company’s stockholders. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), stock bonuses, other stock-based awards and cash awards. The maximum aggregate number of awards available to be granted under the plan, as amended, is 4,500,000 , of which all or any portion may be issued as shares of Medley Management Inc.’s Class A common stock or Medley LLC’s unit interests. Shares of Class A common stock issued by the Company in settlement of awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the market or by private purchase or a combination of the foregoing. As of December 31, 2016 , there were 2.8 million awards available to be granted under the Plan. The fair value of RSUs granted under the plan is determined to be the fair value of the underlying shares on the date of grant. The aggregate fair value, which is then adjusted for anticipated forfeitures, is charged to compensation expense on a straight-line basis over the vesting period, which is generally up to five years. For the years ended December 31, 2016 , 2015 and 2014 stock-based compensation was $3.8 million , $3.1 million and $0.9 million respectively. The following summarizes RSU activity for the years ended December 31, 2016 , 2015 and 2014: Number of RSUs Weighted Average Grant Date Fair Value Balance at December 31, 2013 — $ — Granted 1,203,515 17.91 Forfeited (5,600 ) 18.00 Vested — — Balance at December 31, 2014 1,197,915 $ 17.91 Granted 188,404 9.96 Forfeited (244,868 ) 17.99 Vested (10,647 ) 18.00 Balance at December 31, 2015 1,130,804 $ 16.56 Granted 597,283 5.89 Forfeited (44,200 ) 17.24 Vested (31,404 ) 6.05 Balance at December 31, 2016 1,652,483 $ 12.88 As of December 31, 2016 there were approximately 1.4 million RSUs outstanding, net of estimated forfeitures, which are expected to vest. Unamortized compensation cost related to unvested RSUs as of December 31, 2016 was $11.1 million and is expected to be recognized over a weighted average period of 3.1 years . |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Non-controlling Interests | REDEEMABLE NON-CONTROLLING INTERESTS In January 2016, the Company executed an amendment to SIC Advisors' operating agreement which provided the Company with the right to redeem membership units owned by the minority interest holder. The Company’s redemption right is triggered by the termination of the dealer manager agreement between SIC and SC Distributors LLC, an affiliate of the minority interest holder. As a result of this redemption feature, the Company reclassified the non-controlling interest in SIC Advisors from the equity section to redeemable non-controlling interests in the mezzanine section of the balance sheet based on its fair value as of the amendment date. The fair value of the non-controlling interest was determined to be $12.2 million on the date of the amendment and was adjusted through a charge to non-controlling interests in Medley LLC. As of December 31, 2016 , the balance of the redeemable non-controlling interest in SIC Advisors LLC was $13.3 million . On June 3, 2016, the Company entered into a Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC (the ‘‘Investors’’) to invest up to $50 million in new and existing Medley managed funds (the ‘‘Joint Venture’’). The Company will contribute up to $10 million and an interest in STRF Advisors LLC, the investment advisor to Sierra Total Return Fund, in exchange for common equity interests in the Joint Venture. The Investors will invest up to $40 million in exchange for preferred equity interests in the Joint Venture. On account of the preferred equity interests, the Investors will receive an 8% preferred distribution, 15% of the Joint Venture’s profits, and all of the profits from the contributed interest in STRF Advisors LLC. Medley has the option, subject to certain conditions, to cause the Joint Venture to redeem the Investors’ interest in exchange for repayment of the outstanding investment amount at the time of redemption, plus certain other considerations. The Investors have the right, after seven years , to redeem their interests in the Joint Venture. As such, the Investors’ interest in the Joint Venture is included as a component of redeemable non-controlling interests on the Company’s consolidated balance sheets and amounted to $17.5 million as of December 31, 2016 . Total contributions to the Joint Venture amounted to $21.3 million through December 31, 2016 and were used to purchase $16.8 million of MCC shares on the open market. The Company intends to use the remaining contributions of $4.4 million , which is included in restricted cash equivalents on our consolidated balance sheets, to fund future investments. |
MARKET AND OTHER RISK FACTORS
MARKET AND OTHER RISK FACTORS | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Market and Other Risk Factors | MARKET AND OTHER RISK FACTORS Due to the nature of the Medley funds’ investment strategy, their portfolio of investments has significant market and credit risk. As a result, the Company is subject to market and other risk factors, including, but not limited to the following: Market Risk The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions that are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Credit Risk There are no restrictions on the credit quality of the investments the Company intends to make. Investments may be deemed by nationally recognized rating agencies to have substantial vulnerability to default in payment of interest and/or principal. Some investments may have low-quality ratings or be unrated. Lower rated and unrated investments have major risk exposure to adverse conditions and are considered to be predominantly speculative. Generally, such investments offer a higher return potential than higher rated investments, but involve greater volatility of price and greater risk of loss of income and principal. In general, the ratings of nationally recognized rating organizations represent the opinions of agencies as to the quality of the securities they rate. Such ratings, however, are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of the relevant securities. It is also possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events. The Company may use these ratings as initial criteria for the selection of portfolio assets for the Company but is not required to utilize them. Limited Liquidity of Investments The funds managed by the Company invest and intend to continue to invest in investments that may not be readily marketable. Illiquid investments may trade at a discount from comparable, more liquid investments and, at times there may be no market at all for such investments. Subordinate investments may be less marketable, or in some instances illiquid, because of the absence of registration under federal securities laws, contractual restrictions on transfer, the small size of the market or the small size of the issue (relative to issues of comparable interests). As a result, the funds managed by the Company may encounter difficulty in selling its investments or may, if required to liquidate investments to satisfy redemption requests of its investors or debt service obligations, be compelled to sell such investments at less than fair value. Counterparty Risk Some of the markets in which the Company, on behalf of its underlying funds, may affect its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight, unlike members of exchange-based markets. This exposes the Company to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the applicable contract (whether or not such dispute is bona fide) or because of a credit or liquidity problem, causing the Company to suffer loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Company has concentrated its transactions with a single or small group of counterparties. |
QUARTERLY FINANCIAL DATA (unaud
QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | QUARTERLY FINANCIAL DATA (unaudited) The following tables present the Company's consolidated unaudited quarterly results of operations for 2016 and 2015. For the Three Months Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 (Amounts in thousands) Revenues $ 18,251 $ 18,880 $ 21,326 $ 17,571 Expenses 9,184 15,553 17,508 13,776 Total other income (expense), net (1,595 ) (2,036 ) (2,714 ) (2,647 ) Income (loss) before income taxes 7,472 1,291 1,104 1,148 Net income (loss) 6,700 1,214 1,002 1,036 Net income (loss) attributable to redeemable non-controlling interests and non-controlling interests in consolidated subsidiaries 1,443 438 405 263 Net income attributable to non-controlling interests in Medley LLC 4,632 556 539 679 Net income attributable to Medley Management Inc. $ 625 $ 220 $ 58 $ 94 Net income (loss) per Class A common stock: Basic $ 0.07 $ — $ (0.03 ) $ (0.01 ) Diluted $ 0.07 $ — $ (0.03 ) $ (0.01 ) Weighted average shares - Basic and Diluted 5,809,130 5,778,409 5,777,726 5,851,129 For the Three Months Ended (unaudited) December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015 (Amounts in thousands) Revenues $ 15,979 $ 5,431 $ 20,536 $ 25,480 Expenses 9,845 3,880 9,990 11,840 Total other income (expense), net (2,467 ) (2,757 ) (1,875 ) (2,125 ) Income (loss) before income taxes 3,667 (1,206 ) 8,671 11,515 Net income (loss) 3,605 (1,093 ) 7,753 10,367 Net income (loss) attributable to redeemable non-controlling interests and non-controlling interests in consolidated subsidiaries 249 (2,150 ) (274 ) 1,290 Net income attributable to non-controlling interests in Medley LLC 2,830 785 6,988 7,803 Net income attributable to Medley Management Inc. $ 526 $ 272 $ 1,039 $ 1,274 Net income per Class A common stock: Basic $ 0.08 $ 0.04 $ 0.14 $ 0.19 Diluted $ 0.08 $ 0.04 $ 0.14 $ 0.19 Weighted average shares - Basic and Diluted 6,009,400 6,000,211 6,000,000 6,000,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On February 9, 2017, the Company’s Board of Directors declared a dividend of $0.20 per share of Class A common stock for the fourth quarter of 2016. The dividend was paid on March 6, 2017 to stockholders of record as of February 23, 2017. On January 18, 2017, Medley LLC completed a public offering of $34.5 million in aggregate principal amount of 7.25% senior notes due 2024 at a public offering price of 100% of the principal amount of notes. The notes mature on January 30, 2024 with interest payable quarterly. Medley LLC used the net proceeds from the offering to repay $33.0 million of the outstanding indebtedness under the Term Loan Facility. On February 22, 2017, Medley LLC completed a public offering of an additional $34.5 million in aggregate principal amount of 7.25% senior notes due 2024 at a public offering price of $25.25 for each $25.00 principal amount of notes. The notes mature on January 30, 2024 with interest payable quarterly. Medley LLC used the net proceeds from the offering to repay the remaining outstanding indebtedness under the Term Loan Facility and for general corporate purposes. The notes under both offerings are traded on the New York Stock Exchange under the trading symbol “ MDLQ. ” |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation , the Company consolidates those entities where it has a direct and indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates entities that the Company concludes are variable interest entities (“VIEs”), for which the Company is deemed to be the primary beneficiary and entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis , which changes the consolidation analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The Company elected to early adopt this new guidance using the modified retrospective method effective January 1, 2015. As a result of the adoption of ASU 2015-02, the Company determined that it is no longer the primary beneficiary of certain funds it manages. Therefore, the Company deconsolidated certain funds that had been consolidated under previous guidance effective January 1, 2015. For legal entities evaluated for consolidation, the Company must determine whether the interests that it holds and fees paid to it qualify as a variable interest in an entity. This includes an evaluation of the management fees and performance fees paid to the Company when acting as a decision maker or service provider to the entity being evaluated. Under the new guidance, if fees received by the Company are customary and commensurate with the level of services provided, and the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, the interest that the Company holds would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if fees are considered a variable interest. Prior to the adoption of the new consolidation guidance, these fees were considered variable interests by the Company. An entity in which the Company holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk have the right to direct the activities of the entity that most significantly impact the legal entity’s economic performance, (c) the voting rights of some investors are disproportionate to their obligation to absorb losses or rights to receive returns from a legal entity. Under the new guidance, for limited partnerships and other similar entities, non-controlling investors must have substantive rights to either dissolve the fund or remove the general partner (“kick-out rights”) in order to not qualify as a VIE. For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company is generally deemed to have a controlling financial interest if it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances. However, quantitative information may also be considered in the analysis, as appropriate. These assessments require judgments. Each entity is assessed for consolidation on a case-by-case basis. For those entities evaluated under the voting interest model, the Company consolidates the entity if it has a controlling financial interest. The Company has a controlling financial interest in a voting interest entity (“VOE”) if it owns a majority voting interest in the entity. Prior to the new guidance, the Company consolidated VOE’s where it was the general partner and as such, was presumed to have control, regardless of its ownership interest. |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities Medley Management Inc. is the sole managing member of Medley LLC and, as such, it operates and controls all of the business and affairs of Medley LLC and, through Medley LLC, conducts its business. Under ASC 810, Medley LLC meets the definition of a VIE because the equity of Medley LLC is not sufficient to permit activities without additional subordinated financial support. Medley Management Inc. has the obligation to absorb expected losses that could be significant to Medley LLC and holds 100% of the voting power, therefore Medley Management Inc. is considered to be the primary beneficiary of Medley LLC. As a result, Medley Management Inc. consolidates the financial results of Medley LLC and its subsidiaries and records a non-controlling interest for the economic interest in Medley LLC held by the non-managing members. Medley Management Inc.’s and the non-managing members’ economic interests in Medley LLC are 19.9% and 80.1% , respectively, as of December 31, 2016 and 20.4% and 79.6% , respectively, as of December 31, 2015 . Net income attributable to the non-controlling interests in Medley LLC on the consolidated statements of operations represents the portion of earnings attributable to the economic interest in Medley LLC held by its non-managing members. Non-controlling interests in Medley LLC on the consolidated balance sheets represents the portion of net assets of Medley LLC attributable to the non-managing members based on total LLC Units of Medley LLC owned by such non-managing members. As of December 31, 2016 , Medley LLC has three majority owned subsidiaries, SIC Advisors LLC, Medley Seed Funding I LLC and STRF Advisors LLC, all of which are consolidated VIEs. Each of these entities was organized as a limited liability company and was legally formed to either manage a designated fund or strategically invest capital as well as isolate business risk. As of December 31, 2016 , total assets and total liabilities, after eliminating entries, of these VIEs reflected in the consolidated balance sheets were $51.7 million and $22.8 million , respectively. As of December 31, 2015 , Medley had only one majority owned subsidiary, SIC Advisors LLC, which was a consolidated VIE. As of December 31, 2015 , total assets and total liabilities, after eliminating entries, of this VIE reflected in the consolidated balance sheets were $31.1 million and $21.2 million , respectively. Except to the extent of the assets of these VIEs that are consolidated, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company. |
Seed Investments | Seed Investments The Company accounts for seed investments through the application of the voting interest model under ASC 810-10-25-1 through 25-14 and consolidates a seed investment when the investment advisor holds a controlling interest, which is, in general, 50% or more of the equity in such investment. For seed investments for which the Company does not hold a controlling interest, the Company accounts for such seed investment under the equity method of accounting, at its ownership percentage of such seed investment’s net asset value. |
Consolidated Funds | Consolidated Funds With respect to the Consolidated Funds, which represent limited partnerships, Medley LLC earns a fixed management fee based on either (i) limited partners' capital commitments to the funds, (ii) invested capital, (III) net asset value (“NAV”), or (iv) lower of cost or market value of a fund's portfolio investments. In addition, Medley earns a performance fee based upon the investment returns in excess of a stated hurdle rate. The Company considered the accounting treatment under ASU 2010-10, Amendments for Certain Investment Funds, and determined that the funds were not VIEs for the year ended December 31, 2014. However, as the general partner, and due to the lack of substantive kick out or participating rights of the limited partners, these funds were consolidated under the voting interest model in accordance with ASC 810-20, Control of Partnerships and Similar Entities , for the year ended December 31, 2014. |
Deconsolidated Funds | Deconsolidated Funds Certain funds that have historically been consolidated in the financial statements are no longer consolidated. The Company had consolidated MOF I in its consolidated financial statements in accordance with ASC 810-20, as the Company was the general partner and the limited partners lacked substantive kick out or participating rights. Effective January 1, 2015, the Company completed its role as investment manager of this fund and transitioned the management of the residual assets of this fund to another asset manager. As a result of the transition, the Company deconsolidated the financial statements of this fund, on January 1, 2015. There was no gain or loss recognized upon deconsolidation. Prior to January 1, 2015, the Company had consolidated Medley Opportunity Fund II LP (“MOF II”) in its consolidated financial statements in accordance with ASC 810-20 as the Company was the general partner and the limited partners lacked kick out rights or participating rights. Under the guidance of ASU 2015-02, which the Company adopted effective as of January 1, 2015, the Company reconsidered the consolidation conclusion for MOF II and, as a result of the new guidance, determined that, although MOF II continues to be a VIE, the Company is no longer considered to be the primary beneficiary. Therefore, the Company deconsolidated MOF II at January 1, 2015 and records its investment in the entity under the equity method of accounting. See Note 3, “Investments.” |
Non-Consolidated Variable Interest Entities | Non-Consolidated Variable Interest Entities Beginning in November 2006, Medley held a variable interest in an investment fund which was formed under the laws of the Cayman Islands and organized to make investments in a diversified portfolio of corporate and asset-based investments. The equity holders (as a group) lack the direct and indirect ability through voting rights or similar rights to make decisions about this legal entity's activities that have a significant effect on the success of the legal entity. As such, this entity is considered to be a VIE under the guidance of ASU 2010-10. Medley had a variable interest in the fund through an investment management agreement pursuant to which Medley managed the investment activities of the fund, received and annual base management fee and was entitled to receive an incentive fee, subject to the underlying financial performance of the invesment fund. The Company did not consolidate this entity's expected losses or receive a majority of the entity's returns. Effective October 31, 2014, the investment management agreement was terminated and Medley transferred its responsibilities to a new investment manager and, therefore, no longer holds a variable interest in this entity. The Company received no management fees from this non-consolidated VIE for the years ended December 31, 2016 and 2015. For the year ended December 31, 2014, the Company received management fees from this entity of $1.1 million . As of December 31, 2016 and 2015, there were no assets recognized in the Company's consolidated balance sheets related to this non-consolidated VIE and Medley had no exposure to losses from the entity. The Company holds interests in certain VIEs that are not consolidated because the Company is not deemed the primary beneficiary. The Company's interest in these entities is in the form of insignificant equity interests and fee arrangements. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. |
Concentration of Credit and Market Risk | Concentration of Credit and Market Risk In the normal course of business, the Company's underlying funds encounter significant credit and market risk. Credit risk is the risk of default on investments in debt securities, loans and derivatives that result from a borrower's or derivative counterparty's inability or unwillingness to make required or expected payments. Credit risk is increased in situations where the Company's underlying funds are investing in distressed assets or unsecured or subordinate loans or in securities that are a material part of its respective business. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors. The Company's underlying funds may make investments outside of the United States. These non-U.S. investments are subject to the same risks associated with U.S. investments, as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing the investments, potentially adverse tax consequences, and the burden of complying with a wide variety of foreign laws. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management’s estimates are based on historical experience and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates also require management to exercise judgment in the process of applying the Company’s accounting policies. Significant estimates and assumptions by management affect the carrying value of investments, performance compensation payable and certain accrued liabilities. Actual results could differ from these estimates, and such differences could be material. |
Indemnification | Indemnification In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has not experienced any prior claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote. |
Non-Controlling Interests | Non-Controlling Interests in Consolidated Entities Non-controlling interests in Consolidated Funds represent the component of equity in such consolidated entities held by third-parties. These interests are adjusted for general partner allocations and for subscriptions and redemptions that occur during the reporting period. Non-controlling interests in consolidated subsidiaries represent the component of equity in such consolidated entities held by third-parties. These interests are adjusted for contributions to and distributions from Medley entities and are allocated income from Medley entities based on their ownership percentages. Redeemable Non-Controlling Interests Redeemable non-controlling interests represents interests of certain third parties that are not mandatorily redeemable but redeemable for cash or other assets at a fixed or determinable price or a fixed or determinable date, at the option of the holder or upon the occurrence of an event that is not solely within the control of the issuer. These interests are classified in temporary equity. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include liquid investments in money market funds and demand deposits. The Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits during the years ended December 31, 2016 and 2015. The Company monitors the credit standing of these financial institutions and has not experienced, and has no expectations of experiencing any losses with respect to such balances. |
Restricted Cash Equivalents | Restricted Cash Equivalents Restricted cash equivalents consist of cash held at one of the Company's subsidiaries which was contributed by the Company and third-party investors. The restricted cash equivalents balance can only be used to purchase investments in new and existing Medley managed funds. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contracts with a customer, (2) identify the performance obligations in the contracts, (3) determine the transaction prices, (4) allocate the transaction prices to the performance obligations in the contracts, and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which clarified the implementation guidance regarding performance obligations and licensing arrangements. The new standard will become effective for the Company on January 1, 2018, with early application permitted to the effective date of January 1, 2017. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. However, the adoption of this guidance is expected to impact the timing of performance fee revenue recognition. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB released ASU 2014-15, Presentation of Financial Statements – Going Concern , which requires a company to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within the one year period subsequent to the date that the financial statements are issued or within the one year period subsequent the date that the financial statements are available to be issued. This guidance is effective for fiscal years ending after December 15, 2016, and for annual and interim periods thereafter. The Company adopted this guidance effective January 1, 2017 and the adoption did not have an impact on the consolidated financial statements of the Company. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which requires that all equity investments (except those accounted for under the equity method of accounting) be measured at fair value with changes in fair value recognized in net income. This guidance eliminates the available-for-sale classification for equity securities with readily determinable fair values. However, companies may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. This guidance is effective for fiscal years beginning after December 31, 2017. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This guidance requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. However, the adoption of this guidance is expected to result in a significant increase in total assets and total liabilities, but will not have a significant impact on the consolidated statement of operations. In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This guidance simplifies and improves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 31, 2016, with early adoption permitted. Upon initial evaluation, the adoption of ASU 2016-09 will have the following changes to the Company's consolidated financial statements. First, excess tax benefits and deficiencies will be recognized in the consolidated statements of operations instead of being recorded to equity, and forfeitures may be accounted for as they occur instead of being estimated. In addition, excess tax benefits will be classified as cash flows from operating activities, and cash withheld by the Company for employees' withholding taxes will be classified as cash flows from financing activities on the Company's consolidated statements of cash flows. The Company does not believe any other recently issued, but not yet effective, revisions to authoritative guidance will have a material effect on its consolidated balance sheets, results of operations or cash flows. Adoption of ASU 2016-15 Effective October 1, 2016, the Company early adopted ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. This guidance was issued to reduce the diversity in practice in how certain cash receipts and payments are classified in the statement of cash flows, including debt prepayment or extinguishment costs, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, and distributions from certain equity method investments. As a result of this guidance, the Company elected to treat distributions received from certain equity method investments using the cumulative earnings approach. Under the cumulative earnings approach, an investor would compare the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings would be considered a return on investment and classified in operating activities. Any excess distributions would be considered a return of investment and classified in investing activities. The early adoption of this new guidance did not have an impact to the presentation of the statement of cash flows for the prior years presented. Adoption of ASU 2016-18 Effective October 1, 2016, the Company early adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires that the statement of cash flows show the change in the total of cash, cash equivalents and restricted cash for the applicable period presented. This new guidance also requires entities to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. The Company early adopted this guidance using the retrospective transition method. The early adoption of this new guidance did not have an impact to the presentation of the statement of cash flows for the prior years presented as the Company did not have any restricted cash for those periods presented. Adoption of ASU 2015-03 In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest , which updated ASU 2015-03 guidance to state that the SEC staff would not object to an entity deferring and presenting debt issuance costs relating to a line of credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit agreement. |
Class A Earnings per Share | Class A Earnings per Share The Company computes and presents earnings per share using the two-class method. Under the two-class method, the Company allocates earnings between common stock and participating securities. The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. For purposes of calculating earnings per share, the Company reduces its reported net earnings by the amount allocated to participating securities to arrive at the earnings allocated to Class A common stockholders. Earnings are then divided by the weighted average number of Class A common stock outstanding to arrive at basic earnings per share. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in our earnings. Participating securities consist of the Company's unvested restricted stock units that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in its basic and diluted calculations. |
Investments | Investments Investments include equity method investments that are not consolidated but over which the Company exerts significant influence. The Company measures the carrying value of its public non-traded equity method investment at NAV per share. The Company measures the carrying value of its privately-held equity method investments by recording its share of the underlying income or loss of these entities. Unrealized appreciation (depreciation) resulting from changes in fair value of the equity method investments is reflected as a component of other income (expense) in the consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The carrying amounts of equity method investments are reflected in investments in the consolidated statements of financial condition. As the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Company’s equity method investments in such entities approximates fair value. The Company evaluates its equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Investments also include available-for-sale securities which consist of an investment in publicly traded common stock. The Company measures the carrying value of its publicly traded investment in available-for-sale securities at the quoted market price on the primary market or exchange on which they trade. Unrealized appreciation (depreciation) resulting from changes in fair value of available-for-sale securities is recorded in accumulated other comprehensive income, redeemable non-controlling interests and non-controlling interests in Medley LLC. Realized gains (losses) and declines in value determined to be other than temporary, if any, are reported in other income (expenses), net. The Company evaluates its investment in available-for-sale securities for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investment may not be recoverable. Prior to January 1, 2015, the Consolidated Funds reflected their investments at fair value with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net change in unrealized depreciation on investments of Consolidated Funds in the consolidated statements of operations. |
Fixed Assets | Fixed Assets Fixed assets consist primarily of furniture, fixtures, computer equipment, and leasehold improvements and are recorded at cost, less accumulated depreciation and amortization. The Company calculates depreciation expense for furniture, fixtures, and computer equipment using the straight-line method over the estimated useful life used for the respective assets, which generally ranges from three to seven years. Amortization of leasehold improvements is provided on a straight-line basis over the shorter of the remaining term of the underlying lease or estimated useful life of the improvement. Useful lives of leasehold improvements range from three to eight years. Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gain or loss is reflected in Other Expenses, net in the consolidated statements of operations. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs represent direct costs incurred with obtaining financing and are amortized over the term of the underlying debt using the effective interest method. Debt issuance costs, and the related amortization expense, are adjusted when any prepayments of principal are made to the related outstanding debt. Amortization of debt issuance costs is included as a component of interest expense in the Company's consolidated statement of operations. |
Adoption of ASU 2015-03 | Adoption of ASU 2015-03 In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest , which updated ASU 2015-03 guidance to state that the SEC staff would not object to an entity deferring and presenting debt issuance costs relating to a line of credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit agreement. The Company adopted the new guidance and retrospectively presented debt issuance costs related to its long-term debt as a deduction from the carrying amount of the associated debt on its Consolidated Balance Sheets as of December 31, 2016 and 2015. As a result of the adoption, $1.7 million of debt issuance costs were reclassified from other assets to debt obligations as of December 31, 2015. The Company continues to present debt issuance costs related to its revolving credit facility as an asset on its Consolidated Balance Sheets as of December 31, 2016 and 2015. This change did not affect the Company’s consolidated statements of operations, cash flows or changes in equity. |
Revenues | Revenues Management Fees Medley provides investment management services to both public and private investment vehicles. Management fees include base management fees, other management fees, and Part I incentive fees, as described below. Base management fees are calculated based on either (i) the average or ending gross assets balance for the relevant period, (ii) limited partners’ capital commitments to the funds, (iii) invested capital, (iv) NAV or (v) lower of cost or market value of a fund’s portfolio investments. For the private funds, Medley receives base management fees during a specified period of time, which is generally ten years from the initial closing date. However, such termination date may be earlier in certain limited circumstances or later if extended for successive one -year periods, typically up to a maximum of two years. Depending upon the contracted terms of the investment management agreement, management fees are paid either quarterly in advance or quarterly in arrears, and are recognized as earned over the period the services are provided. Certain management agreements provide for Medley to receive other management fee revenue derived from up front origination fees paid by the portfolio companies of the funds, as well as separately managed accounts. These fees are recognized when Medley becomes entitled to such fees. Certain management agreements also provide for Medley to receive Part I incentive fee revenue derived from net interest income (excluding gains and losses) above a hurdle rate. Effective January 1, 2016, as it relates to Medley Capital Corporation (“MCC”), these fees are subject to netting against realized and unrealized losses. Part I incentive fees are paid quarterly and are recognized as earned over the period the services are provided. Performance Fees Performance fees consist principally of the allocation of profits from certain funds and separately managed accounts, to which Medley provides management services. Medley is generally entitled to an allocation of income as a performance fee after returning the invested capital plus a specified preferred return as set forth in each respective agreement. Medley recognizes revenues attributable to performance fees based upon the amount that would be due pursuant to the respective agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized in the Company's consolidated financial statements reflects Medley’s share of the gains and losses of the associated funds’ underlying investments measured at their current fair values. Performance fee revenue may include reversals of previously recognized performance fees due to a decrease in the net income of a particular fund that results in a decrease of cumulative performance fees earned to date. Since fund return hurdles are cumulative, previously recognized performance fees also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. During the year ended December 31, 2016, the Company did no t reverse previously recognized performance fees. During the year ended December 31, 2015, the Company reversed $24.0 million of previously recognized performance fees. For the year ended December 31, 2014, the Company reversed $4.4 million and $2.3 million of previously recognized performance fees on a standalone and consolidated basis, respectively. As of December 31, 2016 , the Company recognized cumulative performance fees of $7.1 million . Performance fees received in prior periods may be required to be returned by Medley in future periods if the funds’ investment performance declines below certain levels. Each fund is considered separately in this regard and, for a given fund, performance fees can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments, at their then current fair values, previously recognized and distributed performance fees would be required to be returned, a liability is established for the potential clawback obligation. As of December 31, 2016 , the Company had not received any performance fee distributions, except for tax distributions related to the Company’s allocation of net income, which included an allocation of performance fees. Pursuant to the organizational documents of each respective fund, a portion of these tax distributions is subject to clawback. As of December 31, 2016 , the Company had accrued $7.1 million for clawback obligations that would need to be paid if the funds were liquidated at fair value as of the end of the reporting period. The Company’s actual obligation, however, would not become payable or realized until the end of a fund’s life. Other Revenues and Fees Medley provides administrative services to certain affiliated funds and is reimbursed for direct and allocated expenses incurred in providing such administrative services, as set forth in the respective fund agreements. These fees are recognized as revenue in the period administrative services are rendered. During the year ended December 31, 2014, included in other revenues and fees are reimbursements received by Medley from SIC under its investment advisory agreement. Expenses incurred by Medley under this agreement are recorded within general, administrative, and other expenses in the consolidated statements of operations. For additional information on these reimbursements, refer to Note 10. |
Performance Fee Compensation | Performance Fee Compensation Medley has issued profit interests in certain subsidiaries to select employees. These profit-sharing arrangements are accounted for under ASC 710, Compensation — General, which requires compensation expense to be measured at fair value at the grant date and expensed over the vesting period, which is usually the period over which the service is provided. The fair value of the profit interests are re-measured at each balance sheet date and adjusted for changes in estimates of cash flows and vesting percentages. The impact of such changes is recorded in the consolidated statements of operations as an increase or decrease to performance fee compensation. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation . Under the fair value recognition provision of this guidance, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period. Stock-based compensation expense recognized for the periods presented is based on awards ultimately expected to vest and have been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The effect of such change in estimated forfeitures is recognized through a cumulative catch-up adjustment that is included in the period of the change in estimate. The value of the portion of the award that is ultimately expected to vest on a straight-line basis over the requisite service period is included within compensation and benefits on the Company’s consolidated statements of operations. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability approach, which requires the recognition of tax benefits or expenses for temporary differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to recognize interest and penalties on uncertain tax positions and other tax matters as a component of income tax expense. For interim periods, the Company accounts for income taxes based on its estimate of the effective tax rate for the year. Discrete items and changes in its estimate of the annual effective tax rate are recorded in the period they occur. Medley Management Inc. is subject to U.S. federal, state and local corporate income taxes on its allocable portion of the income of Medley LLC at prevailing corporate tax rates, which are reflected in the Company’s consolidated financial statements. Medley LLC and its subsidiaries are not subject to federal, state and local corporate income taxes since all income, gains and losses are passed through to its members. However, Medley LLC and its subsidiaries are subject to New York City’s unincorporated business tax, which is included in the Company’s provision for income taxes. Prior to the Company's Reorganization and IPO, no provision was made for U.S. federal, state and local corporate income taxes in the accompanying consolidated financial statements since the Company was a group of pass-through entities for U.S. and state income tax purposes and its profits and losses were allocated to the partners who are individually responsible for reporting such amounts. A provision for income taxes was made for certain entities that were subject to New York City's unincorporated business tax. The Company analyzes its tax filing positions in all of the U.S. federal, state and local tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established. |
Leases | Leases Certain lease agreements contain escalating payments and rent holiday periods. The related rent expense is recorded on a straight-line basis over the length of the lease term. The difference between rent expense and rent paid is recorded as deferred rent. Leasehold improvements made by the lessee and funded by landlord allowances or other incentives are also recorded as deferred rent and are amortized as a reduction in rent expense over the term of the lease. Deferred rent is included as a component of accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. |
Secured Borrowings of Consolidated Funds | Secured Borrowings of Consolidated Funds The Consolidated Funds follow the guidance in ASC 860, Transfers and Servicing, when accounting for loan participations and other partial loan sales. Such guidance provides accounting and reporting standards for transfers and servicing of financial assets and requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance. Under ASC 860, the Company applies a control-oriented approach to participating interests whereby control is considered to have been surrendered only if (i) the transferred financial assets have been isolated from the transferor, (ii) the transferee has the right to pledge or exchange the transferred financial assets it received, and (iii) the transferor, its consolidated affiliates in the financial statements being presented, or its agents do not maintain effective control over the transferred financial assets. Participations or other partial loan sales which do not meet all of these conditions remain on the Company’s consolidated balance sheets and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. For these participations or partial loan sales accounted for as secured borrowings, the interest income earned on the entire loan balance is recorded within interest and other income of Consolidated Funds and the interest income earned by the buyer in the partial loan sale is recorded as interest expense of Consolidated Funds in the accompanying consolidated statements of operations. Changes in the fair value of secured borrowings of Consolidated Funds are included in net change in unrealized depreciation (appreciation) on secured borrowings in the consolidated statements of operations. |
Fair Value Measurement | The Company follows the guidance set forth in ASC 820 for measuring the fair value of investments in available-for-sale securities. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. Financial instruments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows: • Level I – Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date. • Level II – Valuations based on inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in non-active markets including bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities. • Level III – Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets and liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level III information, assuming no additional corroborating evidence. When determining the fair value of publicly traded equity securities, the Company uses the quoted market price as of the valuation date on the primary market or exchange on which they trade. The Company’s investments in available-for-sale securities are categorized as Level I. As of December 31, 2016 and 2015, there were no financial instruments classified as Level II or Level III. Our equity method investments for which fair value is measured at NAV per share, or its equivalent, using the practical expedient, are not categorized in the fair value hierarchy. A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financials assets or liabilities. Reclassifications impacting all levels of the fair value hierarchy are reported as transfers in or out of Level I, II or III category as of the beginning of the quarter during which the reclassifications occur. |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Investments [Abstract] | |
Composition of Investments | The components of investments are as follows: As of December 31, 2016 2015 (Amounts in thousands) Equity method investments, at fair value $ 14,895 $ 16,360 Available-for-sale securities 17,009 — Total investments, at fair value $ 31,904 $ 16,360 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Other Assets | The components of other assets are as follows: As of December 31, 2016 2015 (Amounts in thousands) Fixed assets, net of accumulated depreciation of $1,816 and $1,667, respectively $ 4,998 $ 1,708 Security deposits 1,975 3,034 Administrative fees receivable (Note 10) 2,068 1,654 Deferred tax assets (Note 12) 2,001 1,658 Due from affiliates (Note 10) 2,133 1,486 Prepaid expenses and taxes 3,078 2,293 Other 2,058 1,182 Total other assets $ 18,311 $ 13,015 |
LOANS PAYABLE (Tables)
LOANS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s loans payable consist of the following: As of December 31, 2016 2015 (Amounts in thousands) Term loans under the Credit Suisse Term Loan Facility, net of unamortized discount and debt issuance costs of $1,207 and $2,489, respectively $ 43,593 $ 92,511 Non-recourse promissory notes, net of unamortized discount and debt issuance costs of $1,415 and $1,953, respectively 8,585 8,360 Total loans payable $ 52,178 $ 100,871 |
ACCOUNTS PAYABLE, ACCRUED EXP31
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Components of Accounts Payable, Accrued Expenses, and Other Liabilities | The components of accounts payable, accrued expenses and other liabilities are as follows: As of December 31, 2016 2015 (Amounts in thousands) Accrued compensation and benefits $ 7,978 $ 9,107 Due to affiliates (Note 10) 15,043 13,634 Revenue share payable (Note 9) 6,472 6,774 Accrued interest 558 1,304 Professional fees 858 614 Deferred rent 2,833 285 Deferred tax liabilities (Note 12) 202 127 Accounts payable and other accrued expenses 2,326 2,901 Total accounts payable, accrued expenses and other liabilities $ 36,270 $ 34,746 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments | Future minimum rental payments under non-cancelable leases are as follows as of December 31, 2016 (in thousands): 2017 $ 2,683 2018 2,704 2019 2,710 2020 2,833 2021 2,430 Thereafter 4,254 Total future minimum lease payments $ 17,614 |
EARNINGS (LOSS) PER CLASS A S33
EARNINGS (LOSS) PER CLASS A SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income per Class A Share | The table below presents basic and diluted net income (loss) per share of Class A common stock using the two-class method for the years ended December 31, 2016 , 2015 and 2014: For the Year Ended December 31, 2016 2015 2014 (Amounts in thousands, except share and per share amounts) Basic and diluted net income per share: Numerator Net income attributable to Medley Management Inc. $ 997 $ 3,111 $ 1,695 Less: Allocation to participating securities (892 ) (353 ) (267 ) Net income (loss) available to Class A common stockholders $ 105 $ 2,758 $ 1,428 Denominator Weighted average shares of Class A common stock outstanding 5,804,042 6,002,422 6,000,000 Net income (loss) per Class A share $ 0.02 $ 0.46 $ 0.24 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for (benefit from) income taxes for the years ended December 31, 2016, 2015 and 2014 consist of the following: For the Years Ended December 31, 2016 2015 2014 (Amounts in thousands, except share and per share amounts) Current Federal $ 272 $ 1,546 $ 486 State 1,058 1,373 2,768 Total current provision 1,330 2,919 3,254 Deferred Federal 158 (454 ) 2 State and local (425 ) (450 ) (728 ) Total deferred provision (267 ) (904 ) (726 ) Provision for Income Taxes $ 1,063 $ 2,015 $ 2,528 |
Summary of Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. The significant components of the Company's deferred tax assets and liabilities included on its consolidated balance sheets are as follow: As of December 31, 2016 2015 (Amounts in thousands) Deferred tax assets Tax goodwill $ 605 $ 597 Basis difference in partnership interest 417 630 Unrealized losses 44 55 Stock-based compensation 216 101 Accrued expenses not currently deductible for tax purposes 7 86 New York City unincorporated business tax credit carryforward 512 — Other liabilities 200 189 Total deferred tax assets $ 2,001 $ 1,658 Deferred tax liabilities Accrued fee income $ 147 $ 68 Other 55 59 Total deferred tax liabilities 202 127 Net deferred tax assets $ 1,799 $ 1,531 |
Reconciliation of Statutory to Effective Tax Rates | A reconciliation of the federal statutory tax rate to the effective tax rates for the years ended December 31, 2016, 2015 and 2014 are as follows: For the Years Ended December 31, 2016 2015 2014 Federal statutory rate 34.0 % 34.0 % 34.0 % Income allocated to non-controlling interests (28.9 )% (26.8 )% (32.9 )% State and local corporate income taxes 1.2 % 1.0 % 0.2 % Partnership unincorporated business tax 4.2 % 1.7 % 2.6 % Permanent differences — % (2.9 )% (0.4 )% Other (0.8 )% 1.9 % — % Effective tax rate 9.7 % 8.9 % 3.5 % |
COMPENSATION EXPENSE (Tables)
COMPENSATION EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Nonvested RSU Activity | The following summarizes RSU activity for the years ended December 31, 2016 , 2015 and 2014: Number of RSUs Weighted Average Grant Date Fair Value Balance at December 31, 2013 — $ — Granted 1,203,515 17.91 Forfeited (5,600 ) 18.00 Vested — — Balance at December 31, 2014 1,197,915 $ 17.91 Granted 188,404 9.96 Forfeited (244,868 ) 17.99 Vested (10,647 ) 18.00 Balance at December 31, 2015 1,130,804 $ 16.56 Granted 597,283 5.89 Forfeited (44,200 ) 17.24 Vested (31,404 ) 6.05 Balance at December 31, 2016 1,652,483 $ 12.88 |
QUARTERLY FINANCIAL DATA (una36
QUARTERLY FINANCIAL DATA (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following tables present the Company's consolidated unaudited quarterly results of operations for 2016 and 2015. For the Three Months Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 (Amounts in thousands) Revenues $ 18,251 $ 18,880 $ 21,326 $ 17,571 Expenses 9,184 15,553 17,508 13,776 Total other income (expense), net (1,595 ) (2,036 ) (2,714 ) (2,647 ) Income (loss) before income taxes 7,472 1,291 1,104 1,148 Net income (loss) 6,700 1,214 1,002 1,036 Net income (loss) attributable to redeemable non-controlling interests and non-controlling interests in consolidated subsidiaries 1,443 438 405 263 Net income attributable to non-controlling interests in Medley LLC 4,632 556 539 679 Net income attributable to Medley Management Inc. $ 625 $ 220 $ 58 $ 94 Net income (loss) per Class A common stock: Basic $ 0.07 $ — $ (0.03 ) $ (0.01 ) Diluted $ 0.07 $ — $ (0.03 ) $ (0.01 ) Weighted average shares - Basic and Diluted 5,809,130 5,778,409 5,777,726 5,851,129 For the Three Months Ended (unaudited) December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015 (Amounts in thousands) Revenues $ 15,979 $ 5,431 $ 20,536 $ 25,480 Expenses 9,845 3,880 9,990 11,840 Total other income (expense), net (2,467 ) (2,757 ) (1,875 ) (2,125 ) Income (loss) before income taxes 3,667 (1,206 ) 8,671 11,515 Net income (loss) 3,605 (1,093 ) 7,753 10,367 Net income (loss) attributable to redeemable non-controlling interests and non-controlling interests in consolidated subsidiaries 249 (2,150 ) (274 ) 1,290 Net income attributable to non-controlling interests in Medley LLC 2,830 785 6,988 7,803 Net income attributable to Medley Management Inc. $ 526 $ 272 $ 1,039 $ 1,274 Net income per Class A common stock: Basic $ 0.08 $ 0.04 $ 0.14 $ 0.19 Diluted $ 0.08 $ 0.04 $ 0.14 $ 0.19 Weighted average shares - Basic and Diluted 6,009,400 6,000,211 6,000,000 6,000,000 |
ORGANIZATION AND BASIS OF PRE37
ORGANIZATION AND BASIS OF PRESENTATION (Narrative) (Details) $ / shares in Units, $ in Thousands | Sep. 29, 2014USD ($)$ / sharesshares | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Organization And Basis Of Presentation [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Date of incorporation | Jun. 13, 2014 | |||
Commencement of operations date | Sep. 29, 2014 | |||
Proceeds from Initial Public Offering | $ | $ 0 | $ 0 | $ 100,440 | |
Transfer of units to common stock, prior to fourth anniversary | 33.33% | |||
Transfer of units to common stock, prior to fifth anniversary | 66.66% | |||
Medley LLC [Member] | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Conversion of pre-IPO interests to LLC Units (in shares) | 23,333,333 | |||
Basis of exchange of LLC Units for Class A shares | exchange their LLC Units for shares of Medley Management Inc.’s Class A common stock on a one-for-one basis | |||
Common Class A [Member] | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Proceeds from Initial Public Offering | $ | $ 100,400 | |||
Issuance of Class A shares in Initial Public Offering, net of underwriters discount (in shares) | 6,000,000 | |||
Issuance of Class A shares, offering price (in dollars per share) | $ / shares | $ 18 | |||
Percentage of common stock owned by LLC personnel for voting rights entitlement, minimum | 10.00% | |||
Common stock exchange ratio | 1 | |||
Common Class B [Member] | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Issuance of Class A shares in Initial Public Offering, net of underwriters discount (in shares) | 100 | |||
Voting rights multiplier upon LLC ownership threshold | 10 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)subsidiary | Dec. 31, 2015USD ($)subsidiary | Dec. 31, 2014USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Percent of voting power in Medley LLC | 100.00% | ||
Number of majority owned subsidiaries | subsidiary | 3 | 1 | |
Management fees | $ 65,496,000 | $ 75,675,000 | $ 61,252,000 |
Fair value of investments in non-consolidated VIEs | 5,100,000 | 5,900,000 | |
Receivables included as a component of other assets and clawback obligation | 1,900,000 | 900,000 | |
Accrued clawback obligations | 7,100,000 | 7,100,000 | |
Maximum loss exposure | $ 7,000,000 | ||
Management fee period | 10 years | ||
Extension period | 1 year | ||
Maximum extension period | 2 years | ||
Reversal of performance fee | $ 0 | 24,000,000 | 4,400,000 |
Reversal of performance fee, consolidated | 2,300,000 | ||
Accounting Standards Update 2015-03 [Member] | Other Assets [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Debt issuance costs | (1,700,000) | ||
Accounting Standards Update 2015-03 [Member] | Loans Payable [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Debt issuance costs | 1,700,000 | ||
Sierra Income Corporation [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Total assets of consolidated variable interest entity | 51,700,000 | 31,100,000 | |
Total liabilities of consolidated variable interest entity | 22,800,000 | 21,200,000 | |
Variable Interest Entity, Not Primary Beneficiary [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Management fees | $ 0 | $ 0 | $ 1,100,000 |
Medley LLC [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Parent ownership percentage of LLC | 19.90% | 20.40% | |
Cumulative performance fees | $ 7,100,000 | ||
Medley LLC [Member] | Non Management [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Noncontrolling interest ownership percentage of LLC | 80.10% | 79.60% | |
Furniture, Fixtures, And Computer Equipment [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 3 years | ||
Furniture, Fixtures, And Computer Equipment [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 7 years | ||
Leasehold Improvements [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 3 years | ||
Leasehold Improvements [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 8 years |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Investments [Line Items] | |||
Equity method investments, at fair value | $ 14,895,000 | $ 16,360,000 | |
Available-for-sale securities | $ 17,009,000 | 0 | |
Publicly traded common stock (in shares) | 2,264,892 | ||
Available for sale impairment | $ 0 | ||
AOCI Attributable to Noncontrolling Interest [Member] | |||
Schedule of Investments [Line Items] | |||
Cumulative unrealized gains | 200,000 | ||
MOF I [Member] | |||
Schedule of Investments [Line Items] | |||
Loss from other than temporary impairment equity investments | 500,000 | 0 | $ 0 |
Sierra Income Corporation [Member] | |||
Schedule of Investments [Line Items] | |||
Equity method investments, at fair value | $ 9,000,000 | $ 9,000,000 |
INVESTMENTS (Composition of Inv
INVESTMENTS (Composition of Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Investments [Abstract] | ||
Equity method investments, at fair value | $ 14,895 | $ 16,360 |
Available-for-sale securities | 17,009 | 0 |
Total investments, at fair value | $ 31,904 | $ 16,360 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Level 1 to Level 2 Transfers | $ 0 | $ 0 |
Level 2 to Level 1 Transfers | 0 | 0 |
Level II [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Instruments classified as Level II or Level III | 0 | 0 |
Level III [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Instruments classified as Level II or Level III | $ 0 | $ 0 |
OTHER ASSETS (Components of Oth
OTHER ASSETS (Components of Other Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other Assets of Medley: | ||
Fixed assets, net of accumulated depreciation of $1,816 and $1,667, respectively | $ 4,998 | $ 1,708 |
Security deposits | 1,975 | 3,034 |
Administrative fees receivable | 2,068 | 1,654 |
Deferred tax assets | 2,001 | 1,658 |
Due from affiliates | 2,133 | 1,486 |
Prepaid expenses and taxes | 3,078 | 2,293 |
Other | 2,058 | 1,182 |
Total other assets | 18,311 | 13,015 |
Accumulated depreciation | $ 1,816 | $ 1,667 |
LOANS PAYABLE (Schedule of Debt
LOANS PAYABLE (Schedule of Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 52,178 | $ 100,871 |
Credit Suisse Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 43,593 | 92,511 |
Debt instrument, unamortized discount and debt issuance costs | 1,207 | 2,489 |
Non-recourse Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, unamortized discount and debt issuance costs | 1,415 | 1,953 |
Non-recourse Promissory Notes [Member] | CNB Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 8,585 | $ 8,360 |
LOANS PAYABLE (Narrative) (Deta
LOANS PAYABLE (Narrative) (Details) | Aug. 19, 2014USD ($) | Aug. 14, 2014USD ($) | Apr. 30, 2012USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 31, 2016USD ($) | Aug. 31, 2016USD ($) | Mar. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 52,178,000 | $ 100,871,000 | |||||||
Ratio of indebtedness to net capital | 3.5 | ||||||||
Future principal payments due in 2019 | $ 54,800,000 | ||||||||
London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 1.00% | ||||||||
Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 15,000,000 | ||||||||
Initiation date | Aug. 19, 2014 | ||||||||
Term Loan Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayments of debt | $ 26,700,000 | $ 23,500,000 | |||||||
Credit Suisse Term Loan Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Issuance date | Aug. 14, 2014 | ||||||||
Debt instrument, face amount | $ 110,000,000 | ||||||||
Maturity date | Jun. 15, 2019 | ||||||||
Interest rate during the period | 6.50% | 6.50% | |||||||
Debt instrument, frequency of periodic payment | quarterly installments | ||||||||
Periodic principal payment | $ 1,400,000 | ||||||||
Voluntary maximum repayments | $ 33,000,000 | ||||||||
Long-term debt | $ 43,593,000 | $ 92,511,000 | |||||||
Debt instrument, unamortized discount (premium), net | 1,200,000 | 2,500,000 | |||||||
Interest expense | $ 6,700,000 | 7,000,000 | $ 2,800,000 | ||||||
Ratio of indebtedness to net capital | 3.5 | ||||||||
Credit Suisse Term Loan Facility [Member] | Federal Funds Effective Swap Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 0.50% | ||||||||
Credit Suisse Term Loan Facility [Member] | Eurodollar [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 5.50% | ||||||||
Credit Suisse Term Loan Facility [Member] | Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 4.50% | ||||||||
Non-recourse Promissory Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 10,000,000 | ||||||||
Interest expense | $ 1,400,000 | 1,400,000 | $ 1,400,000 | ||||||
Number of shares of common stock purchased (in shares) | shares | 1,108,033 | ||||||||
Unamortized debt issuance expense | $ 3,800,000 | ||||||||
Notes payable, fair value disclosure | $ 10,200,000 | 10,100,000 | |||||||
Nonrecourse Promissory Note Zero Interest [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 2,500,000 | ||||||||
Periodic principal payment | $ 300,000 | ||||||||
Long-term debt | $ 300,000 | ||||||||
Non Recourse Promissory Notes Due March 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturity date | Mar. 31, 2019 | ||||||||
Maximum [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 4.00% | ||||||||
Maximum [Member] | Revolving Credit Facility [Member] | Alternate Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 3.25% | ||||||||
Minimum [Member] | Credit Suisse Term Loan Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Spread on interest rate | 1.00% |
SENIOR UNSECURED DEBT (Details)
SENIOR UNSECURED DEBT (Details) - USD ($) | Oct. 18, 2016 | Dec. 31, 2016 | Aug. 09, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 52,178,000 | $ 100,871,000 | ||
Medley LLC 6.875 Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 28,600,000 | |||
Stated interest rate | 6.875% | |||
Discounted offering price (in dollars per share) | $ 24.45 | |||
Offering price (in dollars per share) | $ 25 | |||
Senior Subordinated Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 25,000,000 | |||
Stated interest rate | 6.875% | |||
Long-term debt | 49,800,000 | |||
Debt issuance costs, net of accumulated depreciation of $83 and $48, respectively | 3,800,000 | |||
Interest expense | 1,200,000 | |||
Notes payable, fair value disclosure | $ 51,600,000 |
ACCOUNTS PAYABLE, ACCRUED EXP46
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Components of Accounts Payable, Accrued Expenses, and Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts payable, accrued expenses and other liabilities of Medley: | ||
Accrued compensation and benefits | $ 7,978 | $ 9,107 |
Due to affiliates | 15,043 | 13,634 |
Revenue share payable | 6,472 | 6,774 |
Accrued interest | 558 | 1,304 |
Professional fees | 858 | 614 |
Deferred rent | 2,833 | 285 |
Deferred tax liabilities (Note 12) | 202 | 127 |
Accounts payable and other accrued expenses | 2,326 | 2,901 |
Total accounts payable, accrued expenses and other liabilities | $ 36,270 | $ 34,746 |
COMMITMENTS AND CONTINGENCIES47
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions | May 29, 2015 | Apr. 30, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Commitments And Contingencies [Line Items] | |||||
Lease expiration period | various times through September 2023 | ||||
Rent expense | $ 2.5 | $ 2.6 | $ 2.6 | ||
Moshe Barkat and MVF Holdings [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Debt default | $ 65 | ||||
Damages sought | 100 | ||||
Settlement amount | $ 1.5 | ||||
CK Pearl Funds' Complaint [Member] | Pending Litigation [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Damages sought | 125 | ||||
Non-recourse Promissory Notes [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Proceeds from issuance of debt | $ 10 | ||||
Present value of future cash flows expected to be paid | $ 4.4 | ||||
Contractual obligation | 6.5 | 6.8 | |||
Consolidated Funds [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Unfunded capital commitments | $ 0.5 | $ 0.3 |
COMMITMENTS AND CONTINGENCIES48
COMMITMENTS AND CONTINGENCIES (Future Minimum Rental Payments) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 2,683 |
2,018 | 2,704 |
2,019 | 2,710 |
2,020 | 2,833 |
2,021 | 2,430 |
Thereafter | 4,254 |
Total future minimum lease payments | $ 17,614 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2012 | Apr. 30, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Related Party Transaction [Line Items] | ||||||
Accrued fees and other revenue receivable | $ 2,068,000 | $ 1,654,000 | ||||
Equity method investments, at fair value | 14,895,000 | 16,360,000 | ||||
Available-for-sale securities | $ 17,009,000 | 0 | ||||
Publicly traded common stock (in shares) | 2,264,892 | |||||
Purchases of available for sale securities | $ 16,815,000 | 0 | $ 0 | |||
Long-term debt | $ 52,178,000 | 100,871,000 | ||||
Percentage of tax benefit under tax receivable agreement | 85.00% | |||||
Nonrecourse Promissory Note Zero Interest [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, face amount | $ 2,500,000 | |||||
Long-term debt | $ 300,000 | |||||
Periodic principal payment | 300,000 | |||||
MCC Admin Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Administrative services revenue | $ 3,900,000 | 4,000,000 | 3,700,000 | |||
Accrued fees and other revenue receivable | 900,000 | 900,000 | ||||
SIC Admin Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Administrative services revenue | 2,800,000 | 2,100,000 | 1,300,000 | |||
Accrued fees and other revenue receivable | 900,000 | 500,000 | ||||
Funds Admin Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Administrative services revenue | 900,000 | 200,000 | ||||
Accrued fees and other revenue receivable | 300,000 | 200,000 | ||||
SIC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investments, at fair value | 9,000,000 | 9,000,000 | ||||
SIC [Member] | Investment Advisory Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Gross proceeds benchmark | $ 300,000,000 | |||||
Percent of gross proceeds | 1.25% | |||||
Organization and offering expenses | 0 | 0 | 1,500,000 | |||
Reimbursements | 0 | 0 | 3,800,000 | |||
SIC [Member] | Expense Support and Reimbursement Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses percentage | 100.00% | |||||
Expense support and reimbursement agreement expenses | 16,100,000 | 6,400,000 | $ 5,000,000 | |||
Liability for ESA expenses | 7,900,000 | $ 7,200,000 | ||||
AOCI Attributable to Noncontrolling Interest [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Cumulative unrealized gains | $ 200,000 |
EARNINGS (LOSS) PER CLASS A S50
EARNINGS (LOSS) PER CLASS A SHARE (Basic and Diluted Income per Class A Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator | |||||||||||
Net income attributable to Medley Management Inc. | $ 625 | $ 220 | $ 58 | $ 94 | $ 526 | $ 272 | $ 1,039 | $ 1,274 | $ 997 | $ 3,111 | $ 1,695 |
Common Class A [Member] | |||||||||||
Numerator | |||||||||||
Net income attributable to Medley Management Inc. | 997 | 3,111 | 1,695 | ||||||||
Net income (loss) available to Class A common stockholders | $ 105 | $ 2,758 | $ 1,428 | ||||||||
Denominator | |||||||||||
Weighted average shares of Class A common stock outstanding (in shares) | 5,804,042 | 6,002,422 | 6,000,000 | ||||||||
Net income (loss) per Class A share (in dollars per share) | $ 0.02 | $ 0.46 | $ 0.24 | ||||||||
Participating Securities [Member] | |||||||||||
Numerator | |||||||||||
Less: Allocation to participating securities | $ (892) | $ (353) | $ (267) |
EARNINGS (LOSS) PER CLASS A S51
EARNINGS (LOSS) PER CLASS A SHARE (Narrative) (Details) - $ / shares | Nov. 10, 2016 | Aug. 09, 2016 | May 10, 2016 | Feb. 11, 2016 | Nov. 11, 2015 | Aug. 10, 2015 | Mar. 29, 2015 | Nov. 10, 2014 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Earnings Per Share [Abstract] | ||||||||||||
Dividends declared per Class A common stock (in dollars per share) | $ 0.2 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.2 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.8 | $ 0.60 | $ 0.20 | |
Antidilutive securities excluded from computation of earnings per share (shares) | 23,333,333 |
INCOME TAXES (Provision for Inc
INCOME TAXES (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
Federal | $ 272 | $ 1,546 | $ 486 |
State | 1,058 | 1,373 | 2,768 |
Total current provision | 1,330 | 2,919 | 3,254 |
Deferred | |||
Federal | 158 | (454) | 2 |
State and local | (425) | (450) | (728) |
Total deferred provision | (267) | (904) | (726) |
Provision for Income Taxes | $ 1,063 | $ 2,015 | $ 2,528 |
INCOME TAXES (Summary of Deferr
INCOME TAXES (Summary of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Tax goodwill | $ 605 | $ 597 |
Basis difference in partnership interest | 417 | 630 |
Unrealized losses | 44 | 55 |
Stock-based compensation | 216 | 101 |
Accrued expenses not currently deductible for tax purposes | 7 | 86 |
New York City unincorporated business tax credit carryforward | 512 | 0 |
Other liabilities | 200 | 189 |
Total deferred tax assets | 2,001 | 1,658 |
Deferred tax liabilities | ||
Accrued fee income | 147 | 68 |
Other | 55 | 59 |
Total deferred tax liabilities | 202 | 127 |
Net deferred tax assets | $ 1,799 | $ 1,531 |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Statutory to Effective Tax Rates) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 34.00% | 34.00% | 34.00% |
Income allocated to non-controlling interests | (28.90%) | (26.80%) | (32.90%) |
State and local corporate income taxes | 1.20% | 1.00% | 0.20% |
Partnership unincorporated business tax | 4.20% | 1.70% | 2.60% |
Permanent differences | (0.00%) | (2.90%) | (0.40%) |
Other | (0.80%) | 1.90% | 0.00% |
Effective tax rate | 9.70% | 8.90% | 3.50% |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Interest expense and penalties, less than $0.1 million in 2016 | $ 100,000 | $ 0 | $ 0 |
Uncertain tax positions | $ 0 | $ 0 | $ 0 |
COMPENSATION EXPENSE (Narrative
COMPENSATION EXPENSE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance fee compensation | $ 319 | $ 8,049 | $ 1,543 |
Performance fee compensation payable | $ 985 | 1,823 | |
Percentage vested from participants eligibility date | 100.00% | ||
Contributions as a percent of employee eligible wages | 3.00% | ||
Accrued contributions | $ 600 | 400 | 400 |
Shares authorized for grant | 4,500,000 | ||
Incentive Plan shares available for grant | 2,800,000 | ||
Stock-based compensation | $ 3,811 | 3,052 | 894 |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
RSU vesting period | 5 years | ||
Units outstanding, net of forfeitures | 1,400,000 | ||
Unvested RSU compensation cost not yet recognized | $ 11,100 | ||
Recognition period for unvested RSU compensation cost | 3 years 1 month 6 days | ||
Chief Executive Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum aggregate compensation | $ 5,000 | $ 3,000 | $ 3,000 |
COMPENSATION EXPENSE (Schedule
COMPENSATION EXPENSE (Schedule of RSU Activity) (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of RSUs | |||
Beginning Balance (in shares) | 1,130,804 | 1,197,915 | 0 |
Granted (in shares) | 597,283 | 188,404 | 1,203,515 |
Forfeited (in shares) | (44,200) | (244,868) | (5,600) |
Vested (in shares) | (31,404) | (10,647) | 0 |
Ending Balance (in shares) | 1,652,483 | 1,130,804 | 1,197,915 |
Weighted Average Grant Date Fair Value | |||
Beginning Balance (in dollars per share) | $ 16.56 | $ 17.91 | $ 0 |
Granted (in dollars per share) | 5.89 | 9.96 | 17.91 |
Forfeited (in dollars per share) | 17.24 | 17.99 | 18 |
Vested (in dollars per share) | 6.05 | 18 | 0 |
Ending Balance (in dollars per share) | $ 12.88 | $ 16.56 | $ 17.91 |
REDEEMABLE NON-CONTROLLING IN58
REDEEMABLE NON-CONTROLLING INTERESTS (Details) - USD ($) | Jun. 03, 2016 | Dec. 31, 2014 | Sep. 28, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2016 |
Redeemable Noncontrolling Interest [Line Items] | |||||||
Balance of redeemable non-controlling interest | $ 30,805,000 | $ 0 | |||||
Contributions to the joint venture | $ 33,726,000 | $ 121,246,000 | 12,000 | ||||
Purchases of available for sale securities | 16,815,000 | $ 0 | $ 0 | ||||
Remaining contributions included in restricted cash | 4,400,000 | ||||||
Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Investments and contributions | $ 10,000,000 | ||||||
SIC [Member] | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Fair value of non-controlling interest | $ 12,200,000 | ||||||
Balance of redeemable non-controlling interest | 13,300,000 | ||||||
Medley and ''Investors'' [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Investments and contributions | $ 50,000,000 | ||||||
DB MED INVESTOR I And II LLC [Member] | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Balance of redeemable non-controlling interest | 17,500,000 | ||||||
Percent of preferred distributions given to Investors | 8.00% | ||||||
Percent of Joint Venture profits given to Investors | 15.00% | ||||||
Period before Investors can redeem their interests | 7 years | ||||||
Contributions to the joint venture | $ 21,300,000 | ||||||
DB MED INVESTOR I And II LLC [Member] | Master Investment Agreement with DB MED Investor I LLC and DB MED Investor II LLC [Member] | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Investments and contributions | $ 40,000,000 |
QUARTERLY FINANCIAL DATA (una59
QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Revenues | $ 18,251 | $ 18,880 | $ 21,326 | $ 17,571 | $ 15,979 | $ 5,431 | $ 20,536 | $ 25,480 | $ 76,028 | $ 67,426 | $ 72,173 | |||
Expenses | 9,184 | 15,553 | 17,508 | 13,776 | 9,845 | 3,880 | 9,990 | 11,840 | 56,021 | 35,555 | 36,761 | |||
Total other income (expense), net | (1,595) | (2,036) | (2,714) | (2,647) | (2,467) | (2,757) | (1,875) | (2,125) | (8,992) | (9,224) | 36,516 | |||
Income (loss) before income taxes | 7,472 | 1,291 | 1,104 | 1,148 | 3,667 | (1,206) | 8,671 | 11,515 | 11,015 | 22,647 | 71,928 | |||
Net income (loss) | 6,700 | 1,214 | 1,002 | 1,036 | 3,605 | (1,093) | 7,753 | 10,367 | $ 17,690 | $ 51,710 | 9,952 | 20,632 | 69,400 | |
Net income attributable to Medley Management Inc. | $ 625 | $ 220 | $ 58 | $ 94 | $ 526 | $ 272 | $ 1,039 | $ 1,274 | $ 997 | $ 3,111 | $ 1,695 | |||
Net income (loss) per Class A common stock, Basic (in dollars per share) | $ 0.07 | $ 0 | $ (0.03) | $ (0.01) | $ 0.08 | $ 0.04 | $ 0.14 | $ 0.19 | $ 0.02 | $ 0.46 | $ 0.24 | [1] | ||
Net income (loss) per Class A common stock, Diluted (in dollars per share) | $ 0.07 | $ 0 | $ (0.03) | $ (0.01) | $ 0.08 | $ 0.04 | $ 0.14 | $ 0.19 | $ 0.02 | $ 0.46 | $ 0.24 | [1] | ||
Weighted average number of shares outstanding, Basic and Diluted (in shares) | 5,809,130 | 5,778,409 | 5,777,726 | 5,851,129 | 6,009,400 | 6,000,211 | 6,000,000 | 6,000,000 | 5,804,042 | 6,002,422 | 6,000,000 | |||
Consolidated Subsidiaries [Member] | ||||||||||||||
Net income (loss) attributable to non-controlling interests | $ 1,443 | $ 438 | $ 405 | $ 263 | $ 249 | $ (2,150) | $ (274) | $ 1,290 | $ 2,549 | $ (885) | $ 1,933 | |||
Medley LLC [Member] | ||||||||||||||
Net income (loss) attributable to non-controlling interests | $ 4,632 | $ 556 | $ 539 | $ 679 | $ 2,830 | $ 785 | $ 6,988 | $ 7,803 | $ 6,406 | $ 18,406 | $ 36,055 | |||
[1] | Based on net income attributable to Medley Management Inc. for the period September 29, 2014 through December 31, 2014. |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) | Feb. 22, 2017 | Feb. 09, 2017 | Jan. 18, 2017 | Dec. 31, 2016 | Oct. 31, 2016 | Aug. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | ||||||||
Dividends (in dollars per share) | $ 0.80 | $ 0.6 | $ 0.2 | |||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends (in dollars per share) | $ 0.20 | |||||||
Subsequent Event [Member] | Senior Notes Due 2024 [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, face amount | $ 34,500,000 | $ 34,500,000 | ||||||
Stated interest rate | 7.25% | 7.25% | ||||||
Discounted offering price (in dollars per share) | $ 25.25 | |||||||
Offering price (in dollars per share) | $ 25 | |||||||
Term Loan Credit Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt Instrument, Repurchased Face Amount | $ 26,700,000 | $ 23,500,000 | ||||||
Term Loan Credit Facility [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt Instrument, Repurchased Face Amount | $ 33,000,000 |
Uncategorized Items - mdly-2016
Label | Element | Value |
Partners' Capital Account, Distributions | us-gaap_PartnersCapitalAccountDistributions | $ 143,309,000 |
Member Units [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 26,753,000 |
Partners' Capital Account, Distributions | us-gaap_PartnersCapitalAccountDistributions | 120,621,000 |
Noncontrolling Interest [Member] | Consolidated Fund [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 22,902,000 |
Partners' Capital Account, Distributions | us-gaap_PartnersCapitalAccountDistributions | 22,688,000 |
Partners' Capital Account, Contributions | us-gaap_PartnersCapitalAccountContributions | 120,318,000 |
Noncontrolling Interest [Member] | Consolidated Subsidiaries [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 2,055,000 |
Partners' Capital Account, Contributions | us-gaap_PartnersCapitalAccountContributions | $ 928,000 |