Note 5 - Derivative Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
Note 5 — Derivative Instruments
Derivative Instruments Used to Hedge Seeded Investment Products
We maintain an economic hedge program that uses derivative instruments to mitigate against market exposure of certain seeded investments by using index and commodity futures (“futures”), contracts for difference, total return swaps, credit default swaps and To-Be-Announced securities (“TBAs”). Certain foreign currency exposures associated with our seeded investment products are also hedged by using foreign currency forward contracts.
We were party to the following derivative instruments as of June 30, 2025, and December 31, 2024 (in millions):
The derivative instruments are not designated as hedges for accounting purposes. Changes in fair value of the derivatives are recognized in investment gains, net in our Condensed Consolidated Statements of Comprehensive Income. The changes in fair value of the derivative instruments for the three and six months ended June 30, 2025 and 2024, are summarized as follows (in millions):
Derivative assets and liabilities are generally recognized on a gross basis and included in other current assets or in accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets. The derivative liabilities as of June 30, 2025, and December 31, 2024, are summarized as follows (in millions):
As of June 30, 2025, and December 31, 2024, the derivative assets in our Condensed Consolidated Balance Sheets were insignificant.
In addition to using derivative instruments to mitigate against market exposure of certain seeded investments, we also engage in short sales of securities to mitigate against market exposure of certain seed investments. As of June 30, 2025, and December 31, 2024, the fair value of securities sold but not yet purchased was insignificant. The cash received from the short sale and the obligation to repurchase the shares are classified in other current assets and in accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, respectively. Fair value adjustments are recognized in investment gains, net in our Condensed Consolidated Statements of Comprehensive Income.
Derivative Instruments Used in Consolidated Seeded Investment Products
Certain of our consolidated seeded investment products use derivative instruments to contribute to the achievement of defined investment objectives. These derivative instruments are classified within other current assets or in accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets. Gains and losses on these derivative instruments are classified within investment gains, net in our Condensed Consolidated Statements of Comprehensive Income.
Our consolidated seeded investment products were party to the following derivative instruments as of June 30, 2025, and December 31, 2024 (in millions):
As of June 30, 2025, and December 31, 2024, the derivative assets and liabilities used in consolidated seeded investment products in our Condensed Consolidated Balance Sheets were insignificant.
Derivative Instruments — Foreign Currency Hedging Program
We maintain a foreign currency hedging program to take reasonable measures to minimize the income statement effects of foreign currency remeasurement of monetary balance sheet accounts. The program uses foreign currency forward contracts and swaps to achieve its objectives, and it is considered an economic hedge for accounting purposes.
The notional value of the foreign currency forward contracts and swaps as of June 30, 2025, and December 31, 2024, is summarized as follows (in millions):
The derivative assets and liabilities are generally recognized on a gross basis and included in other current assets or in accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets. As of June 30, 2025, and December 31, 2024, the derivative assets and liabilities were insignificant.
Changes in fair value of the derivatives are recognized in other non-operating income, net in our Condensed Consolidated Statements of Comprehensive Income. Foreign currency remeasurement is also recognized in other non-operating income, net in our Condensed Consolidated Statements of Comprehensive Income. For the three and six months ended June 30, 2025 and 2024, the change in fair value of the foreign currency forward contracts and swaps was insignificant.
Derivative Instruments — Warrants
Equity warrants issued are classified as derivative instruments and included in other non-current liabilities in our Condensed Consolidated Balance Sheets. As of June 30, 2025, the derivative liability was $22.1 million. Fair value adjustments associated with the warrant liability will be recognized in other non-operating income, net, in our Condensed Consolidated Statements of Comprehensive Income.
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