v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 11. Fair Value Measurements

Financial Instruments not recognized at Fair Value

The Company measures certain assets and liabilities at fair value on a recurring basis which are discussed below. Our financial instruments not recognized at fair value were as follows:

 

 

As of March 31, 2026

 

 

As of December 31, 2025

 

 

 

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

Fair Value Level

 

Reference

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due from related party - Advisory Agreements

 

$

86,899

 

 

$

59,964

 

 

$

83,900

 

 

$

55,455

 

3

 

Note 13

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Debt Obligations

 

$

375,009

 

 

$

375,009

 

 

$

373,204

 

 

$

373,204

 

2

 

Note 12

Financial Instruments recognized at Fair Value

Earnouts associated with the acquisition of Qualitas

On April 4, 2025, included in total consideration of the Qualitas acquisition was an earnout payment not to exceed €31.7 million. The amount ultimately owed to the sellers is based on the run-rate net revenue as of December 31, 2027 from newly launched Qualitas funds post-acquisition. Any earnout payment will be paid no later than December 31, 2028 in a mix of cash and Class A common stock at the sellers' election, with no more than 65% payable in cash. As of March 31, 2026, no earnout payment has been earned or paid. The determined risk adjusted discount rate for the contingent consideration of 11.0% and 13.5% were the significant unobservable inputs as of March 31, 2026 and December 31, 2025, respectively. Total remeasurement gain recognized for the three months ended March 31, 2026 and 2025 was $4.0 million and $0, respectively, which was included in contingent consideration gain on the Consolidated Statements of Operations.

Derivative instruments and hedging activities

In September 2025, the Company entered into an interest rate collar agreement to hedge the variability in cash flows associated with its variable-rate borrowings under the Amended and Restated Credit Agreement (as defined below). The collar has a notional amount of $211.3 million, effective as of September 30, 2025, and a termination date of August 1, 2028. The collar references the 3-month United States Dollar ("USD") SOFR Chicago Mercantile Exchange ("CME") term rate ("USD-SOFR-CME"), with a cap strike rate of 4.25% and a floor strike rate of 2.31%.

The Company records the effective portion of changes in the fair value of its cash flow hedges to other comprehensive income, net of tax, and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized. Any changes in fair value of hedges that are determined to be ineffective are immediately reclassified from accumulated other comprehensive income into earnings. For the three months ended March 31, 2026 and 2025, the Company recorded an unrealized gain on interest rate derivatives, net of tax for $0.2 million and $0, respectively, which is included in other comprehensive income. The Company estimates that an insignificant amount currently recorded in accumulated other comprehensive income will be recognized in earnings over the next 12 months.

When derivatives are used, the Company is exposed to credit loss in the event of non-performance by the counterparties; non-performance risk is incorporated into the valuation of the hedges, but non-performance by any of our derivative counterparties is not anticipated. ASC 815 requires companies to recognize all derivative instruments as either

assets or liabilities at fair value in the balance sheet. The fair values of the interest rate derivatives are based on quoted market prices for similar instruments from commercial banks, which are significant observable inputs or Level 2 inputs.

The amounts included in accumulated other comprehensive income will be reclassified to interest expense should the hedges no longer be considered effective. No amount of ineffectiveness was included in net income for the three months ended March 31, 2026. The Company will continue to assess the effectiveness of the hedges on an ongoing basis.

The following table presents all recurring items measured at fair value as of March 31, 2026:

 

 

As of March 31, 2026

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

-

 

 

$

219

 

 

$

-

 

 

$

219

 

Total assets

 

$

-

 

 

$

219

 

 

$

-

 

 

$

219

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration obligation

 

$

-

 

 

$

-

 

 

$

11,181

 

 

$

11,181

 

Total liabilities

 

$

-

 

 

$

-

 

 

$

11,181

 

 

$

11,181

 

For the liabilities and assets presented in the table above, there were no changes in fair value hierarchy levels during the three months ended March 31, 2026.

The following table presents all recurring items measured at fair value as of December 31, 2025:

 

 

As of December 31, 2025

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

-

 

 

$

74

 

 

$

-

 

 

$

74

 

Total assets

 

$

-

 

 

$

74

 

 

$

-

 

 

$

74

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration obligation

 

$

-

 

 

$

-

 

 

$

15,599

 

 

$

15,599

 

Total liabilities

 

$

-

 

 

$

-

 

 

$

15,599

 

 

$

15,599

 

The changes in the fair value of Level III financial instruments are set forth below:

Contingent Consideration Liability

 

 

 

 

 

For the Three Months Ended March 31,

 

 

 

 

 

 

 

2026

 

 

2025

 

Balance, beginning of year:

 

 

 

 

 

$

15,599

 

 

$

-

 

   Additions

 

 

 

 

 

 

-

 

 

 

-

 

Change in fair value

 

 

 

 

 

 

(4,016

)

 

 

-

 

   Impact of exchange rate movements

 

 

 

 

 

 

(402

)

 

 

-

 

Balance, end of period:

 

 

 

 

 

$

11,181

 

 

$

-

 

Until transferred out of Level 3 fair value measurement, the fair value of the contingent consideration liability represents the fair value of future payments upon satisfaction of performance targets. The assumptions used in the analysis are inherently subjective; therefore, the ultimate amount of the contingent consideration liability primarily relates to the expected future payments of obligations with a discount rate applied. The contingent consideration liability is included in contingent consideration on the Consolidated Balance Sheets.