v3.26.1
Fair Value Disclosures
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value Disclosures
The Company classifies its fair value measurements using a three-tiered fair value hierarchy. The basis of the tiers is dependent upon the various “inputs” used to determine the fair value of the Company’s assets and liabilities. Fair value is considered the value using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The inputs are summarized in the three broad levels listed below:
•Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
•Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
Level 3 Valuation Techniques

In the absence of observable market prices, the Company values financial instruments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist;
management’s determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors. Financial instruments for which market prices are not observable include:
•Business Combination Earn-Out Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future share prices and the implied earn-out payment discounted using the risk-free rate.
•TRA Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future taxable income, share prices, and the implied TRA payments discounted using the liability discount rate which is estimated based on the Company’s credit rating.
•EEA Earn-Out Liability - The Company’s valuation approach utilized a Discounted Cash Flow approach to determine the fair value using the liability discount rate which is estimated based on the Company’s credit quality.
•Envoi Earn-Out Consideration Liability - The Company’s valuation approach utilized a risk-adjusted Discounted Cash Flow approach to determine the fair value using the liability discount rate which is estimated based on the Company’s credit quality rating.
•Envoi Earn-Out Growth Consideration Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future revenue and the implied earn-out payment discounted using the liability discount rate which is estimated based on the Company’s credit quality rating.
•Kontora Earn-Out Liability - The Company’s valuation approach utilized a Discounted Cash Flow approach to determine the fair value using the liability discount rate which is estimated based on the Kontora subgroups’ weighted average cost of capital for a useful life of ten years.
•Preferred Stock Tranche Liability - The fair value of the Allianz Tranche Right is determined based on Level 3 inputs using a binomial lattice model. At each node of the binomial lattice model, the decision to exercise the Allianz Tranche Right is determined based on if the value of the Series A Preferred Stock at such node is greater than the right’s strike price of $1,000 per share. At nodes where the Allianz Tranche Right is exercised, the resulting payoff of the right is discounted back to the prior node at the risk-free rate. The fair value of the Allianz Tranche Right is estimated by backward inducting values in the binomial lattice model to the initial node. A probability-weighted assessment is also included as part of the inputs to the valuation of the Allianz Tranche Right.
•Investments in External Strategic Managers - The Company utilized a Discounted Cash Flow approach to determine the fair value of the External Strategic Managers. The discount rate selection for each investment was calibrated using the implied internal rate of return as of the original investment date, adjusted for certain market- and company-specific factors. The selected long-term growth rate for each investment was based on long-term GDP growth rates in the geographic locations of the underlying External Strategic Manager, with consideration for general growth in the asset management industry.
Refer to the valuation methodologies table below for further analysis of Level 3 valuations.
The Company’s financial instruments measured at fair value in the Condensed Consolidated Statements of Financial Position as of March 31, 2026, and December 31, 2025, have been categorized based on the fair value hierarchy as follows:
As of March 31, 2026
Level 1Level 2Level 3
(Dollars in Thousands)Quoted PricesObservable InputsUnobservable InputsTotal
Assets:
Mutual funds$38 $— $— $38 
Exchange-traded funds and BDC funds37 — — 37 
Investments – External Strategic Managers — — 148,568 148,568 
Investments – Affiliated Funds (1)
— — — 1,092 
   Other6 — — 6 
Total$81 $— $148,568 $149,741 
Liabilities:
Preferred stock tranche liability$— $— $1,410 $1,410 
Earn-out liabilities— — 47,675 47,675 
TRA liability (2)
— — 8,584 8,584 
Derivative liability$— $— $57,669 $57,669 
As of December 31, 2025
Level 1Level 2Level 3
(Dollars in Thousands)Quoted PricesObservable InputsUnobservable InputsTotal
Assets:
Mutual funds$42 $— $— $42 
Exchange-traded funds and BDC funds35 — — 35 
Investments – External Strategic Managers
— — 142,976 142,976 
Investments – Affiliated Funds (1)
— — — 1,080 
Other6 57 — 63 
Total$83 $57 $142,976 $144,196 
Liabilities:
Preferred stock tranche liability$— $— $2,410 $2,410 
Earn-out liabilities— — 57,411 57,411 
TRA liability (2)
— — 8,785 8,785 
Total$— $— $68,606 $68,606 
(1) Investments in Affiliated Funds are measured at fair value using the NAV (or its equivalent) practical expedient. The Company’s investments in Affiliated Funds represent interests that do not trade in an active market and are valued using the NAV of each investment company as reported and without adjustment. The Company does not have any commitments to the Affiliated Funds and redemptions are permitted on a monthly basis and require 30 days’ notice. The strategies of the Affiliated Funds primarily focus on near-dated, hard catalyst events that typically involve hostile deals, proposals, minority interest buy-ins, leverage buyouts, activism, spin-offs, recapitalizations, and agreed upon deals. The investments held in the Affiliated Funds are primarily highly liquid and marketable securities. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Condensed Consolidated Statements of Financial Position.
(2) The Company carries a portion of its TRA liability at fair value equal to the expected future payments under the TRA.
Level 3 Rollforwards
The following table sets forth a summary of changes in the fair value of Level 3 financial instruments during the three months ended March 31, 2026 and December 31, 2025:
As of March 31, 2026
(Dollars in Thousands)Beginning balanceIssuancesSettlements
Net (gains) losses (1)
Other comprehensive lossEnding balance
Assets:
Investments – External Strategic Managers$142,976 — — 5,592 — $148,568 
Liabilities:
Preferred stock tranche liability$2,410 — — (1,000)— $1,410 
Business combination earn-out liability$15,268 — — (10,193)— $5,075 
EEA earn-out liability$25,259 — — 1,067 — $26,326 
Envoi earn-out consideration liability$8,220 — — (420)— $7,800 
Envoi earn-out growth consideration liability$1,620 — — (170)— $1,450 
Kontora earn-out liability$7,044 — — 135 (155)$7,024 
TRA liability $8,785 — — (201)— $8,584 
As of December 31, 2025
(Dollars in Thousands)Beginning balanceIssuancesSettlements
Net (gains) losses (1)
Other comprehensive incomeEnding balance
Assets:
Investments – External Strategic Managers$147,568 — — (4,592)— $142,976 
Liabilities:
Preferred stock tranche liability$3,940 — — (1,530)— $2,410 
Business combination earn-out liability$23,848 — — (8,580)— $15,268 
EEA earn-out liability$29,871 — (7,387)2,775 — $25,259 
Envoi earn-out consideration liability$9,600 — (2,953)1,573 — $8,220 
Envoi earn-out growth consideration liability$1,320 — — 300 — $1,620 
Kontora earn-out liability$— 5,743 — 1,059 242 $7,044 
TRA liability $9,378 — — (593)— $8,785 
(1) Realized and unrealized gains/(losses) on Investments - External Strategic Managers, Preferred stock tranche liability, earn-out liabilities and TRA liability are recorded in Gain (loss) on investments, Gain (loss) on preferred stock tranche liability, Gain (loss) on earnout liabilities, and Gain (loss) on TRA, respectively, in the Condensed Consolidated Statements of Operations.
During the periods ended March 31, 2026 and December 31, 2025, there were no transfers from Level 3 to Level 1.
Valuation Methodologies for Fair Value Measurements Categorized within Level 3 as of March 31, 2026

(Dollars in Thousands)Fair
Value		Valuation
Techniques		Unobservable
Inputs		RangesImpact to Valuation from an Increase in Input
Level 3 Assets:
Investments – External Strategic Managers$148,568 Discounted Cash FlowDiscount rate
17.0% -30.0%
Lower
Long-term growth rate4.0 %Higher
Level 3 Liabilities:
TRA liability$8,584 Monte CarloVolatility60.0 %Lower
Correlation22.5 %Higher
Cost of debt range
11.6% - 12.8%
Lower
Equity risk premium
5.5% - 13.2%
Lower
Business Combination earn-out liability$5,075 Monte CarloVolatility60.0 %Higher
Risk-free rate3.8 %Higher
EEA earn-out liability$26,326 Discounted Cash FlowEBITDA Discount Rate14.3 %Lower
Risk-free rate3.8 %Lower
Credit spread10.4 %Lower
Envoi earn-out consideration liability$7,800 Discounted Cash FlowRevenue risk-adjusted discount rate11.5 %Lower
Risk-free rate3.7 %Lower
Credit spread10.1 %Lower
Envoi earn-out growth consideration liability$1,450 Monte CarloMetric volatility39.0 %Lower
Risk-free rate3.7 %Lower
Revenue discount rate11.5 %Lower
Credit Risk Adjusted Discount Rate13.8 %Lower
Kontora earn-out liability$7,024 Discounted Cash FlowDiscount rate11.0 %Lower
Preferred stock tranche liability$1,410 Binomial lattice modelVolatility52.5 %Lower
Probability of option exercise50.0 %Higher
Risk-free rate4.9 %Lower
Credit spread10.4 %Lower
Valuation Methodologies for Fair Value Measurements Categorized within Level 3 as of December 31, 2025
(Dollars in Thousands)Fair
Value		Valuation
Techniques		Unobservable
Inputs		RangesImpact to Valuation from an Increase in Input
Level 3 Assets:
Investments – External Strategic Managers$142,976 Discounted Cash FlowDiscount rate
17.0% -30%
Lower
Long-term growth rate4.0 %Higher
Level 3 Liabilities:
TRA liability$8,785 Monte CarloVolatility55.0 %Lower
Correlation22.5 %Higher
Cost of debt range
10.6% - 11.9%
Lower
Equity risk premium
5.8% - 13.2%
Lower
Business Combination earn-out liability$15,268 Monte CarloVolatility65.0 %Higher
Risk-free rate3.5 %Higher
EEA earn-out liability$25,259 Discounted Cash FlowEBITDA Discount Rate14.6 %Lower
Risk-free rate3.5 %Lower
Credit spread9.3 %Lower
Envoi earn-out consideration liability$8,220 Discounted Cash FlowRevenue risk-adjusted discount rate11.0 %Lower
Risk-free rate3.4 %Lower
Credit spread9.1 %Lower
Envoi earn-out growth consideration liability$1,620 Monte CarloMetric volatility29.0 %Lower
Risk-free rate3.4 %Lower
Revenue discount rate11.0 %Lower
Credit Risk Adjusted Discount Rate12.5 %Lower
Kontora earn-out liability$7,044 Discounted Cash FlowDiscount rate11.7 %Lower
Preferred stock tranche liability$2,410 Binomial lattice modelVolatility47.5 %Lower
Probability of option exercise50.0 %Higher
Risk-free rate4.8 %Lower
Credit spread9.3 %Lower
The carrying value of financial instruments not measured at fair value, which consists primarily of cash and restricted cash, approximates fair value.
The Company measures certain assets and liabilities at fair value on a non-recurring basis, such as assets acquired and liabilities assumed in a business combination.