v3.26.3
Derivative Instruments
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
See Note 14, Consolidated Company-Sponsored Investment Funds, for disclosure of derivative instruments held by our consolidated company-sponsored investment funds.

We enter various futures, forwards, options and swaps to economically hedge certain seed capital investments. Also, we have currency forwards that help us to economically hedge certain balance sheet exposures. We do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, Derivatives and Hedging.
The notional value and fair value as of September 30, 2026 and December 31, 2025 for derivative instruments not designated as hedging instruments were as follows:
Fair Value
Notional ValueDerivative AssetsDerivative Liabilities
(in thousands)
September 30, 2026:
Exchange-traded futures$202,002 $4,286 $194 
Currency forwards116,363 7,235 4,597 
Interest rate swaps5,575 682 — 
Credit default swaps440,454 2,368 10,447 
Total return swaps27,524 716 400 
Option swaps50,026 6,053 149 
Total derivatives$841,944 $21,340 $15,787 
December 31, 2025:
Exchange-traded futures$200,332 $832 $366 
Currency forwards88,910 5,073 6,102 
Interest rate swaps7,185 181 12 
Credit default swaps371,581 864 10,551 
Total return swaps157,940 1,140 419 
Option swaps50,196 4,895 165 
Total derivatives$876,144 $12,985 $17,615 

As of September 30, 2026 and December 31, 2025, the derivative assets and liabilities are included in both receivables and payables to brokers and dealers on our condensed consolidated statements of financial condition.

The gains and losses for derivative instruments for the three and nine months ended September 30, 2026 and 2025 recognized in investment gains (losses) in the condensed consolidated statements of income were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
(in thousands)
Exchange-traded futures$7,562 $(3,782)$1,313 $(7,415)
Currency forwards1,315 809 4,942 (4,966)
Interest rate swaps526 9 12 (301)
Credit default swaps254 (1,445)(1,740)(3,932)
Total return swaps590 168 (5,625)(9,209)
Option swaps898 (638)2,523 (2,906)
Net gains (losses) on derivative instruments$11,145 $(4,879)$1,425 $(28,729)

We may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. We minimize our counterparty exposure through a credit review and approval process. In addition, we have executed various collateral arrangements with counterparties to the over-the-counter derivative transactions that require both pledging and accepting collateral in the form of cash. As of September 30, 2026 and December 31, 2025, we held $6.8 million and $5.5 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in payables to brokers and dealers in our condensed consolidated statements of financial condition.

Although notional amount typically is utilized as the measure of volume in the derivatives market, it is not used as a measure of credit risk. Generally, the current credit exposure of our derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received. A derivative with positive value (a derivative asset) indicates existence of credit risk because the counterparty would owe us if the contract were closed. Alternatively, a derivative contract with negative value (a derivative liability) indicates we would owe money to the counterparty if the contract were closed. Generally, if
there is more than one derivative transaction with a single counterparty, a master netting arrangement exists with respect to derivative transactions with that counterparty to provide for aggregate net settlement.

Our standardized contracts for over-the-counter derivative transactions, known as ISDA master agreements, provide for collateralization. As of September 30, 2026 and December 31, 2025, we delivered $10.8 million and $10.3 million, respectively, of cash collateral into brokerage accounts. We report this cash collateral in cash and cash equivalents in our condensed consolidated statement of financial condition.