falsedesktopOZM2020-09-30000140325620000181{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "☑\tQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\tFor the quarterly period ended September 30 2020\n\tor\n☐\tTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\tFor the transition period from ________ to ________\n", "q10k_tbl_1": "Large accelerated filer\t☐\tAccelerated filer\t☑\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\nIf an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\t\t\t☐\n", "q10k_tbl_2": "\t\tPage\nPART I - FINANCIAL INFORMATION\t\t\nItem 1.\tFinancial Statements (Unaudited)\t5\n\tConsolidated Balance Sheets as of September 30 2020 and December 31 2019\t5\n\tConsolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30 2020 and 2019\t6\n\tConsolidated Statements of Changes in Shareholders' Equity (Deficit) for the Three and Nine Months Ended September 30 2020 and 2019\t7\n\tConsolidated Statements of Cash Flows for the Nine Months Ended September 30 2020 and 2019\t9\n\tNotes to Consolidated Financial Statements\t11\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t39\nItem 3.\tQuantitative and Qualitative Disclosures about Market Risk\t76\nItem 4.\tControls and Procedures\t77\nPART II - OTHER INFORMATION\t\t\nItem 1.\tLegal Proceedings\t79\nItem 1A.\tRisk Factors\t79\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t80\nItem 3.\tDefaults upon Senior Securities\t80\nItem 4.\tMine Safety Disclosures\t80\nItem 5.\tOther Information\t80\nItem 6.\tExhibits\t82\nSignatures\t\t83\n", "q10k_tbl_3": "2007 Offerings\tRefers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited a wholly owned indirect subsidiary of Dubai Holdings LLC\nactive executive managing directors\tExecutive managing directors who remain active in our business\nAnnual Report\tOur annual report on Form 10-K for the year ended December 31 2019 as amended dated February 25 2020 and filed with the SEC\nClass A Shares\tOur Class A Shares representing Class A common stock of Sculptor Capital Management Inc. which are publicly traded and listed on the NYSE\nClass B Shares\tClass B Shares of Sculptor Capital Management Inc. which are not publicly traded are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares\nCLOs\tCollateralized loan obligations\nthe Company Sculptor Capital the firm we us our\tRefers unless the context requires otherwise to the Registrant and its consolidated subsidiaries including the Sculptor Operating Group\nExchange Act\tSecurities Exchange Act of 1934 as amended\nexecutive managing directors\tThe current executive managing directors of the Company and except where the context requires otherwise also includes certain executive managing directors who are no longer active in our business\nfunds\tThe multi-strategy funds dedicated credit funds including opportunistic credit funds and Institutional Credit Strategies products real estate funds and other alternative investment vehicles for which we provide asset management services\nGAAP\tU.S. generally accepted accounting principles\nGroup A Units\tRefers collectively to one Class A operating group unit in each of the Sculptor Operating Partnerships. Group A Units are limited partner interests held by our executive managing directors\nGroup A-1 Units\tRefers collectively to one Class A-1 operating group unit in each of the Sculptor Operating Partnerships. Group A-1 Units are limited partner interests held by our executive managing directors\nGroup B Units\tRefers collectively to one Class B operating group unit in each of the Sculptor Operating Partnerships. Group B Units are limited partner interests held by Sculptor Corp\nGroup D Units\tRefers collectively to one Class D operating group unit in each of the Sculptor Operating Partnerships. Group D Units are limited partner interests held by our executive managing directors\nGroup E Units\tRefers collectively to one Class E operating group unit in each of the Sculptor Operating Partnerships. Group E Units are limited partner interests held by our executive managing directors\n", "q10k_tbl_4": "Group P Units\tRefers collectively to one Class P operating group unit in each of the Sculptor Operating Partnerships. Group P Units are limited partner interests held by our executive managing directors\nInstitutional Credit Strategies\tOur asset management platform that invests in performing credits including leveraged loans high-yield bonds private credit/bespoke financing and investment grade credit via CLOs aircraft securitizations collateralized bond obligations and other customized solutions\nIPO\tOur initial public offering of 3.6 million Class A Shares that occurred in November 2007\nNYSE\tNew York Stock Exchange\nPartner Equity Units\tRefers collectively to the Group A Units Group E Units and Group P Units\nPreferred Units\tOne Class A cumulative preferred unit in each of the Sculptor Operating Partnerships collectively represents one \"Preferred Unit.\" Certain of our executive managing directors collectively own 100% of the Preferred Units. Preferred Units issued in 2016 and 2017 are collectively referred to as \"2016 Preferred Units.\" Preferred Units issued in 2019 are referred to as \"2019 Preferred Units.\"\nPSUs\tClass A performance-based RSUs\nRecapitalization\tRefers to the recapitalization of our business that occurred in February 2019. As part of the Recapitalization a portion of the interests held by our active and former executive managing directors were reallocated to existing members of senior management. In addition we restructured the previously outstanding senior debt and Preferred Units\nRegistrant\tSculptor Capital Management Inc. a Delaware corporation\nRSUs\tClass A restricted share units\nSculptor Corp\tSculptor Capital Holding Corporation a Delaware corporation\nSculptor Operating Group\tRefers collectively to the Sculptor Operating Partnerships and their consolidated subsidiaries\nSculptor Operating Group Units\tRefers collectively to Sculptor Operating Group A B D E and P Units\nSculptor Operating Partnerships\tRefers collectively to Sculptor Capital LP Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP\nSEC\tU.S. Securities and Exchange Commission\nSecurities Act\tSecurities Act of 1933 as amended\nSpecial Investments\tInvestments that we as investment manager believe lack a readily ascertainable market value are illiquid or should be held until the resolution of a special event or circumstance\n", "q10k_tbl_5": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nAssets\t\t\nCash and cash equivalents\t290297\t240938\nRestricted cash\t3578\t4501\nInvestments (includes assets measured at fair value of $340814 and $329435 including assets sold under agreements to repurchase of $101843 and $98085 as of September 30 2020 and December 31 2019 respectively)\t436095\t411426\nIncome and fees receivable\t37708\t215395\nDue from related parties\t11523\t15355\nDeferred income tax assets\t333999\t310557\nOperating lease assets\t107585\t115810\nOther assets net\t75003\t82608\nAssets of consolidated funds:\t\t\nOther assets of consolidated funds\t737\t649\nTotal Assets\t1296525\t1397239\nLiabilities and Shareholders' Equity\t\t\nLiabilities\t\t\nCompensation payable\t67506\t187180\nUnearned incentive income\t66892\t60798\nDue to related parties\t194975\t211915\nOperating lease liabilities\t118091\t128043\nDebt obligations\t258795\t286728\nSecurities sold under agreements to repurchase\t101892\t97508\nOther liabilities\t176365\t59217\nLiabilities of consolidated funds:\t\t\nOther liabilities of consolidated funds\t443\t389\nTotal Liabilities\t984959\t1031778\nCommitments and Contingencies (Note 18)\t\t\nRedeemable Noncontrolling Interests (Note 4)\t155598\t150000\nShareholders' Equity\t\t\nClass A Shares par value $0.01 per share 100000000 and 100000000 shares authorized 22557205 and 21284945 shares issued and outstanding as of September 30 2020 and December 31 2019 respectively\t226\t213\nClass B Shares par value $0.01 per share 75000000 and 75000000 shares authorized 32820413 and 29208952 shares issued and outstanding as of September 30 2020 and December 31 2019 respectively\t328\t292\nAdditional paid-in capital\t150831\t117936\nAccumulated deficit\t(396077)\t(343759)\nShareholders' deficit attributable to Class A Shareholders\t(244692)\t(225318)\nShareholders' equity attributable to noncontrolling interests\t400660\t440779\nTotal Shareholders' Equity\t155968\t215461\nTotal Liabilities Redeemable Noncontrolling Interests and Shareholders' Equity\t1296525\t1397239\n", "q10k_tbl_6": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nRevenues\t\t\t\t\t\t\t\t\t\t\nManagement fees\t68053\t62956\t195389\t187979\t\t\t\t\t\t\nIncentive income\t41525\t30423\t89085\t118378\t\t\t\t\t\t\nOther revenues\t2316\t3646\t7693\t12458\t\t\t\t\t\t\nIncome of consolidated funds\t58\t1820\t90\t6732\t\t\t\t\t\t\nTotal Revenues\t111952\t98845\t292257\t325547\t\t\t\t\t\t\nExpenses\t\t\t\t\t\t\t\t\t\t\nCompensation and benefits\t65030\t78343\t197739\t244767\t\t\t\t\t\t\nInterest expense\t4488\t6323\t14944\t19054\t\t\t\t\t\t\nGeneral administrative and other\t26465\t48272\t203786\t114487\t\t\t\t\t\t\nExpenses of consolidated funds\t34\t507\t53\t646\t\t\t\t\t\t\nTotal Expenses\t96017\t133445\t416522\t378954\t\t\t\t\t\t\nOther Income (Loss)\t\t\t\t\t\t\t\t\t\t\nChanges in tax receivable agreement liability\t0\t0\t278\t5362\t\t\t\t\t\t\nNet losses on early retirement of debt\t0\t(218)\t(693)\t(6271)\t\t\t\t\t\t\nNet gains (losses) on investments\t8157\t(2169)\t3266\t3668\t\t\t\t\t\t\nNet (losses) gains of consolidated funds\t0\t(460)\t0\t3768\t\t\t\t\t\t\nTotal Other Income (Loss)\t8157\t(2847)\t2851\t6527\t\t\t\t\t\t\nIncome (Loss) Before Income Taxes\t24092\t(37447)\t(121414)\t(46880)\t\t\t\t\t\t\nIncome taxes\t9397\t(1446)\t(17971)\t12074\t\t\t\t\t\t\nConsolidated and Comprehensive Net Income (Loss)\t14695\t(36001)\t(103443)\t(58954)\t\t\t\t\t\t\nLess: Net (income) loss attributable to noncontrolling interests\t(4393)\t11435\t63552\t26653\t\t\t\t\t\t\nLess: Net income attributable to redeemable noncontrolling interests\t0\t(574)\t0\t(8745)\t\t\t\t\t\t\nNet Income (Loss) Attributable to Sculptor Capital Management Inc.\t10302\t(25140)\t(39891)\t(41046)\t\t\t\t\t\t\nChange in redemption value of Preferred Units\t(2285)\t0\t(5598)\t44364\t\t\t\t\t\t\nNet Income (Loss) Attributable to Class A Shareholders\t8017\t(25140)\t(45489)\t3318\t\t\t\t\t\t\nEarnings (Loss) per Class A Share\t\t\t\t\t\t\t\t\t\t\nEarnings (Loss) per Class A Share - basic\t0.35\t(1.20)\t(2.02)\t0.16\t\t\t\t\t\t\nEarnings (Loss) per Class A Share - diluted\t0.25\t(1.20)\t(2.71)\t0.12\t\t\t\t\t\t\nWeighted-average Class A Shares outstanding - basic\t22729285\t20907021\t22542047\t20703211\t\t\t\t\t\t\nWeighted-average Class A Shares outstanding - diluted\t49737060\t20907021\t38559963\t28165978\t\t\t\t\t\t\n", "q10k_tbl_7": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nNumber of Class A Shares\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t22311432\t20631750\t21284945\t19905126\t\t\t\t\t\t\nEquity-based compensation\t245773\t117556\t1272260\t844180\t\t\t\t\t\t\nEnding Balance\t22557205\t20749306\t22557205\t20749306\t\t\t\t\t\t\nNumber of Class B Shares\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t32820414\t29208952\t29208952\t29458948\t\t\t\t\t\t\nEquity-based compensation\t(1)\t0\t3611461\t(249996)\t\t\t\t\t\t\nEnding Balance\t32820413\t29208952\t32820413\t29208952\t\t\t\t\t\t\nClass A Shares Par Value\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t223\t206\t213\t0\t\t\t\t\t\t\nEquity-based compensation\t3\t1\t13\t2\t\t\t\t\t\t\nReclassification upon corporate conversion\t0\t0\t0\t205\t\t\t\t\t\t\nEnding Balance\t226\t207\t226\t207\t\t\t\t\t\t\nClass B Shares Par Value\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t328\t292\t292\t0\t\t\t\t\t\t\nEquity-based compensation\t0\t0\t36\t0\t\t\t\t\t\t\nReclassification upon corporate conversion\t0\t0\t0\t292\t\t\t\t\t\t\nEnding Balance\t328\t292\t328\t292\t\t\t\t\t\t\nAdditional Paid-in Capital\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t142288\t70875\t117936\t3135841\t\t\t\t\t\t\nDividend equivalents on Class A restricted share units\t(61)\t483\t814\t961\t\t\t\t\t\t\nEquity-based compensation net of taxes\t10889\t29058\t37679\t69376\t\t\t\t\t\t\nReclassification upon corporate conversion\t0\t0\t0\t(3235728)\t\t\t\t\t\t\nImpact of changes in Sculptor Operating Group ownership\t0\t0\t0\t(124)\t\t\t\t\t\t\nReallocation of equity and income tax effects of Recapitalization\t0\t0\t0\t35408\t\t\t\t\t\t\nAmendment to tax receivable agreement\t0\t0\t0\t50318\t\t\t\t\t\t\nChange in redemption value of Preferred Units\t(2285)\t0\t(5598)\t44364\t\t\t\t\t\t\nEnding Balance\t150831\t100416\t150831\t100416\t\t\t\t\t\t\n", "q10k_tbl_8": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nAccumulated Deficit\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t(406440)\t(358204)\t(343759)\t(3564727)\t\t\t\t\t\t\nCash dividends declared on Class A Shares\t0\t(6631)\t(11613)\t(18955)\t\t\t\t\t\t\nDividend equivalents on Class A restricted share units\t61\t(483)\t(814)\t(961)\t\t\t\t\t\t\nReclassification upon corporate conversion\t0\t0\t0\t3235231\t\t\t\t\t\t\nComprehensive net income (loss) excluding amounts attributable to redeemable noncontrolling interests\t10302\t(25140)\t(39891)\t(41046)\t\t\t\t\t\t\nEnding Balance\t(396077)\t(390458)\t(396077)\t(390458)\t\t\t\t\t\t\nShareholders' Deficit Attributable to Class A Shareholders\t(244692)\t(289543)\t(244692)\t(289543)\t\t\t\t\t\t\nShareholders' Equity Attributable to Noncontrolling Interests\t\t\t\t\t\t\t\t\t\t\nBeginning balance\t386686\t453892\t440779\t419431\t\t\t\t\t\t\nCapital contributions\t3535\t958\t7084\t1576\t\t\t\t\t\t\nCapital distributions\t(391)\t(264)\t(3639)\t(891)\t\t\t\t\t\t\nEquity-based compensation net of taxes\t6437\t2769\t19988\t34377\t\t\t\t\t\t\nImpact of changes in Sculptor Operating Group ownership\t0\t0\t0\t124\t\t\t\t\t\t\nReallocation of equity and income tax effects of Recapitalization\t0\t0\t0\t(39086)\t\t\t\t\t\t\nChange in redemption value of Preferred Units\t0\t0\t0\t57042\t\t\t\t\t\t\nComprehensive net income (loss) excluding amounts attributable to redeemable noncontrolling interests\t4393\t(11435)\t(63552)\t(26653)\t\t\t\t\t\t\nEnding Balance\t400660\t445920\t400660\t445920\t\t\t\t\t\t\nTotal Shareholders' Equity\t155968\t156377\t155968\t156377\t\t\t\t\t\t\nCash dividends paid on Class A Shares\t0\t0.32\t0.53\t0.92\t\t\t\t\t\t\n", "q10k_tbl_9": "\tNine Months Ended September 30\t\n\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\nCash Flows from Operating Activities\t\t\t\t\t\t\t\t\nConsolidated net loss\t(103443)\t(58954)\t\t\t\t\t\t\nAdjustments to reconcile consolidated net loss to net cash provided by operating activities:\t\t\t\t\t\t\t\t\nAmortization of equity-based compensation\t60342\t106270\t\t\t\t\t\t\nDepreciation amortization and net gains and losses on fixed assets\t5379\t6941\t\t\t\t\t\t\nNet losses on early retirement of debt\t693\t6271\t\t\t\t\t\t\nDeferred income taxes\t(23422)\t6525\t\t\t\t\t\t\nNon-cash lease expense\t16026\t15911\t\t\t\t\t\t\nNet gains on investments net of dividends\t(617)\t(823)\t\t\t\t\t\t\nOperating cash flows due to changes in:\t\t\t\t\t\t\t\t\nIncome and fees receivable\t177687\t48031\t\t\t\t\t\t\nDue from related parties\t3833\t(961)\t\t\t\t\t\t\nOther assets net\t6861\t8756\t\t\t\t\t\t\nCompensation payable\t(121190)\t(43143)\t\t\t\t\t\t\nUnearned incentive income\t6095\t1994\t\t\t\t\t\t\nDue to related parties\t(16940)\t(4140)\t\t\t\t\t\t\nOperating lease liabilities\t(17160)\t(13485)\t\t\t\t\t\t\nOther liabilities\t117996\t798\t\t\t\t\t\t\nConsolidated funds related items:\t\t\t\t\t\t\t\t\nNet gains of consolidated funds\t0\t(3768)\t\t\t\t\t\t\nPurchases of investments\t0\t(128917)\t\t\t\t\t\t\nProceeds from sale of investments\t0\t263505\t\t\t\t\t\t\nOther assets of consolidated funds\t(90)\t(31815)\t\t\t\t\t\t\nOther liabilities of consolidated funds\t54\t8038\t\t\t\t\t\t\nNet Cash Provided by Operating Activities\t112104\t187034\t\t\t\t\t\t\nCash Flows from Investing Activities\t\t\t\t\t\t\t\t\nPurchases of fixed assets\t(1781)\t(1587)\t\t\t\t\t\t\nPurchases of United States government obligations\t(322439)\t(260445)\t\t\t\t\t\t\nMaturities and sales of United States government obligations\t316879\t181278\t\t\t\t\t\t\nInvestments in funds\t(18501)\t(84906)\t\t\t\t\t\t\nReturn of investments in funds\t5790\t56947\t\t\t\t\t\t\nNet Cash Used in Investing Activities\t(20052)\t(108713)\t\t\t\t\t\t\n", "q10k_tbl_10": "\tNine Months Ended September 30\t\n\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\nCash Flows from Financing Activities\t\t\t\t\t\t\t\t\nContributions from noncontrolling and redeemable noncontrolling interests\t7084\t5323\t\t\t\t\t\t\nDistributions to noncontrolling and redeemable noncontrolling interests\t(3639)\t(103983)\t\t\t\t\t\t\nDividends on Class A Shares\t(11613)\t(18955)\t\t\t\t\t\t\nProceeds from debt obligations net of issuance costs\t3276\t0\t\t\t\t\t\t\nRepayment of debt obligations including prepayment costs\t(36668)\t(187790)\t\t\t\t\t\t\nProceeds from securities sold under agreements to repurchase net of issuance costs\t0\t36134\t\t\t\t\t\t\nOther net\t(2056)\t(1166)\t\t\t\t\t\t\nNet Cash Used in Financing Activities\t(43616)\t(270437)\t\t\t\t\t\t\nNet change in cash and cash equivalents and restricted cash\t48436\t(192116)\t\t\t\t\t\t\nCash and cash equivalents and restricted cash beginning of period\t245439\t323884\t\t\t\t\t\t\nCash and Cash Equivalents and Restricted Cash End of Period\t293875\t131768\t\t\t\t\t\t\nSupplemental Disclosure of Cash Flow Information\t\t\t\t\t\t\t\t\nCash paid during the period:\t\t\t\t\t\t\t\t\nInterest\t10794\t9810\t\t\t\t\t\t\nIncome taxes\t5614\t4199\t\t\t\t\t\t\nNon-cash transactions:\t\t\t\t\t\t\t\t\nIncrease in paid-in capital as a result of tax receivable agreement amendment\t0\t50318\t\t\t\t\t\t\nReconciliation of cash and cash equivalents and restricted cash:\t\t\t\t\t\t\t\t\nCash and cash equivalents\t290297\t126814\t\t\t\t\t\t\nRestricted cash\t3578\t4954\t\t\t\t\t\t\nTotal Cash and Cash Equivalents and Restricted Cash\t293875\t131768\t\t\t\t\t\t\n", "q10k_tbl_11": "\tAs of September 30 2020\nSculptor Capital Management Inc.\t\nClass A Shares\t22557205\nClass B Shares\t32820413\nSculptor Operating Partnerships\t\nGroup A Units\t16019506\nGroup A-1 Units\t9779446\nGroup B Units\t22557205\nGroup E Units\t12975820\nGroup P Units\t3385000\n", "q10k_tbl_12": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nSculptor Capital LP\t\t\t\t\t\t\t\t\t\t\nNet income (loss)\t8836\t(23983)\t(133304)\t(74801)\t\t\t\t\t\t\nBlended participation percentage\t46%\t43%\t42%\t44%\t\t\t\t\t\t\nNet Income (Loss) Attributable to Group A Units\t4049\t(10377)\t(55356)\t(32589)\t\t\t\t\t\t\nSculptor Capital Advisors LP\t\t\t\t\t\t\t\t\t\t\nNet income (loss)\t948\t(10838)\t(18343)\t(2864)\t\t\t\t\t\t\nBlended participation percentage\t47%\t12%\t42%\tn/m\t\t\t\t\t\t\nNet Income (Loss) Attributable to Group A Units\t445\t(1248)\t(7617)\t5447\t\t\t\t\t\t\nSculptor Capital Advisors II LP\t\t\t\t\t\t\t\t\t\t\nNet income (loss)\t13043\t(4562)\t29822\t12041\t\t\t\t\t\t\nBlended participation percentage\t0%\t0%\t0%\t0%\t\t\t\t\t\t\nNet Income (Loss) Attributable to Group A Units\t0\t0\t0\t0\t\t\t\t\t\t\nTotal Sculptor Operating Group\t\t\t\t\t\t\t\t\t\t\nNet income (loss)\t22827\t(39383)\t(121825)\t(65624)\t\t\t\t\t\t\nBlended participation percentage\t20%\t30%\t52%\t41%\t\t\t\t\t\t\nNet Income (Loss) Attributable to Group A Units\t4494\t(11625)\t(62973)\t(27142)\t\t\t\t\t\t\n", "q10k_tbl_13": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nGroup A Units\t4494\t(11625)\t(62973)\t(27142)\t\t\t\t\t\t\t\t\t\t\t\t\nOther\t(101)\t190\t(579)\t489\t\t\t\t\t\t\t\t\t\t\t\t\n\t4393\t(11435)\t(63552)\t(26653)\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_14": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nGroup A Units\t391959\t434943\nOther\t8701\t5836\n\t400660\t440779\n", "q10k_tbl_15": "\tThree Months Ended September 30\t\t\t\n\t2020\t2019\t\t\n\tPreferred Units\tFunds\tPreferred Units\tTotal\n\t(dollars in thousands)\t\t\t\nBeginning Balance\t153313\t97229\t150000\t247229\nChange in redemption value of Preferred Units\t2285\t0\t0\t0\nCapital contributions\t0\t102\t0\t102\nCapital distributions\t0\t(54532)\t0\t(54532)\nFunds deconsolidation\t0\t(43373)\t0\t(43373)\nComprehensive income\t0\t574\t0\t574\nEnding Balance\t155598\t0\t150000\t150000\n", "q10k_tbl_16": "\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t\t\n\tPreferred Units\tFunds\tPreferred Units\tTotal\n\t(dollars in thousands)\t\t\t\nBeginning balance\t150000\t157660\t420000\t577660\nFair value of Debt Securities exchanged for 2016 Preferred Units\t0\t0\t(167799)\t(167799)\nFair value of 2019 Preferred Units exchanged for 2016 Preferred Units\t0\t0\t(137759)\t(137759)\nIssuance of 2019 Preferred Units net of issuance costs\t0\t0\t136964\t136964\nChange in redemption value of Preferred Units\t5598\t0\t(101406)\t(101406)\nCapital contributions\t0\t3747\t0\t3747\nCapital distributions\t0\t(126779)\t0\t(126779)\nFunds deconsolidation\t0\t(43373)\t0\t(43373)\nComprehensive income\t0\t8745\t0\t8745\nEnding Balance\t155598\t0\t150000\t150000\n", "q10k_tbl_17": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nUnited States government obligations at fair value\t152174\t146565\nCLOs at fair value\t188640\t182870\nOther investments equity method\t95281\t81991\nTotal Investments\t436095\t411426\n", "q10k_tbl_18": "\tAs of September 30 2020\t\t\t\n\tLevel I\tLevel II\tLevel III\tTotal\n\t(dollars in thousands)\t\t\t\nAssets at Fair Value\t\t\t\t\nIncluded within cash and cash equivalents:\t\t\t\t\nUnited States government obligations\t83899\t0\t0\t83899\nIncluded within investments:\t\t\t\t\nUnited States government obligations\t152174\t0\t0\t152174\nCLOs(1)\t0\t0\t188640\t188640\n", "q10k_tbl_19": "\tAs of December 31 2019\t\t\t\n\tLevel I\tLevel II\tLevel III\tTotal\n\t(dollars in thousands)\t\t\t\nAssets at Fair Value\t\t\t\t\nIncluded within cash and cash equivalents:\t\t\t\t\nUnited States government obligations\t97034\t0\t0\t97034\nIncluded within investments:\t\t\t\t\nUnited States government obligations\t146565\t0\t0\t146565\nCLOs(1)\t0\t0\t182870\t182870\n", "q10k_tbl_20": "\tJune 30 2020\tTransfers In\tTransfers Out\tInvestment Purchases / Issuances\tInvestment Sales / Settlements\tGains / Losses\tSeptember 30 2020\n\t(dollars in thousands)\t\t\t\t\t\t\nAssets at Fair Value\t\t\t\t\t\t\t\nIncluded within investments:\t\t\t\t\t\t\t\nCLOs\t178842\t0\t0\t778\t(103)\t9123\t188640\n", "q10k_tbl_21": "\tJune 30 2019\tTransfers In\tTransfers Out\tInvestment Purchases / Issuances\tInvestment Sales / Settlements\tGains / Losses\tSeptember 30 2019\n\t(dollars in thousands)\t\t\t\t\t\t\nAssets at Fair Value\t\t\t\t\t\t\t\nIncluded within investments:\t\t\t\t\t\t\t\nCLOs\t181547\t0\t0\t1709\t(28)\t(6489)\t176739\nInvestments of consolidated funds:\t\t\t\t\t\t\t\nBank debt\t36130\t5326\t(17427)\t9231\t(33283)\t23\t0\n", "q10k_tbl_22": "\tDecember 31 2019\tTransfers In\tTransfers Out\tInvestment Purchases / Issuances\tInvestment Sales / Settlements\tGains / Losses\tSeptember 30 2020\n\t(dollars in thousands)\t\t\t\t\t\t\nAssets at Fair Value\t\t\t\t\t\t\t\nIncluded within investments:\t\t\t\t\t\t\t\nCLOs\t182870\t0\t0\t5185\t(288)\t873\t188640\n", "q10k_tbl_23": "\tDecember 31 2018\tTransfers In\tTransfers Out\tInvestment Purchases / Issuances\tInvestment Sales / Settlements\tGains / Losses\tSeptember 30 2019\n\t(dollars in thousands)\t\t\t\t\t\t\nAssets at Fair Value\t\t\t\t\t\t\t\nIncluded within investments:\t\t\t\t\t\t\t\nCLOs\t181868\t0\t0\t28420\t(27778)\t(5771)\t176739\nInvestments of consolidated funds:\t\t\t\t\t\t\t\nBank debt\t75613\t7982\t(40272)\t29601\t(73772)\t848\t0\nCorporate bonds\t0\t0\t0\t987\t(981)\t(6)\t0\n", "q10k_tbl_24": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nAssets at Fair Value\t\t\t\t\nIncluded within investments:\t\t\t\t\nCLOs\t3185\t(463)\t873\t(5612)\n", "q10k_tbl_25": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nNet assets of unconsolidated VIEs in which the Company has a variable interest\t9531763\t8805128\nMaximum risk of loss as a result of the Company's involvement with VIEs:\t\t\nUnearned revenues\t72421\t63337\nIncome and fees receivable\t11023\t21841\nInvestments\t208691\t200215\nMaximum Exposure to Loss\t292135\t285393\n", "q10k_tbl_26": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nLease Cost\t\t\t\t\nOperating lease cost\t5152\t5135\t15440\t15430\nShort-term lease cost\t13\t13\t38\t45\nFinance lease cost - amortization of leased assets\t199\t137\t529\t411\nFinance lease cost - imputed interest on lease liabilities\t19\t22\t57\t71\nLess: Sublease income\t(391)\t(380)\t(1145)\t(1145)\nNet Lease Cost\t4992\t4927\t14919\t14812\n", "q10k_tbl_27": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nSupplemental Lease Cash Flow Information\t\t\t\t\nCash paid for amounts included in the measurement of lease liabilities\t\t\t\t\nOperating cash flows for operating leases\t5634\t8731\t16837\t20109\nOperating cash flows for finance leases\t1\t22\t6\t71\nFinance cash flows for finance leases\t256\t154\t907\t611\nRight-of-use assets obtained in exchange for lease obligations\t\t\t\t\nOperating leases\t0\t0\t6\t126007\nFinance leases\t0\t0\t745\t1702\n", "q10k_tbl_28": "\tSeptember 30 2020\tDecember 31 2019\nLease Term and Discount Rate\t\t\nWeighted average remaining lease term\t\t\nOperating leases\t8.7 years\t9.3 years\nFinance leases\t1.9 years\t2.1 years\nWeighted average discount rate\t\t\nOperating leases\t7.9%\t7.9%\nFinance leases\t7.2%\t7.9%\n", "q10k_tbl_29": "\tOperating Leases\tFinance Leases\n\t(dollars in thousands)\t\nMaturity of Lease Liabilities\t\t\nOctober 1 2020 to December 31 2020\t5635\t0\n2021\t21028\t867\n2022\t19831\t248\n2023\t19125\t0\n2024\t15353\t0\nThereafter\t82234\t0\nTotal Lease Payments\t163206\t1115\nImputed interest\t(45115)\t(49)\nTotal Lease Liabilities\t118091\t1066\n", "q10k_tbl_30": "\tOperating Leases\n\t(dollars in thousands)\nSublease Rent Payments Receivable\t\nOctober 1 2020 to December 31 2020\t384\n2021\t1537\n2022\t1537\n2023\t1204\n2024\t0\nThereafter\t0\nTotal Sublease Rent Payments Receivable\t4662\n", "q10k_tbl_31": "\tDebt Securities\t2018 Term Loan\tCLO Investments Loans\tTotal\n\t(dollars in thousands)\t\t\t\nMaturity of Debt Obligations\t\t\t\t\nOctober 1 2020 to December 31 2020\t0\t0\t0\t0\n2021\t0\t0\t6576\t6576\n2022\t40000\t0\t484\t40484\n2023\t40000\t8500\t0\t48500\n2024\t40000\t0\t19120\t59120\nThereafter\t80000\t0\t39035\t119035\nTotal Payments\t200000\t8500\t65215\t273715\nUnamortized discounts & deferred financing costs\t(14480)\t(130)\t(310)\t(14920)\nTotal Debt Obligations\t185520\t8370\t64905\t258795\n", "q10k_tbl_32": "Initial Borrowing Date\tContractual Rate\tFinal Maturity Date\tCarrying Value\t\n\t\t\tSeptember 30 2020\tDecember 31 2019\n\t\t\t(dollars in thousands)\t\nJune 7 2017\tLIBOR plus 1.48%\tNovember 16 2029\t17195\t17245\nAugust 2 2017\tLIBOR plus 1.41%\tJanuary 21 2030\t21582\t21679\nSeptember 14 2017\tEURIBOR plus 2.21%\tSeptember 14 2024\t19067\t18237\nAugust 1 2019\tEURIBOR plus 1.15%\tJune 29 2021\t6576\t3464\nFebruary 27 2020\tEURIBOR plus 0.80%\tJanuary 11 2022\t485\t0\n\t\t\t64905\t60625\n", "q10k_tbl_33": "Securities Sold under Agreements to Repurchase\tGross Amounts of Recognized Liabilities\tGross Amounts Offset in the Consolidated Balance Sheet\tNet Amounts of Liabilities in the Consolidated Balance Sheet\tSecurities Transferred\tNet Amount\n\t(dollars in thousands)\t\t\t\t\nAs of September 30 2020\t101892\t0\t101892\t101843\t49\nAs of December 31 2019\t97508\t0\t97508\t97508\t0\n", "q10k_tbl_34": "\tInvestments in CLOs\t\t\t\t\nSecurities Sold under Agreements to Repurchase\tOvernight and Continuous\tUp to 30 Days\t30-90 Days\tGreater Than 90 Days\tTotal\n\t(dollars in thousands)\t\t\t\t\nAs of September 30 2020\t0\t0\t0\t101892\t101892\nAs of December 31 2019\t0\t0\t0\t97508\t97508\n", "q10k_tbl_35": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nFixed Assets:\t\t\nLeasehold improvements\t52798\t52798\nComputer hardware and software\t49484\t47361\nFurniture fixtures and equipment\t8411\t8411\nAccumulated depreciation and amortization\t(79108)\t(73730)\nFixed assets net\t31585\t34840\nGoodwill\t22691\t22691\nPrepaid expenses\t14497\t18507\nOther\t6230\t6570\nTotal Other Assets Net\t75003\t82608\n", "q10k_tbl_36": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nLegal provisions{1)\t138040\t19100\nAccrued expenses\t12637\t19275\nUncertain tax positions\t8250\t8250\nUnearned management fee\t6410\t311\nUnused trade commissions\t3863\t5192\nOther\t7165\t7089\nTotal Other Liabilities\t176365\t59217\n", "q10k_tbl_37": "\tThree Months Ended September 30 2020\t\tThree Months Ended September 30 2019\t\n\tManagement Fees\tIncentive Income\tManagement Fees\tIncentive Income\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nMulti-strategy funds\t33239\t22013\t34201\t13732\t\t\t\t\t\t\nCredit\t\t\t\t\t\t\t\t\t\t\nOpportunistic credit funds\t12512\t16585\t11217\t2664\t\t\t\t\t\t\nInstitutional Credit Strategies\t13302\t0\t14713\t0\t\t\t\t\t\t\nReal estate funds\t9000\t2927\t2613\t14027\t\t\t\t\t\t\nOther\t0\t0\t212\t0\t\t\t\t\t\t\nTotal\t68053\t41525\t62956\t30423\t\t\t\t\t\t\n", "q10k_tbl_38": "\tNine Months Ended September 30 2020\t\tNine Months Ended September 30 2019\t\t\n\t\tManagement Fees\tIncentive Income\tManagement Fees\tIncentive Income\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t(dollars in thousands)\t\t\t\nMulti-strategy funds\t\t94826\t58377\t102801\t59516\t\t\t\t\t\t\t\t\t\t\t\t\nCredit\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nOpportunistic credit funds\t\t33308\t24005\t32356\t35653\t\t\t\t\t\t\t\t\t\t\t\t\nInstitutional Credit Strategies\t\t36653\t0\t42284\t0\t\t\t\t\t\t\t\t\t\t\t\t\nReal estate funds\t\t30594\t6703\t9862\t23209\t\t\t\t\t\t\t\t\t\t\t\t\nOther\t\t8\t0\t676\t0\t\t\t\t\t\t\t\t\t\t\t\t\nTotal\t\t195389\t89085\t187979\t118378\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_39": "\tNine Months Ended September 30\t\n\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\nBeginning of Period\t60798\t61397\t\t\t\t\t\t\nAmounts collected during the period\t8887\t20168\t\t\t\t\t\t\nAmounts recognized during the period\t(2793)\t(18174)\t\t\t\t\t\t\nEnd of Period\t66892\t63391\t\t\t\t\t\t\n", "q10k_tbl_40": "\tSeptember 30 2020\tDecember 31 2019\n\t(dollars in thousands)\t\nManagement fees\t23767\t25726\nIncentive income\t13941\t189669\nIncome and Fees Receivable\t37708\t215395\n", "q10k_tbl_41": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\nStatutory U.S. federal income tax rate\t21.00%\t21.00%\t21.00%\t21.00%\t\t\t\t\t\t\nIncome passed through to noncontrolling interests\t-0.39%\t0.44%\t-1.38%\t4.18%\t\t\t\t\t\t\nNondeductible transaction costs\t-%\t-%\t-%\t-4.66%\t\t\t\t\t\t\nTax effects of income recorded to equity in connection with the Recapitalization\t-%\t-%\t-%\t3.46%\t\t\t\t\t\t\nForeign income taxes\t4.57%\t-2.93%\t-2.03%\t-7.38%\t\t\t\t\t\t\nRSU excess income tax benefit or expense\t2.29%\t-0.29%\t-0.44%\t-3.72%\t\t\t\t\t\t\nState and local income taxes\t5.44%\t1.62%\t3.47%\t-13.44%\t\t\t\t\t\t\nNondeductible amortization of Partner Equity Units\t5.66%\t-10.19%\t-4.36%\t-22.99%\t\t\t\t\t\t\nNondeductible interest expense\t0.85%\t-5.72%\t-0.74%\t-4.57%\t\t\t\t\t\t\nOther net\t-0.42%\t-0.07%\t-0.72%\t2.36%\t\t\t\t\t\t\nEffective Income Tax Rate\t39.00%\t3.86%\t14.80%\t-25.76%\t\t\t\t\t\t\n", "q10k_tbl_42": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nOccupancy and equipment\t7549\t7555\t22685\t22663\t\t\t\t\t\t\nInformation processing and communications\t5223\t5074\t15881\t15924\t\t\t\t\t\t\nRecurring placement and related service fees\t4057\t3527\t14229\t10372\t\t\t\t\t\t\nProfessional services\t3836\t8111\t18781\t29801\t\t\t\t\t\t\nInsurance\t2118\t2176\t6374\t6500\t\t\t\t\t\t\nBusiness development\t237\t1032\t1600\t2989\t\t\t\t\t\t\nForeign exchange (gains) losses\t(84)\t173\t(394)\t(181)\t\t\t\t\t\t\nOther expenses\t1489\t1524\t5690\t7319\t\t\t\t\t\t\n\t24425\t29172\t84846\t95387\t\t\t\t\t\t\nLegal provisions\t2040\t19100\t118940\t19100\t\t\t\t\t\t\nTotal General Administrative and Other\t26465\t48272\t203786\t114487\t\t\t\t\t\t\n", "q10k_tbl_43": "Three Months Ended September 30 2020\tNet Income Attributable to Class A Shareholders\tWeighted- Average Class A Shares Outstanding\tEarnings Per Class A Share\tNumber of Antidilutive Units Excluded from Diluted Calculation\n\t(dollars in thousands except per share amounts)\t\t\t\nBasic\t8017\t22729285\t0.35\t\nEffect of dilutive securities:\t\t\t\t\nGroup A Units\t4264\t16019506\t\t0\nGroup E Units\t0\t10988269\t\t0\nRSUs\t0\t0\t\t4110587\nDiluted\t12281\t49737060\t0.25\t\n", "q10k_tbl_44": "Three Months Ended September 30 2019\tNet Loss Attributable to Class A Shareholders\tWeighted- Average Class A Shares Outstanding\tLoss Per Class A Share\tNumber of Antidilutive Units Excluded from Diluted Calculation\n\t(dollars in thousands except per share amounts)\t\t\t\nBasic\t(25140)\t20907021\t(1.20)\t\nEffect of dilutive securities:\t\t\t\t\nGroup A Units\t0\t0\t\t16019506\nGroup E Units\t0\t0\t\t13476211\nRSUs\t0\t0\t\t4903263\nDiluted\t(25140)\t20907021\t(1.20)\t\n", "q10k_tbl_45": "Nine Months Ended September 30 2020\tNet Loss Attributable to Class A Shareholders\tWeighted- Average Class A Shares Outstanding\tLoss Per Class A Share\tNumber of Antidilutive Units Excluded from Diluted Calculation\n\t(dollars in thousands except per share amounts)\t\t\t\nBasic\t(45489)\t22542047\t(2.02)\t\nEffect of dilutive securities:\t\t\t\t\nGroup A Units\t(59134)\t16017916\t\t0\nGroup E Units\t0\t0\t\t13386679\nRSUs\t0\t0\t\t4186109\nDiluted\t(104623)\t38559963\t(2.71)\t\n", "q10k_tbl_46": "Nine Months Ended September 30 2019\tNet Income Attributable to Class A Shareholders\tWeighted- Average Class A Shares Outstanding\tEarnings Per Class A Share\tNumber of Antidilutive Units Excluded from Diluted Calculation\n\t(dollars in thousands except per share amounts)\t\t\t\nBasic\t3318\t20703211\t0.16\t\nEffect of dilutive securities:\t\t\t\t\nGroup A Units\t0\t0\t\t17344925\nGroup E Units\t0\t6908523\t\t0\nRSUs\t0\t554244\t\t0\nDiluted\t3318\t28165978\t0.12\t\n", "q10k_tbl_47": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nFees charged on investments held by related parties:\t\t\t\t\t\t\t\t\t\t\nManagement fees\t982\t1613\t2881\t6009\t\t\t\t\t\t\nIncentive income\t257\t2646\t688\t7414\t\t\t\t\t\t\n", "q10k_tbl_48": "\tPotential Payments Under Tax Receivable Agreement\n\t(dollars in thousands)\nOctober 1 2020 to December 31 2020\t11805\n2021\t9935\n2022\t29559\n2023\t46089\n2024\t43002\nThereafter\t47071\nTotal Payments\t187461\n", "q10k_tbl_49": "\tThree Months Ended September 30 2020\t\t\t\t\n\tJune 30 2020\tInflows / (Outflows)\tDistributions / Other Reductions\tAppreciation / (Depreciation)\tSeptember 30 2020\n\t(dollars in thousands)\t\t\t\t\nMulti-strategy funds\t9401759\t(54445)\t0\t605980\t9953294\nCredit\t\t\t\t\t\nOpportunistic credit funds\t5880126\t93403\t(177918)\t245548\t6041159\nInstitutional Credit Strategies\t15399295\t3470\t(194687)\t82889\t15290967\nReal estate funds\t4736544\t669\t(44818)\t5770\t4698165\nOther\t770\t0\t(770)\t0\t0\nTotal\t35418494\t43097\t(418193)\t940187\t35983585\n", "q10k_tbl_50": "\tThree Months Ended September 30 2019\t\t\t\t\n\tJune 30 2019\tInflows / (Outflows)\tDistributions / Other Reductions\tAppreciation / (Depreciation)\tSeptember 30 2019\n\t(dollars in thousands)\t\t\t\t\nMulti-strategy funds\t9775395\t(350708)\t(30683)\t(304112)\t9089892\nCredit\t\t\t\t\t\nOpportunistic credit funds\t6025955\t97220\t(1938)\t(79137)\t6042100\nInstitutional Credit Strategies\t14718741\t259418\t(19894)\t(94474)\t14863791\nReal estate funds\t2921525\t9262\t(1146253)\t(4777)\t1779757\nOther\t217850\t140\t(42803)\t0\t175187\nTotal\t33659466\t15332\t(1241571)\t(482500)\t31950727\n", "q10k_tbl_51": "\tNine Months Ended September 30 2020\t\t\t\t\n\tDecember 31 2019\tInflows / (Outflows)\tDistributions / Other Reductions\tAppreciation / (Depreciation)\tSeptember 30 2020\n\t(dollars in thousands)\t\t\t\t\nMulti-strategy funds\t9332118\t(372659)\t(17819)\t1011654\t9953294\nCredit\t\t\t\t\t\nOpportunistic credit funds\t6025306\t286165\t(177933)\t(92379)\t6041159\nInstitutional Credit Strategies\t15710319\t422716\t(814123)\t(27945)\t15290967\nReal estate funds\t3393876\t1422774\t(114087)\t(4398)\t4698165\nOther\t8311\t20\t(8331)\t0\t0\nTotal\t34469930\t1759016\t(1132293)\t886932\t35983585\n", "q10k_tbl_52": "\tNine Months Ended September 30 2019\t\t\t\t\n\tDecember 31 2018\tInflows / (Outflows)\tDistributions / Other Reductions\tAppreciation / (Depreciation)\tSeptember 30 2019\n\t(dollars in thousands)\t\t\t\t\nMulti-strategy funds\t10420858\t(2085933)\t(57660)\t812627\t9089892\nCredit\t\t\t\t\t\nOpportunistic credit funds\t5751411\t222548\t(34114)\t102255\t6042100\nInstitutional Credit Strategies\t13491734\t1733588\t(129027)\t(232504)\t14863791\nReal estate funds\t2577040\t363817\t(1156301)\t(4799)\t1779757\nOther\t286635\t(62728)\t(49099)\t379\t175187\nTotal\t32527678\t171292\t(1426201)\t677958\t31950727\n", "q10k_tbl_53": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nWeighted-average assets under management\t35215556\t33406239\t34448513\t32380058\t\t\t\t\t\t\nAverage management fee rates\t0.72%\t0.70%\t0.70%\t0.73%\t\t\t\t\t\t\n", "q10k_tbl_54": "\t\t\tReturns for the Nine Months Ended September 30\t\t\t\tAnnualized Returns Since Inception Through September 30 2020\t\t\t\n\tAssets Under Management as of September 30\t\t2020\t\t2019\t\n\t2020\t2019\tGross\tNet\tGross\tNet\tGross\t\tNet\t\nFund\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nSculptor Master Fund(1)\t9136360\t8320734\t16.8%\t12.4%\t12.8%\t9.9%\t16.7%\t(2)\t11.6%\t(2)\nSculptor Enhanced Master Fund\t787563\t624312\t15.7%\t11.7%\t16.7%\t13.3%\t15.0%\t\t10.4%\t\nOther funds\t29371\t144846\tn/m\tn/m\tn/m\tn/m\tn/m\t\tn/m\t\n\t9953294\t9089892\t\t\t\t\t\t\t\t\n", "q10k_tbl_55": "\tAssets Under Management as of September 30\t\n\t2020\t2019\n\t(dollars in thousands)\t\nOpportunistic credit funds\t6041159\t6042100\nInstitutional Credit Strategies\t15290967\t14863791\n\t21332126\t20905891\n", "q10k_tbl_56": "\t\t\tReturns for the Nine Months Ended September 30\t\t\t\tAnnualized Returns Since Inception Through September 30 2020\n\tAssets Under Management as of September 30\t\t2020\t\t2019\t\t\n\t2020\t2019\tGross\tNet\tGross\tNet\t\tGross\t\t\t\t\t\tNet\t\t\nFund\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\nSculptor Credit Opportunities Master Fund(1)\t1888511\t1658348\t-5.6%\t-7.5%\t2.4%\t1.1%\t\t12.9%\t\t\t\t\t\t8.9%\t\t\nCustomized Credit Focused Platform\t3279505\t3220292\t-2.1%\t-2.0%\t5.4%\t3.9%\t\t15.1%\t\t\t\t\t\t11.4%\t\t\nClosed-end opportunistic credit funds\t349006\t548312\tSee below for return information on our closed-end opportunistic credit funds.\t\t\t\t\nOther funds\t524137\t615148\tn/m\tn/m\tn/m\tn/m\t\tn/m\t\t\t\t\t\tn/m\t\t\n\t6041159\t6042100\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_57": "\tAssets Under Management as of September 30\t\tInception to Date as of September 30 2020\t\t\t\t\n\t2020\t2019\tTotal Commitments\tTotal Invested Capital(1)\tGross IRR(2)\tNet IRR(3)\tGross MOIC(4)\nFund (Investment Period)\t(dollars in thousands)\t\t\t\t\t\nSculptor European Credit Opportunities Fund (2012-2015)\t0\t0\t459600\t305487\t15.7%\t11.8%\t1.5x\nSculptor Structured Products Domestic Fund II (2011-2014)\t15986\t60682\t326850\t326850\t19.4%\t15.3%\t2.1x\nSculptor Structured Products Offshore Fund II (2011-2014)\t14659\t64896\t304531\t304531\t16.8%\t13.1%\t1.9x\nSculptor Structured Products Offshore Fund I (2010-2013)\t4315\t4573\t155098\t155098\t23.8%\t19.1%\t2.1x\nSculptor Structured Products Domestic Fund I (2010-2013)\t3957\t4230\t99986\t99986\t22.6%\t18.0%\t2.0x\nOther funds\t310089\t413931\t412170\t78781\tn/m\tn/m\tn/m\n\t349006\t548312\t1758235\t1270733\t\t\t\n", "q10k_tbl_58": "\tMost Recent Closing or Refinancing Year\t\t\t\tAssets Under Management as of September 30\t\t\n\t\tDeal Size\t\t2020\t\t2019\n\t\t\t(dollars in thousands)\t\t\t\t\nCollateralized loan obligations\t2017\t\t4209590\t\t3492539\t\t3475032\n\t2018\t\t7487273\t\t7108237\t\t7041843\n\t2019\t\t2985214\t\t2913465\t\t2834403\n\t2020\t\t409250\t\t398021\t\t394909\n\t\t\t15091327\t\t13912262\t\t13746187\nAircraft securitizations\t2018\t\t696000\t\t475415\t\t497611\n\t2019\t\t1128000\t\t381680\t\t543505\n\t2020\t\t472732\t\t183122\t\t0\n\t\t\t2296732\t\t1040217\t\t1041116\nCollateralized bond obligation\t2019\t\t349550\t\t274632\t\t0\nOther funds\tn/a\t\tn/a\t\t63856\t\t76488\n\t\t\t17737609\t\t15290967\t\t14863791\n", "q10k_tbl_59": "\tAssets Under Management as of September 30\t\n\t2020\t2019\nFund\t(dollars in thousands)\t\nSculptor Real Estate Fund I\t0\t13578\nSculptor Real Estate Fund II\t60550\t63011\nSculptor Real Estate Fund III\t474133\t530996\nSculptor Real Estate Fund IV\t2593233\t0\nSculptor Real Estate Credit Fund I\t730931\t730365\nOther funds\t839318\t441807\n\t4698165\t1779757\n", "q10k_tbl_60": "\tInception to Date as of September 30 2020\t\t\t\t\t\t\t\t\t\n\t\tTotal Investments\t\t\t\t\tRealized/Partially Realized Investments(1)\t\t\t\n\tTotal Commitments\tInvested Capital(2)\tTotal Value(3)\tGross IRR(4)\tNet IRR(5)\tGross MOIC(6)\tInvested Capital\tTotal Value\tGross IRR(4)\tGross MOIC(6)\nFund (Investment Period)\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nSculptor Real Estate Fund I(7) (2005-2010)\t408081\t386298\t847612\t25.5%\t16.1%\t2.2x\t386298\t847612\t25.5%\t2.2x\nSculptor Real Estate Fund II(7) (2011-2014)\t839508\t762588\t1557175\t32.8%\t21.5%\t2.0x\t762588\t1557175\t32.8%\t2.0x\nSculptor Real Estate Fund III(7) (2014-2019)\t1500000\t1053677\t1736897\t28.1%\t18.4%\t1.6x\t765998\t1346990\t34.0%\t1.8x\nSculptor Real Estate Fund IV(8) (2019-2023)\t2596024\t204516\t227279\tn/m\tn/m\tn/m\t0\t0\tn/m\tn/m\nSculptor Real Estate Credit Fund I (2015-2020)\t736225\t378784\t447164\t15.8%\t10.6%\t1.2x\t130028\t168733\t22.6%\t1.3x\nOther funds\t1146672\t447070\t599989\tn/m\tn/m\tn/m\t64761\t114070\tn/m\tn/m\n\t7226510\t3232933\t5416116\t\t\t\t2109673\t4034580\t\t\n", "q10k_tbl_61": "\tUnrealized Investments as of September 30 2020\t\t\n\tInvested Capital\tTotal Value\tGross MOIC(6)\nFund (Investment Period)\t(dollars in thousands)\t\t\nSculptor Real Estate Fund I (2005-2010)(7)\t0\t0\t0\nSculptor Real Estate Fund II (2011-2014)(7)\t0\t0\t0\nSculptor Real Estate Fund III (2014-2019)(7)\t287679\t389907\t1.4x\nSculptor Real Estate Fund IV (2019-2023)(8)\t204516\t227279\tn/m\nSculptor Real Estate Credit Fund I (2015-2020)\t248756\t278431\t1.1x\nOther funds\t382309\t485919\tn/m\n\t1123260\t1381536\t\n", "q10k_tbl_62": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tLonger-Term Assets Under Management\tAccrued Unrecognized Incentive Income\tLonger-Term Assets Under Management\tAccrued Unrecognized Incentive Income\n\t(dollars in thousands)\t\t\t\nMulti-strategy funds\t421753\t19909\t344623\t11280\nCredit\t\t\t\t\nOpportunistic credit funds\t4052368\t133328\t4012023\t143134\nInstitutional Credit Strategies\t15276624\t0\t15667058\t0\nReal estate funds\t4698167\t103290\t3393877\t99163\nOther\t0\t0\t8311\t0\n\t24448912\t256527\t23425892\t253577\n", "q10k_tbl_63": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nManagement fees\t68053\t62956\t195389\t187979\t\t\t\t\t\t\nIncentive income\t41525\t30423\t89085\t118378\t\t\t\t\t\t\nOther revenues\t2316\t3646\t7693\t12458\t\t\t\t\t\t\nIncome of consolidated funds\t58\t1820\t90\t6732\t\t\t\t\t\t\nTotal Revenues\t111952\t98845\t292257\t325547\t\t\t\t\t\t\n", "q10k_tbl_64": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nCompensation and benefits\t65030\t78343\t197739\t244767\t\t\t\t\t\t\nInterest expense\t4488\t6323\t14944\t19054\t\t\t\t\t\t\nGeneral administrative and other\t26465\t48272\t203786\t114487\t\t\t\t\t\t\nExpenses of consolidated funds\t34\t507\t53\t646\t\t\t\t\t\t\nTotal Expenses\t96017\t133445\t416522\t378954\t\t\t\t\t\t\n", "q10k_tbl_65": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nChanges in tax receivable agreement liability\t0\t0\t278\t5362\t\t\t\t\t\t\nNet losses on early retirement of debt\t0\t(218)\t(693)\t(6271)\t\t\t\t\t\t\nNet gains (losses) on investments\t8157\t(2169)\t3266\t3668\t\t\t\t\t\t\nNet (losses) gains of consolidated funds\t0\t(460)\t0\t3768\t\t\t\t\t\t\nTotal Other Income (Loss)\t8157\t(2847)\t2851\t6527\t\t\t\t\t\t\n", "q10k_tbl_66": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nIncome taxes\t9397\t(1446)\t(17971)\t12074\t\t\t\t\t\t\n", "q10k_tbl_67": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\nGroup A Units\t4494\t(11625)\t(62973)\t(27142)\t\t\t\t\t\t\t\t\t\t\t\t\nOther\t(101)\t190\t(579)\t489\t\t\t\t\t\t\t\t\t\t\t\t\nTotal\t4393\t(11435)\t(63552)\t(26653)\t\t\t\t\t\t\t\t\t\t\t\t\nRedeemable noncontrolling interests\t0\t574\t0\t8745\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_68": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nNet Income (Loss) Attributable to Class A Shareholders\t8017\t(25140)\t(45489)\t3318\t\t\t\t\t\t\n", "q10k_tbl_69": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nEconomic Income Basis\t\t\t\t\t\t\t\t\t\t\nManagement fees\t63477\t59163\t179771\t176813\t\t\t\t\t\t\nIncentive income\t41548\t30682\t89121\t118637\t\t\t\t\t\t\nOther revenues\t2316\t3646\t7693\t12458\t\t\t\t\t\t\nTotal Economic Income Revenues\t107341\t93491\t276585\t307908\t\t\t\t\t\t\n", "q10k_tbl_70": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nEconomic Income Basis\t\t\t\t\t\t\t\t\t\t\nCompensation and benefits\t41338\t46181\t122378\t130043\t\t\t\t\t\t\nInterest expense\t3657\t2074\t11462\t8390\t\t\t\t\t\t\nGeneral administrative and other expenses\t19917\t42308\t182259\t96360\t\t\t\t\t\t\nTotal Economic Income Expenses\t64912\t90563\t316099\t234793\t\t\t\t\t\t\n", "q10k_tbl_71": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\nEconomic Income\t42428\t2931\t(39514)\t73120\t\t\t\t\t\t\n", "q10k_tbl_72": "\tClass A Shares\t\nPayment Date\tRecord Date\tDividend per Share\nMarch 3 2020\tFebruary 25 2020\t0.53\nNovember 25 2019\tNovember 18 2019\t0.03\nAugust 21 2019\tAugust 14 2019\t0.32\nMay 28 2019\tMay 20 2019\t0.37\nMarch 29 2019\tMarch 22 2019\t0.23\n", "q10k_tbl_73": "\tOctober 1 2020-December 31 2020\t2021-2022\t2023-2024\tThereafter\tTotal\n\t(dollars in thousands)\t\t\t\t\nLong-term debt(1)\t0\t47060\t107620\t119035\t273715\nEstimated interest on long-term debt(2)\t2902\t22334\t14666\t6998\t46900\nSecurities sold under agreements to repurchase(3)\t0\t0\t0\t101892\t101892\nOperating leases(4)\t5635\t40859\t34478\t82234\t163206\nTax receivable agreement(5)\t11805\t39494\t89091\t47071\t187461\nUnrecognized tax benefits(6)\t0\t0\t0\t0\t0\nIncentive income subject to clawback(7)\t0\t0\t0\t0\t0\nTotal Contractual Obligations\t20342\t149747\t245855\t357230\t773174\n", "q10k_tbl_74": "\tThree Months Ended September 30\t\n\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\nNet Income (Loss) Attributable to Class A Shareholders-GAAP\t8017\t(25140)\t\t\t\t\t\t\nChange in redemption value of Preferred Units\t2285\t0\t\t\t\t\t\t\nNet Income (Loss) Allocated to Sculptor Capital Management Inc.-GAAP\t10302\t(25140)\t\t\t\t\t\t\nNet income (loss) allocated to Group A Units\t4494\t(11625)\t\t\t\t\t\t\nEquity-based compensation net of RSUs settled in cash\t17972\t31952\t\t\t\t\t\t\nAdjustment to recognize deferred cash compensation in the period of grant\t4996\t2264\t\t\t\t\t\t\nRecapitalization-related non-cash interest expense accretion\t831\t4249\t\t\t\t\t\t\nIncome taxes\t9397\t(1446)\t\t\t\t\t\t\nNet losses on early retirement of debt\t0\t218\t\t\t\t\t\t\nNet (gains) losses on investments\t(8158)\t2169\t\t\t\t\t\t\nAdjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance\t724\t(2055)\t\t\t\t\t\t\nDepreciation amortization and net gains and losses on fixed assets\t1442\t2166\t\t\t\t\t\t\nOther adjustments\t428\t179\t\t\t\t\t\t\nEconomic Income-Non-GAAP\t42428\t2931\t\t\t\t\t\t\n", "q10k_tbl_75": "\tNine Months Ended September 30\t\n\t2020\t2019\t\t\t\t\t\t\n\t(dollars in thousands)\t\nNet (Loss) Income Attributable to Class A Shareholders-GAAP\t(45489)\t3318\t\t\t\t\t\t\nChange in redemption value of Preferred Units\t5598\t(44364)\t\t\t\t\t\t\nNet Loss Allocated to Sculptor Capital Management Inc.-GAAP\t(39891)\t(41046)\t\t\t\t\t\t\nNet loss allocated to Group A Units\t(62973)\t(27142)\t\t\t\t\t\t\nEquity-based compensation net of RSUs settled in cash\t60011\t106270\t\t\t\t\t\t\nAdjustment to recognize deferred cash compensation in the period of grant\t13109\t6849\t\t\t\t\t\t\nRecapitalization-related non-cash interest expense accretion\t3482\t10664\t\t\t\t\t\t\nIncome taxes\t(17971)\t12074\t\t\t\t\t\t\nNet losses on early retirement of debt\t693\t6271\t\t\t\t\t\t\nNet gains on investments\t(3266)\t(3668)\t\t\t\t\t\t\nAdjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance\t2241\t1604\t\t\t\t\t\t\nChanges in tax receivable agreement liability\t(278)\t(5362)\t\t\t\t\t\t\nDepreciation amortization and net gains and losses on fixed assets\t5379\t6941\t\t\t\t\t\t\nOther adjustments\t(50)\t(335)\t\t\t\t\t\t\nEconomic Income-Non-GAAP\t(39514)\t73120\t\t\t\t\t\t\n", "q10k_tbl_76": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t(dollars in thousands)\t\t\t\nManagement fees-GAAP\t68053\t62956\t195389\t187979\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nAdjustment to management fees(1)\t(4576)\t(3793)\t(15618)\t(11166)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nManagement Fees-Economic Income Basis-Non-GAAP\t63477\t59163\t179771\t176813\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nIncentive income-Economic Income Basis-GAAP\t41525\t30423\t89085\t118378\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nAdjustment to incentive income(2)\t23\t259\t36\t259\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nIncentive Income-Economic Income Basis-Non-GAAP\t41548\t30682\t89121\t118637\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nOther Revenues-Economic Income Basis-GAAP and Non-GAAP\t2316\t3646\t7693\t12458\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nTotal Revenues-Economic Income Basis-Non-GAAP\t107341\t93491\t276585\t307908\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_77": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nCompensation and benefits-GAAP\t65030\t78343\t197739\t244767\nAdjustment to compensation and benefits(1)\t(23692)\t(32162)\t(75361)\t(114724)\nCompensation and Benefits-Economic Income Basis-Non-GAAP\t41338\t46181\t122378\t130043\nInterest expense-GAAP\t4488\t6323\t14944\t19054\nAdjustment to interest expense(2)\t(831)\t(4249)\t(3482)\t(10664)\nInterest Expense-Economic Income Basis-Non-GAAP\t3657\t2074\t11462\t8390\nGeneral administrative and other expenses-GAAP\t26465\t48272\t203786\t114487\nAdjustment to general administrative and other expenses(3)\t(6548)\t(5964)\t(21527)\t(18127)\nGeneral Administrative and Other Expenses-Economic Income Basis-Non-GAAP\t19917\t42308\t182259\t96360\n", "q10k_tbl_78": "Exhibit No.\tDescription\n10.1\tCredit and Guaranty Agreement dated as of September 25 2020 among Sculptor Capital LP as borrower Sculptor Capital Advisors LP Sculptor Capital Advisors II LP and the other guarantors party thereto from time to time the lenders party thereto from time to time and Delaware Life Insurance Company as administrative agent incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on September 25 2020.\n10.2\tSettlement Agreement and Full and Final Release of All Claims dated September 17 2020 by and among OZ Africa Management GP LLC and certain former shareholders of Africa Resources Ltd. incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on September 23 2020.\n10.3*\tSecond Amendment to the Deferred Prosecution Agreement dated as of November 3 2020 by and among Sculptor Capital Management Inc. the U.S. Department of Justice and the U.S. Attorney's Office for the Eastern District of New York.\n31.1*\tCertificate of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.\n31.2*\tCertificate of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.\n32.1*\tCertification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101*\tThe following financial information from the Quarterly Report on Form 10-Q for the three months ended September 30 2020 formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Comprehensive Income (Loss); (iii) Consolidated Statements of Changes in Shareholders' Equity (Deficit); (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements.\n104*\tCover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)\n*\tFiled herewith\n"}{"bs": "q10k_tbl_5", "is": "q10k_tbl_6", "cf": "q10k_tbl_9"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 001-33805
SCULPTOR CAPITAL MANAGEMENT, INC.
(Exact name of Registrant as specified in its charter)
Delaware
26-0354783
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
9 West 57th Street, New York, New York10019
(Address of principal executive offices)
(212) 790-0000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Class A Shares
SCU
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☑
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☑
As of November 5, 2020, there were 22,581,124 Class A Shares and 32,820,413 Class B Shares outstanding.
Refers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited, a wholly owned indirect subsidiary of Dubai Holdings LLC
active executive managing directors
Executive managing directors who remain active in our business
Annual Report
Our annual report on Form 10-K for the year ended December 31, 2019, as amended, dated February 25, 2020 and filed with the SEC
Class A Shares
Our Class A Shares, representing Class A common stock of Sculptor Capital Management, Inc., which are publicly traded and listed on the NYSE
Class B Shares
Class B Shares of Sculptor Capital Management, Inc., which are not publicly traded, are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares
CLOs
Collateralized loan obligations
the Company, Sculptor Capital, the firm, we, us, our
Refers, unless the context requires otherwise, to the Registrant and its consolidated subsidiaries, including the Sculptor Operating Group
Exchange Act
Securities Exchange Act of 1934, as amended
executive managing directors
The current executive managing directors of the Company, and, except where the context requires otherwise, also includes certain executive managing directors who are no longer active in our business
funds
The multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles for which we provide asset management services
GAAP
U.S. generally accepted accounting principles
Group A Units
Refers collectively to one Class A operating group unit in each of the Sculptor Operating Partnerships. Group A Units are limited partner interests held by our executive managing directors
Group A-1 Units
Refers collectively to one Class A-1 operating group unit in each of the Sculptor Operating Partnerships. Group A-1 Units are limited partner interests held by our executive managing directors
Group B Units
Refers collectively to one Class B operating group unit in each of the Sculptor Operating Partnerships. Group B Units are limited partner interests held by Sculptor Corp
Group D Units
Refers collectively to one Class D operating group unit in each of the Sculptor Operating Partnerships. Group D Units are limited partner interests held by our executive managing directors
Group E Units
Refers collectively to one Class E operating group unit in each of the Sculptor Operating Partnerships. Group E Units are limited partner interests held by our executive managing directors
1
Group P Units
Refers collectively to one Class P operating group unit in each of the Sculptor Operating Partnerships. Group P Units are limited partner interests held by our executive managing directors
Institutional Credit Strategies
Our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs, aircraft securitizations, collateralized bond obligations, and other customized solutions
IPO
Our initial public offering of 3.6 million Class A Shares that occurred in November 2007
NYSE
New York Stock Exchange
Partner Equity Units
Refers collectively to the Group A Units, Group E Units and Group P Units
Preferred Units
One Class A cumulative preferred unit in each of the Sculptor Operating Partnerships collectively represents one “Preferred Unit.” Certain of our executive managing directors collectively own 100% of the Preferred Units. Preferred Units issued in 2016 and 2017 are, collectively, referred to as “2016 Preferred Units.” Preferred Units issued in 2019 are referred to as “2019 Preferred Units.”
PSUs
Class A performance-based RSUs
Recapitalization
Refers to the recapitalization of our business that occurred in February 2019. As part of the Recapitalization, a portion of the interests held by our active and former executive managing directors were reallocated to existing members of senior management. In addition, we restructured the previously outstanding senior debt and Preferred Units
Registrant
Sculptor Capital Management, Inc., a Delaware corporation
RSUs
Class A restricted share units
Sculptor Corp
Sculptor Capital Holding Corporation, a Delaware corporation
Sculptor Operating Group
Refers collectively to the Sculptor Operating Partnerships and their consolidated subsidiaries
Sculptor Operating Group Units
Refers collectively to Sculptor Operating Group A, B, D, E, and P Units
Sculptor Operating Partnerships
Refers collectively to Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP
SEC
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Special Investments
Investments that we, as investment manager, believe lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance
2
Available Information
We file annual, quarterly and current reports, proxy statements and other information required by the Exchange Act with the SEC. We make available free of charge on our website (www.sculptor.com) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and any amendments to those filings as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. We also use our website to distribute company information, and such information may be deemed material. Accordingly, investors should monitor our website, in addition to our press releases, SEC filings and public conference calls and webcast. The contents of our website are not, however, a part of this report.
Also posted on our website in the “Investor Relations—Corporate Governance” section are charters for our Audit Committee; Compensation Committee; Nominating, Corporate Governance and Conflicts Committee and Corporate Responsibility and Compliance Committee, as well as our Corporate Governance Guidelines and Code of Business Conduct and Ethics governing our directors, officers and employees. Information on, or accessible through, our website is not a part of, and is not incorporated into, this report or any other SEC filing. Copies of our SEC filings or corporate governance materials are available without charge upon written request to Sculptor Capital Management, Inc., 9 West 57th Street, New York, New York 10019, Attention: Office of the Secretary. Any materials we file with the SEC are also publicly available through the SEC’s website (www.sec.gov).
No statements herein, available on our website or in any of the materials we file with the SEC constitute, or should be viewed as constituting, an offer of any fund.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that reflect our current views with respect to, among other things, future events, our operations and our financial performance. We generally identify forward-looking statements by terminology such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve,” “see,” “think,” “position” or the negative version of those words or other comparable words.
Any forward-looking statements contained herein are based upon historical information and on our current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.
We caution that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions, including the impact of public health crises, such as the ongoing COVID-19 pandemic; whether we are able to satisfy the conditions to closing under our new senior secured credit facility; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; the outcome of third-party litigation involving us; the consequences of the Foreign Corrupt Practices Act settlements with the SEC and the U.S. Department of Justice (the “DOJ”) and any claims arising therefrom; whether the Company realizes all or any of the anticipated benefits from the Recapitalization and other related transactions; whether the Recapitalization and other related transactions result in any increased or unforeseen costs, indemnification obligations or have an impact on our ability to retain or compete for professional talent or investor capital; conditions impacting the alternative asset management industry; our ability to retain existing investor capital; our ability to successfully compete for fund investors, assets, professional talent and investment opportunities; our ability to retain our active executive managing directors, managing directors and other investment professionals; our successful formulation and execution of our business and growth strategies; our ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to our business; the anticipated benefits of changing the Registrant’s tax classification from a partnership to a corporation and subsequently converting from a limited liability company to a corporation; and assumptions relating to our operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.
If one or more of these or other risks or uncertainties materialize, or if our assumptions or estimates prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in our
3
filings with the SEC, including but not limited to our Annual Report and Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.
There may be additional risks, uncertainties and factors that we do not currently view as material or that are not known. The forward-looking statements contained in this report are made only as of the date of this report. We do not undertake to update any forward-looking statement because of new information, future developments or otherwise.
4
SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS — UNAUDITED
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
September 30, 2020
December 31, 2019
(dollars in thousands)
Assets
Cash and cash equivalents
$
290,297
$
240,938
Restricted cash
3,578
4,501
Investments (includes assets measured at fair value of $340,814 and $329,435, including assets sold under agreements to repurchase of $101,843 and $98,085 as of September 30, 2020 and December 31, 2019, respectively)
436,095
411,426
Income and fees receivable
37,708
215,395
Due from related parties
11,523
15,355
Deferred income tax assets
333,999
310,557
Operating lease assets
107,585
115,810
Other assets, net
75,003
82,608
Assets of consolidated funds:
Other assets of consolidated funds
737
649
Total Assets
$
1,296,525
$
1,397,239
Liabilities and Shareholders’ Equity
Liabilities
Compensation payable
$
67,506
$
187,180
Unearned incentive income
66,892
60,798
Due to related parties
194,975
211,915
Operating lease liabilities
118,091
128,043
Debt obligations
258,795
286,728
Securities sold under agreements to repurchase
101,892
97,508
Other liabilities
176,365
59,217
Liabilities of consolidated funds:
Other liabilities of consolidated funds
443
389
Total Liabilities
984,959
1,031,778
Commitments and Contingencies (Note 18)
Redeemable Noncontrolling Interests (Note 4)
155,598
150,000
Shareholders’ Equity
Class A Shares, par value $0.01 per share, 100,000,000 and 100,000,000 shares authorized, 22,557,205 and 21,284,945 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
226
213
Class B Shares, par value $0.01 per share, 75,000,000 and 75,000,000 shares authorized, 32,820,413 and 29,208,952 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
328
292
Additional paid-in capital
150,831
117,936
Accumulated deficit
(396,077)
(343,759)
Shareholders’ deficit attributable to Class A Shareholders
(244,692)
(225,318)
Shareholders’ equity attributable to noncontrolling interests
400,660
440,779
Total Shareholders’ Equity
155,968
215,461
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity
$
1,296,525
$
1,397,239
See notes to consolidated financial statements.
5
SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — UNAUDITED
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
(dollars in thousands)
Revenues
Management fees
$
68,053
$
62,956
$
195,389
$
187,979
Incentive income
41,525
30,423
89,085
118,378
Other revenues
2,316
3,646
7,693
12,458
Income of consolidated funds
58
1,820
90
6,732
Total Revenues
111,952
98,845
292,257
325,547
Expenses
Compensation and benefits
65,030
78,343
197,739
244,767
Interest expense
4,488
6,323
14,944
19,054
General, administrative and other
26,465
48,272
203,786
114,487
Expenses of consolidated funds
34
507
53
646
Total Expenses
96,017
133,445
416,522
378,954
Other Income (Loss)
Changes in tax receivable agreement liability
—
—
278
5,362
Net losses on early retirement of debt
—
(218)
(693)
(6,271)
Net gains (losses) on investments
8,157
(2,169)
3,266
3,668
Net (losses) gains of consolidated funds
—
(460)
—
3,768
Total Other Income (Loss)
8,157
(2,847)
2,851
6,527
Income (Loss) Before Income Taxes
24,092
(37,447)
(121,414)
(46,880)
Income taxes
9,397
(1,446)
(17,971)
12,074
Consolidated and Comprehensive Net Income (Loss)
14,695
(36,001)
(103,443)
(58,954)
Less: Net (income) loss attributable to noncontrolling interests
(4,393)
11,435
63,552
26,653
Less: Net income attributable to redeemable noncontrolling interests
—
(574)
—
(8,745)
Net Income (Loss) Attributable to Sculptor Capital Management, Inc.
10,302
(25,140)
(39,891)
(41,046)
Change in redemption value of Preferred Units
(2,285)
—
(5,598)
44,364
Net Income (Loss) Attributable to Class A Shareholders
$
8,017
$
(25,140)
$
(45,489)
$
3,318
Earnings (Loss) per Class A Share
Earnings (Loss) per Class A Share - basic
$
0.35
$
(1.20)
$
(2.02)
$
0.16
Earnings (Loss) per Class A Share - diluted
$
0.25
$
(1.20)
$
(2.71)
$
0.12
Weighted-average Class A Shares outstanding - basic
22,729,285
20,907,021
22,542,047
20,703,211
Weighted-average Class A Shares outstanding - diluted
49,737,060
20,907,021
38,559,963
28,165,978
See notes to consolidated financial statements.
6
SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
(dollars in thousands)
Number of Class A Shares
Beginning balance
22,311,432
20,631,750
21,284,945
19,905,126
Equity-based compensation
245,773
117,556
1,272,260
844,180
Ending Balance
22,557,205
20,749,306
22,557,205
20,749,306
Number of Class B Shares
Beginning balance
32,820,414
29,208,952
29,208,952
29,458,948
Equity-based compensation
(1)
—
3,611,461
(249,996)
Ending Balance
32,820,413
29,208,952
32,820,413
29,208,952
Class A Shares Par Value
Beginning balance
$
223
$
206
$
213
$
—
Equity-based compensation
3
1
13
2
Reclassification upon corporate conversion
—
—
—
205
Ending Balance
$
226
$
207
$
226
$
207
Class B Shares Par Value
Beginning balance
$
328
$
292
$
292
$
—
Equity-based compensation
—
—
36
—
Reclassification upon corporate conversion
—
—
—
292
Ending Balance
$
328
$
292
$
328
$
292
Additional Paid-in Capital
Beginning balance
$
142,288
$
70,875
$
117,936
$
3,135,841
Dividend equivalents on Class A restricted share units
(61)
483
814
961
Equity-based compensation, net of taxes
10,889
29,058
37,679
69,376
Reclassification upon corporate conversion
—
—
—
(3,235,728)
Impact of changes in Sculptor Operating Group ownership
—
—
—
(124)
Reallocation of equity and income tax effects of Recapitalization
—
—
—
35,408
Amendment to tax receivable agreement
—
—
—
50,318
Change in redemption value of Preferred Units
(2,285)
—
(5,598)
44,364
Ending Balance
$
150,831
$
100,416
$
150,831
$
100,416
7
SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED — (continued)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
(dollars in thousands)
Accumulated Deficit
Beginning balance
$
(406,440)
$
(358,204)
$
(343,759)
$
(3,564,727)
Cash dividends declared on Class A Shares
—
(6,631)
(11,613)
(18,955)
Dividend equivalents on Class A restricted share units
61
(483)
(814)
(961)
Reclassification upon corporate conversion
—
—
—
3,235,231
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests
10,302
(25,140)
(39,891)
(41,046)
Ending Balance
$
(396,077)
$
(390,458)
$
(396,077)
$
(390,458)
Shareholders’ Deficit Attributable to Class A Shareholders
$
(244,692)
$
(289,543)
$
(244,692)
$
(289,543)
Shareholders’ Equity Attributable to Noncontrolling Interests
Beginning balance
$
386,686
$
453,892
$
440,779
$
419,431
Capital contributions
3,535
958
7,084
1,576
Capital distributions
(391)
(264)
(3,639)
(891)
Equity-based compensation, net of taxes
6,437
2,769
19,988
34,377
Impact of changes in Sculptor Operating Group ownership
—
—
—
124
Reallocation of equity and income tax effects of Recapitalization
—
—
—
(39,086)
Change in redemption value of Preferred Units
—
—
—
57,042
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests
4,393
(11,435)
(63,552)
(26,653)
Ending Balance
$
400,660
$
445,920
$
400,660
$
445,920
Total Shareholders’ Equity
$
155,968
$
156,377
$
155,968
$
156,377
Cash dividends paid on Class A Shares
$
—
$
0.32
$
0.53
$
0.92
See notes to consolidated financial statements.
8
SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
Nine Months Ended September 30,
2020
2019
(dollars in thousands)
Cash Flows from Operating Activities
Consolidated net loss
$
(103,443)
$
(58,954)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Amortization of equity-based compensation
60,342
106,270
Depreciation, amortization and net gains and losses on fixed assets
5,379
6,941
Net losses on early retirement of debt
693
6,271
Deferred income taxes
(23,422)
6,525
Non-cash lease expense
16,026
15,911
Net gains on investments, net of dividends
(617)
(823)
Operating cash flows due to changes in:
Income and fees receivable
177,687
48,031
Due from related parties
3,833
(961)
Other assets, net
6,861
8,756
Compensation payable
(121,190)
(43,143)
Unearned incentive income
6,095
1,994
Due to related parties
(16,940)
(4,140)
Operating lease liabilities
(17,160)
(13,485)
Other liabilities
117,996
798
Consolidated funds related items:
Net gains of consolidated funds
—
(3,768)
Purchases of investments
—
(128,917)
Proceeds from sale of investments
—
263,505
Other assets of consolidated funds
(90)
(31,815)
Other liabilities of consolidated funds
54
8,038
Net Cash Provided by Operating Activities
112,104
187,034
Cash Flows from Investing Activities
Purchases of fixed assets
(1,781)
(1,587)
Purchases of United States government obligations
(322,439)
(260,445)
Maturities and sales of United States government obligations
316,879
181,278
Investments in funds
(18,501)
(84,906)
Return of investments in funds
5,790
56,947
Net Cash Used in Investing Activities
(20,052)
(108,713)
9
SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED — (continued)
Nine Months Ended September 30,
2020
2019
(dollars in thousands)
Cash Flows from Financing Activities
Contributions from noncontrolling and redeemable noncontrolling interests
7,084
5,323
Distributions to noncontrolling and redeemable noncontrolling interests
(3,639)
(103,983)
Dividends on Class A Shares
(11,613)
(18,955)
Proceeds from debt obligations, net of issuance costs
3,276
—
Repayment of debt obligations, including prepayment costs
(36,668)
(187,790)
Proceeds from securities sold under agreements to repurchase, net of issuance costs
—
36,134
Other, net
(2,056)
(1,166)
Net Cash Used in Financing Activities
(43,616)
(270,437)
Net change in cash and cash equivalents and restricted cash
48,436
(192,116)
Cash and cash equivalents and restricted cash, beginning of period
245,439
323,884
Cash and Cash Equivalents and Restricted Cash, End of Period
$
293,875
$
131,768
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest
$
10,794
$
9,810
Income taxes
$
5,614
$
4,199
Non-cash transactions:
Increase in paid-in capital as a result of tax receivable agreement amendment
$
—
$
50,318
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents
$
290,297
$
126,814
Restricted cash
3,578
4,954
Total Cash and Cash Equivalents and Restricted Cash
$
293,875
$
131,768
See notes to consolidated financial statements.
10
SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
1. OVERVIEW
Sculptor Capital Management, Inc. (the “Registrant”), a Delaware corporation, together with its consolidated subsidiaries (collectively, the “Company” or “Sculptor Capital”), is a global alternative asset management firm providing investment products in a range of areas, including multi-strategy, credit and real estate. With offices in New York, London, Hong Kong and Shanghai, the Company serves global clients through commingled funds, separate accounts and specialized products (collectively, the “funds”). Sculptor Capital’s distinct investment process seeks to generate attractive and consistent risk-adjusted returns across market cycles through a combination of bottom-up fundamental analysis, a high degree of flexibility, a collaborative team and integrated risk management. The Company’s capabilities span all major geographies, in strategies including fundamental equities, corporate credit, real estate debt and equity, merger arbitrage, structured credit and private investments.
The Company manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”), aircraft securitizations, collateralized bond obligations (“CBOs”), commingled products and other customized solutions for clients.
The Company’s primary sources of revenues are management fees, which are based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of its funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the funds.
The Company has one operating and reportable segment and generates substantially all of its revenues in the United States. The Company conducts its operations through Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP (collectively, the “Sculptor Operating Partnerships” and collectively with their consolidated subsidiaries, the “Sculptor Operating Group”). The Registrant holds its interests in the Sculptor Operating Group indirectly through Sculptor Capital Holding Corporation (“Sculptor Corp”), a wholly owned subsidiary of the Registrant.
References to the Company’s “executive managing directors” include the current executive managing directors of the Company, and, except where the context requires otherwise, also include certain executive managing directors who are no longer active in the Company’s business. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business.
COVID-19 Pandemic
In the first nine months of 2020, a novel strain of coronavirus (“COVID-19”) spread across the world resulting in a wide-spread market and economic downturn. The Company’s largest fund, the Sculptor Master Fund, has generated performance-related appreciation through September 30, 2020. However, in the first quarter of 2020, the fund experienced significant performance-related depreciation driven by the market and economic impacts of the ongoing COVID-19 pandemic, which had a negative impact on the Company’s incentive income during the first quarter of 2020. In the second and third quarters of 2020, the Company generated strong returns that offset the first quarter losses. To the extent that the Company experiences significant performance-related depreciation in the fourth quarter of 2020, whether due to the COVID-19 pandemic or other factors, it would have a material impact on the Company’s ability to earn incentive income in 2020, as well as in future years until the losses are recovered for continuing fund investors.
In addition, in the first quarter of 2020, the Company also experienced significant unrealized losses on its risk retention investments held in certain of the CLOs that it manages as a result of the market and economic impacts of the ongoing COVID-19 pandemic. As of September 30, 2020, those unrealized losses had been recovered due to improved market conditions. The Company is required to hold these investments for the entire duration of the CLOs. To the extent that cash flows in the
11
SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
CLOs deteriorate, whether due to the COVID-19 pandemic or other factors, the Company could experience declining interest income and impairments on these investments.
A portion of the management fees the Company earns from its CLOs is subordinated to other obligations of the CLOs, including principal and interest on the notes issued by the CLOs. When certain overcollateralization tests are triggered, cash flows received on the underlying collateral in the CLOs that would have otherwise been distributed as subordinated management fees to the Company are redirected to pay principal and interest on the more senior obligations of the CLOs. In the second quarter of 2020, driven by the market and economic impacts of the ongoing COVID-19 pandemic and resulting ratings downgrades and defaults on certain of the collateral held by CLOs, certain impacted CLOs failed to satisfy one or more overcollateralization tests, and therefore, the Company has stopped recognizing management fees for these CLOs until the collateral tests are remedied and such fees are paid. The Company recovered a portion of those management fees in the third quarter, and as of September 30, 2020, the Company had approximately $8.3 million of subordinated management fees on a U.S. GAAP basis for which collection and revenue recognition has been deferred until certain overcollateralization tests have been cured. In the event the persistent market conditions do not sufficiently recover over the life cycle of these CLOs, the Company’s management fees from its securitization vehicles will continue to deteriorate. The Company will continue to evaluate its ability to collect these and any future fees; however, to the extent the overcollateralization tests in the CLOs have not been cured, the amount of fees for which collection and revenue recognition has been deferred would continue to increase, which would negatively impact the Company’s liquidity and the amounts it recognizes as revenue in future periods.
The Company has also evaluated its long-lived assets including operating lease assets and goodwill and has not identified any impairments to these assets as of September 30, 2020.
Company Structure
The Registrant is a holding company that, through Sculptor Corp, holds equity ownership interests in the Sculptor Operating Group. The Registrant had issued and outstanding the following share classes:
•Class A Shares—Class A Shares are publicly traded and entitle the holders thereof to one vote per share on matters submitted to a vote of shareholders. The holders of Class A Shares are entitled to any distributions declared on the Class A Shares by the Registrant’s Board of Directors (the “Board”).
•Class B Shares—Class B Shares are held by executive managing directors, as further discussed below. These shares are not publicly traded but rather entitle the executive managing directors to one vote per share on matters submitted to a vote of shareholders. These shares do not participate in the earnings of the Registrant, as the executive managing directors participate in the related economics of the Sculptor Operating Group through their direct ownership in the Sculptor Operating Group, subject to the Distribution Holiday discussed below.
The Company conducts its operations through the Sculptor Operating Group. The following is a list of the outstanding units of the Sculptor Operating Partnerships as of September 30, 2020:
•Group A Units—Group A Units are limited partner interests issued to certain executive managing directors. Beginning on the final day of the Distribution Holiday (as defined in Note 3), each executive managing director may exchange his or her vested and booked-up (as defined below) Group A Units for an equal number of Class A Shares (or the cash equivalent thereof) over a period of two years in three equal installments commencing upon the final day of the Distribution Holiday and on each of the first and second anniversary thereof (or, for units that become vested and booked-up Group A Units after the final day of the Distribution Holiday, from the later of the date on which they would have been exchangeable in accordance with the foregoing and the date on which they become vested and booked-up Group A Units) (and thereafter such units will remain exchangeable), in each case, subject to certain restrictions. A “book-up” is achieved when sufficient appreciation has occurred to meet a prescribed capital account book-up target under the terms of the Sculptor Operating Partnership limited partnership agreements.
12
SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
Holders of Group A Units do not receive distributions during the Distribution Holiday. Group A Unit grants are accounted for as equity-based compensation. See Note 14 in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2019, dated February 25, 2020 (“Annual Report”) for additional information. The Company completed a recapitalization in February 2019 (“Recapitalization”). See Note 3 for additional details. In connection with the Recapitalization each Group A Unit outstanding on the Recapitalization date was recapitalized into 0.65 Group A Units and 0.35 Group A-1 Units.
•Group A-1 Units—Group A-1 Units are limited partner interests into which 0.35 of each Group A Unit was recapitalized in connection with the reallocation that was effectuated by the Recapitalization. The Group A-1 Units will be canceled at such time and to the extent that the Group E Units granted in connection with the Recapitalization vest and achieve a book-up. Group A-1 Units are not eligible to receive distributions at any time and do not participate in the net income (loss) of the Sculptor Operating Group. However, the holders of Group A-1 Units shall participate in any sale, change of control or other liquidity event that takes place prior to cancellation of the Group A-1 Units. In the Recapitalization, the holders of the 2016 Preferred Units (as defined below) forfeited an additional 749,813 Group A Units, which were recapitalized into Group A-1 Units.
•Group B Units—Sculptor Corp holds a general partner interest and Group B Units in each Sculptor Operating Partnership. Sculptor Corp owns all of the Group B Units, which represent equity interest in the Sculptor Operating Partnerships. Except during the Distribution Holiday as described above, the Group B Units are economically identical to the Group A Units held by executive managing directors but are not exchangeable for Class A Shares and are not subject to vesting, forfeiture or minimum retained ownership requirements.
•Group E Units—Group E Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group E Unit converts into a Group A Unit and becomes exchangeable for one Class A Share (or the cash equivalent thereof) to the extent there has been a sufficient amount of appreciation for a Group E Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group E Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right, in a change of control transaction or other liquidity event only to the extent of their relative positive capital accounts (if any). In connection with the Recapitalization, all outstanding Group D Units, which were non-equity profits interests, converted into Group E Units on a one-for-one basis. Holders of Group E Units do not receive distributions during the Distribution Holiday. See Note 3 for additional information. Group E Unit grants are accounted for as equity-based compensation. See Note 14 in the Annual Report for additional information.
•Group P Units—Group P Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group P Unit becomes exchangeable for one Class A Share (or the cash equivalent thereof), in each case upon satisfaction of certain service and performance conditions at such time and, with respect to exchanges, to the extent there has been sufficient appreciation for a Group P Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group P Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right, in a change of control transaction or other liquidity event only to the extent that certain performance conditions are met and to the extent of their relative positive capital accounts (if any). The terms of the Group P Units may be varied for certain executive managing directors. Group P Unit grants are accounted for as equity-based compensation. See Note 14 in the Annual Report for additional information.
•Preferred Units— The Preferred Units are non-voting preferred equity interests in the Sculptor Operating Partnerships. Preferred Units issued in 2016 and 2017 are collectively referred to as the “2016 Preferred Units.” The Preferred Units issued in 2019 are referred to as the “2019 Preferred Units.” See Note 10 for additional information.
13
SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
Executive managing directors hold a number of Class B Shares equal to the number of Group A Units, vested Group E Units, Group A-1 Units (to the extent the corresponding Class B Shares have not been canceled in connection with the vesting of certain Group E Units issued in connection with the Recapitalization, as further discussed in Note 3) and Group P Units held. Upon the exchange of a Group A Unit or a Group P Unit for a Class A Share, the corresponding Class B Share is canceled and a Group B Unit is issued to Sculptor Corp.
The following table presents the number of shares and units (excluding Preferred Units) of the Registrant and the Sculptor Operating Partnerships, respectively, that were outstanding as of September 30, 2020: