OM ASSET MANAGEMENT PLC, 10-Q filed on 5/10/2016
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2016
May 6, 2016
Document and Entity Information
 
 
Entity Registrant Name
OM Asset Management plc 
 
Entity Central Index Key
0001611702 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2016 
 
Document Fiscal Year Focus
2016 
 
Entity Current Reporting Status
Yes 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding (in shares)
 
120,203,522 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Assets
 
 
Cash and cash equivalents
$ 70.4 
$ 135.9 
Investment advisory fees receivable
137.0 
151.8 
Property and equipment, net
31.1 
30.7 
Investments (includes balances reported at fair value of $102.3 and $97.0)
211.5 
202.6 
Acquired intangibles, net
1.4 
1.5 
Goodwill
126.5 
126.5 
Other assets
17.8 
23.0 
Other amounts due from related parties
0.2 
Note receivable due from related party
0.8 
0.5 
Deferred tax assets
343.1 
341.6 
Total assets
939.8 
1,014.1 
Liabilities and shareholders’ equity
 
 
Accounts payable and accrued expenses
49.6 
45.7 
Accrued incentive compensation
50.4 
134.0 
Other amounts due to related parties
214.5 
222.9 
Long-term compensation liabilities
264.3 
260.8 
Accrued income taxes
93.8 
87.7 
Third party borrowings
85.0 
90.0 
Other liabilities
6.0 
7.1 
Total liabilities
763.6 
848.2 
Commitments and contingencies
   
   
Equity:
 
 
Ordinary shares (nominal value $0.001; 120,854,122 and 120,558,278 shares, respectively, issued)
0.1 
0.1 
Shareholders’ equity
189.7 
168.6 
Accumulated other comprehensive loss
(13.6)
(2.8)
Total equity
176.2 
165.9 
Total liabilities and equity
$ 939.8 
$ 1,014.1 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Investments, fair value
$ 102.3 
$ 97.0 
Ordinary shares, nominal value (in dollars per share)
$ 0.001 
$ 0.001 
Ordinary shares, issued (shares)
120,854,122 
120,558,278 
Condensed Consolidated Statements of Operations (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Revenue:
 
 
Management fees
$ 149.6 
$ 156.9 
Performance fees
3.6 
Other revenue
0.1 
Total revenue
149.6 
160.6 
Operating expenses:
 
 
Compensation and benefits
84.6 
94.8 
General and administrative expense
21.8 
19.8 
Depreciation and amortization
2.2 
1.6 
Total operating expenses
108.6 
116.2 
Operating income
41.0 
44.4 
Non-operating income and (expense):
 
 
Investment income
3.5 
2.7 
Interest expense
(0.5)
(0.9)
Total non-operating income
3.0 
1.8 
Income from continuing operations before taxes
44.0 
46.2 
Income tax expense
13.4 
12.2 
Income from continuing operations
30.6 
34.0 
Gain on disposal of discontinued operations, net of tax
0.2 
0.2 
Net income
$ 30.8 
$ 34.2 
Earnings per share (basic) (in dollars per share)
$ 0.26 
$ 0.28 
Earnings per share (diluted) (in dollars per share)
$ 0.26 
$ 0.28 
Continuing operations earnings per share (basic) (in dollars per share)
$ 0.26 
$ 0.28 
Continuing operations earnings per share (diluted) (in dollars per share)
$ 0.26 
$ 0.28 
Weighted average ordinary shares outstanding (in shares)
120,024,818 
120,000,000 
Weighted average diluted ordinary shares outstanding (in shares)
120,000,000 
120,427,907 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
Net income
$ 30.8 
$ 34.2 
Valuation of derivative securities, net of tax
(11.0)
Foreign currency translation adjustment
0.2 
(0.3)
Total other comprehensive income
$ 20.0 
$ 33.9 
Condensed Consolidated Statements of Changes in Stockholders' Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Accumulated other comprehensive income (loss)
Consolidated Entity Excluding Consolidated Funds
Ordinary shares
Consolidated Entity Excluding Consolidated Funds
Shareholders’ equity (deficit)
Consolidated Entity Excluding Consolidated Funds
Accumulated other comprehensive income (loss)
Consolidated Entity Excluding Consolidated Funds
Total shareholders’ equity (deficit)
Consolidated Funds
Consolidated Funds
Non-controlling interests
Balance at Dec. 31, 2014
$ 2,495.5 
 
$ 0.1 
$ 31.1 
$ 5.3 
$ 36.5 
 
$ 2,459.0 
Balance (in shares) at Dec. 31, 2014
 
 
120,000,000 
 
 
 
 
 
Balance at Dec. 31, 2014
2,557.4 
 
 
 
 
 
 
 
Balance at Dec. 31, 2014
 
 
 
 
 
 
61.9 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
 
Issuance of ordinary shares (in shares)
 
 
500,000 
 
 
 
 
 
Capital contributions redemptions
(0.3)
 
 
(0.3)
 
(0.3)
 
 
Equity-based compensation
2.7 
 
 
2.7 
 
2.7 
 
 
Foreign currency translation adjustment
(0.3)
 
 
 
(0.3)
(0.3)
 
 
Net de-consolidation of Funds
(2,459.0)
 
 
 
 
 
 
(2,459.0)
Valuation of derivative securities, net of tax
 
 
 
 
 
 
 
Dividends to shareholders
(2.1)
 
 
(2.1)
 
(2.1)
 
 
Dividends to related parties
(7.6)
 
 
(7.6)
 
(7.6)
 
 
Net income
34.2 
 
 
34.2 
 
34.2 
 
 
Increase (Decrease) in redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
 
Net de-consolidation of Funds
 
 
 
 
 
 
(61.9)
 
Increase (Decrease) in total equity and redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
 
Capital contributions redemptions
(0.3)
 
 
 
 
 
 
 
Equity-based compensation
2.7 
 
 
 
 
 
 
 
Foreign currency translation adjustment
(0.3)
 
 
 
 
 
 
 
De-consolidation of Funds
(2,520.9)
 
 
 
 
 
 
 
Dividends to shareholders
(2.1)
 
 
 
 
 
 
 
Dividends to related parties
(7.6)
 
 
 
 
 
 
 
Net income (loss)
34.2 
 
 
 
 
 
 
 
Balance at Mar. 31, 2015
63.1 
 
0.1 
58.0 
5.0 
63.1 
 
Balance (in shares) at Mar. 31, 2015
 
 
120,500,000 
 
 
 
 
 
Balance at Mar. 31, 2015
63.1 
 
 
 
 
 
 
 
Balance at Mar. 31, 2015
 
 
 
 
 
 
 
Balance at Dec. 31, 2015
165.9 
(4.6)
0.1 
168.6 
(2.8)
165.9 
 
Balance (in shares) at Dec. 31, 2015
 
 
120,500,000 
 
 
 
 
 
Balance at Dec. 31, 2015
165.9 
 
 
 
 
 
 
 
Balance at Dec. 31, 2015
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
 
Issuance of ordinary shares (in shares)
 
 
500,000 
 
 
 
 
 
Equity-based compensation
2.9 
 
 
2.9 
 
2.9 
 
 
Foreign currency translation adjustment
0.2 
 
 
 
0.2 
0.2 
 
 
Repurchase of ordinary shares (in shares)
 
 
(200,000)
 
 
 
 
 
Repurchase of ordinary shares
(2.8)
 
 
(2.8)
 
(2.8)
 
 
Valuation of derivative securities, net of tax
(11.0)
 
 
 
(11.0)
(11.0)
 
 
Dividends to shareholders
(3.4)
 
 
(3.4)
 
(3.4)
 
 
Dividends to related parties
(6.4)
 
 
(6.4)
 
(6.4)
 
 
Net income
30.8 
 
 
30.8 
 
30.8 
 
 
Increase (Decrease) in total equity and redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
 
Equity-based compensation
2.9 
 
 
 
 
 
 
 
Repurchase of ordinary shares
(2.8)
 
 
 
 
 
 
 
Foreign currency translation adjustment
0.2 
 
 
 
 
 
 
 
De-consolidation of Funds
 
 
 
 
 
 
 
Valuation of derivative securities, net of tax
(11.0)
 
 
 
 
 
 
 
Dividends to shareholders
(3.4)
 
 
 
 
 
 
 
Dividends to related parties
(6.4)
 
 
 
 
 
 
 
Net income (loss)
30.8 
 
 
 
 
 
 
 
Balance at Mar. 31, 2016
176.2 
(15.4)
0.1 
189.7 
(13.6)
176.2 
 
Balance (in shares) at Mar. 31, 2016
 
 
120,800,000 
 
 
 
 
 
Balance at Mar. 31, 2016
176.2 
 
 
 
 
 
 
 
Balance at Mar. 31, 2016
 
 
 
 
 
 
$ 0 
 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities:
 
 
Net income
$ 30.8 
$ 34.2 
Adjustments to reconcile net income to net cash provided by (used in) operating activities from continuing operations:
 
 
Net (income) from discontinued operations
(0.2)
(0.2)
Depreciation and other amortization
2.2 
1.6 
Amortization and revaluation of non-cash compensation awards
6.0 
9.8 
Net earnings from Affiliates accounted for using the equity method
(3.2)
(2.6)
Distributions received from equity method Affiliates
0.4 
0.2 
Deferred income taxes
1.0 
2.5 
Changes in operating assets and liabilities (excluding discontinued operations):
 
 
(Increase) decrease in investment advisory fees receivable and other amounts due from related parties
14.2 
7.8 
(Increase) decrease in other receivables, prepayments, deposits and other assets
5.2 
6.5 
Increase (decrease) in accrued incentive compensation, other amounts due to related parties and other liabilities
(80.3)
(73.7)
Increase (decrease) in accounts payable and accruals and accrued income taxes
(4.0)
(3.1)
Net cash flows used in operating activities of continuing operations
(27.9)
(17.0)
Net cash flows provided by (used in) operating activities of discontinued operations
(0.2)
0.1 
Total net cash flows used in operating activities
(28.1)
(16.9)
Cash flows from investing activities:
 
 
Purchase of fixed assets
(2.5)
(2.8)
Purchase of investment securities
(13.1)
(7.6)
Sale of investment securities
7.0 
3.2 
De-consolidation of Funds
(93.0)
Net cash flows used in investing activities of continuing operations
(8.6)
(100.2)
Net cash flows provided by (used in) investing activities of discontinued operations
Total net cash flows used in investing activities
(8.6)
(100.2)
Cash flows from financing activities:
 
 
Proceeds from third party borrowings
28.0 
Repayment of third party borrowings
(33.0)
Repayment of related party borrowings
(1.0)
Payment to Parent for deferred tax arrangement
(8.8)
(13.6)
Payment to Parent for co-investment redemptions
(2.6)
(2.8)
Dividends paid to shareholders
(3.3)
(2.0)
Dividends paid to related parties
(6.3)
(7.6)
Repurchases of ordinary shares
(2.8)
Net cash flows used in financing activities of continuing operations
(28.8)
(27.0)
Net cash flows provided by (used in) financing activities of discontinued operations
Total net cash flows used in financing activities
(28.8)
(27.0)
Net decrease in cash and cash equivalents
(65.5)
(144.1)
Cash and cash equivalents at beginning of period
135.9 
268.6 
Cash and cash equivalents at end of period
70.4 
124.5 
Supplemental disclosure of cash flow information:
 
 
Interest paid (excluding consolidated Funds)
0.5 
0.9 
Income taxes paid
5.0 
2.6 
De-consolidation of Funds
(2,520.9)
Non-cash capital contribution to Parent
$ 0 
$ (0.1)
Organization and Description of the Business
Organization and Description of the Business
OM Asset Management plc (“OMAM” or the “Company”), through its subsidiaries, is a global asset management business with interests in a diverse group of boutique investment management firms (the “Affiliates”) individually headquartered in the United States. The Company provides investment management services globally to predominantly institutional investors, in asset classes that include U.S. and global equities, fixed income, real estate and timber. Fees for services are largely asset-based and, as a result, the Company’s revenue fluctuates based on the performance of financial markets and investors’ asset flows in and out of the Company’s products.
The Company’s Affiliates are organized as limited liability companies. The Company generally utilizes a profit-sharing model in structuring its compensation and ownership arrangements with Affiliates. The Affiliates’ variable compensation is generally based on each firm’s profitability. OMAM and Affiliate key employees share in profits after variable compensation according to their respective ownership interests. The profit-sharing model results in alignment of OMAM and Affiliate key employee economic interests, which is critical to the Company’s talent management strategy and long-term growth of the business. The Company operates in one reportable segment.
The Company is a majority-owned subsidiary of Old Mutual plc (the “Parent”), an international long-term savings, protection and investment group, listed on the London Stock Exchange.
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies
The Company’s significant accounting policies are as follows:
Basis of presentation
These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets; statements of operations and of comprehensive income; statements of changes in shareholders’ equity; and statements of cash flows of the Company. Within these Condensed Consolidated Financial Statements, entities that are part of the Parent’s consolidated results, but are not part of OMAM, as defined above, are referred to as “related parties.”
On October 15, 2014, the Company completed the initial public offering (the “Offering”) by its Parent of 22,000,000 ordinary shares of the Company pursuant to the Securities Act of 1933, as amended.  Additionally, the underwriters in the Offering exercised a portion of their overallotment option and purchased an additional 2,231,375 shares of the Company from the Parent.  On June 22, 2015, the Company completed a secondary public offering by its Parent of 13,300,000 ordinary shares of the Company pursuant to the Securities Act of 1933, as amended.  Additionally, the underwriters in the secondary public offering exercised their full overallotment option and purchased an additional 1,995,000 shares of the Company from the Parent. 
The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and the Parent are included in the Condensed Consolidated Financial Statements, however material intercompany balances and transactions among the Company and its consolidated Affiliates are eliminated in consolidation.
These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. The Company’s significant accounting policies, which have been consistently applied, are summarized in those Financial Statements.
Consolidation
Affiliates
The Company evaluates each of its Affiliate and other operating entities to determine the appropriate method of accounting. Generally, majority-owned entities or otherwise controlled investments in which the Company holds a controlling financial interest as the principal shareholder, managing member, or general partner are consolidated.
Funds
In evaluating whether or not a legal entity must be consolidated, the Company determines if such entity is a variable interest entity (“VIE”) or a voting interest entity (“VOE”). A VOE is considered an entity in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns, and the right to direct the activities of the entity that most significantly impact the entity’s economic performance. A VIE is an entity that lacks one or more of the characteristics of a VOE. Assessing whether an entity is a VIE or VOE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership and any related party or de facto agent implications of the Company’s involvement with the entity. Investments that are determined to be VIEs are consolidated if the Company or a consolidated Affiliate is the primary beneficiary of the investment. VOEs are typically consolidated if the Company holds the majority voting interest or otherwise controls the entity.
In the normal course of business, the Company’s Affiliates sponsor and manage certain investment vehicles (the “Funds”). The Company assesses consolidation requirements with respect to its Funds pursuant to Accounting Standards Codification (“ASC”) Topic 810, Consolidation, as amended by Accounting Standards Update 2015-02, Consolidation: Amendments to the Consolidation Analysis ("ASU 2015-02") relating to the consolidation of VIEs.
In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. For VIEs that are investment companies subject to ASU 2010-10, the primary beneficiary of the VIE is generally the variable interest holder that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.
The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest. A controlling financial interest is defined as (i) the power to direct the activities of the VIE that most significantly impacts its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. If no single party satisfies both criteria, but the Company and its related parties satisfy the criteria on a combined basis, then the primary beneficiary is the entity out of the related party group that is most closely associated to the VIE. The consolidation analysis can generally be performed qualitatively, however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.
The Company consolidates VOEs when it has control over significant operating, financial and investing decisions of the entity or holds the majority voting interest. For VOEs organized as limited partnerships or as an entity with governance structures similar to a limited partnership (e.g., limited liability company with a managing member), the Company consolidates an entity when it holds the controlling general partnership interest and the limited partners do not hold substantive participating rights or rights to remove and replace the general partner or rights that could provide the limited partners with the ability to impact the ongoing governance and operating activities of the entity.
Upon the occurrence of certain events (such as contributions and redemptions, either by the Company, its Affiliates, or third parties, or amendments to the governing documents of the Company’s investees or sponsored Funds) management reviews and reconsiders its previous conclusion regarding the status of an entity as a VIE or a VOE. Additionally, management continually reconsiders whether the Company is deemed to be a VIE’s primary beneficiary who consolidates such entity. As of March 31, 2016, there were no Funds which were consolidated pursuant to ASU 2015-02.
Derivatives and Hedging
The Company may utilize derivative financial instruments to hedge the risk of movement of interest rates and foreign currency on financial assets and liabilities. These derivative financial instruments may or may not qualify as hedges for accounting purposes. The Company records all derivative financial instruments as either assets or liabilities on its Consolidated Balance Sheets and measures these instruments at fair value. For a derivative financial instrument that qualifies as a hedge for accounting purposes and is designated as a hedging instrument, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings over the life of the hedge. The ineffective portion of the gain or loss is reported in earnings immediately.
Use of Estimates
The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ significantly from those estimates.
Fair Value Measurements
Fair Value Measurements
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2016 (in millions):
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value,
March 31, 2016
Assets of OMAM(1)
 

 
 

 
 

 
 
 
 

Investment securities(2)
$
69.2

 
$

 
$

 
$

 
$
69.2

Investments in unconsolidated Funds(3)

 

 

 
33.1

 
33.1

Total fair value assets
$
69.2

 
$

 
$

 
$
33.1

 
$
102.3

 
 
 
 
 
 
 
 
 
 
Liabilities of OMAM(1)
 
 
 
 
 
 
 
 
 
Derivative securities
$

 
$
(22.5
)
 
$

 
$

 
$
(22.5
)
Total fair value liabilities
$

 
$
(22.5
)
 
$

 
$

 
$
(22.5
)

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2015 (in millions): 
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value December 31, 2015
Assets of OMAM(1)
 

 
 

 
 

 
 

 
 

Investment securities(2)
$
66.9

 
$

 
$

 
$

 
$
66.9

Investments in unconsolidated Funds(3)

 

 

 
30.1

 
30.1

Total fair value assets
$
66.9

 
$

 
$

 
$
30.1

 
$
97.0

Liabilities of consolidated Funds(1)
 

 
 

 
 

 
 
 
 

Derivative securities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
Total fair value liabilities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
 
 
(1)
Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliates. Of these, pursuant to ASU 2015-07, collective investment funds are multi-strategy products, uncategorized because they are redeemable monthly and valued at net asset value per share of the fund without adjustment which the Company believes represents the fair value of the investments.
The fair value of other investments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs and therefore classified within Level II. The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided. If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.
Equity, short-term investment funds and derivatives which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. These securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. 
(2)
Investment securities of $69.2 million and $66.9 million at March 31, 2016 and December 31, 2015, respectively, are investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I. Not included in the above are $51.9 million and $51.6 million at March 31, 2016 and December 31, 2015, respectively, of various investments carried at cost, including investments in timber and timberlands.
(3)
The $33.1 million and $30.1 million at March 31, 2016 and December 31, 2015, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in funds advised by Affiliates and are valued using NAV which the Company relies on to determine their fair value as a practical expedient. The Company has not classified these investments in the fair value hierarchy in accordance with ASU 2015-07. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investments funds.The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates.
These investments are subject to longer than monthly or quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one to eight years from March 31, 2016. The valuation process for the underlying real estate investments held by the real estate investments Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair-value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions. 
There were no significant transfers of financial assets or liabilities among Levels I, II or III during the three months ended March 31, 2016 or 2015.
Variable Interest Entities
Variable Interest Entities
The Company sponsors the formation of various entities considered to be VIEs. The Company evaluates the consolidation of these entities as required pursuant to ASC Topic 810 relating to the consolidation of VIEs. These VIEs are primarily Funds managed by Affiliates and are investment vehicles typically owned entirely by third-party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own minority interests in an Affiliate.
The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to the majority of the risks and rewards of the entity. Typically the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.
At March 31, 2016 and December 31, 2015, there were no Funds that were VIEs requiring consolidation by the Company.
The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIE’s results are attributable to third parties. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors.
The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions): 
 
March 31,
2016
 
December 31,
2015
Unconsolidated VIE assets
$
7,290.7

 
$
7,302.4

Unconsolidated VIE liabilities
$
4,204.5

 
$
4,189.1

Equity interests on the Condensed Consolidated Balance Sheet
$
56.2

 
$
53.2
*
Maximum risk of loss (1)
$
62.8

 
$
59.0
*
 
 
(1)
Includes equity investments the Company has made or is required to make in unconsolidated funds and any earned but uncollected management/incentive fees from those funds. The Company does not record performance/incentive allocations until the respective measurement period has ended.
*    Balances have been amended to reflect immaterial corrections.
In addition to the multiple unconsolidated VIE Funds, the Company determined that Heitman LLC, one of the Company’s Affiliates, is a VIE. The Company concluded that it is not the primary beneficiary of Heitman LLC because it does not hold the power to direct its most economically significant activities. The Company aggregated Heitman LLC with the Company’s other unconsolidated VIE Funds due to their similar risk profiles given that the risks and rewards are driven by changes in investment values and the Affiliates’ ability to manage those assets.
Related Party Transactions
Related Party Transactions
The Company’s Parent provides the Company with various oversight services, including governance, which includes oversight by the Parent’s board and executive committees, investor relations, procurement of insurance coverage, human resources, financial reporting, internal audit, treasury, systems, risk and tax services. That portion of the above costs which (i) are directly attributable to the Company, (ii) have been charged to the Company by the Parent and (iii) have been paid to the Parent by the Company, have been recorded in the Company’s unaudited Condensed Consolidated Financial Statements and was $0.3 million for both of the three months ended March 31, 2016 and 2015.
As part of its profit-interests plan, an Affiliate made tax payments in 2014 on behalf of its employees who became vested in profit interests of the Affiliate. Payments totaling $5.1 million and $5.3 million were repaid by the employees of the Affiliate in the three months ended March 31, 2016 and 2015, respectively.
During 2014, the Company entered into a seed capital management agreement, a co-investment deed, a deferred tax asset deed and a shareholder agreement with the Parent and/or the Parent’s subsidiaries. Amounts owed to the Parent associated with the deferred tax asset deed were $190.5 million at March 31, 2016. Amounts owed to the Parent associated with the co-investment deed were $17.1 million at March 31, 2016, net of tax. As of March 31, 2016, the Company recorded $4.7 million withheld for redemptions and estimated taxes due under the co-investment deed. Amounts withheld in excess of the future tax liability will be payable to the Parent upon settlement.
Borrowings and Debt
Borrowings and Debt
The Company’s long term debt at March 31, 2016 and December 31, 2015 was comprised of the following (in millions): 
 
 
3/31/2016
 
12/31/2015
 
Interest rate
 
Maturity
Third party obligations:
 
 

 
 

 
 
 
 
Revolving credit facility
 
$
85.0

 
$
90.0

 
LIBOR + 1.25% plus 0.20% commitment fee
 
October 15, 2019
Total long term debt of the Company
 
$
85.0

 
$
90.0

 
 
 
 

The fair value of borrowings approximated net cost basis as of March 31, 2016 and December 31, 2015. Fair value was determined based on future cash flows, discounted to present value using current market rates. The inputs are categorized as Level III in the fair value hierarchy. Interest expense incurred amounted to a total of $0.5 million and $0.9 million for the three months ended March 31, 2016 and 2015, respectively.
On October 15, 2014, the Company entered into a revolving credit facility with Citibank, as administrative agent and issuing bank, Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint book runners (the “Credit Facility”). Pursuant to the terms of the Credit Facility, the Company may obtain loans on a revolving credit basis and procure the issuance of letters of credit in an aggregate amount at any time outstanding not in excess of $350 million. The Credit Facility has a maturity date of October 15, 2019. Borrowings under the credit facility will bear interest, at OMAM’s option, at either the per annum rate equal to (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the one month Adjusted LIBO Rate plus 1.0%, plus, in each case an additional amount ranging from 0.25% to 1.00%, with such additional amount being based from time to time on the ratio of the Company’s total consolidated indebtedness to Adjusted EBITDA (a “Leverage Ratio”) until either Moody’s Investor Service, Inc. or Standard & Poor’s has assigned an initial rating to the Company’s senior, unsecured long-term indebtedness for borrowed money that is not subject to credit enhancement, or its credit rating, at which time such additional amount will be based on its credit rating or (b) the London interbank offered rate for a period, at the Company’s election, equal to one, two, three or six months plus an additional amount ranging from 1.25% to 2.00%, with such additional amount being based from time to time on the Company’s Leverage Ratio until it has been assigned a credit rating, at which time such additional amount will be based on its credit rating. In addition, the Company will be charged a commitment fee based on the average daily unused portion of the revolving credit facility at a per annum rate ranging from 0.20% to 0.50%, with such amount being based from time to time on its Leverage Ratio until it has been assigned a credit rating, at which time such amount will be based on the Company’s credit rating. Under the Credit Facility, the ratio of third-party borrowings to trailing twelve months Adjusted EBITDA cannot exceed 3.0x, and the interest coverage ratio must not be less than 4.0x. At March 31, 2016 the outstanding balance of the facility was $85.0 million. An interest rate of LIBOR plus a margin of 1.25% and commitment fee rate of 0.20% is being charged, and the Company’s ratio of third-party borrowings to trailing twelve months Adjusted EBITDA was 0.4x.
Commitments and Contingencies
Commitments and Contingencies
Operational commitments
The Company had unfunded commitments to invest up to $12.7 million and $15.7 million in co-investments with an Affiliate as of March 31, 2016 and December 31, 2015, respectively. These commitments will be funded as required through the end of the respective investment periods ranging through fiscal 2018.
Certain Affiliates operate under regulatory authorities that require that they maintain minimum financial or capital requirements. Management is not aware of any violations of such financial requirements occurring during the period.
Litigation
The Company and its Affiliates are subject to claims, legal proceedings and other contingencies in the ordinary course of their business activities. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company or its Affiliates. The Company and its Affiliates establish accruals for matters for which the outcome is probable and can be reasonably estimated. As of March 31, 2016, there were no accruals for claims, legal proceedings or other contingencies.
Indemnifications
In the normal course of business, such as through agreements to enter into business combinations and divestitures of Affiliates, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.
Foreign tax contingency
The Company has clients in non-U.S. jurisdictions which require entities that are conducting certain business activities in such jurisdictions to collect and remit tax assessed on certain fees paid for goods and services provided. The Company does not believe this requirement is applicable based on its limited business activities in these jurisdictions. However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes. At March 31, 2016, management of the Company has estimated the potential maximum exposure and concluded that it is not material. No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at March 31, 2016.
Considerations of credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash investments. The Company maintains cash and cash equivalents and short term investments with various financial institutions. These financial institutions are typically located in cities in which the Company and its Affiliates operate. For the Company and certain Affiliates, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits.
Earnings Per Share
Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding. Diluted earnings per share is similar to basic earnings per share, but is adjusted for the effect of potentially issuable ordinary shares, except when inclusion is antidilutive. 
The calculation of basic and diluted earnings per ordinary share is as follows (dollars in millions, except per share data):
 
Three Months Ended March 31,
 
2016
 
2015
Numerator:
 

 
 

Net income
$
30.8

 
$
34.2

Less: Total income available to participating unvested securities(1)
0.2

 
0.1

Total net income attributable to ordinary shares
$
30.6

 
$
34.1

Denominator:
 

 
 

Weighted-average ordinary shares outstanding—basic
120,024,818

 
120,000,000

Potential ordinary shares
 
 
 
Restricted stock units
23,082

 
427,907

Weighted-average ordinary shares outstanding—diluted
120,047,900

 
120,427,907

Earnings per ordinary share:
 

 
 

Basic
$
0.26

 
$
0.28

Diluted
$
0.26

 
$
0.28

 
 
(1)
Income available to participating unvested securities includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings.
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income
The following tables show the tax effects allocated to each component of other comprehensive income (in millions):
 
For the three months ended March 31, 2016
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
0.2

 
$

 
$
0.2

Change in net realized and unrealized gain (loss) on derivative securities
(13.8
)
 
2.8

 
(11.0
)
Other comprehensive income (loss)
$
(13.6
)
 
$
2.8

 
$
(10.8
)
 
For the three months ended March 31, 2015
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
(0.3
)
 
$

 
$
(0.3
)
Other comprehensive loss
$
(0.3
)
 
$

 
$
(0.3
)
The components of accumulated other comprehensive income (loss) for the three months ended March 31, 2016 were as follows (in millions):
 
Foreign currency translation adjustment
 
Valuation of derivative securities
 
Total
Balance, as of December 31, 2015
$
2.0

 
$
(6.6
)
 
$
(4.6
)
Other comprehensive income (loss)
0.2

 
(11.0
)
 
(10.8
)
Balance, as of March 31, 2016
$
2.2

 
$
(17.6
)
 
$
(15.4
)

In the three months ended March 31, 2016 the Company recorded $(11.0) million, net of tax of $2.8 million, on the derivative contract as further described in Note 10. There were no significant amounts reclassified from accumulated other comprehensive income (loss) to the Condensed Consolidated Statements of Income for the three months ended March 31, 2016 and 2015.
Derivatives and Hedging
Derivatives and Hedging
Cash flow hedge
In late July 2015, the Company entered into a $300 million notional Treasury rate lock contract which was designated and qualified as a cash flow hedge under Accounting Standard Codification 815, "Derivatives and Hedging", (“ASC 815”). The Company documented its hedging strategy and risk management objective for this contract in anticipation of a future debt issuance. The Treasury rate lock contract effectively eliminates the impact of fluctuations in the underlying benchmark interest rate. The Company assesses the effectiveness of the hedging contract at inception and on a quarterly basis thereafter. At March 31, 2016, the hedging contract was evaluated to be highly effective in offsetting changes in cash flows associated with the hedged items. The Company did not record any hedge ineffectiveness during the quarter ended March 31, 2016. The fair value of the contract included in accounts payable and accrued expenses was $22.5 million at March 31, 2016. Amounts included in accumulated other comprehensive income were $(11.0) million, net of tax of $2.8 million, for the quarter ended March 31, 2016. The Treasury rate lock contract has not been settled as of March 31, 2016. During the next twelve months the Company expects to reclassify approximately $0.6 million, net of tax, of the loss on the Treasury rate lock contract into earnings.
Discontinued Operations and Restructuring
Discontinued Operations and Restructuring
All of the Company’s discontinued operations were wound down or transferred to the Parent prior to the third quarter of 2014 and there were no results from discontinued operations in either the three months ended March 31, 2016 or March 31, 2015.
The Company recognized a gain on disposal, net of taxes, of $0.2 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively.
Basis of Presentation and Significant Accounting Policies (Policies)
Basis of presentation
These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets; statements of operations and of comprehensive income; statements of changes in shareholders’ equity; and statements of cash flows of the Company. Within these Condensed Consolidated Financial Statements, entities that are part of the Parent’s consolidated results, but are not part of OMAM, as defined above, are referred to as “related parties.”
On October 15, 2014, the Company completed the initial public offering (the “Offering”) by its Parent of 22,000,000 ordinary shares of the Company pursuant to the Securities Act of 1933, as amended.  Additionally, the underwriters in the Offering exercised a portion of their overallotment option and purchased an additional 2,231,375 shares of the Company from the Parent.  On June 22, 2015, the Company completed a secondary public offering by its Parent of 13,300,000 ordinary shares of the Company pursuant to the Securities Act of 1933, as amended.  Additionally, the underwriters in the secondary public offering exercised their full overallotment option and purchased an additional 1,995,000 shares of the Company from the Parent. 
The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and the Parent are included in the Condensed Consolidated Financial Statements, however material intercompany balances and transactions among the Company and its consolidated Affiliates are eliminated in consolidation.
These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. The Company’s significant accounting policies, which have been consistently applied, are summarized in those Financial Statements.
Consolidation
Affiliates
The Company evaluates each of its Affiliate and other operating entities to determine the appropriate method of accounting. Generally, majority-owned entities or otherwise controlled investments in which the Company holds a controlling financial interest as the principal shareholder, managing member, or general partner are consolidated.
Funds
In evaluating whether or not a legal entity must be consolidated, the Company determines if such entity is a variable interest entity (“VIE”) or a voting interest entity (“VOE”). A VOE is considered an entity in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns, and the right to direct the activities of the entity that most significantly impact the entity’s economic performance. A VIE is an entity that lacks one or more of the characteristics of a VOE. Assessing whether an entity is a VIE or VOE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership and any related party or de facto agent implications of the Company’s involvement with the entity. Investments that are determined to be VIEs are consolidated if the Company or a consolidated Affiliate is the primary beneficiary of the investment. VOEs are typically consolidated if the Company holds the majority voting interest or otherwise controls the entity.
In the normal course of business, the Company’s Affiliates sponsor and manage certain investment vehicles (the “Funds”). The Company assesses consolidation requirements with respect to its Funds pursuant to Accounting Standards Codification (“ASC”) Topic 810, Consolidation, as amended by Accounting Standards Update 2015-02, Consolidation: Amendments to the Consolidation Analysis ("ASU 2015-02") relating to the consolidation of VIEs.
In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. For VIEs that are investment companies subject to ASU 2010-10, the primary beneficiary of the VIE is generally the variable interest holder that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.
The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest. A controlling financial interest is defined as (i) the power to direct the activities of the VIE that most significantly impacts its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. If no single party satisfies both criteria, but the Company and its related parties satisfy the criteria on a combined basis, then the primary beneficiary is the entity out of the related party group that is most closely associated to the VIE. The consolidation analysis can generally be performed qualitatively, however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.
The Company consolidates VOEs when it has control over significant operating, financial and investing decisions of the entity or holds the majority voting interest. For VOEs organized as limited partnerships or as an entity with governance structures similar to a limited partnership (e.g., limited liability company with a managing member), the Company consolidates an entity when it holds the controlling general partnership interest and the limited partners do not hold substantive participating rights or rights to remove and replace the general partner or rights that could provide the limited partners with the ability to impact the ongoing governance and operating activities of the entity.
Upon the occurrence of certain events (such as contributions and redemptions, either by the Company, its Affiliates, or third parties, or amendments to the governing documents of the Company’s investees or sponsored Funds) management reviews and reconsiders its previous conclusion regarding the status of an entity as a VIE or a VOE. Additionally, management continually reconsiders whether the Company is deemed to be a VIE’s primary beneficiary who consolidates such entity.
Derivatives and Hedging
The Company may utilize derivative financial instruments to hedge the risk of movement of interest rates and foreign currency on financial assets and liabilities. These derivative financial instruments may or may not qualify as hedges for accounting purposes. The Company records all derivative financial instruments as either assets or liabilities on its Consolidated Balance Sheets and measures these instruments at fair value. For a derivative financial instrument that qualifies as a hedge for accounting purposes and is designated as a hedging instrument, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings over the life of the hedge. The ineffective portion of the gain or loss is reported in earnings immediately.
Use of Estimates
The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ significantly from those estimates.
Fair Value Measurements (Tables)
Summary of the assets and liabilities that are measured at fair value on a recurring basis
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2016 (in millions):
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value,
March 31, 2016
Assets of OMAM(1)
 

 
 

 
 

 
 
 
 

Investment securities(2)
$
69.2

 
$

 
$

 
$

 
$
69.2

Investments in unconsolidated Funds(3)

 

 

 
33.1

 
33.1

Total fair value assets
$
69.2

 
$

 
$

 
$
33.1

 
$
102.3

 
 
 
 
 
 
 
 
 
 
Liabilities of OMAM(1)
 
 
 
 
 
 
 
 
 
Derivative securities
$

 
$
(22.5
)
 
$

 
$

 
$
(22.5
)
Total fair value liabilities
$

 
$
(22.5
)
 
$

 
$

 
$
(22.5
)

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2015 (in millions): 
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value December 31, 2015
Assets of OMAM(1)
 

 
 

 
 

 
 

 
 

Investment securities(2)
$
66.9

 
$

 
$

 
$

 
$
66.9

Investments in unconsolidated Funds(3)

 

 

 
30.1

 
30.1

Total fair value assets
$
66.9

 
$

 
$

 
$
30.1

 
$
97.0

Liabilities of consolidated Funds(1)
 

 
 

 
 

 
 
 
 

Derivative securities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
Total fair value liabilities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
 
 
(1)
Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliates. Of these, pursuant to ASU 2015-07, collective investment funds are multi-strategy products, uncategorized because they are redeemable monthly and valued at net asset value per share of the fund without adjustment which the Company believes represents the fair value of the investments.
The fair value of other investments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs and therefore classified within Level II. The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided. If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.
Equity, short-term investment funds and derivatives which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. These securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. 
(2)
Investment securities of $69.2 million and $66.9 million at March 31, 2016 and December 31, 2015, respectively, are investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I. Not included in the above are $51.9 million and $51.6 million at March 31, 2016 and December 31, 2015, respectively, of various investments carried at cost, including investments in timber and timberlands.
(3)
The $33.1 million and $30.1 million at March 31, 2016 and December 31, 2015, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in funds advised by Affiliates and are valued using NAV which the Company relies on to determine their fair value as a practical expedient. The Company has not classified these investments in the fair value hierarchy in accordance with ASU 2015-07. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investments funds.The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates.
These investments are subject to longer than monthly or quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one to eight years from March 31, 2016. The valuation process for the underlying real estate investments held by the real estate investments Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair-value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions. 
Variable Interest Entities (Tables)
Schedule of assets and liabilities and information pertains to VIEs
The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions): 
 
March 31,
2016
 
December 31,
2015
Unconsolidated VIE assets
$
7,290.7

 
$
7,302.4

Unconsolidated VIE liabilities
$
4,204.5

 
$
4,189.1

Equity interests on the Condensed Consolidated Balance Sheet
$
56.2

 
$
53.2
*
Maximum risk of loss (1)
$
62.8

 
$
59.0
*
 
 
(1)
Includes equity investments the Company has made or is required to make in unconsolidated funds and any earned but uncollected management/incentive fees from those funds. The Company does not record performance/incentive allocations until the respective measurement period has ended.
*    Balances have been amended to reflect immaterial corrections.
Borrowings and Debt (Tables)
Schedule of long term debt
The Company’s long term debt at March 31, 2016 and December 31, 2015 was comprised of the following (in millions): 
 
 
3/31/2016
 
12/31/2015
 
Interest rate
 
Maturity
Third party obligations:
 
 

 
 

 
 
 
 
Revolving credit facility
 
$
85.0

 
$
90.0

 
LIBOR + 1.25% plus 0.20% commitment fee
 
October 15, 2019
Total long term debt of the Company
 
$
85.0

 
$
90.0

 
 
 
 
Earnings Per Share (Tables)
Schedule of calculation of pro forma basic and diluted earnings per share
The calculation of basic and diluted earnings per ordinary share is as follows (dollars in millions, except per share data):
 
Three Months Ended March 31,
 
2016
 
2015
Numerator:
 

 
 

Net income
$
30.8

 
$
34.2

Less: Total income available to participating unvested securities(1)
0.2

 
0.1

Total net income attributable to ordinary shares
$
30.6

 
$
34.1

Denominator:
 

 
 

Weighted-average ordinary shares outstanding—basic
120,024,818

 
120,000,000

Potential ordinary shares
 
 
 
Restricted stock units
23,082

 
427,907

Weighted-average ordinary shares outstanding—diluted
120,047,900

 
120,427,907

Earnings per ordinary share:
 

 
 

Basic
$
0.26

 
$
0.28

Diluted
$
0.26

 
$
0.28

 
 
(1)
Income available to participating unvested securities includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings.
Accumulated Other Comprehensive Income (Tables)
Schedule of components of accumulated other comprehensive income including proportions attributable to non-controlling interests
The following tables show the tax effects allocated to each component of other comprehensive income (in millions):
 
For the three months ended March 31, 2016
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
0.2

 
$

 
$
0.2

Change in net realized and unrealized gain (loss) on derivative securities
(13.8
)
 
2.8

 
(11.0
)
Other comprehensive income (loss)
$
(13.6
)
 
$
2.8

 
$
(10.8
)
 
For the three months ended March 31, 2015
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
(0.3
)
 
$

 
$
(0.3
)
Other comprehensive loss
$
(0.3
)
 
$

 
$
(0.3
)
The components of accumulated other comprehensive income (loss) for the three months ended March 31, 2016 were as follows (in millions):
 
Foreign currency translation adjustment
 
Valuation of derivative securities
 
Total
Balance, as of December 31, 2015
$
2.0

 
$
(6.6
)
 
$
(4.6
)
Other comprehensive income (loss)
0.2

 
(11.0
)
 
(10.8
)
Balance, as of March 31, 2016
$
2.2

 
$
(17.6
)
 
$
(15.4
)
Organization and Description of the Business (Details)
3 Months Ended
Mar. 31, 2016
segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of reportable segments
Basis of Presentation and Significant Accounting Policies (Details)
0 Months Ended
Jun. 22, 2015
Oct. 15, 2014
Stock offering
 
 
Ordinary shares, issued shares (in shares)
13,300,000 
 
IPO
 
 
Stock offering
 
 
Ordinary shares, issued shares (in shares)
 
22,000,000 
Overallotment option
 
 
Stock offering
 
 
Ordinary shares, issued shares (in shares)
1,995,000 
2,231,375 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2016
Recurring
Minimum
Real estate investment funds
Mar. 31, 2016
Recurring
Maximum
Real estate investment funds
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Recurring
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Recurring
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Recurring
Quoted prices in active markets (Level I)
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Recurring
Quoted prices in active markets (Level I)
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Recurring
Significant other observable inputs (Level II)
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Recurring
Significant other observable inputs (Level II)
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Recurring
Significant unobservable inputs (Level III)
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Recurring
Significant unobservable inputs (Level III)
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Recurring
Uncategorized
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Recurring
Uncategorized
Mar. 31, 2016
Portion at Other than Fair Value Measurement [Member]
Consolidated Entity Excluding Consolidated Funds
Dec. 31, 2015
Portion at Other than Fair Value Measurement [Member]
Consolidated Entity Excluding Consolidated Funds
Assets of OMAM
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
$ 69.2 
$ 66.9 
$ 69.2 
$ 66.9 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 51.9 
$ 51.6 
Investments in unconsolidated funds
 
 
 
 
33.1 
30.1 
33.1 
30.1 
 
 
Total fair value assets
102.3 
97.0 
 
 
102.3 
97.0 
69.2 
66.9 
33.1 
30.1 
 
 
Liabilities of OMAM
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative securities
 
 
 
 
(22.5)
(8.8)
(22.5)
(8.8)
 
 
Total fair value liabilities
 
 
 
 
$ (22.5)
$ (8.8)
$ 0 
$ 0 
$ (22.5)
$ (8.8)
$ 0 
$ 0 
$ 0 
$ 0 
 
 
Term over which the underlying assets are expected to be liquidated by the investees
 
 
1 year 
8 years 
 
 
 
 
 
 
 
 
 
 
 
 
Variable Interest Entities - Unconsolidated VIE's (Details) (Variable Interest Entity, Not Primary Beneficiary [Member], USD $)
Mar. 31, 2016
Dec. 31, 2015
Variable Interest Entity, Not Primary Beneficiary [Member]
 
 
Variable Interest Entities
 
 
Unconsolidated VIE assets
$ 7,290,700,000 
$ 7,302,400,000 
Unconsolidated VIE liabilities
4,204,500,000 
4,189,100,000 
Equity interests on the Condensed Consolidated Balance Sheet
56,200,000 
53,200,000 
Maximum risk of loss
$ 62,800,000.0 
$ 59,000,000.0 
Related Party Transactions (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Parent
 
 
Related party transactions
 
 
Costs allocated
$ 0.3 
$ 0.3 
Affiliates
 
 
Related party transactions
 
 
Repayment of taxes by employees of the Affiliate
5.1 
5.3 
OMGUK
 
 
Related party transactions
 
 
Estimated payment of future realizable benefits
190.5 
 
Carrying value of co-investments
17.1 
 
Taxes withheld related to co-investments
$ 4.7 
 
Borrowings and Debt - Long Term Debt Excluding Consolidated Funds (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Oct. 15, 2014
Revolving credit facility
LIBOR
Mar. 31, 2016
Revolving credit facility
LIBOR
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
LIBOR
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
LIBOR
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
Revolving credit facility
$ 85.0 
$ 90.0 
 
 
 
 
$ 85.0 
$ 90.0 
 
 
Total long term debt of the Company
 
 
 
 
$ 85.0 
$ 90.0 
 
 
 
 
Variable rate basis
 
 
London interbank offered rate 
 
 
 
 
 
LIBOR 
LIBOR 
Variable rate margin (as a percent)
 
 
1.00% 
1.25% 
 
 
 
 
1.25% 
1.25% 
Commitment fee (as a percent)
 
 
 
0.20% 
 
 
 
 
0.20% 
0.20% 
Borrowings and Debt - Narrative (Details) (USD $)
3 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2016
Revolving credit facility
Oct. 15, 2014
Revolving credit facility
Oct. 15, 2014
Revolving credit facility
Minimum
Oct. 15, 2014
Revolving credit facility
Maximum
Oct. 15, 2014
Revolving credit facility
Prime Rate
Oct. 15, 2014
Revolving credit facility
Federal Funds Effective Swap Rate
Oct. 15, 2014
Revolving credit facility
LIBOR
Mar. 31, 2016
Revolving credit facility
LIBOR
Oct. 15, 2014
Revolving credit facility
LIBOR
Minimum
Oct. 15, 2014
Revolving credit facility
LIBOR
Maximum
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Mar. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
Mar. 31, 2016
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
LIBOR
Dec. 31, 2015
Consolidated Entity Excluding Consolidated Funds
Revolving credit facility
LIBOR
Borrowings and debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
$ 500,000 
$ 900,000 
 
 
 
 
Maximum borrowing capacity
 
 
 
350,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rate basis
 
 
 
 
 
 
prime rate 
federal funds effective rate 
London interbank offered rate 
 
 
 
 
 
 
 
LIBOR 
LIBOR 
Variable rate additional margin (as a percent)
 
 
 
 
 
 
 
0.50% 
 
 
0.25% 
1.00% 
 
 
 
 
 
 
Variable rate margin (as a percent)
 
 
 
 
 
 
 
 
1.00% 
1.25% 
1.25% 
2.00% 
 
 
 
 
1.25% 
1.25% 
Undrawn amounts fee (as a percent)
 
 
 
 
0.20% 
0.50% 
 
 
 
0.20% 
 
 
 
 
 
 
0.20% 
0.20% 
Ratio of third-party borrowings to trailing twelve months Adjusted EBITDA
 
 
0.4 
 
 
3.0 
 
 
 
 
 
 
 
 
 
 
 
 
Interest coverage ratio
 
 
 
 
4.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility
$ 85,000,000 
$ 90,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
$ 85,000,000 
$ 90,000,000 
 
 
Commitments and Contingencies (Details) (Affiliates, Maximum, USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Affiliates |
Maximum
 
 
Operational commitments
 
 
Commitments to invest (up to)
$ 12.7 
$ 15.7 
Earnings Per Share (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Numerator:
 
 
Net income
$ 30.8 
$ 34.2 
Less: Total income available to participating unvested securities
0.2 
0.1 
Total net income attributable to ordinary shares
$ 30.6 
$ 34.1 
Denominator:
 
 
Weighted average ordinary shares outstanding (in shares)
120,024,818 
120,000,000 
Restricted stock units (in shares)
23,082 
427,907 
Weighted average diluted ordinary shares outstanding (in shares)
120,000,000 
120,427,907 
Earnings per ordinary share:
 
 
Basic (in dollars per share)
$ 0.26 
$ 0.28 
Diluted (in dollars per share)
$ 0.26 
$ 0.28 
Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Total other comprehensive income
$ 20.0 
$ 33.9 
Foreign currency translation adjustment
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Other comprehensive income (loss), pre-tax
0.2 
(0.3)
Other comprehensive income (loss), tax benefit (expense)
Total other comprehensive income
0.2 
(0.3)
Change in net realized and unrealized gain (loss) on derivative securities
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Other comprehensive income (loss), pre-tax
(13.8)
 
Other comprehensive income (loss), tax benefit (expense)
2.8 
 
Total other comprehensive income
(11.0)
 
AOCI Including Portion Attributable to Noncontrolling Interest
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Other comprehensive income (loss), pre-tax
(13.6)
(0.3)
Other comprehensive income (loss), tax benefit (expense)
2.8 
Total other comprehensive income
$ (10.8)
$ (0.3)
Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
Balance
$ 165.9 
$ 2,495.5 
Other comprehensive income (loss)
20.0 
33.9 
Balance
176.2 
63.1 
Foreign currency translation adjustment
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
Balance
2.0 
 
Other comprehensive income (loss)
0.2 
(0.3)
Balance
2.2 
 
Other comprehensive income (loss), tax benefit (expense)
Valuation of derivative securities
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
Balance
(6.6)
 
Other comprehensive income (loss)
(11.0)
 
Balance
(17.6)
 
Other comprehensive income (loss), tax benefit (expense)
2.8 
 
Accumulated other comprehensive income (loss)
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
Balance
(4.6)
 
Other comprehensive income (loss)
(10.8)
 
Balance
$ (15.4)
 
Derivatives and Hedging (Details) (USD $)
3 Months Ended 3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Jul. 31, 2015
Treasury Lock
Designated as Hedging Instrument
Mar. 31, 2016
Treasury Lock
Designated as Hedging Instrument
Cash Flow Hedging
Mar. 31, 2016
AOCI Including Portion Attributable to Noncontrolling Interest
Mar. 31, 2016
Accounts Payable and Accrued Liabilities
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
Notional amount
 
 
$ 300,000,000 
 
 
 
Derivative liability included in accounts payable and accrued expenses
 
 
 
 
 
22,500,000 
Valuation of derivative securities, net of tax
(11,000,000)
 
 
 
 
Tax on derivative gain
 
 
 
 
2,800,000 
 
Loss amount reclassified within twelve months
 
 
 
$ 600,000 
 
 
Discontinued Operations and Restructuring (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]
 
 
Gain on disposal, net of tax
$ 0.2 
$ 0.2