Investment Management and Advisory Fees
The Company earns advisory fees relating to the terms of investment management agreements entered into with its investment partnerships and privately offered pooled investment vehicles, insurance companies, and other institutional clients (collectively “Clients”).The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company’s performance obligation consists primarily of providing continuous investment management and advisory services. Revenue is recognized over time in accordance with ASC 606, as the Clients simultaneously receive and consume the benefits of the Company’s performance as the services are provided. Advisory fees are generally earned based on contractual percentages of (i) assets under management, (ii) unpaid principal balance of underlying assets, or (iii) other defined asset bases, as specified in the applicable client agreements. Fees are typically calculated and billed monthly or periodically in accordance with the contractual terms. The Company applies “right to invoice” practical expedient under ASC 606, as the invoiced amounts correspond directly with the value of services transferred to Clients.
Certain client agreements provide for incentive or transaction-based fees tied to the performance, monetization, or disposition of underlying portfolio assets. Such fees represent variable consideration under ASC 606. The Company estimates variable consideration using the most likely amount method and includes such amounts in revenue only to the extent it is probable that s significant reversal will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Incentive or transaction-based fees are generally recognized upon completion of the underlying transaction or achievement of specified performance thresholds, when the Company’s performance obligation has been satisfied and the amount is no longer subject to significant reversal, including under applicable Clawback provisions.
Invoices for advisory and transaction-based services are generally due upon receipt or within a short period following issuance. The Company’s contracts do not contain significant financing components, as the period between performance and payment is typically very short.
Accounts receivable related to investment management and advisory fees represent trade receivables and are recorded at the invoiced amount, net of an allowance for expected credit losses, if any. These receivables are included in other assets on the Consolidated Statements of Financial Condition. The Company evaluates these receivables for expected credit losses in accordance with ASC 326, Financial Instruments – Credit Losses. The evaluation considers historical loss experience, current conditions, and reasonable and supportable forecasts. As of December 31, 2025, no allowance for credit losses was recorded, as
receivables are primarily due from institutional counterparties, are subject to short collection cycles, and the Company has not historically experienced credit losses related to these balances. Interest income is not recognized on these trade receivables.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.