0001403528-20-000022 | 10-Q | XBRL Viewer | Oaktree Capital Group LLC

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Nov. 04, 2020
Entity Information [Line Items]
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001403528
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-35500
Entity Registrant Name	Oaktree Capital Group, LLC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-0174894
Entity Address, Address Line One	333 South Grand Avenue
Entity Address, Address Line Two	28th Floor
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90071
City Area Code	213
Local Phone Number	830-6300
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Series A Preferred Units
Entity Information [Line Items]
Title of 12(b) Security	6.625% Series A preferred units
Trading Symbol	OAK-PA
Security Exchange Name	NYSE
Series B Preferred Units
Entity Information [Line Items]
Title of 12(b) Security	6.550% Series B preferred units
Trading Symbol	OAK-PB
Security Exchange Name	NYSE
Class A Units
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		98,677,040
Class B Units
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		61,370,607

Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets
Receivable for securities sold	$ 59,184	$ 65,346
Derivative assets, at fair value	560
Total assets	9,118,704	9,264,762
Liabilities:
Operating lease liabilities	43,500
Derivative liabilities, at fair value	9,279	4,254
Total liabilities	6,861,274	6,696,371
Commitments and contingencies (Note 17)
Non-controlling redeemable interests in consolidated funds	644,880	866,222
Unitholders’ capital:
Paid-in capital	817,504	750,299
Retained earnings (accumulated deficit)	(39,267)	51,534
Accumulated other comprehensive loss	(10,179)	(3,501)
Unitholders’ capital attributable to Oaktree Capital Group, LLC	1,168,642	1,198,916
Non-controlling interests in consolidated subsidiaries	443,908	503,253
Total unitholders’ capital	1,612,550	1,702,169
Total liabilities and unitholders’ capital	9,118,704	9,264,762
Series A Preferred Units
Unitholders’ capital:
Preferred stock	173,669	173,669
Series B Preferred Units
Unitholders’ capital:
Preferred stock	226,915	226,915
Class A Units
Unitholders’ capital:
Common stock	0	0
Class B Units
Unitholders’ capital:
Common stock	0	0
Oaktree Capital Group Excluding Consolidated Funds
Assets
Cash and cash-equivalents	204,522	323,550
U.S. Treasury and other securities	9,150	9,232
Corporate investments (includes $19,169 and $34,934 measured at fair value as of September 30, 2020 and December 31, 2019, respectively)	915,697	709,137
Due from affiliates	69,536	164,189
Deferred tax assets	3,019	3,096
Right-of-use assets	37,605	39,702
Other assets, net	44,477	41,198
Investments, at fair value	19,169	34,934
Liabilities:
Accrued compensation expense	96,119	130,818
Accounts payable, accrued expenses and other liabilities	8,855	11,316
Due to affiliates	47,750	87,063
Debt obligations of CLOs	0	0
Operating lease liabilities	43,500	45,793
Consolidated Funds
Assets
Cash and cash-equivalents	846,788	518,243
Other assets, net	12,774	7,436
Investments, at fair value	6,880,386	7,358,409
Dividends and interest receivable	25,339	25,058
Receivable for securities sold	69,072	58,622
Derivative assets, at fair value	339	6,890
Liabilities:
Accounts payable, accrued expenses and other liabilities	80,987	89,937
Debt obligations of CLOs	6,241,881	5,767,999
Payables for securities purchased	341,541	367,983
Derivative liabilities, at fair value	546	2,551
Distributions payable	95	34,434
Borrowings under credit facilities	0	158,477
Non-controlling redeemable interests in consolidated funds	$ 644,880	$ 866,222

Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Series A Preferred Units
Preferred units, issued (in shares)	7,200,000	7,200,000
Preferred units, outstanding (in shares)	7,200,000	7,200,000
Series B Preferred Units
Preferred units, issued (in shares)	9,400,000	9,400,000
Preferred units, outstanding (in shares)	9,400,000	9,400,000
Class A Units
Common units, par value (in dollars per share)	$ 0	$ 0
Common units, authorized (in shares)	unlimited	unlimited
Common units, issued (in shares)	98,677,040	97,967,255
Common units, outstanding (in shares)	98,677,040	97,967,255
Class B Units
Common units, par value (in dollars per share)	$ 0	$ 0
Common units, authorized (in shares)	unlimited	unlimited
Common units, issued (in shares)	61,383,742	61,793,286
Common units, outstanding (in shares)	61,383,742	61,793,286
Oaktree Capital Group Excluding Consolidated Funds
Investments, at fair value	$ 19,169	$ 34,934

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues:
Total revenues	$ 45,582	$ 205,190	$ 181,810	$ 785,088
Expenses:
Compensation and benefits	(33,659)	(111,281)	(96,368)	(334,919)
Equity-based compensation	(4,068)	(22,779)	(13,380)	(59,756)
Incentive income compensation	(474)	(11,427)	(15,612)	(136,849)
Total compensation and benefits expense	(38,201)	(145,487)	(125,360)	(531,524)
General and administrative	(6,395)	(86,851)	(18,816)	(184,592)
Depreciation and amortization	(561)	(6,602)	(1,498)	(19,732)
Consolidated fund expenses	(11,706)	(6,540)	(31,726)	(12,994)
Total expenses	(56,863)	(245,480)	(177,400)	(748,842)
Other income (loss):
Interest expense	(35,420)	(59,883)	(121,753)	(149,643)
Interest and dividend income	74,128	101,882	238,294	278,782
Net realized gain (loss) on consolidated funds’ investments	(19,635)	(3,664)	(97,642)	(9,036)
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments	533	(40,964)	(222,746)	17,967
Investment income (loss)	60,296	26,819	18,030	121,804
Other income (loss), net	43	0	59	58
Total other income (loss)	79,945	24,190	(185,758)	259,932
Income (loss) before income taxes	68,664	(16,100)	(181,348)	296,178
Income taxes	(1,170)	(4,798)	(6,499)	(11,148)
Net income (loss)	67,494	(20,898)	(187,847)	285,030
Less:
Net income (loss) attributable to Oaktree Capital Group, LLC	52,383	(9,819)	(297)	93,537
Net income attributable to preferred unitholders	(6,829)	(6,829)	(20,487)	(20,487)
Net income (loss) attributable to OCG Class A unitholders	$ 45,554	$ (16,648)	$ (20,784)	$ 73,050
Distributions declared per Class A unit (in dollars per share)	$ 0.49	$ 3.13	$ 0.71	$ 4.93
Net income (loss) per Class A unit (basic and diluted):
Net income (loss) per Class A unit (in dollars per share)	$ 0.46	$ (0.22)	$ (0.21)	$ 0.99
Weighted average number of Class A units outstanding (in shares)	98,677	75,995	98,457	74,005
Consolidated Funds
Other income (loss):
Net realized gain (loss) on consolidated funds’ investments	$ (19,635)	$ (3,664)	$ (97,642)	$ (9,036)
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments	533	(40,964)	(222,746)	17,967
Less:
Net income (loss) attributable to non-controlling interests	13,882	4,208	174,244	(82,234)
Consolidated Subsidiaries
Less:
Net income (loss) attributable to non-controlling interests	(28,993)	6,871	13,306	(109,259)
Management fees
Revenues:
Total revenues	45,466	179,761	138,278	524,798
Incentive income
Revenues:
Total revenues	$ 116	$ 25,429	$ 43,532	$ 260,290

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Net income (loss)	$ 67,494	$ (20,898)	$ (187,847)	$ 285,030
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(5,919)	(5,780)	(10,816)	(2,411)
Other comprehensive loss, net of tax	(5,919)	(5,780)	(10,816)	(2,411)
Total comprehensive income (loss)	61,575	(26,678)	(198,663)	282,619
Comprehensive income (loss) attributable to OCG	48,733	(13,745)	(6,975)	90,962
Comprehensive income attributable to preferred unitholders	(6,829)	(6,829)	(20,487)	(20,487)
Comprehensive income (loss) attributable to OCG Class A unitholders	41,904	(20,574)	(27,462)	70,475
Consolidated Funds
Other comprehensive loss, net of tax:
Less: Comprehensive (income) loss attributable to non-controlling interest	13,882	4,208	174,244	(82,234)
Consolidated Subsidiaries
Other comprehensive loss, net of tax:
Less: Comprehensive (income) loss attributable to non-controlling interest	$ (26,724)	$ 8,725	$ 17,444	$ (109,423)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (187,847)	$ 285,030
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Investment income	(18,030)	(121,804)
Depreciation and amortization	1,498	19,732
Equity-based compensation	13,380	59,756
Net realized and unrealized (gain) loss from consolidated funds’ investments	320,388	(8,931)
Accretion of original issue and market discount of consolidated funds’ investments, net	(17,645)	(4,305)
Income distributions from corporate investments in funds and companies	23,334	123,911
Other non-cash items	104	3,295
Cash flows due to changes in operating assets and liabilities:
Net cash used in operating activities	(775,656)	(2,796,179)
Cash flows from investing activities:
Purchases of U.S. Treasury and other securities	(35,731)	(602,600)
Proceeds from maturities and sales of U.S. Treasury and other securities	35,631	1,124,951
Corporate investments in funds and companies	(196,949)	(254,478)
Distributions and proceeds from corporate investments in funds and companies	229,543	373,916
Purchases of fixed assets	(315)	(6,366)
Net cash provided by investing activities	32,179	635,423
Cash flows from financing activities:
Net cash provided by financing activities	1,062,941	2,415,944
Effect of exchange rate changes on cash	(8,799)	(12,078)
Net increase in cash and cash-equivalents	310,665	243,110
Deconsolidation of funds	(101,148)	(102,839)
Cash and cash-equivalents, beginning balance	841,793	831,727
Cash and cash-equivalents, ending balance	1,051,310	971,998
Total cash and cash-equivalents	1,051,310	971,998
Oaktree Capital Group Excluding Consolidated Funds
Cash flows due to changes in operating assets and liabilities:
Decrease in deferred tax assets	6	0
(Increase) decrease in other assets	787	(3,883)
Decrease in net due from affiliates	57,631	281,791
Decrease in accrued compensation expense	(34,983)	(191,859)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(3,894)	65,325
Cash flows from financing activities:
Capital contributions	56,023	0
Repurchase and cancellation of units	0	(12,191)
Distributions to Class A unitholders	(69,797)	(436,494)
Distributions to OCGH unitholders	(43,678)	(358,455)
Distributions to preferred unitholders	(20,487)	(20,487)
Distributions to non-controlling interests	0	(3,421)
Cash and cash-equivalents, ending balance	204,522	356,431
Total cash and cash-equivalents	204,522	356,431
Consolidated Funds
Cash flows due to changes in operating assets and liabilities:
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(14,681)	26,111
(Increase) decrease in dividends and interest receivable	23,967	(8,437)
(Increase) decrease in due from brokers	(8,221)	11,476
Increase in receivables for securities sold	(28,354)	(27,609)
Increase in other assets	(6,426)	(7,074)
Increase (decrease) in payables for securities purchased	(17,003)	123,853
Purchases of securities	(3,030,232)	(5,571,689)
Proceeds from maturities and sales of securities	2,150,565	2,149,132
Cash flows from financing activities:
Distributions to non-controlling interests	(217,851)	(107,071)
Contributions from non-controlling interests	863,893	519,684
Proceeds from debt obligations issued by CLOs	1,030,422	3,892,380
Payment of debt issuance costs	(2,780)	(3,070)
Repayment on debt obligations issued by CLOs	(559,694)	(1,188,452)
Borrowings on credit facilities	75,380	505,521
Repayments on credit facilities	(48,490)	(372,000)
Cash and cash-equivalents, ending balance	846,788	615,567
Total cash and cash-equivalents	$ 846,788	$ 615,567

Condensed Consolidated Statements of Changes in Unitholders' Capital (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	$ 1,581,018	$ 2,423,663	$ 1,702,169	$ 2,487,717
Accounting Standards Update [Extensible List]			us-gaap:AccountingStandardsUpdate201613Member
Capital contributions	37,500		$ 57,317
Repurchase and cancellation of units		(2,239)		(12,191)
Deferred tax effect resulting from the purchase of OCGH units		212,017
Equity reallocation between controlling and non-controlling interests	(223)		(1,295)
Capital increase related to equity-based compensation	4,058	26,680	13,096	60,685
Distributions declared	(85,260)	(507,895)	(133,962)	(818,857)
Net income	81,376	(16,690)	(13,603)	202,796
Foreign currency translation adjustment, net of tax	(5,919)	(5,780)	(10,816)	(2,411)
Unitholders' capital, end of period	1,612,550	2,129,756	1,612,550	2,129,756
Adoption of new accounting guidance (ASU 2016-13)
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period			(356)
Paid-in Capital
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	777,686	937,880	750,299	893,043
Capital contributions	37,500		57,317
Repurchase and cancellation of units		(941)		(8,378)
Deferred tax effect resulting from the purchase of OCGH units		212,017		212,017
Equity reallocation between controlling and non-controlling interests	(184)	267,715	1,829	304,280
Capital increase related to equity-based compensation	2,502	12,699	8,059	28,408
Distributions declared		(262,761)		(262,761)
Unitholders' capital, end of period	817,504	1,166,609	817,504	1,166,609
Retained Earnings (Accumulated Deficit)
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	(36,469)	60,056	51,534	100,683
Distributions declared	(48,352)	(43,408)	(69,797)	(173,733)
Net income	45,554	(16,648)	(20,784)	73,050
Unitholders' capital, end of period	(39,267)	0	(39,267)	0
Retained Earnings (Accumulated Deficit) \| Adoption of new accounting guidance (ASU 2016-13)
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period			(220)
Accumulated Other Comprehensive Income (Loss)
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	(6,529)	2,404	(3,501)	1,053
Foreign currency translation adjustment, net of tax	(3,650)	(3,926)	(6,678)	(2,575)
Unitholders' capital, end of period	(10,179)	(1,522)	(10,179)	(1,522)
Non-controlling Interests in Consolidated Subsidiaries
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	445,746	1,022,739	503,253	1,092,354
Repurchase and cancellation of units		(1,298)		(3,813)
Equity reallocation between controlling and non-controlling interests	(39)	(267,715)	(3,124)	(304,280)
Capital increase related to equity-based compensation	1,556	13,981	5,037	32,277
Distributions declared	(30,079)	(194,897)	(43,678)	(361,876)
Net income	28,993	(6,871)	(13,306)	109,259
Foreign currency translation adjustment, net of tax	(2,269)	(1,854)	(4,138)	164
Unitholders' capital, end of period	$ 443,908	$ 564,085	443,908	$ 564,085
Non-controlling Interests in Consolidated Subsidiaries \| Adoption of new accounting guidance (ASU 2016-13)
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period			$ (136)
Class A Units \| Common Units
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period (in shares)	98,677	75,649	97,967	71,662
Issuance of units (in shares)		25,529		29,713
Unit exchange (in shares)			710
Cancellation of units associated with forfeitures (in shares)				(27)
Cancellation of units (in shares)		(3,122)		(3,122)
Repurchase and cancellation of units (in shares)		(89)		(259)
Unitholders' capital, end of period (in shares)	98,677	97,967	98,677	97,967
Class B Units \| Common Units
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period (in shares)	61,386	84,001	61,793	85,472
Issuance of units (in shares)		3,675	319	5,113
Unit exchange (in shares)			(710)
Cancellation of units associated with forfeitures (in shares)	(2)		(18)	(119)
Cancellation of units (in shares)		(200)		(2,917)
Repurchase and cancellation of units (in shares)		(25,330)		(25,403)
Unitholders' capital, end of period (in shares)	61,384	62,146	61,384	62,146
Series A Preferred Units \| Preferred Stock
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	$ 173,669	$ 173,669	$ 173,669	$ 173,669
Distributions declared	(2,981)	(2,981)	(8,943)	(8,943)
Net income	2,981	2,981	8,943	8,943
Unitholders' capital, end of period	173,669	173,669	173,669	173,669
Series B Preferred Units \| Preferred Stock
Increase (decrease) in Stockholders' Equity:
Unitholders' capital, beginning of period	226,915	226,915	226,915	226,915
Distributions declared	(3,848)	(3,848)	(11,544)	(11,544)
Net income	3,848	3,848	11,544	11,544
Unitholders' capital, end of period	$ 226,915	$ 226,915	$ 226,915	$ 226,915

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
ORGANIZATION AND BASIS OF PRESENTATION	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	ORGANIZATION AND BASIS OF PRESENTATION As used in these condensed consolidated financial statements: “Oaktree” refers to (i) Oaktree Capital Group, LLC and, where applicable, its subsidiaries and affiliates prior to October 1, 2019 and (ii) the Oaktree Operating Group and, where applicable, their respective subsidiaries and affiliates after September 30, 2019; and the “Company” refers to Oaktree Capital Group, LLC and, where applicable, its subsidiaries and affiliates, including, as the context requires, affiliated Oaktree Operating Group members after September 30, 2019. Oaktree is a leader among global investment managers specializing in alternative investments. Oaktree emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. Funds managed by Oaktree (the “Oaktree funds”) include commingled funds, separate accounts, collateralized loan obligation vehicles (“CLOs”) and business development companies (“BDCs”). Commingled funds include open-end and closed-end limited partnerships in which Oaktree makes an investment and for which it serves as the general partner. CLOs are structured finance vehicles in which Oaktree typically makes an investment and for which it serves as collateral manager. Oaktree Capital Group, LLC is a Delaware limited liability company that was formed on April 13, 2007. Prior to the Mergers described below, the Company was owned by (i) its public Class A common unitholders, (ii) its public Series A and Series B preferred unitholders and (iii) Oaktree Capital Group Holdings, L.P. (“OCGH”) who held 100% of the Company’s Class B common units which did not represent an economic interest in the Company. OCGH is owned by Oaktree’s senior executives, current and former employees, and certain other investors (collectively, the “OCGH unitholders”). The Class A units held by the public unitholders were entitled to one vote per unit and the Class B units held by OCGH were entitled to ten votes per unit. The number of Class B units held by OCGH increased or decreased in response to corresponding changes in OCGH’s economic interest in the Oaktree Operating Group; consequently, the OCGH unitholders’ economic interest in the Oaktree Operating Group is reflected within non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. Subsequent to the Mergers, (i) all of the Company’s Class A units, which are no longer publicly traded, are held by an affiliate of Brookfield Asset Management, Inc. (“Brookfield”), (ii) the Company’s public preferred unitholders continue to hold the Series A and Series B preferred units listed on the NYSE and (iii) OCGH continues to hold all of the Company’s Class B units. Subject to the operating agreement of the Company, to the extent the approval of any matter requires the vote of the Company’s unitholders, the Class A units continue to be entitled to one vote per unit and the Class B units continue to be entitled to ten votes per unit, voting together as a single class. Additionally, prior to the Restructuring as described below, the Company’s operations were conducted through a group of six operating entities collectively referred to as the “Oaktree Operating Group,” and the Company had an indirect economic interest in each of the members of the Oaktree Operating Group. However, after the Restructuring, the Company has an indirect economic interest in only two of the six Oaktree Operating Group members. OCGH has a direct economic interest in all six of the Oaktree Operating Group members. The interests in the Oaktree Operating Group are referred to as the “Oaktree Operating Group units.” An Oaktree Operating Group unit is not a separate legal interest but represents one limited partnership interest in each of the Oaktree Operating Group entities. As of October 1, 2019, Oaktree Capital Management, L.P. (“OCM”), a former indirect subsidiary of the Company, provides certain administrative and other services relating to the operations of the Company’s business pursuant to a Services Agreement between the Company and OCM (as amended from time to time, the “Services Agreement”). Brookfield Merger On March 13, 2019, Oaktree, Brookfield, Berlin Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”) and a wholly-owned subsidiary of Brookfield, Oslo Holdings LLC, a Delaware limited liability company (“SellerCo”) and a wholly-owned subsidiary of OCGH, and Oslo Holdings Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of Oaktree (“Seller MergerCo”) entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and conditions set forth in the Merger Agreement, on September 30, 2019, (i) Merger Sub merged with and into Oaktree (the “Merger”), with Oaktree continuing as the surviving entity, and (ii) immediately following the Merger, SellerCo merged with and into Seller MergerCo (the “Subsequent Merger” and together with the Merger, the “Mergers”), with Seller MergerCo continuing as the surviving entity. Upon the completion of the Mergers on September 30, 2019, Brookfield acquired 61.2% of Oaktree’s business in a stock and cash transaction. The remaining 38.8% of the business continued to be owned by OCGH, whose unitholders consist primarily of Oaktree’s founders and certain other members of management and current and former employees. As part of the Merger, Brookfield acquired all outstanding vested OCG Class A units for, at the election of OCG Class A unitholders, either $49.00 in cash or 1.0770 Class A shares of Brookfield per OCG Class A unit (subject to pro-ration to ensure that no more than fifty percent (50%) of the aggregate merger consideration is paid in the form of cash or stock), in each case, without interest and subject to any applicable withholding taxes. In addition, as part of the Subsequent Merger the founders, senior management, and current and former employee-unitholders of OCGH sold 20% of their OCGH units to Brookfield for the same consideration as the OCG Class A unitholders received in the merger. The aggregate amount of cash payable to Class A unitholders and OCGH unitholders in the transaction was approximately $2.4 billion and approximately 52.8 million Brookfield Class A shares were issued in the Mergers. In connection with the closing of the Merger, Oaktree Class A units were delisted from the New York Stock Exchange. Upon completion of the Merger, each unvested Class A Unit held by current, or in certain cases former, employees, officers and directors of Oaktree and its subsidiaries was converted into one unvested OCGH Unit (each, a “Converted OCGH Unit”) and became subject to the terms and conditions of the OCGH limited partnership agreement. The Converted OCGH Units will (i) be subject to the same vesting terms that were applicable to such units prior to the completion of the Merger, (ii) be entitled to receive ongoing distributions in respect of earnings, but not capital distributions and (iii) upon vesting, receive the accumulated value of capital distributions that accrued while such units were unvested. Please see note 15 for more information. Restructuring Transaction On the closing date of the Mergers, the Company and certain other entities entered into a Restructuring Agreement (the “Restructuring”) pursuant to which the Company’s direct and indirect ownership of general partner and limited partner interests in certain Oaktree Operating Group entities were transferred to newly-formed, indirect subsidiaries of Brookfield as of October 1, 2019. As a result, as of October 1, 2019, four of the six Oaktree Operating Group entities are no longer indirect subsidiaries of the Company. Accordingly, the Company’s condensed consolidated financial statements reflect its indirect economic interest in only two of the Oaktree Operating Group entities: (i) Oaktree Capital I, L.P. (“Oaktree Capital I”), which acts as or controls the general partner of certain Oaktree funds and which holds a majority of Oaktree’s investments in its funds and (ii) Oaktree Capital Management (Cayman), L.P. (“OCM Cayman”), which represents Oaktree’s non-U.S. fee business. As of October 1, 2019, the Company’s condensed consolidated financial statements no longer reflects any economic interests in the remaining four Oaktree Operating Group entities: (i) Oaktree Capital II, L.P. (“Oaktree Capital II”), which acts as or controls the general partner of certain Oaktree funds and which includes Oaktree’s investments in certain funds and other businesses, including Oaktree’s investment in DoubleLine Capital, L.P., (ii) OCM, an entity that serves as the U.S. registered investment adviser to most of the Oaktree funds, (iii) Oaktree Investment Holdings, L.P. (“Oaktree Investment Holdings”), which holds certain corporate investments in other entities and (iv) Oaktree AIF Investments, L.P. (“Oaktree AIF”), which primarily holds interests in certain Oaktree fund investments for regulatory and structuring purposes. As a consequence, the assets of Oaktree Capital II, OCM, Oaktree Investment Holdings and Oaktree AIF will no longer directly support the Company’s operations. As a result of the Restructuring of the Company’s business, references to “Oaktree” in these financial statements will generally refer to the collective business of the Oaktree Operating Group, of which the Company is a component. Basis of Presentation The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) such that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. Certain of the Oaktree funds consolidated by the Company are investment companies that follow a specialized basis of accounting established by GAAP. All intercompany transactions and balances have been eliminated in consolidation. The Restructuring was a transfer of assets among entities under common control, since both the transferring and receiving entities are under control of OCGH. Accordingly, the assets and liabilities were removed at book value and the transfer did not result in a gain or loss to the Company. The deconsolidation of the Oaktree Operating Group entities whose interests were transferred in the Restructuring was accounted for prospectively and did not require a recast of the Company's historical financial information. On October 1, 2019, the deconsolidation of entities whose interests were transferred in the Restructuring resulted in decreases in total assets of $1.7 billion, total liabilities of $1.2 billion, and total unitholders capital of $0.5 billion. Additionally, as a result of the Restructuring, our consolidated results of operations for the nine months ended September 30, 2020 reflect the activities for Oaktree Capital I and OCM Cayman, including their related funds and investment vehicles, and do not include the activities for the remaining four Oaktree Operating Group entities, including their related funds and investment vehicles. As a result of the Restructuring, our consolidated results of operations for the three and nine months ended September 30, 2020 are not directly comparable to the three and nine months ended September 30, 2019, which included the activities of all six Oaktree Operating Group entities. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2020. Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of income and expenses during the period then ended. Actual results could differ from these estimates.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2020
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies of the Company Consolidation The Company consolidates entities in which it has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. A limited partnership or similar entity is a variable interest entity (“VIE”) if the unaffiliated limited partners do not have substantive kick-out or participating rights. Most of the Oaktree funds are VIEs because they have not granted unaffiliated limited partners substantive kick-out or participating rights. The Company consolidates those VIEs in which it is the primary beneficiary. An entity is deemed to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) 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. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Company holds a variable interest is a VIE and (b) whether the Company’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance-based fees), would give it a controlling financial interest. A decision maker’s fee arrangement is not considered a variable interest if (a) it is compensation for services provided, commensurate with the level of effort required to provide those services, and part of a compensation arrangement that includes only terms, conditions or amounts that are customarily present in arrangements for similar services negotiated at arm’s length (“at-market”), and (b) the decision maker does not hold any other variable interests that absorb more than an insignificant amount of the potential VIE’s expected residual returns. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. 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. 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. Investments and redemptions (either by the Company, affiliates of the Company or third parties) or amendments to the governing documents of the respective Oaktree funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. The Company does not consolidate most of the Oaktree funds because it is not the primary beneficiary of those funds due to the fact that its fee arrangements are considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in those funds that are considered to be more than insignificant. Please see note 4 for more information regarding both consolidated and unconsolidated VIEs. For entities that are not VIEs, consolidation is evaluated through a majority voting interest model. “Consolidated funds” refers to Oaktree-managed funds and CLOs that the Company is required to consolidate. When funds or CLOs are consolidated, the Company reflects the assets, liabilities, revenues, expenses and cash flows of the funds or CLOs on a gross basis, and the majority of the economic interests in those funds or CLOs, which are held by third-party investors, are reflected as non-controlling interests in consolidated funds or debt obligations of CLOs in the condensed consolidated financial statements. All of the revenues earned by the Company as investment manager of the consolidated funds are eliminated in consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the consolidation of a fund does not impact net income or loss attributable to the Company. Certain entities in which the Company has the ability to exert significant influence, including unconsolidated Oaktree funds for which the Company acts as general partner, are accounted for under the equity method of accounting. Non-controlling Redeemable Interests in Consolidated Funds The Company records non-controlling interests to reflect the economic interests of the unaffiliated limited partners. These interests are presented as non-controlling redeemable interests in consolidated funds within the condensed consolidated statements of financial condition, outside of the permanent capital section. Limited partners in open-end and evergreen funds generally have the right to withdraw their capital, subject to the terms of the respective limited partnership agreements, over periods ranging from one month to three years. While limited partners in consolidated closed-end funds generally have not been granted redemption rights, these limited partners do have withdrawal or redemption rights in certain limited circumstances that are beyond the control of the Company, such as instances in which retaining the limited partnership interest could cause the limited partner to violate a law, regulation or rule. The allocation of net income or loss to non-controlling redeemable interests in consolidated funds is based on the relative ownership interests of the unaffiliated limited partners after the consideration of contractual arrangements that govern allocations of income or loss. At the consolidated level, potential incentives are allocated to non-controlling redeemable interests in consolidated funds until such incentives become allocable to the Company under the substantive contractual terms of the limited partnership agreements of the funds. Non-controlling Interests in Consolidated Subsidiaries Non-controlling interests in consolidated subsidiaries reflect the portion of unitholders’ capital attributable to OCGH unitholders (“OCGH non-controlling interest”) and third parties. All non-controlling interests in consolidated subsidiaries are attributed a share of income or loss in the respective consolidated subsidiary based on the relative economic interests of the OCGH unitholders or third parties after consideration of contractual arrangements that govern allocations of income or loss. Please see note 13 for more information. Acquisitions The Company accounts for business combinations using the acquisition method of accounting, which requires the use of estimates and judgment to measure the fair value of identifiable tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquiree as of the acquisition date. Contingent consideration that is determined to be part of the business combination is recognized at fair value as of the acquisition date and is included in the purchase price. Transaction costs are expensed as incurred. Transactions that do not meet the definition of a business are accounted for as asset acquisitions. The cost of an asset acquisition is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Transaction costs are included in the cost of the acquisition and no goodwill is recognized. Goodwill and Intangibles Goodwill represents the excess of cost over the fair value of identifiable net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead is tested for impairment annually in the fourth quarter of each fiscal year, or more frequently when events or circumstances indicate that impairment may have occurred. The Company’s acquired identifiable intangible assets primarily relate to contractual rights to earn future management fees and incentive income. Finite-lived intangible assets are amortized over their estimated useful lives, which range from seven to 25 years, and are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. In connection with the Restructuring, the Company’s indirect subsidiaries that held most of the goodwill and all of the acquired intangibles were deconsolidated, and these assets are no longer reflected on the statement of financial condition subsequent to September 30, 2019. Fair Value of Financial Instruments GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market observability. Market price observability is affected by a number of factors, such as the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: •Level I – Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement. The types of investments in Level I include exchange-traded equities, debt and derivatives with quoted prices. •Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. The types of investments in Level II generally include corporate bonds and loans, government and agency securities, less liquid and restricted equity investments, over-the-counter traded derivatives, debt obligations of consolidated CLOs, and other investments where the fair value is based on observable inputs. •Level III – Valuations for which one or more significant inputs are unobservable. These inputs reflect the Company’s assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices of quoted securities in markets for which there are few transactions, less public information exists or prices vary among brokered market makers. The types of investments in Level III include non-publicly traded equity, debt, real estate and derivatives. In some instances, the inputs used to value an instrument may fall into multiple levels of the fair-value hierarchy. In such instances, the instrument’s level within the fair-value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair-value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. Transfers of assets into or out of each fair value hierarchy level as a result of changes in the observability of the inputs used in measuring fair value are accounted for as of the beginning of the reporting period. Transfers resulting from a specific event, such as a reorganization or restructuring, are accounted for as of the date of the event that caused the transfer. In the absence of observable market prices, the Company values Level III investments using valuation methodologies applied on a consistent basis. The quarterly valuation process for Level III investments begins with each portfolio company, property or security being valued by the investment and/or valuation teams. With the exception of open-end funds, all unquoted Level III investment values are reviewed and approved by (i) the Company’s valuation officer, who is independent of the investment teams, (ii) a designated investment professional of each strategy and (iii) for a substantial majority of unquoted Level III holdings as measured by market value, a valuation committee of the respective strategy. For open-end funds, unquoted Level III investment values are reviewed and approved by the Company’s valuation officer. For certain investments, the valuation process also includes a review by independent valuation parties, at least annually, to determine whether the fair values determined by management are reasonable. Results of the valuation process are evaluated each quarter, including an assessment of whether the underlying calculations should be adjusted or recalibrated. In connection with this process, the Company periodically evaluates changes in fair-value measurements for reasonableness, considering items such as industry trends, general economic and market conditions, and factors specific to the investment. Certain assets are valued using prices obtained from pricing vendors or brokers. The Company seeks to obtain prices from at least two pricing vendors for the subject or similar securities. In cases where vendor pricing is not reflective of fair value, a secondary vendor is unavailable, or no vendor pricing is available, a comparison value made up of quotes for the subject or similar securities received from broker dealers may be used. These investments may be classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions. The Company evaluates the prices obtained from brokers or pricing vendors based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Company also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Company performs due diligence procedures surrounding pricing vendors to understand their methodology and controls to support their use in the valuation process. Fair Value Option The Company has elected the fair value option for certain corporate investments that otherwise would not have reflected unrealized gains and losses in current-period earnings. Such election is irrevocable and is applied on an investment-by-investment basis at initial recognition. Unrealized gains and losses resulting from changes in fair value are reflected as a component of investment income in the condensed consolidated statements of operations. The Company’s accounting for these investments is similar to its accounting for investments held by the consolidated funds at fair value and the valuation methods are consistent with those used to determine the fair value of the consolidated funds’ investments. The Company has elected the fair value option for the financial assets and financial liabilities of its consolidated CLOs. The assets and liabilities of CLOs are primarily reflected within the investments, at fair value and within the debt obligations of CLOs line items in the condensed consolidated statements of financial condition. The Company’s accounting for CLO assets is similar to its accounting for its funds with respect to both carrying investments held by CLOs at fair value and the valuation methods used to determine the fair value of those investments. The fair value of CLO liabilities are measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Realized gains or losses and changes in the fair value of CLO assets, respectively, are included in net realized gain on consolidated funds’ investments and net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Interest income of CLOs is included in interest and dividend income, and interest expense and other expenses, respectively, are included in interest expense and consolidated fund expenses in the condensed consolidated statements of operations. Changes in the fair value of a CLO’s financial liabilities in accordance with the CLO measurement guidance are included in net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Please see notes 6 and 10 for more information. Foreign Currency The assets and liabilities of the Company’s foreign subsidiaries with non-U.S. dollar functional currencies are translated at exchange rates prevailing at the end of each reporting period. The results of foreign operations are translated at the weighted average exchange rate for each reporting period. Translation adjustments are included in other comprehensive income (loss) within the condensed consolidated statements of financial condition until realized. Gains and losses resulting from foreign-currency transactions are included in general and administrative expense. Derivatives and Hedging A derivative is a financial instrument whose value is derived from an underlying financial instrument or index, such as interest rates, equity securities, currencies, commodities or credit spreads. Derivatives include futures, forwards, swaps or option contracts, and other financial instruments with similar characteristics. Derivative contracts often involve future commitments to exchange interest payment streams or currencies based on a notional or contractual amount (e.g., interest-rate swaps, foreign-currency forwards or cross-currency swaps). The Company enters into derivatives as part of its overall risk management strategy or to facilitate its investment management activities. The Company manages its exposure to interest rate and foreign exchange market risks, when deemed appropriate, through the use of derivatives, including foreign currency forward and option contracts, interest-rate and cross currency swaps with financial counterparties. Risks associated with fluctuations in interest rates and foreign-currency exchange rates in the normal course of business are addressed as part of the Company’s overall risk management strategy that may result in the use of derivatives to economically hedge or reduce these exposures. From time to time, the Company may enter into (a) foreign-currency option and forward contracts to reduce earnings and cash-flow volatility associated with changes in foreign-currency exchange rates, and (b) interest-rate swaps to manage all or a portion of the interest-rate risk associated with its variable-rate borrowings. As a result of the use of these or other derivative contracts, the Company is exposed to the risk that counterparties will fail to fulfill their contractual obligations. The Company attempts to mitigate this counterparty risk by entering into derivative contracts only with major financial institutions that have investment-grade credit ratings. Counterparty credit risk is evaluated in determining the fair value of derivatives. The Company recognizes all derivatives as assets or liabilities in its condensed consolidated statements of financial condition at fair value. In connection with its derivative activities, the Company generally enters into agreements subject to enforceable master netting arrangements that allow the Company to offset derivative assets and liabilities in the same currency by specific derivative type or, in the event of default by the counterparty, to offset derivative assets and liabilities with the same counterparty. While these derivatives are eligible to be offset in accordance with applicable accounting guidance, the Company has elected to present derivative assets and liabilities based on gross fair value in its condensed consolidated statements of financial condition. When the Company enters into a derivative contract, it may or may not elect to designate the derivative as a hedging instrument and apply hedge accounting as part of its overall risk management strategy. In other situations, when a derivative does not qualify for hedge accounting or when the derivative and the hedged item are both recorded in current-period earnings and thus deemed to be economic hedges, hedge accounting is not applied. Freestanding derivatives are financial instruments that we enter into as part of our overall risk management strategy but do not utilize hedge accounting. These financial instruments may include foreign-currency exchange contracts, interest-rate swaps and other derivative contracts. Derivatives that are designated as hedging instruments are classified as either a hedge of (a) a recognized asset or liability (“fair-value hedge”), (b) a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash-flow hedge”), or (c) a net investment in a foreign operation. For a fair-value hedge, the Company records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk in current-period earnings in the same caption in the condensed consolidated statements of operations as the hedged item. Changes in the fair value of a derivative that is highly effective and is designated and qualifies as a cash-flow hedge, to the extent that the hedge is effective, are recorded in other comprehensive income (loss) until earnings are affected by the variability of cash flows of the hedged transaction. Any hedge ineffectiveness is recorded in current-period earnings. Changes in the fair value of derivatives designated as hedging instruments that are caused by factors other than changes in the risk being hedged are excluded from the assessment of hedge effectiveness and recognized in current-period earnings. For freestanding derivatives, changes in fair value are recorded in current-period earnings. The Company formally documents at inception the hedge relationship, including identification of the hedging instrument and the hedged item, as well as the risk management objectives, the strategy for undertaking the hedge transaction, and the evaluation of effectiveness of the hedged transaction. On a quarterly basis, the Company formally assesses whether the derivative it designated in each hedging relationship has been and is expected to remain highly effective in offsetting changes in the estimated fair value or cash flow of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the balance remaining in other comprehensive income (loss) is released to earnings. Cash and Cash-equivalents Cash and cash-equivalents include demand deposit accounts, money market funds, and other short-term investments with maturities of three months or less at the date of acquisition. U.S. Treasury and Other Securities U.S. Treasury and other securities include holdings of U.S. Treasury bills, notes, and bonds, time deposit securities, and commercial paper with maturities greater than three months at the date of acquisition. These securities are classified as available-for-sale and are recorded at fair value with changes in fair value included in other comprehensive income (loss). Changes in fair value were not material for all years presented. Other securities include investment grade debt securities with maturities greater than three months from the date of acquisition that are issued or guaranteed by U.S. government-sponsored entities, sovereign debt, domestic and international corporate fixed and floating rating debt, and structured credit. These securities are classified as trading and are recorded at fair value with changes in fair value included in investment income. Corporate Investments Corporate investments consist of investments in funds, companies in which the Company does not have a controlling financial interest, and non-investment grade debt securities. Investments for which the Company is deemed to exert significant influence are accounted for under the equity method of accounting and reflect Oaktree’s ownership interest in each fund or company. In the case of investments for which the Company is not deemed to exert significant influence or control, the fair value option of accounting has been elected. Investment income represents the Company’s pro-rata share of income or loss from these funds or companies, or the change in fair value of the investment, as applicable. Oaktree’s general partnership interests are substantially illiquid. While investments in funds reflect each respective fund’s holdings at fair value, equity-method investments in companies are not adjusted to reflect the fair value of the underlying company. The fair value of the underlying investments in Oaktree funds is based on the Company’s assessment, which takes into account expected cash flows, earnings multiples and/or comparisons to similar market transactions, among other factors. Valuation adjustments reflecting consideration of credit quality, concentration risk, sales restrictions and other liquidity factors are integral to valuing these instruments. Non-investment grade debt securities include domestic and international corporate fixed and floating rating debt and structured credit investments. These securities are classified as trading and are recorded at fair value with changes in fair value included in investment income. Revenue Recognition The Company earns management fees and incentive income from the investment advisory services it provides to its customers. Revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company typically enters into contracts with investment funds to provide investment management and administrative services. These services are generally capable of being distinct and each is accounted for as separate performance obligations comprised of distinct service periods because the services are performed over time. The Company determined that for accounting purposes, based on certain facts and circumstances specific to each investment fund structure, that either the investment fund or individual investors may be considered the customer with respect to commingled funds, while the individual investors are the customers with respect to separate account and fund-of-one vehicles. The Company receives management fees and/or incentive income with respect to its investment management services, and it is reimbursed by the funds for expenses incurred or paid on behalf of the funds with respect to its investment advisory services and its administrative services. The Company evaluates whether it is the principal (i.e., report as management fees on a gross basis) or agent (i.e., report as management fees on a net basis) with respect to each performance obligation and associated reimbursement arrangements. The Company has elected to apply the variable consideration exemption for its fee arrangements with its customers. Please see note 3 for more information on revenues. Management Fees Management fees are recognized over the period in which the investment management services are performed because customers simultaneously consume and receive benefits that are satisfied over time. The contractual terms of management fees generally vary by fund structure. For closed-end funds, the management fee rate is applied against committed capital, drawn capital or cost basis during the fund’s investment period and the lesser of total funded capital or cost basis of assets in the liquidation period. For closed-end funds that pay management fees based on committed capital, the Company may elect to delay the start of the fund’s investment period and thus its full management fees, in which case it earns management fees based on drawn capital, and in certain cases outstanding borrowings under a fund-level credit facility made in lieu of drawing capital, until the Company elects to start the fund’s investment period. The Company’s right to receive management fees typically ends after 10 or 11 years from either the initial closing date or the start of the investment period, even if assets remain in the fund. In the case of CLOs, the management fee is based on the aggregate par value of collateral assets and principal cash, as defined in the applicable CLO indentures, and a portion of the management fees is dependent on the sufficiency of the particular vehicle’s cash flow. For open-end and evergreen funds, the management fee is generally based on the NAV of the fund. For the BDCs, the management fee is based on gross assets (including assets acquired with leverage), net of cash. In the case of certain open-end fund accounts, the Company has the potential to earn performance-based fees, typically in reference to a relevant benchmark index or hurdle rate, which are classified as management fees. The Company also earns quarterly incentive fees on the investment income from certain evergreen funds, such as the BDCs and other fund accounts, which are generally recurring in nature and reflected as management fees. The ultimate amount of management fees that will be earned over the life of the contract is subject to a large number and broad range of possible outcomes due to market volatility and other factors outside of the Company’s control. As a result, the amount of revenue earned in any given period is generally determined at the end of each reporting period and relates to services performed during that period. Included in this amount is a gross-up for reimbursable costs incurred on behalf of the Oaktree funds in which the Company has determined it is the principal within the principal and agent relationship of the related fund. Such reimbursable costs are presented in compensation and benefits and general and administrative expenses. Subsequent to the Restructuring, our management fees consist primarily of fees earned from funds managed by OCM Cayman and sub-advisory fees for services provided to OCM. Our revenue recognition for sub-advisory fees is substantially similar to revenue recognition for management fees. Incentive Income Incentive income generally represents 20% of each closed-end fund’s profits, subject to the return of contributed capital and a preferred return of typically 8% per annum, and up to 20% of certain evergreen fund’s annual profits, subject to high-water marks or hurdle rates. Incentive income is recognized when it is probable that a significant reversal will not occur. Revenue recognition is typically met (a) for closed-end funds, only after all contributed capital and the preferred return on that capital have been distributed to the fund’s investors, and (b) for certain evergreen funds, at the conclusion of each annual measurement period. Potential incentive income is highly susceptible to market volatility, the judgment and actions of third parties, and other factors outside of the Company’s control. The Company’s experience has demonstrated little predictive value in the amount of potential incentive income ultimately earned due to the highly uncertain nature of returns inherent in the markets and contingencies associated with many realization events. As a result, the amount of incentive income recognized in any given period is generally determined after giving consideration to a number of factors, including whether the fund is in its investment or liquidation period, and the nature and level of risk associated with changes in fair value of the remaining assets in the fund. In general, it would be unlikely that any amount of potential incentive income would be recognized until (a) the uncertainty is resolved or (b) the fund is near final liquidation, assets are under contract for sale or are of low risk of significant fluctuation in fair value, and the assets are significantly in excess of the threshold at which incentive income would be earned. Incentives received by the Company before the revenue recognition criteria have been met are deferred and recorded as a deferred incentive income liability within accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. The Company may receive tax distributions related to taxable income allocated by funds, which are treated as an advance of incentive income and subject to the same recognition criteria. Tax distributions are contractually not subject to clawback. Total Compensation and Benefits Compensation and Benefits Compensation and benefits expense reflects all compensation-related items not directly related to incentive income, investment income or equity-based compensation, and includes salaries, bonuses, compensation based on management fees or a definition of profits, employee benefits, payroll taxes and phantom equity awards. Bonuses are generally accrued over the related service period. Phantom equity awards represent liability-classified awards subject to vesting and remeasurement at the end of each reporting period. Prior to the Merger, the remeasurement was based on changes in the Company’s Class A unit trading price. After the Merger, the remeasurement is based on changes in the value of Converted OCGH Units or other OCGH units, as applicable. Subsequent to the Restructuring, our consolidated operating results include compensation and benefits expense primarily related to employees of OCM Cayman. Equity-based Compensation Equity-based compensation expense reflects the non-cash charge associated with grants of Class A units, OCGH units, OCGH equity value units (“EVUs”), deferred equity units and other performance-based units, and is calculated based on the grant-date fair value of the unit award. A contemporaneous valuation report is utilized in determining fair value at the date of grant for OCGH unit awards. Prior to the Merger, each valuation report was based on the market price of the Class A units as well as other pertinent factors. A discount was then applied to the Class A unit market price to reflect the lack of marketability for equity-classified awards, if applicable. The determination of an appropriate discount for lack of marketability was based on a review of discounts on the sale of restricted shares of publicly-traded companies and multi-period put-based quantitative methods. Factors that influenced the size of the discount for lack of marketability applicable to OCGH units included (a) the estimated time it would take for an OCGH unitholder to exchange units into Class A units, (b) the volatility of the Company’s business and (c) thin trading of the Class A units. Each of these factors is subject to significant judgment. After the Merger, OCGH unit grants are valued based on a formula as described in note 15 under “Restated Exchange Agreement—Valuation” and reflect a discount for lack of marketability due to the post-vesting restrictions described in note 15. Factors that influence the formula-based valuation include the estimated time it would take for an OCGH unitholder to exchange units for value pursuant to the Restated Exchange Agreement and estimates of the Company’s future results, which are inputs to the valuation formula. Each of these factors is subject to significant judgment. Equity-based awards that do not require future service (i.e., awards vested at grant) are expensed immediately. Equity-based awards that require future service are expensed on a straight-line basis over the requisite service period. Cash-settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period. With respect to forfeitures, the Company made an accounting policy election to account for forfeitures when they occur. Accordingly, no forfeitures have been assumed in the calculation of compensation expense. Incentive Income Compensation Incentive income compensation expense primarily reflects compensation directly related to incentive income, which generally consists of percentage interests (sometimes referred to as “points”) that the Company grants to its investment professionals associated with the particular fund that generated the incentive income, and secondarily, compensation directly related to investment income. The Company has an obligation to pay a fixed percentage of the incentive income earned from a particular fund, including income from consolidated funds that is eliminated in consolidation, to specified investment professionals responsible for the management of the fund. Amounts payable pursuant to these arrangements are recorded as compensation expense when they have become probable and reasonably estimable. The Company’s determination of the point at which it becomes probable and reasonably estimable that incentive income compensation expense should be recorded is based on its assessment of numerous factors, particularly those related to the profitability, realizations, distribution status, investment profile and commitments or contingencies of the individual funds that may give rise to incentive income. Incentive income compensation is generally expensed in the period in which the underlying income is recognized. Payment of incentive income compensation generally occurs in the same period the related income is received or in the next period. Participation in incentive income generated by the funds is subject to forfeiture upon departure and to vesting provisions (generally over a period of five years), in each case, under certain circumstances set forth in the applicable governing documents. These provisions are generally only applicable to incentive income compensation that has not yet been recognized as an expense by the Company or paid to the participant. Depreciation and Amortization Depreciation and amortization expense includes costs associated with the purchase of furniture and equipment, capitalized software, office leasehold improvements, corporate aircraft and acquired intangibles. Furniture and equipment and capitalized software costs are depreciated using the straight-line method over the estimated useful life of the asset, generally three to five years beginning in the first full month after the asset is placed in service. Leasehold improvements are amortized using the straight-line method over the shorter of the respective estimated useful life or the lease term. Corporate aircraft are depreciated using the straight-line method over their estimated useful life. Acquired intangibles primarily relate to contractual rights and are amortized over their estimated useful lives on a straight-line basis, which range from seven to 25 years. In connection with the Restructuring, the Company's indirect subsidiaries that held the acquired intangibles and corporate aircraft were deconsolidated, and these assets are no longer reflected on the statement of financial condition after September 30, 2019. Other Income (Expense), Net Other income (expense), net represents non-operating income or expense items. Income Taxes The Company is a publicly traded partnership. Because it satisfies the qualifying income test, it is not required to be treated as a corporation for U.S. federal and state income tax purposes; rather it is taxed as a partnership. The Company currently holds interests in Oaktree Capital I, L.P. (a non-corporate entity that is not subject to U.S. federal corporate income tax) and Oaktree Capital Management (Cayman), L.P. (which holds subsidiaries that are taxable in non-U.S. jurisdictions). Prior to the Restructuring on October 1, 2019, Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc., which were two of the Company’s Intermediate Holding Companies and wholly-owned corporate subsidiaries, were subject to U.S. federal and state income taxes. The remainder of the Company’s income was generally not subject to U.S. corporate-level taxation. Upon the Restructuring, Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc. merged with and into newly formed, indirect subsidiaries of Brookfield, with those subsidiaries surviving the mergers. As a result, as of October 1, 2019, Oaktree Holdings, Inc. and Oaktree AIF Holdings, Inc. ceased to exist and the Company no longer includes on our financial statements economic interests in Oaktree Capital II, Oaktree Investment Holdings, OCM, and Oaktree AIF. All deferred tax balances related to these entities were deconsolidated as part of the Restructuring effective October 1, 2019. Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amount of assets and liabilities and their respective tax bases, using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets would be reduced by a valuation allowance if it becomes more likely than not that some portion or all of the deferred tax assets will not be realized. The Company analyzes its tax filing positions for all open tax years in all of the U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns. If the Company determines that uncertainties in tax positions exist, a reserve is established. The Company recognizes accrued interest and penalties related to uncertain tax positions within income tax expense in the condensed consolidated statements of operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties. The Company reviews its tax positions quarterly and adjusts its tax balances as new information becomes available. The Oaktree funds are generally not subject to U.S. federal and state income taxes and, consequently, no income tax provision has been made in the accompanying condensed consolidated financial statements because individual partners are responsible for their proportionate share of the taxable income. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting unitholders’ capital that are excluded from net income (loss). Other gains and losses result from foreign-currency translation adjustments, net of tax, and unrealized gains and losses on cash-flow hedges. Accounting Policies of Consolidated Funds Investment Transactions and Income Recognition The consolidated funds record investment transactions at cost on trade date for publicly-traded securities or when they have an enforceable right to acquire the security, which is generally on the closing date if not publicly traded. Realized gains and losses on investments are recorded on a specific-identification basis. The consolidated funds record dividend income on the ex-dividend date and interest income on an accrual basis, unless the related investment is in default or if collection of the income is otherwise considered doubtful. The consolidated funds may hold investments that provide for interest payable in-kind rather than in cash, in which case the related income is recorded at its estimated net realizable amount. Income Taxes The consolidated funds may invest in operating entities that are treated as partnerships for U.S. federal income tax purposes which may give rise to unrelated business taxable income or income effectively connected with a U.S. trade or business. In such situations, the consolidated funds permit certain investors to elect to participate in these investments through a “blocker structure” using entities that are treated as corporations for U.S. federal income tax purposes and are generally subject to U.S. federal, state and local taxes. The consolidated funds withhold blocker expenses and tax payments from electing limited partners, which are treated as deemed distributions to such limited partners pursuant to the terms of the respective limited partnership agreement. Foreign Currency Investments denominated in non-U.S. currencies are recorded in the condensed consolidated financial statements after translation into U.S. dollars utilizing rates of exchange on the last business day of the period. Interest and dividend income is recorded net of foreign withholding taxes and calculated using the exchange rate in effect when the income is recognized. The effect of changes in exchange rates on assets and liabilities, income, and realized gains or losses is included as part of net realized gain (loss) on consolidated funds’ investments and net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Cash and Cash-equivalents Cash and cash-equivalents held at the consolidated funds represent cash that, although not legally restricted, is not available to support the general liquidity needs of the Company as the use of such amounts is generally limited to the investment activities of the consolidated funds. Cash-equivalents, a Level I valuation, include highly liquid investments such as money market funds, whose carrying value approximates fair value due to its short-term nature. Receivable for Investments Sold Receivables for investments sold by the consolidated funds are recorded at net realizable value. Changes in net realizable value are reflected within net change in unrealized appreciation (depreciation) on consolidated funds’ investments and realizations are reflected within net realized gain on consolidated funds’ investments in the condensed consolidated statements of operations. Investments, at Fair Value The consolidated funds include investment limited partnerships and CLOs that reflect their investments, including majority-owned and controlled investments, at fair value. The Company has retained the specialized investment company accounting guidance for investment limited partnerships with respect to consolidated investments and has elected the fair value option for the financial assets of CLOs. Thus, the consolidated investments are reflected in the condensed consolidated statements of financial condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Non-publicly traded debt and equity securities and other securities or instruments for which reliable market quotations are not available are valued by management using valuation methodologies applied on a consistent basis. These securities may initially be valued at the acquisition price as the best indicator of fair value. The Company reviews the significant unobservable inputs, valuations of comparable investments and other similar transactions for investments valued at acquisition price to determine whether another valuation methodology should be utilized. Subsequent valuations will depend on the facts and circumstances known as of the valuation date and the application of valuation methodologies as further described below under “—Non-publicly Traded Equity and Real Estate Investments.” The fair value may also be based on a pending transaction expected to close after the valuation date. Exchange-traded Investments Securities listed on one or more national securities exchanges are valued at their last reported sales price on the date of valuation. If no sale occurred on the valuation date, the security is valued at the mean of the last “bid” and “ask” prices on the valuation date. Securities that are not readily marketable due to legal restrictions that may limit or restrict transferability are generally valued at a discount from quoted market prices. The discount would reflect the amount market participants would require due to the risk relating to the inability to access a public market for the security for the specified period and would vary depending on the nature and duration of the restriction and the perceived risk and volatility of the underlying securities. Securities with longer duration restrictions or higher volatility are generally valued at a higher discount. Such discounts are generally estimated based on put option models or an analysis of market studies. Instances where the Company has applied discounts to quoted prices of restricted listed securities have been infrequent. The impact of such discounts is not material to the Company’s condensed consolidated statements of financial condition and results of operations for all periods presented. Credit-oriented Investments (including Real Estate Loan Portfolios) Investments in corporate and government debt which are not listed or admitted to trading on any securities exchange are valued at the mean of the last bid and ask prices on the valuation date based on quotations supplied by recognized quotation services or by reputable broker-dealers. The market-yield approach is considered in the valuation of non-publicly traded debt securities, utilizing expected future cash flows and discounted using estimated current market rates. Discounted cash-flow calculations may be adjusted to reflect current market conditions and/or the perceived credit risk of the borrower. Consideration is also given to a borrower’s ability to meet principal and interest obligations; this may include an evaluation of collateral and/or the underlying value of the borrower utilizing techniques described below under “—Non-publicly Traded Equity and Real Estate Investments.” Non-publicly Traded Equity and Real Estate Investments The fair value of equity and real estate investments is determined using a cost, market or income approach. The cost approach is based on the current cost of reproducing a real estate investment less deterioration and functional and economic obsolescence. The market approach utilizes valuations of comparable public companies and transactions, and generally seeks to establish the enterprise value of the portfolio company or investment property using a market-multiple methodology. This approach takes into account the financial measure (such as EBITDA, adjusted EBITDA, free cash flow, net operating income, net income, book value or net asset value) believed to be most relevant for the given company or investment property. Consideration also may be given to factors such as acquisition price of the security or investment property, historical and projected operational and financial results for the portfolio company, the strengths and weaknesses of the portfolio company or investment property relative to its comparable companies or properties, industry trends, general economic and market conditions, and others deemed relevant. The income approach is typically a discounted cash-flow method that incorporates expected timing and level of cash flows. It incorporates assumptions in determining growth rates, income and expense projections, discount and capitalization rates, capital structure, terminal values, and other factors. The applicability and weight assigned to market and income approaches are determined based on the availability of reliable projections and comparable companies and transactions. The valuation of securities may be impacted by expectations of investors’ receptiveness to a public offering of the securities, the size of the holding of the securities and any associated control, information with respect to transactions or offers for the securities (including the transaction pursuant to which the investment was made and the elapsed time from the date of the investment to the valuation date), and applicable restrictions on the transferability of the securities. These valuation methodologies involve a significant degree of management judgment. Accordingly, valuations by the Company do not necessarily represent the amounts that eventually may be realized from sales or other dispositions of investments. Fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the condensed consolidated financial statements. Securities Sold Short Securities sold short represent obligations of the consolidated funds to make a future delivery of a specific security and, correspondingly, create an obligation to purchase the security at prevailing market prices (or deliver the security, if owned by the consolidated funds) as of the delivery date. As a result, these short sales create the risk that the funds’ obligations to satisfy the delivery requirement may exceed the amount recorded in the accompanying condensed consolidated statements of financial condition. Securities sold short are recorded at fair value, with the resulting change in value reflected as a component of net change in unrealized appreciation (depreciation) on consolidated funds’ investments in the condensed consolidated statements of operations. When the securities are delivered, any gain or loss is included in net realized gain on consolidated funds’ investments. The funds maintain cash deposits with prime brokers in order to cover their obligations on short sales. These amounts are included in due from brokers in the condensed consolidated statements of financial condition. Options The purchase price of a call option or a put option is recorded as an investment, which is carried at fair value. If a purchased option expires, a loss in the amount of the cost of the option is realized. When there is a closing sale transaction, a gain or loss is realized if the proceeds are greater or less than, respectively, the cost of the option. When a call option is exercised, the cost of the security purchased upon exercise is increased by the premium originally paid. When a consolidated fund writes an option, the premium received is recorded as a liability and is subsequently adjusted to the current fair value of the option written. If a written option expires, a gain is realized in the amount of the premium received. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain or loss. The writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. Options written are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. Total-return Swaps A total-return swap is an agreement to exchange cash flows based on an underlying asset. Pursuant to these agreements, a fund may deposit collateral with the counterparty and may pay a swap fee equal to a fixed percentage of the value of the underlying security (notional amount). A fund earns interest on cash collateral held on account with the counterparty and may be required to deposit additional collateral equal to the unrealized appreciation or depreciation on the underlying asset. Changes in the value of the swaps, which are recorded as unrealized gains or losses, are based on changes in the underlying value of the security. All amounts exchanged with the swap counterparty representing capital appreciation or depreciation, dividend income and expense, items of interest income on short proceeds, borrowing costs on short sales, and commissions are recorded as realized gains or losses. Dividend income and expense on the underlying assets are accrued as unrealized gains or losses on the ex-date. Due From Brokers Due from brokers represents cash owned by the consolidated funds and cash collateral on deposit with brokers and counterparties that are used as collateral for the consolidated funds’ securities and swaps. Risks and Uncertainties Certain consolidated funds invest primarily in the securities of entities that are undergoing, or are considered likely to undergo, reorganization, debt restructuring, liquidation or other extraordinary transactions. Investments in such entities are considered speculative and involve substantial risk of principal loss. Certain of the consolidated funds’ investments may also consist of securities that are thinly traded, securities and other assets for which no market exists, and securities which are restricted as to their transferability. Additionally, investments are subject to concentration and industry risks, reflecting numerous factors, including political, regulatory or economic issues that could cause the investments and their markets to be relatively illiquid and their prices relatively volatile. Investments denominated in non-U.S. currencies or involving non-U.S. domiciled entities are subject to risks and special considerations not typically associated with U.S. investments. Such risks may include, but are not limited to, investment and repatriation restrictions; currency exchange-rate fluctuations; adverse political, social and economic developments; less liquidity; smaller capital markets; and certain local tax law considerations. Credit risk is the potential loss that may be incurred from the failure of a counterparty or an issuer to make payments according to the terms of a contract. Some consolidated funds are subject to additional credit risk due to strategies of investing in debt of financially distressed issuers or derivatives, as well as involvement in privately-negotiated structured notes and structured-credit transactions. Counterparties include custodian banks, major brokerage houses and their affiliates. The Company monitors the creditworthiness of the financial institutions with which it conducts business. Bank debt has exposure to certain types of risk, including interest rate, market, and the potential non-payment of principal and interest as a result of default or bankruptcy of the issuer. Loans are generally subject to prepayment risk, which will affect the maturity of such loans. The consolidated funds may enter into bank debt participation agreements through contractual relationships with a third-party intermediary, causing the consolidated funds to assume the credit risk of both the borrower and the intermediary. Certain consolidated funds may invest in real property and real estate-related investments, including commercial mortgage-backed securities (“CMBS”) and real estate loans, that entail substantial inherent risks. There can be no assurance that such investments will increase in value or that significant losses will not be incurred. CMBS are subject to a number of risks, including credit, interest rate, prepayment and market. These risks can be affected by a number of factors, including general economic conditions, particularly those in the area where the related mortgaged properties are located, the level of the borrowers’ equity in the mortgaged properties, and the relative timing and rate of delinquencies and prepayments of mortgage loans bearing a higher rate of interest. Real estate loans include residential or commercial loans that are non-performing at the time of their acquisition or that become non-performing following their acquisition. Non-performing real estate loans may require a substantial amount of workout negotiations or restructuring, which may entail, among other things, a substantial reduction in the interest rate and/or write-down of the principal balance. Moreover, foreclosure on collateral securing one or more real estate loans held by the consolidated funds may be necessary, which may be lengthy and expensive. Residential loans are typically subject to risks associated with the value of the underlying properties, which may be affected by a number of factors including general economic conditions, mortgage qualification standards, local market conditions such as employment levels, the supply of homes, and the safety, convenience and attractiveness of the properties and neighborhoods. Commercial loans are typically subject to risks associated with the ability of the borrower to repay, which may be impacted by general economic conditions, as well as borrower-specific factors including the quality of management, the ability to generate sufficient income to make scheduled principal and interest payments, or the ability to obtain alternative financing to repay the loan. Certain consolidated funds hold over-the-counter derivatives that may allow counterparties to terminate derivative contracts prior to maturity under certain circumstances, thereby resulting in an accelerated payment of any net liability owed to the counterparty. Recent Accounting Developments In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance that changes the fair value measurement disclosure requirements. The amendments remove or modify certain disclosures, while adding others. The guidance was effective for the Company in the first quarter of 2020. The Company adopted this guidance and it did not have a material impact on the condensed consolidated financial statements. In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairments by eliminating step 2 of the goodwill impairment test. This step currently requires an entity to perform a hypothetical purchase price allocation to derive the implied fair value of goodwill. Under the new guidance, an impairment loss is recognized if the carrying value of a reporting unit exceeds its fair value. The impairment loss would equal the amount of that excess, limited to the total amount of goodwill. All other goodwill impairment guidance remains largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance was effective for the Company in the first quarter of 2020 on a prospective basis. The Company adopted this guidance and it did not have a material impact on the condensed consolidated financial statements. In June 2016, the FASB issued guidance that significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The revised credit loss guidance will replace the existing “incurred loss” model with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as is required with the current other-than-temporary impairment credit loss model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The Company reviewed its condensed consolidated financial statements and determined that the amounts in scope were primarily related to short term receivables from Oaktree funds. The guidance was effective for the Company in the first quarter of 2020 and was adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. The adoption of this guidance in the first quarter of 2020 did not have a material impact on the Company’s condensed consolidated financial statements. Upon adoption the Company recorded a cumulative-effect adjustment to retained earnings of $0.4 million in its condensed consolidated financial statements.

REVENUES

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUES

The Company provides investment management services through funds and separate accounts. The Company earns revenues from the management fees and incentive income generated by the funds that it manages. Additionally, for acting as a sub-investment manager, or sub-advisor, to certain Oaktree funds, the Company earns sub-advisory fees. Under certain subsidiary services agreements the Company provides certain investment and marketing related services to Oaktree affiliated entities. As a result of the Restructuring, which was effective October 1, 2019, sub-advisory fees are no longer eliminated in the consolidated operating results of the Company while management fees earned by OCM are no longer included in the Company's consolidated operating results.

Revenues are affected by economic factors related to the asset class composition of the holdings and the contractual terms such as the basis for calculating the management fees and investors’ ability to redeem. Revenues by fund structure and sub-advisory fees are set forth below.


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Management Fees
Closed-end	$	765	$	120,462	$	1,404	$	345,091
Open-end	2,553		29,990		6,808		90,480
Evergreen	—		29,309		—		89,227
Sub-advisory fees	42,148		—		130,066		—
Total	$	45,466	$	179,761	$	138,278	$	524,798

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Incentive Income


Closed-end and Evergreen	$	116	$	25,429	$	43,532	$	260,290

Contract Balances

The Company receives management fees monthly or quarterly in accordance with its contracts with customers. Incentive income is received when the fund makes a distribution. Contract assets relate to the Company’s conditional right to receive payment for its performance completed under the contract. Receivables are recorded when the right to consideration becomes unconditional (i.e., only requires the passage of time). Contract liabilities (i.e., deferred revenues) relate to payments received in advance of performance under the contract. Contract liabilities are recognized as revenues when the Company provides investment management services.

The table below sets forth contract balances for the periods indicated:


	As of
	September 30, 2020		December 31, 2019

Receivables	$	59,184	$	65,346
Contract assets (1)	—		73,907
Contract liabilities	(100)		—

(1) The changes in the balances primarily related to accruals, net of payments received.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES

The Company consolidates VIEs for which it is the primary beneficiary. VIEs include funds managed by Oaktree and CLOs for which Oaktree acts as collateral manager. The purpose of these VIEs is to provide investment opportunities for investors in exchange for management fees and, in certain cases, performance-based fees. While the investment strategies of the funds and CLOs differ by product, in general the fundamental risks of the funds and CLOs have similar characteristics, including loss of invested capital and reduction or absence of management and performance-based fees. As general partner or collateral manager, respectively, Oaktree generally considers itself the sponsor of the applicable fund or CLO. The Company does not provide performance guarantees and, other than capital commitments, has no financial obligation to provide funding to VIEs.

Consolidated VIEs

As of September 30, 2020, the Company consolidated 22 VIEs for which it was the primary beneficiary, including 9 funds managed by Oaktree and 13 CLOs for which Oaktree serves as collateral manager. As of December 31, 2019, the Company consolidated 22 VIEs.

As of September 30, 2020, the assets and liabilities of the 22 consolidated VIEs representing funds and CLOs amounted to $7.4 billion and $6.6 billion, respectively. The assets of these consolidated VIEs primarily consisted of investments in debt and equity securities, while their liabilities primarily represented debt obligations issued by CLOs. The assets of these VIEs may be used only to settle obligations of the same VIE. In addition, there is no recourse to the Company for the VIEs’ liabilities. In exchange for managing either the funds’ or CLOs’ collateral, the Company typically earns management fees and may earn performance fees, all of which are eliminated in consolidation. As of September 30, 2020, the Company’s investments in consolidated VIEs had a carrying value of $538.6 million, which represented its maximum risk of loss as of that date. The Company’s investments in CLOs are generally subordinated to other interests in the CLOs and entitle the Company to receive a pro-rata portion of the residual cash flows, if any, from the CLOs. Please see note 10 for more information on CLO debt obligations.

Unconsolidated VIEs

The Company holds variable interests in certain VIEs in the form of direct equity interests that are not consolidated because it is not the primary beneficiary, inasmuch as its fee arrangements are considered at-market and it does not hold interests in those entities that are considered more than insignificant.

The carrying value of the Company’s investments in VIEs that were not consolidated are shown below.


	Carrying Value as of
	September 30, 2020		December 31, 2019

Corporate investments	$	818,387	$	693,090
Due from affiliates	2,441		87,524
Maximum exposure to loss	$	820,828	$	780,614

INVESTMENTS

9 Months Ended

Sep. 30, 2020

Investments [Abstract]

INVESTMENTS

Corporate Investments

Corporate investments consist of investments in funds and companies in which the Company does not have a controlling financial interest. Investments for which the Company is deemed to exert significant influence are accounted for under the equity method of accounting and reflect the Company’s ownership interest in each fund or company. In the case of investments for which the Company is not deemed to exert significant influence or control, the fair value option of accounting has been elected. Investment income represents the Company’s pro-rata share of income or loss from these funds or companies, or the change in fair value of the investment, as applicable. The Company’s general partnership interests are substantially illiquid. While investments in funds reflect each respective fund’s holdings at fair value, equity-method investments in companies are not adjusted to reflect the fair value of the underlying company. The fair value of the underlying investments in Oaktree funds is based on the Company’s assessment, which takes into account expected cash flows, earnings multiples and/or comparisons to similar market transactions, among other factors. Valuation adjustments reflecting consideration of credit quality, concentration risk, sales restrictions and other liquidity factors are integral to valuing these instruments.

Corporate investments consisted of the following:


	As of
Corporate Investments	September 30, 2020		December 31, 2019

Equity-method investments:
Funds	$	892,363	$	670,348
Companies	4,165		3,855
Other investments, at fair value	19,169		34,934
Total corporate investments	$	915,697	$	709,137

The components of investment income (loss) are set forth below:


	Three months ended September 30,				Nine months ended September 30,
Investment Income (Loss)	2020		2019		2020		2019

Equity-method investments:
Funds	$	63,225	$	(12,106)	$	29,114	$	45,211
Companies	(13)		20,108		309		56,919
Other investments, at fair value	(2,916)		18,817		(11,393)		19,674
Total investment income (loss)	$	60,296	$	26,819	$	18,030	$	121,804

Equity-method Investments

The Company’s equity-method investments include its investments in Oaktree funds for which it serves as general partner, and other third-party funds and companies that are not consolidated, but for which the Company is deemed to exert significant influence. The Company’s share of income or loss generated by these investments is recorded within investment income in the condensed consolidated statements of operations. The Company’s equity-method investments in Oaktree funds principally reflect the Company’s general partner interests in those funds, which typically does not exceed 2.5% in each fund. The Oaktree funds are investment companies that follow a specialized basis of accounting established by GAAP.

Each reporting period, the Company evaluates each of its equity-method investments to determine if any are considered significant, as defined by the SEC. For the nine months ended September 30, 2020, no individual equity-method investment met the significance criteria.

Summarized financial information of the Company’s equity-method investments is set forth below.


	Three months ended September 30,				Nine months ended September 30,
Statements of Operations	2020		2019		2020		2019
Revenues / investment income	$	268,389	$	353,289	$	1,057,398	$	1,584,552
Interest expense	(14,093)		(54,329)		(108,679)		(185,227)
Other expenses	(97,358)		(157,878)		(503,361)		(639,180)
Net realized and unrealized gain (loss) on investments	2,628,272		(204,820)		77,518		916,097
Net income (loss)	$	2,785,210	$	(63,738)	$	522,876	$	1,676,242

Other Investments, at Fair Value

Other investments, at fair value primarily consist of (a) investments in certain Oaktree and non-Oaktree funds for which the fair value option of accounting has been elected (b) non-investment grade debt securities, and (c) derivatives utilized to hedge the Company’s exposure to investment income earned from its funds.

The following table summarizes net gains (losses) attributable to the Company’s other investments:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019

Realized gain (loss)	$	(1,479)	$	1,345	$	2,024	$	7,656
Net change in unrealized gain (loss)	(1,437)		17,472		(13,417)		12,018
Total gain (loss)	$	(2,916)	$	18,817	$	(11,393)	$	19,674

Investments of Consolidated Funds

Investments, at Fair Value

Investments held and securities sold short by the consolidated funds are summarized below:


	Fair Value as of				Fair Value as a Percentage of Investments of Consolidated Funds as of
Investments	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
United States:
Debt securities:
Communication services	$	543,145	$	464,356	7.9	%	6.4	%
Consumer discretionary	522,455		508,701		7.6		6.9
Consumer staples	111,420		92,102		1.6		1.3
Energy	159,035		223,671		2.3		3.0
Financials	284,167		355,113		4.1		4.8
Health care	462,806		512,864		6.7		7.0
Industrials	611,730		563,920		8.9		7.7
Information technology	463,968		524,390		6.7		7.1
Materials	264,482		294,300		3.8		4.0
Real estate	107,667		204,933		1.6		2.8
Utilities	247,323		216,053		3.6		2.9
Other	6,479		—		0.1		—
Total debt securities (cost: $3,923,050 and $3,981,956 as of September 30, 2020 and December 31, 2019, respectively)	3,784,677		3,960,403		54.9		53.9
Equity securities:
Communication services	56		312		0.0		0.0
Consumer discretionary	208		658		0.0		0.0
Energy	644		256		0.0		0.0



Materials	177		—		0.0		—
Utilities	87,344		130,671		1.3		1.8
Total equity securities (cost: $151,756 and $137,149 as of September 30, 2020 and December 31, 2019, respectively)	88,429		131,897		1.3		1.8
Real estate:
Real estate	5,877		230,741		0.1		3.1

Total real estate securities (cost: $5,841 and $230,741 as of September 30, 2020 and December 31, 2019, respectively)	5,877		230,741		0.1		3.1


	Fair Value as of				Fair Value as a Percentage of Investments of Consolidated Funds as of
Investments	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Europe:
Debt securities:
Communication services	$	408,850	$	469,822	5.9	%	6.4	%
Consumer discretionary	662,805		659,001		9.6		9.0
Consumer staples	197,048		178,609		2.9		2.4
Energy	2,218		11,316		0.0		0.2
Financials	74,245		101,933		1.1		1.4
Health care	607,634		579,765		8.8		7.9
Industrials	414,309		362,120		6.0		4.9
Information technology	218,339		177,152		3.2		2.4
Materials	256,196		230,289		3.7		3.1
Real estate	17,196		96,315		0.2		1.3
Utilities	6,815		3,852		0.1		0.1
Other	3,771		—		0.1		—
Total debt securities (cost: $2,959,485 and $2,876,531 as of September 30, 2020 and December 31, 2019, respectively)	2,869,426		2,870,174		41.6		39.1
Equity securities:
Consumer discretionary	—		94		—		0.0




Total equity securities (cost: $0 and $1,227 as of September 30, 2020 and December 31, 2019, respectively)	—		94		—		0.0
Asia and other:
Debt securities:
Communication services	22,921		15,750		0.3		0.2
Consumer discretionary	34,482		40,073		0.5		0.5
Consumer staples	19,848		11,545		0.3		0.2
Energy	4,210		13,471		0.1		0.1
Financials	8,047		10,313		0.1		0.1
Government	—		917		—		0.0
Health care	3,360		8,923		0.0		0.1
Industrials	19,918		31,814		0.3		0.4
Information technology	2,754		5,639		0.0		0.1
Materials	4,132		5,604		0.1		0.1
Real estate	597		751		0.0		0.0
Utilities	5,862		20,300		0.1		0.3
Other	5,846		—		0.1		—
Total debt securities (cost: $136,417 and $164,650 as of September 30, 2020 and December 31, 2019, respectively)	131,977		165,100		1.9		2.2














Total debt securities	6,786,080		6,995,677		98.6		95.1
Total equity securities	88,429		131,991		1.3		1.8
Total real estate	5,877		230,741		0.1		3.1
Total investments, at fair value	$	6,880,386	$	7,358,409	100.0	%	100.0	%

As of September 30, 2020 and December 31, 2019, no single issuer or investment had a fair value that exceeded 5% of Oaktree’s total consolidated net assets.

Net Gains (Losses) From Investment Activities of Consolidated Funds

Net gains (losses) from investment activities in the condensed consolidated statements of operations consist primarily of realized and unrealized gains and losses on the consolidated funds’ investments (including foreign exchange gains and losses attributable to foreign-denominated investments and related activities) and other financial instruments. Unrealized gains or losses result from changes in the fair value of these investments and other financial instruments. Upon disposition of an investment, unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period.

The following table summarizes net gains (losses) from investment activities:


	Three months ended September 30,
	2020				2019
	Net Realized Gain (Loss) on Investments		Net Change in Unrealized Appreciation (Depreciation) on Investments		Net Realized Gain (Loss) on Investments		Net Change in Unrealized Appreciation (Depreciation) on Investments

Investments and other financial instruments	$	(19,781)	$	118,110	$	636	$	(14,910)
CLO liabilities (1)	—		(117,948)		—		(25,778)
Foreign-currency forward contracts (2)	192		417		(4,300)		(276)
Total-return and interest-rate swaps (2)	68		(6)		—		—
Options and futures (2)	(114)		(40)		—		—
Total	$	(19,635)	$	533	$	(3,664)	$	(40,964)


	Nine months ended September 30,
	2020				2019
	Net Realized Gain (Loss) on Investments		Net Change in Unrealized Appreciation (Depreciation) on Investments		Net Realized Gain (Loss) on Investments		Net Change in Unrealized Appreciation (Depreciation) on Investments

Investments and other financial instruments	$	(86,506)	$	(325,510)	$	(7,076)	$	137,322
CLO liabilities (1)	—		126,410		—		(119,767)
Foreign-currency forward contracts (2)	(11,200)		(23,483)		(1,960)		412
Total-return and interest-rate swaps (2)	68		(6)		—		—
Options and futures (2)	(4)		(157)		—		—
Total	$	(97,642)	$	(222,746)	$	(9,036)	$	17,967

(1) Represents the net change in the fair value of CLO liabilities based on the more observable fair value of CLO assets, as measured under the CLO measurement guidance. Please see note 2 for more information.

(2) Please see note 7 for additional information.

FAIR VALUE

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE

Fair Value of Financial Assets and Liabilities

The short-term nature of cash and cash-equivalents, receivables and accounts payable causes each of their carrying values to approximate fair value. The fair value of short-term investments included in cash and cash-equivalents is a Level I valuation. The Company’s other financial assets and financial liabilities by fair-value hierarchy level are set forth below. Please see notes 10 and 18 for the fair value of the Company’s outstanding debt obligations and amounts due from/to affiliates, respectively.


	As of September 30, 2020								As of December 31, 2019
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Assets
U.S. Treasury and other securities (1)	$	9,150	$	—	$	—	$	9,150	$	9,232	$	—	$	—	$	9,232
Corporate investments	—		3,888		23,334		27,222		—		4,717		30,311		35,028
Foreign-currency forward contracts (2)	—		221		—		221		—		—		—		—

Total assets	$	9,150	$	4,109	$	23,334	$	36,593	$	9,232	$	4,717	$	30,311	$	44,260

Liabilities

Foreign-currency forward contracts (3)	$	—	$	(8,733)	$	—	$	(8,733)	$	—	$	(1,703)	$	—	$	(1,703)

(1) For U.S. Treasury securities the carrying value approximates fair value due to their short-term nature and are classified as Level I investments within the fair value hierarchy detailed above.

(2) Amounts are included in other assets, except for $137 as of September 30, 2020, which is included within corporate investments in the consolidated statements of financial condition.

(3) Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition, except for $8,190 and $94 as of September 30, 2020 and December 31, 2019, respectively, which are included within corporate investments in the condensed consolidated statements of financial condition.

The table below sets forth a summary of changes in the fair value of Level III financial instruments:


	Three months ended September 30,
	2020				2019
	Corporate Investments		Contingent Liability		Corporate Investments		Contingent Liability

Beginning balance	$	22,022	$	—	$	42,234	$	(6,737)
Contributions or additions	772		—		883		—
Distributions	(1,996)		—		—		—
Net gain (loss) included in earnings	2,536		—		2,519		2,219
Ending balance	$	23,334	$	—	$	45,636	$	(4,518)

Net change in unrealized gains (losses) attributable to financial instruments still held at end of period	$	2,536	$	—	$	2,519	$	2,219


	Nine months ended September 30,
	2020				2019
	Corporate Investments		Contingent Liability		Corporate Investments		Contingent Liability

Beginning balance	$	30,311	$	—	$	45,426	$	(6,657)
Contributions or additions	2,562		—		937		—
Distributions	(6,993)		—		(7,181)		—
Net gain (loss) included in earnings	(2,546)		—		6,454		2,139
Ending balance	$	23,334	$	—	$	45,636	$	(4,518)

Net change in unrealized gains (losses) attributable to financial instruments still held at end of period	$	(989)	$	—	$	6,454	$	2,139

The table below sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the Company’s Level III financial instruments:

Fair Value as of

Significant Unobservable Input

Financial Instrument

September 30, 2020

December 31, 2019

Valuation Technique

Range

Weighted Average

Corporate investment – Limited partnership interests

23,334

30,311

Market approach
(value of underlying assets)

Not applicable

Fair Value of Financial Instruments Held By Consolidated Funds

The short-term nature of cash and cash-equivalents held at the consolidated funds causes their carrying value to approximate fair value. The fair value of cash-equivalents is a Level I valuation. Derivatives may relate to a mix of Level I, II or III investments, and therefore their fair-value hierarchy level may not correspond to the fair-value hierarchy level of the economically hedged investment. The table below summarizes the investments and other financial instruments of the consolidated funds by fair-value hierarchy level:


	As of September 30, 2020								As of December 31, 2019
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Assets
Investments:
Corporate debt – bank debt	$	—	$	5,946,317	$	94,973	$	6,041,290	$	—	$	5,911,523	$	149,642	$	6,061,165
Corporate debt – all other	—		724,901		19,889		744,790		—		903,246		31,266		934,512
Equities – common stock	383		—		87,910		88,293		552		345		130,437		131,334
Equities – preferred stock			—		136		136		—		—		657		657
Real estate	—		5,877		—		5,877		—		—		230,741		230,741
Total investments	383		6,677,095		202,908		6,880,386		552		6,815,114		542,743		7,358,409
Derivatives:
Foreign-currency forward contracts	—		319		—		319		27		6,863		—		6,890
Options and futures	20		—		—		20		—		—		—		—
Total derivatives (1)	20		319		—		339		27		6,863		—		6,890
Total assets	$	403	$	6,677,414	$	202,908	$	6,880,725	$	579	$	6,821,977	$	542,743	$	7,365,299

Liabilities
CLO debt obligations:
Senior secured notes	$	—	$	(6,066,574)	$	—	$	(6,066,574)	$	—	$	(5,613,846)	$	—	$	(5,613,846)
Subordinated notes	—		(175,307)		—		(175,307)		—		(154,153)		—		(154,153)
Total CLO debt obligations (2)	—		(6,241,881)		—		(6,241,881)		—		(5,767,999)		—		(5,767,999)