Ameriprise 2015 Annual Report Download - page 135

housing partnerships is limited to the carrying value of these investments. The carrying value is reflected in other
investments and was $517 million and $504 million as of December 31, 2015 and 2014, respectively.
The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured
investments typically invest in fixed income instruments and are managed by third parties and include asset backed
securities, commercial mortgage backed securities and residential mortgage backed securities. The Company classifies
these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of
these structures due to the size of the Company’s investment in the entities and position in the capital structure of these
entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited
to its carrying value. See Note 5 for additional information about these structured investments.
The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its investment
nor has the Company provided any support to these entities. The carrying value of the Company’s investment in these
entities is included in investments on the consolidated balance sheets.
Consolidated VIEs
The consolidated CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans
and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors
various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company.
The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the
Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company generally
earns management fees from the CLOs based on the CLO’s collateral pool and, in certain instances, may also receive
incentive fees. The Company has invested in a portion of the unrated, junior subordinated notes of certain CLOs. For
certain of the CLOs, the Company has determined that consolidation is required as it has power over the CLOs as collateral
manager and holds a variable interest in the CLOs for which the Company has the potential to receive benefits or the
potential obligation to absorb losses that could be significant to the CLO.
The Company provides investment advice and related services to property funds, certain of which are considered VIEs. For
investment management services, the Company generally earns management fees based on the market value of assets
under management, and in certain instances may also receive performance-based fees. The Company has determined that
consolidation is required for certain property funds managed by the Company.
During 2015, the Company consolidated two new CLOs with assets of approximately $1.3 billion and liquidated one CLO
resulting in the sale of approximately $203 million in assets. During 2014, the Company consolidated three new CLOs with
assets of approximately $1.7 billion and liquidated one CLO resulting in the sale of approximately $300 million in assets.
During 2015, the Company consolidated three new property funds with assets of approximately $452 million. During
2014, the Company consolidated two new property funds with assets of approximately $260 million. The liquidation of
properties may occur over several years until the fund is terminated. See the summary of changes in Level 3 assets and
liabilities for gross sales and purchases of properties, within the other assets caption, for the twelve months ended
December 31, 2015 and 2014.
Fair Value of Assets and Liabilities
The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 14 for the definition
of the three levels of the fair value hierarchy.
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