ASSURED GUARANTY LTD

10. Asset Management Fees

Prior to the Sound Point Transaction and AHP Transaction, the Company received management fees, as well as performance fees, incentive allocations or carried interest (collectively referred to as performance fees) in exchange for AssuredIM providing investment advisory services to manage investment funds and CLOs. After the Sound Point Transaction and AHP Transaction, the Company continues to consolidate the general partner of a fund that Sound Point now manages and may report performance fees reported in “other income.”

All management, CLO and performance fees earned by the Company are accounted for as contracts with customers. The Company recognizes revenue when the contractual performance criteria are met and only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Given the uniqueness of each fee arrangement, performance fee contractual provisions were evaluated on an individual basis to determine the timing of revenue recognition.

The following table presents the sources of asset management fees on a consolidated basis through the end of December 31, 2023.

Asset Management Fees

(1) Represents asset management fees associated with the AssuredIM consolidated business for the first half of 2023, prior to the Sound Point Transaction and AHP Transaction.

As of December 31, 2022, the Company had related party receivables, which were included in “other assets” on the consolidated balance sheets, consisting of management and performance fees receivable of $10 million and other receivables of $3 million from AssuredIM managed funds.

In the second half of 2023, after the consummation of the Sound Point Transaction, one AssuredIM GP is still consolidated in the Company’s financial statements, which had $5 million of revenues and $3 million of expenses.