COMMITMENTS AND CONTINGENCIES In the normal course of business, Oaktree enters into contracts that contain certain representations, warranties and indemnifications. The Companys exposure under these arrangements would involve future claims that have not yet been asserted. Inasmuch as no such claims currently exist or are expected to arise, the Company has not accrued any liability in connection with these indemnifications. Legal Actions Oaktree, its affiliates, investment professionals, and portfolio companies are routinely involved in litigation and other legal actions in the ordinary course of their business and investing activities. In addition, Oaktree is subject to the authority of a number of U.S. and non-U.S. regulators, including the SEC and the Financial Industry Regulatory Authority, and those authorities periodically conduct examinations of Oaktree and make other inquiries that may result in the commencement of regulatory proceedings against Oaktree and its personnel. Oaktree is currently not subject to any pending actions or regulatory proceedings that either individually or in the aggregate are expected to have a material impact on its consolidated financial statements. Incentive Income In addition to the incentive income recognized by the Company, certain of its funds have amounts recorded as potentially allocable to the Company as its share of potential future incentive income, based on each funds net asset value. Inasmuch as this incentive income is contingent upon future investment activity and other factors, it is not recognized by the Company as revenue until it is probable that a significant reversal will not occur. As of March 31, 2019 and December 31, 2018, respectively, the aggregate of such amounts recorded at the fund level in excess of incentive income recognized by the Company was $1,425,969 and $1,434,458 , for which related direct incentive income compensation expense was estimated to be $746,367 and $754,903 . Contingent Liabilities The Company has a contingent consideration obligation of up to $36.1 million , payable in cash and Class A units. The amount of contingent consideration is based on the achievement of certain performance targets. As of March 31, 2019 and December 31, 2018, respectively, the fair value of the contingent liability was $6.6 million and $6.7 million . Changes in this liability resulted in income of $0.1 million and $2.6 million for the three months ended March 31, 2019 and 2018, respectively. The fair value of the contingent consideration liability is a Level III valuation, which uses a discounted cash-flow analysis based on a probability-weighted average estimate of certain performance targets, including fundraising and revenue levels. The assumptions used in the analysis are inherently subjective, and thus the ultimate amount of the contingent consideration liability may differ materially from the most recent estimate. The contingent consideration liability is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. Changes in the liability are recorded in general and administrative expense in the condensed consolidated statements of operations. In connection with the BDC acquisition in October 2017, Fifth Street Management LLC pledged assets with an estimated fair value of $ 56.2 million to indemnify the Company or the BDCs against any claims or assessments arising from the period during which it managed the BDCs. As of March 31, 2019, the remaining amount of the pledged assets was $32.0 million . Commitments to Funds As of March 31, 2019 and December 31, 2018, the Company, generally in its capacity as general partner, had undrawn capital commitments of $524.3 million and $385.8 million , respectively, including commitments to both unconsolidated and consolidated funds. Investment Commitments of the Consolidated Funds Certain of the consolidated funds are parties to credit arrangements that provide for the issuance of letters of credit and/or revolving loans, which may require the particular fund to extend loans to investee companies. The consolidated funds use the same investment criteria in making these commitments as they do for investments that are included in the condensed consolidated statements of financial condition. The unfunded liability associated with these credit arrangements is equal to the amount by which the contractual loan commitment exceeds the sum of funded debt and cash held in escrow, if any. As of March 31, 2019 and December 31, 2018, the consolidated funds had potential aggregate commitments of $12.6 million and $13.8 million , respectively. These commitments are expected to be funded by the funds cash balances, proceeds from asset sales or drawdowns against existing capital commitments. A consolidated fund may agree to guarantee the repayment obligations of certain investee companies. As of March 31, 2019 and December 31, 2018, there were no guaranteed amounts under such arrangements. Certain consolidated funds are investment companies that are required to disclose financial support provided or contractually required to be provided to any of their portfolio companies. During the three months ended March 31, 2019, the consolidated funds did not provide any financial support to portfolio companies.