Arbitrage Trading Account And Arbitrage Funds

6 Months Ended

Jun. 30, 2012

Arbitrage Trading Account And Arbitrage Funds [Abstract]

Arbitrage Trading Account And Arbitrage Funds

Arbitrage Trading Account

At June 30, 2012 and December 31, 2011, the fair value and carrying value of the arbitrage trading account were $419 million and $397 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company believes that this makes arbitrage investments less vulnerable to changes in general financial market conditions.