Investments in Equity Method Affiliates

3 Months Ended

Mar. 31, 2013

Equity Method Investments And Joint Ventures [Abstract]

Investments in Equity Method Affiliates

11. INVESTMENTS IN EQUITY METHOD AFFILIATES

The Company has several investments that are accounted for under the equity method. Equity method accounting requires that the Company record its investment on the consolidated balance sheets and recognize its share of the affiliate’s net income as earnings each year. Investment in equity method affiliates is included as a component of other assets on the Company’s consolidated balance sheets.

The Company has certain equity method affiliates for which it has elected the fair value option. Those investees are excluded from the table below. Those investees are included as a component of other investments, at fair value in the consolidated balance sheets. All gains and losses (unrealized and realized) from securities classified as other investments, at fair value in the consolidated balance sheets are recorded as a component of principal transactions and other income in the consolidated statements of operations.

Effective in March 2013, the Company acquired 100% control of Star Asia Manager as a result of the Star Asia Manager Repurchase Transaction. See note 4. Prior to March 1, 2013, the Company accounted for its investment in Star Asia Manager under the equity method. Since March 1, 2013, the Company has included Star Asia Manager in its consolidated financial statements.

As of March 31, 2013, the Company had the following equity method investees (excluding equity method affiliates for which it had adopted the fair value option): (i) Deep Value GP; (ii) Deep Value GP II; (iii) Star Asia SPV; (iv) Star Asia Opportunity; (v) Star Asia Capital Management; (vi) SAA Manager; and (vii) SAP GP. During the three months ended March 31, 2013, the Company did not make an investment in SAP GP or recognize any income or loss under the equity method related to SAP GP. The following table summarizes the activity and the earnings of the Company’s equity method affiliates and includes the activity for Star Asia Manager during the period that the Company accounted for its investment in Star Asia Manager under the equity method.

INVESTMENT IN EQUITY METHOD AFFILIATES

(Dollars in Thousands)

	Investment in
	Star Asia Manager			Deep Value GP		Deep Value GP II			Star Asia SPV		Star Asia Opportunity			Star Asia Capital Management			SAA Manager			Total
Balance at January 1, 2013	$	547		$	7	$	39		$	1,395	$	22		$	(92	)	$	(8	)	$	1,910
Investments / advances		—			—		—			—		—			—			10			10
Acquisition (1)		(705	)		—		—			—		—			—			—			(705	)
Earnings / (loss) realized		158			—		(4	)		1,314		(6	)		34			23			1,519
Balance at March 31, 2013	$	—		$	7	$	35		$	2,709	$	16		$	(58	)	$	25		$	2,734

(1) See note 4.

The following table summarizes the combined financial information for all equity method investees, including equity method investees for which the fair value option was elected. This aggregated summarized financial data does not represent the Company’s proportionate share of equity method investees’ assets or earnings.

SUMMARY DATA OF EQUITY METHOD INVESTEES

(unaudited)

(Dollars in Thousands)

	March 31, 2013		December 31, 2012
Total Assets	$	251,113	$	279,874
Liabilities	$	81,846	$	96,981
Equity attributable to the investees		169,008		182,277
Non-controlling interest		259		616
Liabilities & Equity	$	251,113	$	279,874

	Three Months Ended March 31,
	2013			2012
Net income / (loss)	$	(12,615	)	$	(15,885	)
Net income / (loss) attributable to the investees	$	(12,257	)	$	(15,570	)

See note 20 for information regarding transactions with the Company’s equity method investees.