Fair Value Measurements for Operating Entities and Consolidated Funds

6 Months Ended

Jun. 30, 2011

Fair Value Measurements for Operating Entities and Consolidated Funds

Fair Value Measurements for Operating Entities and Consolidated Funds

6. Fair Value Measurements for Operating Entities and Consolidated Funds

        The following table presents the financial instruments recorded at fair value on the condensed consolidated statements of financial condition by caption and by level within the valuation hierarchy as of June 30, 2011 and December 31, 2010:

• Operating Entities

		Assets at Fair Value as of June 30, 2011
		Level 1		Level 2		Level 3		Total
				(dollars in thousands)
Securities owned and derivatives
	US Government securities	$	162,410	$	—	$	—	$	162,410
	Common stocks		205,419		1,469		953		207,841
	Restricted common stock		—		—		5,000		5,000
	Convertible bonds		—		27,222		—		27,222
	Corporate bonds		1,588		314,538		—		316,126
	Exchange-traded Funds		218,135		—		—		218,135
	Futures		551		—		—		551
	Equity swaps		—		2		—		2
	Options		32,267		13,019		123		45,409
	Warrants and rights		—		—		3,411		3,411
	Mutual funds		870		—		—		870
Other investments
	Portfolio Funds		286		14,615		17,744		32,645
	Real estate investments		—		—		2,289		2,289
	Lehman claim		—		—		501		501
		$	621,526	$	370,865	$	30,021	$	1,022,412

		Liabilities at Fair Value as of June 30, 2011
		Level 1		Level 2		Level 3		Total
		(dollars in thousands)
Securities sold, not yet purchased and derivatives
	US Government securities	$	118,892	$	235	$	—	$	119,127
	Common stocks		140,457		2		—		140,459
	Corporate bonds		—		69,562		—		69,562
	Exchange-traded Funds		97,769		—		—		97,769
	Futures		119		—		—		119
	Equity swaps—short exposure		—		758		—		758
	Options		15,174		170		—		15,344
		$	372,411	$	70,727	$	—	$	443,138

		Assets at Fair Value as of December 31, 2010
		Level 1		Level 2		Level 3		Total
		(dollars in thousands)
Securities owned and derivatives
	US Government securities	$	143,247	$	—	$	—	$	143,247
	Common stocks		115,875		6		334		116,215
	Restricted common stock		—		—		5,000		5,000
	Corporate bonds		—		191,702		—		191,702
	Futures		442		—		—		442
	Options		14,234		115		—		14,349
	Warrants and rights		357		—		1,977		2,334
	Mutual funds		1,248		—		—		1,248
Other investments
	Portfolio Funds		566		11,744		17,081		29,391
	Real estate investments		—		—		1,882		1,882
	Lehman claim		—		—		313		313
		$	275,969	$	203,567	$	26,587	$	506,123

		Liabilities at Fair Value as of December 31, 2010
		Level 1		Level 2		Level 3		Total
		(dollars in thousands)
Securities sold, not yet purchased and derivatives
	US Government securities	$	100,559	$	—	$	—	$	100,559
	Common stocks		88,580		—		—		88,580
	Corporate bonds		—		2,615		—		2,615
	Equity swaps—short exposure		—		245		—		245
	Futures		334		—		—		334
	Options		6,162		—		—		6,162
		$	195,635	$	2,860	$	—	$	198,495

• Consolidated Funds' investments

		Assets at Fair Value as of June 30, 2011
		Level 1		Level 2		Level 3		Total
		(dollars in thousands)
Securities owned
	US Government securities	$	4,064	$	—	$	—	$	4,064
	Commercial paper		—		1,726		—		1,726
	Corporate bonds		—		401		—		401
Other investments
	Portfolio Funds		—		14,990		239,588		254,578
	Lehman claims		—		—		7,320		7,320
		$	4,064	$	17,117	$	246,908	$	268,089

		Assets at Fair Value as of December 31, 2010
		Level 1		Level 2		Level 3		Total
		(dollars in thousands)
Securities owned
	US Government securities	$	7,682	$	—	$	—	$	7,682
	Corporate bonds		—		1,040		—		1,040
Other investments
	Portfolio Funds		—		15,889		311,242		327,131
	Lehman claims		—		—		6,243		6,243
		$	7,682	$	16,929	$	317,485	$	342,096

        The following table includes a rollforward of the amounts for the three and six months ended June 30, 2011 and 2010 for financial instruments classified within level 3. The classification of a financial instrument within level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement.

	Operating Entities																									Consolidated Funds
	Common stocks, owned			Common stocks, sold not yet purchased			Restricted Common Stock			Corporate Bonds		Options			Warrants and Rights			Portfolio Funds			Real estate			Lehman claim		Portfolio Funds			Lehman claim
	(dollars in thousands)
Balance at March 31, 2011	$	490		$	401		$	5,000		$	—	$	—		$	2,902		$	17,660		$	2,102		$	501	$	260,443		$	7,193
Transfers in		—			—			—			—		—			—			—			—			—		—			—
Transfers out		—			—			—			—		—			—			—			—			—		—			—
Purchases/(covers)		659			(826	)		—			—		—			—			2,322			141			—		—			—
(Sales)/short buys		(409	)		417			—			—		—			(48	)		(2,587	)		—			—		(28,300	)		—
Realized gains (losses)		—			(7	)		—			—		—			48			11			—			—		843			—
Unrealized gains (losses)		213			15			—			—		123			509			338			46			—		6,602			127
Balance at June 30, 2011	$	953		$	—		$	5,000		$	—	$	123		$	3,411		$	17,744		$	2,289		$	501	$	239,588		$	7,320
Balance at March 31, 2010	$	334		$	—		$	5,058		$	—	$	—		$	587		$	14,407		$	1,108		$	313	$	88,935		$	13,966
Transfers in		—			—			—			—		—			—			—			—			—		—			—
Transfers out		—			—			—			—		—			—			—			—			—		—			—
Purchases		2,000			—			—			1,215		—			—			1,966			70			—		4,013			—
Sales		(2,000	)		—			—			—		—			—			(483	)		—			—		(6,085	)		—
Realized gains (losses)		—			—			—			—		—			—			—			—			—		(11	)		—
Unrealized gains (losses)		—			—			(58	)		118		971			(183	)		318			(19	)		—		(2,117	)		616
Balance at June 30, 2010	$	334		$	—		$	5,000		$	1,333	$	971		$	404		$	16,208		$	1,159		$	313	$	84,735		$	14,582
Balance at December 31, 2010	$	334		$	—		$	5,000		$	—	$	—		$	1,977		$	17,081		$	1,882		$	313	$	311,242		$	6,243
Transfers in		—			—			—			—		—			—			—			—			—		—			—
Transfers out		—			—			—			—		—			—			—			—			—		—			—
Purchases/(covers)		659			(978	)		—			—		—			65			36,573			237			—		1			—
(Sales)/short buys		(409	)		833			—			—		—			(48	)		(36,729	)		(5	)		—		(80,924	)		—
Realized gains (losses)		—			145			—			—		—			48			107			—			—		2,376			—
Unrealized gains (losses)		369			—			—			—		123			1,369			712			175			188		6,893			1,077
Balance at June 30, 2011	$	953		$	—		$	5,000		$	—	$	123		$	3,411		$	17,744		$	2,289		$	501	$	239,588		$	7,320
Balance at December 31, 2009	$	334		$	—		$	—		$	—	$	—		$	—		$	17,370		$	1,077		$	209	$	97,366		$	3,881
Transfers in		—			—			—			—		—			1,356	(a)		—			—			—		—			—
Transfers out		—			—			—			—		—			—			(2,866	)(b)		—			—		—			—
Purchases		—			—			5,000			1,215		7,000			—			2,100			114			—		17,052			—
Sales		—			—			—			—		(7,000	)		(402	)		(1,286	)		(53	)		—		(30,290	)		—
Realized gains (losses)		—			—			—			—		—			—			—			—			—		2,387			—
Unrealized gains (losses)		—			—			—			118		971			(550	)		890			21			104		(1,780	)		10,701
Balance at June 30, 2010	$	334		$	—		$	5,000		$	1,333	$	971		$	404		$	16,208		$	1,159		$	313	$	84,735		$	14,582

(a)

Changes in the observability of inputs used in the valuation of such assets

(b)

Deconsolidation of CHRP GP (See Note 3b)

        All realized and unrealized gains (losses) in the table above are reflected in other income (loss) in the accompanying condensed consolidated statements of operations.

        There were no significant transfers between Level 1 and Level 2 assets and liabilities for the three months and six months ended June 30, 2011 and June 30, 2010, respectively.