Fair Value Measurements for Operating Entities and Consolidated Funds

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value Measurements for Operating Entities and Consolidated Funds

Fair Value Measurements for Operating Entities and Consolidated Funds

The following table presents the assets and liabilities that are measured at fair value on a recurring basis on the consolidated statements of financial condition by caption and by level within the valuation hierarchy as of December 31, 2011 and 2010:

Operating Entities

	Assets at Fair Value as of December 31, 2011
	Level 1		Level 2		Level 3		Total
			(dollars in thousands)
Securities owned and derivatives
US Government securities	$	182,868	$	—	$	—	$	182,868
Common stocks	248,598		713		1,069		250,380
Convertible bonds	—		18,130		—		18,130
Corporate bonds	—		231,864		—		231,864
Futures	172		—		—		172
Equity swaps	—		635		—		635
Options	55,530		169		69		55,768
Warrants and rights	1,225		—		1,465		2,690
Mutual funds	3,214		—		—		3,214
Other investments
Portfolio Funds	—		23,431		18,905		42,336
Real estate investments	—		—		2,353		2,353
Lehman claim	—		—		553		553
	$	491,607	$	274,942	$	24,414	$	790,963

	Liabilities at Fair Value as of December 31, 2011
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Securities sold, not yet purchased and derivatives
US Government securities	$	165,197	$	—	$	—	$	165,197
Common stocks	123,875		2		—		123,877
Corporate bonds	—		1,529		—		1,529
Futures	617		—		—		617
Equity swaps—short exposure	—		140		—		140
Options	43,648		—		—		43,648
	$	333,337	$	1,671	$	—	$	335,008

	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 December 31, 2011
	Level 1		Level 2		Level 3		Total
			(dollars in thousands)
Securities owned
US Government securities	$	2,006	$	—	$	—	$	2,006
Commercial paper	—		3,927		—		3,927
Corporate bonds	—		401		—		401
Other investments
Portfolio Funds	—		8,078		213,402		221,480
Lehman claims	—		—		7,340		7,340
	$	2,006	$	12,406	$	220,742	$	235,154

	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 years ended December 31, 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			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 December 31, 2009	$	334		$	—		$	—		$	—		$	—		$	—			$	17,370			$	1,077		$	209	$	97,366			$	3,881
Transfers in	—			—			—			—			—			1,356			(a)	855			(b)	—			—		382,004			(a)	—
Transfers out	—			—			—			—			—							(2,866		)	(c)						(9,139		)	(a)	—
Purchases/(covers)	—			—			5,000			1,215			10,179			36				310,078				800			—		20,685				—
(Sales)/short buys	—			—			—			(1,634		)	(10,343		)	(938		)		(310,562		)		(100		)	—		(197,035		)		(8,547		)
Realized gains (losses)	—			—			—			419			164			495				1,108				—			—		4,224				—
Unrealized gains (losses)	—			—			—			—			—			1,028				1,098				105			104		13,137				10,909
Balance at December 31, 2010	$	334		$	—		$	5,000		$	—		$	—		$	1,977			$	17,081			$	1,882		$	313	$	311,242			$	6,243
Transfers in	—						—			—			—			—				566			(a)	—			—		—				—
Transfers out	—						—			—			—			—				—				—			—		—				—
Purchases/(covers)	687			(978		)	—			—			—			111				52,475				330			—		2				—
(Sales)/short buys	(568		)	833			(4,857		)	—			—			(84		)		(53,435		)		(10		)	—		(104,243		)		—
Realized gains (losses)	159			145			(143		)	—			—			48				157				—			—		2,508				—
Unrealized gains (losses)	457						—			—			69			(587		)		2,061				151			240		3,893				1,097
Balance at December 31, 2011	$	1,069		$	—		$	—		$	—		$	69		$	1,465			$	18,905			$	2,353		$	553	$	213,402			$	7,340

(a) Changes in the observability of inputs used in the valuation of such assets

(b) Deconsolidation of Ramius Alternative Replication Fund Ltd (See Note 3b)

(c) 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 consolidated statements of operations.

There were no significant transfers between level 1 and level 2 assets and liabilities for the year ended December 31, 2011 and 2010, respectively.

Certain assets and liabilities are measured at fair value on a nonrecurring basis and therefore are not included in the tables above. These include assets, such as goodwill and intangibles (see Note 10), which have been written down to fair value, during the twelve months ended December 31, 2011, as a result of an impairment.