Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company acts as managing member, general partner and/or investment manager to the Ramius managed funds, Cowen Healthcare Royalty Management, LLC (“CHRP Management”), and the CHRP Funds, and certain managed accounts. Management fees and incentive income are primarily earned from affiliated entities. Fees receivable primarily represents the management fees and incentive income owed to the Company from these related funds and certain affiliated managed accounts. As of December 31, 2011 and 2010, $14.9 million and $9.9 million, respectively, included in fees receivable are earned from related parties.

The Company may, at its discretion, waive certain of the fees charged to the funds that it manages to avoid duplication of fees when such funds have an underlying investment in another affiliated investment fund. For the year ended December 31, 2011, 2010, and 2009, the Company reimbursed the funds that it manages $1.6 million, $2.4 million and $5 million, respectively, which were recorded net in management fees and incentive income in the consolidated statements of operations. As of December 31, 2011 and 2010, related amounts still payable were $3.4 million and $2.3 million, respectively, and were reflected in fees payable in the consolidated statements of financial condition.

During the first quarter of 2010, certain affiliated funds incurred a loss related to a trading error for which the Company determined, consistent with its internal policies, to bear the cost of correcting such error. This resulted in a loss of approximately $2.7 million for the Company. This amount is included in other expenses in the accompanying consolidated statements of operations for the year ended December 31, 2010.

As a result of a business combination in 2004, Ramius Alternative Solutions LLC acquired receivables of $9.6 million and assumed liabilities of a corresponding amount relating to various agreements with investors. Such amounts have been recorded in fees receivable and due to related parties, respectively, in the consolidated statements of financial condition. The remaining balance yet to be paid was $1.0 million and $1.7 million as of December 31, 2011 and 2010, respectively. Of such amounts outstanding at December 31, 2011, $0.7 million will be paid in 2012.

The Company may, on occasion, also make loans to employees or other affiliates, excluding executive officers of the Company. These loans are interest bearing and settle pursuant to the agreed-upon terms with such employees or affiliates and are included in due from related parties in the consolidated statements of financial condition. As of December 31, 2011 and 2010, loans to employees of $5.3 million and $4.7 million, respectively, were included in due from related parties on the consolidated statements of financial condition. For the year ended December 31, 2011 and 2010 the interest income was insignificant and for the year ended December 31, 2009, interest of $0.1 million was charged for these loans and advances. The remaining balance included in due from related parties primarily relates to amounts due to the Company from affiliated funds and real estate entities due to expenses paid on their behalf.

In April 2011, the Company entered into a credit agreement with Starboard Value LP (see Note 6), whereby the Company can loan up to $3 million to Starboard Value LP at an interest rate of LIBOR plus 3.75% (payable quarterly) with a maturity of March 30, 2014. As of December 31, 2011 $1.5 million is included in due from related parties in the consolidated statement of financial condition. For the year ended December 31, 2011, interest charged for this loan was insignificant.

Included in due to related parties is approximately $0.3 million and $6.5 million as of December 31, 2011 and 2010, respectively, related to a subordination agreement with an investor in certain real estate funds. This total is based on a hypothetical liquidation of the real estate funds as of the balance sheet date.