Investments of Operating Entities and Consolidated Funds


a.	Operating Entities

Securities owned, at fair value

Securities owned, at fair value are held by the Company and are considered held for trading. Substantially all equity securities are pledged to the clearing broker under terms which permit the clearing broker to sell or re-pledge the securities to others subject to certain limitations.

As of December 31, 2014 and 2013, securities owned, at fair value consisted of the following:



	As of December 31,
	2014		2013
	(dollars in thousands)
U.S. Government securities (a)	$	2,010	$	9
Preferred stock	15,070		324
Common stocks	579,349		176,939
Restricted common stock	18,127		—
Convertible bonds (b)	900		5,958
Corporate bonds (c)	159,557		121,372
Warrants and rights	1,417		5,912
Mutual funds	15,776		525
	$	792,206	$	311,039


(a)	As of December 31, 2014, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. As of December 31, 2013, the maturity was April 2016 with an interest rate of 5.95%.


(b)	As of December 31, 2014, the maturity was February 2015 with an interest rate of 10.00%. As of December 31, 2013, maturities ranged from May 2014 to October 2014 and interest rates ranged between 5.00% to 10.00% .


(c)	As of December 31, 2014, maturities ranged from February 2015 to February 2046 and interest rates ranged between 5.63% to 11.54%. As of December 31, 2013, maturities ranged from January 2014 to February 2046 and interest rates ranged between 3.38% to 11.75%.

Receivable on and Payable for derivative contracts, at fair value

The Company's direct involvement with derivative financial instruments includes futures, currency forwards, equity swaps, and options. Open equity positions in futures transactions are recorded as receivables from and payables to broker-dealers or clearing brokers, as applicable. The Company's derivatives trading activities exposes the Company to certain risks, such as price and interest rate fluctuations, volatility risk, credit risk, counterparty risk, foreign currency movements and changes in the liquidity of markets.

Upon issuance of the Company's cash convertible unsecured senior notes ("Convertible Notes") (see Note 19), the Company recognized the embedded cash conversion option at fair value of $35.7 million which is valued as of December 31, 2014 at $36.8 million and is included in payable for derivative contracts in the accompanying consolidated statement of financial condition. Also, on the date of issuance of the Convertible Notes, the Company entered into a separate cash convertible note economic hedge transaction (the "Hedge Transaction") with a counterparty (the “Option Counterparty”) whereby, the Company purchased a cash settled option contract with terms identical to the conversion option embedded in the Convertible Notes and simultaneously sold an equity settled warrant with a higher strike price. The Hedge Transaction is expected to reduce the Company’s exposure to potential cash payments in excess of the principal amount of converted notes that the Company may be required to make upon conversion of the Convertible Notes. The Company paid a premium of $35.7 million for the option under the Hedge Transaction and received a premium of $15.2 million for the equity settled warrant transaction, for a net cost of $20.5 million. The Hedge Transaction is valued at $36.8 million as of December 31, 2014 and is included in receivable on derivative contracts in the accompanying consolidated statement of financial condition. Aside from the initial premium paid, the Company will not be required to make any cash payments under the Hedge Transaction and could be entitled to receive an amount of cash from the Option Counterparty generally equal to the amount by which the market price per share of common stock exceeds the strike price of the Hedge Transaction during the relevant valuation period. The warrants cover 28,048,786 shares of the Company's Class A common stock and have an initial exercise price of $7.18 per share. The warrants expire over a period of 80 trading days beginning on November 14, 2018. The warrant transaction could have a dilutive effect to the extent that the market value per share of the Company’s Class A common stock exceeds the applicable strike price of the warrants.

The Company's long and short exposure to derivatives is as follows:



Receivable on derivative contracts	As of December 31,
	2014					2013
	Number of contracts / Notional Value			Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Commodity Future	$	3,041		$	75	$	11,762	$	285
Currency forwards	$	23,961		310		$	3,270	22
Equity Swap	$	12,904		251		$	10,996	70
Options other (a)	367,441			48,201		71,129		9,698
Foreign currency options	$	32,200	1,040	1,040		—		—
				$	49,877			$	10,075

(a) Options other include index, equity, commodity future and cash conversion options.



Payable for derivative contracts	As of December 31,
	2014				2013
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	2,213	$	33	$	13,856	$	275
Currency forwards	$	—	—		$	21,867	301
Equity and credit default swaps	$	18,352	1,603		$	17,271	525
Options (a)	22,043		39,694		38,221		6,573
			$	41,330			$	7,674

(a) Options include index, equity, commodity future and cash conversion options.

The following tables present the gross and net derivative positions and the related offsetting amount, as of December 31, 2014 and 2013.



							Gross amounts not offset in the Statement of Financial Condition
	Gross amounts recognized		Gross amounts offset on the Consolidated Statements of Financial Condition (a)		Net amounts included on the Consolidated Statements of Financial Condition		Financial instruments		Cash Collateral pledged (b)		Net amounts
	(dollars in thousands)
As of December 31, 2014
Receivable on derivative contracts, at fair value	$	49,877	$	—	$	49,877	$	—	$	2,588	$	47,289
Payable for derivative contracts, at fair value	41,330		—		41,330		—		1,603		39,727

As of December 31, 2013
Receivable on derivative contracts, at fair value	10,075		—		10,075		—		92		9,983
Payable for derivative contracts, at fair value	7,674		—		7,674		—		826		6,848


(a)	Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.


(b)	Includes the amount of collateral held or posted.

The realized and unrealized gains/(losses) related to derivatives trading activities were $(0.5) million , $4.4 million and $7.8 million for the years ended December 31, 2014, 2013 and 2012, respectively, and are included in other income in the accompanying consolidated statements of operations.

Pursuant to the various derivatives transactions discussed above, except for the cash convertible note hedge (See Note 19) and exchange traded derivatives, the Company is required to post/receive collateral. As of December 31, 2014 and 2013, collateral consisting of $4.2 million and $10.0 million of cash, respectively, is included in receivable from brokers and payable to brokers on the accompanying consolidated statements of financial condition. As of December 31, 2014 and 2013 all derivative contracts were with multiple major financial institutions.

Other investments

As of December 31, 2014 and 2013, other investments included the following:



	As of December 31,
	2014		2013
	(dollars in thousands)
(1) Portfolio Funds, at fair value	$	103,466	$	71,051
(2) Real estate investments, at fair value	2,175		2,088
(3) Equity method investments	61,443		25,966
(4) Lehman claims, at fair value	380		378
	$	167,464	$	99,483


(1)	Portfolio Funds, at fair value

The Portfolio Funds, at fair value as of December 31, 2014 and 2013, included the following:



	As of December 31,
	2014		2013
	(dollars in thousands)
HealthCare Royalty Partners (a)(*)	$	11,935	$	9,741
HealthCare Royalty Partners II (a)(*)	6,648		4,961
Orchard Square Partners Credit Fund LP (b)	11,532		12,674
Starboard Value and Opportunity Fund LP (c)(*)	21,792		17,495
Starboard Partners Fund LP (d)(*)	14,652		—
Starboard Leaders Fund LP (e)(*)	1,367		552
Formation 8 Partners Fund I (f)	11,283		2,788
RCG LV Park Lane LLC (g) (*)	642		678
RCGL 12E13th LLC (h) (*)	638		558
RCG Longview Debt Fund V, L.P. (h) (*)	12,876		11,979
Other private investment (i)	7,324		7,772
Other affiliated funds (j)(*)	2,777		1,853
	$	103,466	$	71,051

* These portfolio funds are affiliates of the Company.

The Company has no unfunded commitments regarding the portfolio funds held by the Company except as noted in Note 18.


(a)	HealthCare Royalty Partners, L.P. and HealthCare Royalty Partners II, L.P. are private equity funds and therefore distributions will be made when cash flows are received from the underlying investments, typically on a quarterly basis.


(b)	Orchard Square Partners Credit Fund LP has a quarterly redemption policy with a 60 day notice period and a 4% penalty on redemptions of investments of less than a year in duration.


(c)	Starboard Value and Opportunity Fund LP permits quarterly withdrawals upon 90 days notice.


(d)	Starboard Partners Fund LP permits redemptions on a semi-annual basis on 180 days prior written notice subsequent to an initial two year period when redemptions are not permitted.


(e)	Starboard Leaders Fund LP does not permit withdrawals, but instead allows terminations with respect to capital commitments upon 30 days prior written notice at any time following the first anniversary of an investors initial capital contribution.


(f)	Formation 8 Partners Fund I is a private equity fund which invests in equity of early stage and growth transformational information and energy technology companies. Distributions will be made when the underlying investments are liquidated.


(g)	RCG LV Park Lane LLC is a single purpose entity formed to participate in a joint venture which acquired, at a discount, the mortgage notes on a portfolio of multifamily real estate properties located in Birmingham, Alabama. RCG LV Park Lane LLC is a private equity structure and therefore distributions will be made when the underlying investments are liquidated.


(h)	RCGL 12E13th LLC and RCG Longview Debt Fund V, L.P. are real estate private equity structures and therefore distributions will be made when the underlying investments are liquidated.


(i)	Other private investment represents the Company's closed end investment in a portfolio fund that invests in a wireless broadband communication provider in Italy.


(j)	The majority of these funds are affiliates of the Company or are managed by the Company and the investors can redeem from these funds as investments are liquidated.


(2)	Real estate investments, at fair value

Real estate investments as of December 31, 2014 and 2013 are carried at fair value and include real estate equity investments held by RCG RE Manager, LLC (“RE Manager”), a real estate operating subsidiary of the Company, of $2.2 million and $2.1 million, respectively.


(3)	Equity method investments

Equity method investments include investments held by the Company in several operating companies whose operations primarily include the day to day management of a number of real estate funds, including the portfolio management and administrative services related to the acquisition, disposition, and active monitoring of the real estate funds' underlying debt and equity investments. The Company's ownership interests in these equity method investments range from 20% to 55%. The Company holds a majority of the outstanding ownership interest (i.e., more than 50%) in three of these entities: RCG Longview Debt Fund IV Management, LLC, RCG Longview Debt Fund IV Partners, LLC and RCG Longview Partners II, LLC. The operating agreements that govern the management of day-to-day operations and affairs of each of these three entities stipulate that certain decisions require support and approval from other members in addition to the support and approval of the Company. As a result, all operating decisions made in these three entities require the support of both the Company and an affirmative vote of a majority of the other managing members who are not affiliates of the Company. As the Company does not possess control over any of these entities, the presumption of consolidation has been overcome pursuant to current accounting standards and the Company accounts for these investments under the equity method of accounting. Also included in equity method investments are the investments in (a) HealthCare Royalty Partners General Partners (b) an investment in the CBOE (Chicago Board Options Exchange) Stock Exchange LLC ("CBOE SE") representing a 9.5% stake in the exchange service provider for which the Company exercises significant influence over through representation on the CBOE Board of Directors, and (c) Starboard Value (and certain related parties) which serves as an operating company whose operations primarily include the day to day management (including portfolio management) of several activist hedge fund and related managed accounts.

During the second quarter of 2014, CBOE SE initiated a plan to wind down its operations and liquidate its assets and liabilities. As a result, the Company determined that the carrying value of its investment in CBOE SE was no longer recoverable and reassessed it for impairment. The Company recognized an impairment loss of $0.8 million, during the second quarter of 2014, which was deemed to be other than temporary. The impairment loss was measured based on the estimated recovery under the liquidation plan submitted to the creditors and the regulators and potential sale to a third party and is included in other income (loss) on the accompanying consolidated statement of operations. The Company recorded no other impairment charges in relation to its equity method investments for the years ended December 31, 2014, 2013 and 2012.

The Company does not hold significant financial interest in Starboard Value entities. The independent portfolio managers are responsible for activities which are significant to the overall business and hold the majority of the equity interest. The Starboard Value entities were formed to provide a full range of investment advisory and management services and act as a general partner, investment advisor, and pension advisor or in similar capacity to clients. In accordance with the respective offering documents of the underlying funds, Starboard Value entities are entitled to a fixed percentage of management fee and performance fees.

The following table summarizes equity method investments held by the Company:



	As of December 31,
	2014		2013
	(dollars in thousands)
RCG Longview Debt Fund IV Management, LLC	$	676	$	1,533
RCG Longview Debt Fund V Partners, LLC	2,684		1,497
HealthCare Royalty GP, LLC	973		794
HealthCare Royalty GP II, LLC	1,125		840
HealthCare Royalty GP III, LLC	62		47
CBOE Stock Exchange, LLC	611		1,351
Starboard Value LP	48,772		14,263
RCG Longview Partners, LLC	237		1,839
RCG Longview Management, LLC	1,117		308
RCG Urban American, LLC	422		316
RCG Urban American Management, LLC	379		238
RCG Longview Equity Management, LLC	316		292
Urban American Real Estate Fund II, LLC	2,329		1,785
RCG Kennedy House, LLC	509		502
Other	1,231		361
	$	61,443	$	25,966

For the year ended December 31, 2014, Starboard Value A LP has met the significance criteria as defined under Regulation S-X Rule 4-08(g) of the SEC guidance. As such, the Company is presenting the following summarized financial information:



Starboard Value A LP	As of December 31,
	2014		2013
	(dollars in thousands)
Assets
Cash	$	197	$	14
Performance fee receivable	93,610		25,214
Investments in Portfolio Funds, at fair value	3,538		2,201
Liabilities	—		—
Equity	$	97,345	$	27,429



	Year Ended December 31,
	2014		2013		2012
	(dollars in thousands)
Performance fee revenues	$	90,905	$	23,098	$	20,448
Net realized and unrealized gains (losses)	734		283		254
Net Income	$	91,639	$	23,381	$	20,702

For the period ended December 31, 2014, equity method investments held by the Company in aggregate have met the significance criteria as defined under SEC guidance. As such, the Company is required to present summarized financial information for these significant investees for the years ended December 31, 2014, 2013 and 2012 and such information is as follows.



Other equity method investments	As of December 31,
	2014			2013
	(dollars in thousands)
Assets	$	190,261		$	114,110
Liabilities	21,037			25,309
Equity	$	169,224		$	88,801

	Year Ended December 31,
	2014			2013			2012
	(dollars in thousands)
Revenues	$	157,187		$	78,217		$	75,046
Expenses	(46,563		)	(49,334		)	(42,663		)
Net realized and unrealized gains (losses)	11,894			18,056			2,091
Net Income	$	122,518		$	46,939		$	34,474

As of December 31, 2014 and 2013, the Company's share of losses in its equity method investment in RCG Longview Partners II, LLC has exceeded the carrying amount recorded in this investee. These amounts are included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated statements of financial condition. RCG Longview Partners II, LLC, as general partner to a real estate fund, has reversed previously recorded incentive income allocations and has recorded a current clawback obligation to the limited partners in the fund. This obligation is due to a change in unrealized value of the fund on which there have previously been distributed carried interest realizations; however, the settlement of a potential obligation is not due until the end of the life of the respective fund. As the Company is obligated to return previous distributions it received from RCG Longview Partners II, LLC, it has continued to record its share of gains/losses in the investee including reflecting its share of the clawback obligation in the amount of $6.2 million.

The Company's income (loss) from equity method investments was $49.1 million, $16.1 million, and $15.6 million for the years ended December 31, 2014, 2013, and 2012, respectively, and is included in net gains (losses) on securities, derivatives and other investments on the accompanying consolidated statements of operations.


(4)	Lehman Claims, at fair value

Lehman Brothers International (Europe) (“LBIE”), through certain affiliates, was a prime broker to the Company, and the Company held cash and cash equivalent balances with LBIE. On September 15, 2008, LBIE was placed into administration (the “Administration”) in the United Kingdom and, as a result, the assets held by the Company in its LBIE accounts were frozen at LBIE. The assets which the Company believed were held at LBIE at the time of Administration (the “Total Net Equity Claim”) consisted of $1.0 million, which represented an unsecured claim against LBIE. The total amounts received to date in respect of the Company’s unsecured claim against LBIE are approximately $1.0 million, representing 100.0% of its agreed claim. The Company may receive further distributions in respect of its claim, but the amount and timing of these distributions remains uncertain. The Company does not expect future distributions to be material. The claim described above does not include claims held by the Company against LBIE through its investment in Enterprise Master discussed in Note 5b(2).

Securities sold, not yet purchased, at fair value

Securities sold, not yet purchased, at fair value represent obligations of the Company to deliver a specified security at a contracted price and, thereby, create a liability to purchase that security at prevailing prices. The Company's liability for securities to be delivered is measured at their fair value as of the date of the consolidated financial statements. However, these transactions result in off-balance sheet risk, as the Company's ultimate cost to satisfy the delivery of securities sold, not yet purchased, at fair value may exceed the amount reflected in the accompanying consolidated statements of financial condition. Substantially all equity securities and options are pledged to the clearing broker under terms which permit the clearing broker to sell or re-pledge the securities to others subject to certain limitations. As of December 31, 2014 and 2013, securities sold, not yet purchased, at fair value consisted of the following:



	As of December 31,
	2014		2013
	(dollars in thousands)
Common stocks	$	207,815	$	130,899
Corporate bonds (a)	60		55
	$	207,875	$	130,954


(a)	As of December 31, 2014 and 2013, the maturity was January 2026 with an interest rate of 5.55%.

Securities purchased under agreements to resell and securities sold under agreements to repurchase

The Company held no securities purchased under agreements to resell or securities sold under agreements to repurchase as of December 31, 2014. The following table represents the Company's securities sold under agreements to repurchase as of December 31, 2013.



	As of December 31, 2013
	(dollars in thousands)
Securities sold under agreements to repurchase
Agreements with Royal Bank of Canada bearing interest of 1.75% due June 2015 to November 2015	$	3,657
	$	3,657

The following tables present the gross and net repurchase agreements and the related offsetting amount, as of December 31, 2013.



As of December 31, 2013
							Gross amounts not offset in the Statement of Financial Condition
	Gross amounts recognized		Gross amounts offset on the Consolidated Statements of Financial Condition (a)		Net amounts included on the Consolidated Statements of Financial Condition		Financial instruments		Collateral pledged (b)		Net amounts
	(dollars in thousands)
Securities sold under agreements to repurchase	$	3,657	$	—	$	3,657	$	—	$	3,657	$	—


(a)	Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.


(b)	Includes the amount of collateral held or posted.

For all of the Company's holdings of repurchase agreements as of December 31, 2013, the repurchase dates were open and the agreement could be terminated by either party at any time. The agreements rolls over on a day-to-day basis.

In connection with repurchase/resell agreements, as of December 31, 2013, the Company had pledged collateral of $4.6 million (consisting of corporate bonds), which is included in securities owned, at fair value in the accompanying consolidated statements of financial condition.

Securities lending and borrowing transactions

The following tables present the contractual gross and net securities borrowing and lending agreements and the related offsetting amount, as of December 31, 2014 and 2013.



							Gross amounts not offset in the Statement of Financial Condition
	Gross amounts recognized		Gross amounts offset on the Consolidated Statements of Financial Condition (a)		Net amounts included on the Consolidated Statements of Financial Condition		Additional Amounts Available			Financial instruments			Cash Collateral pledged (b)		Net amounts
	(dollars in thousands)
As of December 31, 2014
Securities borrowed	$	676,100	$	—	$	676,100	$	(15,655	)	$	(660,445	)	$	—	$	—
Securities loaned	682,493		—		682,493		(2,441		)	(680,052		)	—		—

As of December 31, 2013
Securities borrowed	927,773		—		927,773		(34,973		)	(892,800		)	—		—
Securities loaned	918,577		—		918,577		(36,877		)	(881,700		)	—		—


(a)	Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.


(b)	Includes the amount of cash collateral held/posted.

Variable Interest Entities

The total assets and liabilities of the variable interest entities for which the Company has concluded that it holds a variable interest, but for which it is not the primary beneficiary, are $2.9 billion and $445.8 million as of December 31, 2014 and $1.7 billion and $242.4 million as of December 31, 2013, respectively. In addition, the maximum exposure relating to these variable interest entities as of December 31, 2014 was $210.3 million, and as of December 31, 2013 was $206.9 million, all of which is included in other investments, at fair value in the accompanying consolidated statements of financial condition. The exposure to loss primarily relates to the Consolidated Feeder Funds' investment in their Unconsolidated Master Funds as of December 31, 2014 and 2013.


b.	Consolidated Funds

Other investments, at fair value

As of December 31, 2014 and 2013 other investments, at fair value, held by the Consolidated Funds are comprised of:



	As of December 31,
	2014		2013
	(dollars in thousands)
(1) Portfolio Funds	$	188,884	$	182,638
(2) Lehman claims	493		4,842
	$	189,377	$	187,480


(1)	Investments in Portfolio Funds, at fair value

As of December 31, 2014 and 2013, investments in Portfolio Funds, at fair value, included the following:



	As of December 31,
	2014		2013
	(dollars in thousands)
Investments of Enterprise LP	$	138,253	$	155,530
Investments of Merger Fund	50,631		26,963
Investments of consolidated fund of funds	—		145
	$	188,884	$	182,638

Consolidated investments of Enterprise LP

Enterprise LP operates under a “master-feeder” structure, whereby Enterprise Master's shareholders are Enterprise LP and RCG II Intermediate Fund, L.P. The consolidated investments in Portfolio Funds include Enterprise LP's investment of $138.3 million and $155.5 million in Enterprise Master as of December 31, 2014 and 2013, respectively. On May 12, 2010, the Company announced its intention to close Enterprise Master. Prior to this announcement, strategies utilized by Enterprise Master included merger arbitrage and activist investing, investments in distressed securities, convertible hedging, capital structure arbitrage, equity market neutral, investments in private placements of convertible securities, proprietary mortgages, structured credit investments, investments in mortgage backed securities and other structured finance products, investments in real estate and real property interests, structured private placements and other relative value strategies. Enterprise Master had broad investment powers and maximum flexibility in seeking to achieve its investment objective. Enterprise Master was permitted to invest in equity securities, debt instruments, options, futures, swaps, credit default swaps and other derivatives. As Enterprise Master winds down its positions it will return capital to its investors. There are no unfunded commitments at Enterprise LP.

Consolidated investments of Merger Fund

The Merger Fund operates under a “master-feeder” structure, whereby Ramius Merger Master Ltd's ("Merger Master") shareholders are Merger Fund and Ramius Merger Fund Ltd. The consolidated investments in Portfolio Funds include Merger Fund's investment of $50.6 million and $27.0 million in Merger Master as of December 31, 2014 and 2013, respectively. The Merger Master’s investment objective is to achieve consistent absolute returns while emphasizing the preservation of investor capital. The Merger Master seeks to achieve these objectives by taking a fundamental, research-driven approach to investing, primarily in the securities of issuers engaged in, or subject to, announced (or unannounced but otherwise anticipated) extraordinary corporate transactions, which may include, but are not limited to, mergers, acquisitions, leveraged buyouts, tender offers, hostile takeover bids, sale processes, exchange offers, and recapitalizations. Merger Master invests in the securities of one or more issuers engaged in or subject to such extraordinary corporate transactions. Merger Master typically seeks to derive a profit by realizing the price differential, or “spread,” between the market price of securities purchased or sold short and the market price or value of securities realized in connection with the completion or termination of the extraordinary corporate transaction, or in connection with the adjustment of market prices in anticipation thereof, while seeking to minimize the market risk associated with the aforementioned investment activities. Merger Master will, depending on markets conditions, generally focus the majority of its investment program on announced transactions. If the investment manager of Merger Master considers it necessary, it may either alone or as part of a group, also initiate shareholder actions seeking to maximize value. Such shareholder actions may include, but are not limited to, re-orienting management’s focus or initiating the sale of the company (or one or more of its divisions) to a third party. There are no unfunded commitments at Merger Fund.

Investment of a consolidated fund of funds investment company

The investment of the consolidated fund of fund investment company was $0.1 million as of December 31, 2013, which was the remaining investment of Vintage Master FOF that was transferred to a third party during the first quarter of 2014. Vintage Master FOF's investment objective was to allocate its capital among portfolio managers that invest through investment pools or managed accounts thereby forming concentrated investments in high conviction managers designed to achieve attractive risk adjusted returns with moderate relative volatility. The investment held at December 31, 2013 was a hedged equity strategy held in an externally managed portfolio fund. The hedged equity strategy focused on equity strategies with some directional market exposure. The strategy attempted to profit from market efficiencies and direction. There are no fund of fund investment companies consolidated as of December 31, 2014.


(2)	Lehman Claims, at fair value

With respect to the aforementioned Lehman claims, the Total Net Equity Claim of Enterprise Master based on the value of assets at the time of Lehman's insolvency held directly by Enterprise Master and through Enterprise Master's ownership interest in affiliated funds consisted of $24.3 million. As of December 31, 2014, Enterprise Master has received distributions totaling approximately $36.2 million in respect of its claim. After giving effect to the distributions received by the Enterprise Master, the remaining Net Equity Claim for Enterprise Master held directly and through its ownership interest in affiliated funds was $0.7 million as of December 31, 2014. Of the $0.7 million current valuation of Enterprise Master's claim, $0.5 million was attributable to Enterprise LP based on its ownership percentage in Enterprise Master at the time of the Administration. The Company expects Enterprise Master to receive additional distributions from LBIE, but the amount and timing of those distributions remains uncertain.

Indirect Concentration of the Underlying Investments Held by Consolidated Funds

From time to time, either directly or indirectly through its investments in the Consolidated Funds, the Company may maintain exposure to a particular issue or issuer (both long and/or short) which may account for 5% or more of the Company's equity. Based on information that is available to the Company as of December 31, 2014 and 2013, the Company assessed whether or not its interests in an issuer for which the Company's pro-rata share exceeds 5% of the Company's equity. There were no indirect concentrations that exceed 5% of the Company's equity as of December 31, 2014 or 2013.

Net realized and unrealized gains (losses)

Net realized gains (losses) and net unrealized gains (losses) on investments and other transactions and on derivatives for Consolidated Funds for the years ended December 31, 2014, 2013 and 2012 were as follows:



	Year Ended December 31,
	2014		2013			2012
	(dollars in thousands)
Consolidated Funds net gains (losses) on investments and other transactions:
Net realized gains (losses) on investments and other transactions	$	1,861	$	6,050		$	(8,121	)
Net unrealized gains (losses) on investments and other transactions	11,029		4,628			14,497
Consolidated Funds net gains (losses) on derivatives:
Net realized gains (losses) on derivatives	$	2,250	$	521		$	915
Net unrealized gains (losses) on derivatives	201		(156		)	(38		)

Underlying Investments of Unconsolidated Funds Held by Consolidated Funds

Enterprise Master and Merger Master

Enterprise LP's investment in Enterprise Master represents Enterprise LP's proportionate share of Enterprise Master's net assets; as a result, the investment balances of Enterprise Master reflected below may exceed the net investment which Enterprise LP has recorded. Merger Fund's investment in Merger Master represents Merger Fund's proportionate share of Merger Master's net assets; as a result, the investment balances of Merger Master reflected below may exceed the net investment which Merger Fund has recorded.The following tables present summarized investment information for the underlying investments and derivatives held by Enterprise Master and Merger Master as of December 31, 2014 and 2013:

Securities owned by Enterprise Master, at fair value



	As of December 31,
	2014		2013
	(dollars in thousands)
Bank debt	$	20	$	5
Common stock	1,659		2,677
Preferred stock	576		973
Private equity	587		406
Restricted stock	124		124
Rights	2,802		2,528
Trade claims	128		128
	$	5,896	$	6,841

Receivable on derivative contracts, at fair value, owned by Enterprise Master



	As of December 31,
	2014		2013
Description	(dollars in thousands)
Currency forwards	$	64	$	(21	)
	$	64	$	(21	)

Portfolio Funds, owned by Enterprise Master, at fair value



		As of December 31,
		2014		2013
	Strategy	(dollars in thousands)
RCG Longview Equity Fund, LP*	Real Estate	$	9,090	$	8,470
RCG Longview II, LP*	Real Estate	747		800
RCG Longview Debt Fund IV, LP*	Real Estate	5,348		17,641
RCG Longview, LP*	Real Estate	40		319
RCG Soundview, LLC*	Real Estate	452		442
RCG Urban American Real Estate Fund, L.P.*	Real Estate	1,161		1,812
RCG International Sarl*	Multi-Strategy	2,113		1,795
RCG Special Opportunities Fund, Ltd*	Multi-Strategy	92,405		82,119
RCG Endeavour, LLC*	Multi-Strategy	—		6
RCG Energy, LLC *	Energy	2,294		2,842
RCG Renergys, LLC*	Energy	1		1
Other Private Investments	Various	12,057		12,952
Other Real Estate Investments (*)	Real Estate	10,138		15,024
		$	135,846	$	144,223


*	Affiliates of the Company.

Merger Master

Securities owned by Merger Master, at fair value



	As of December 31,
	2014		2013
	(dollars in thousands)
Common stocks	$	133,510	$	33,901
Corporate bonds (a)	3,383		14,444
Options	541		200
	$	137,434	$	48,545


(a)	As of December 31, 2014, maturities ranged from February 2017 to June 2019 and interest rates ranged between 8.50% and 9.75%. As of December 31, 2013, maturities ranged from April 2016 to October 2020 and interest rates ranged between 7.00% and 10.88%.

Securities sold, not yet purchased, by Merger Master, at fair value

As of December 31, 2014 and 2013, Merger Master held common stock, sold not yet purchased, of $39.9 million and $19.5 million, respectively and options, sold not yet purchased, of $0.2 million and $0.1 million, respectively.

Receivable on derivative contracts, at fair value, owned by Merger Master



	As of December 31,
	2014		2013
Description	(dollars in thousands)
Equity swaps	$	78	$	30
	$	78	$	30

Payable for derivative contracts, at fair value, owned by Merger Master



	As of December 31,
	2014		2013
Description	(dollars in thousands)
Currency forwards	$	—	$	11
Equity swaps	58		125
	$	58	$	136