Investments of Operating Entities and Consolidated Funds - (Tables)

3 Months Ended

Mar. 31, 2016

As of March 31, 2016 and December 31, 2015, securities owned, at fair value consisted of the following:



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
U.S. Government securities (a)	$	3,774	$	3,016
Preferred stock (b)	23,696		25,563
Common stocks (b)	589,359		516,108
Convertible bonds (c)	250		819
Corporate bonds (d)	6,853		47,192
Warrants and rights	2,731		3,059
Mutual funds (e)	1,104		14,477
	$	627,767	$	610,234


(a)	As of March 31, 2016, maturities ranged from June 2016 to February 2017 with interest rates ranged between 0% to 5.95%. As of December 31, 2015, maturities ranged from January 2016 to August 2016 with interest rates ranged between 0% to 5.95%.


(b)	Included in preferred stocks and common stocks are investments in securities for which the Company has elected the fair value option with the fair value of $4.8 million and $2.7 million, respectively, at March 31, 2016 and $7.7 million and $7.4 million, respectively, at December 31, 2015. These investments were acquired in connection with merchant banking transactions.


(c)	As of March 31, 2016, the maturity was March 2018 with an interest rate of 8%. As of December 31, 2015, maturities ranged from July 2016 to March 2018 with interest rates ranged between 8% to 10.00%.


(d)	As of March 31, 2016, maturities ranged from August 2017 to February 2046 and interest rates ranged between 3.48% to 7.25%. As of December 31, 2015, maturities ranged from March 2016 to February 2046 and interest rates ranged between 3.25% to 9.00%.


(e)	Included in this amount as of December 31, 2015, are investments in affiliated funds of $13.4 million all of which was liquidated during the three months ended March 31, 2016.

Schedule of Derivative Instruments

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



Receivable on derivative contracts	As of March 31, 2016				As of December 31, 2015
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	17,143	$	1,289	$	9,416	$	189
Currency forwards	$	56,569	154		$	67,862	659
Equity swaps	$	21,012	811		$	118,488	2,327
Options other (a)	334,903		38,978		289,433		31,456
Foreign currency options	$	280,507	4,493		$	283,797	4,987
			$	45,725			$	39,618

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



Payable for derivative contracts	As of March 31, 2016				As of December 31, 2015
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	15,401	$	1,834	$	11,995	$	101
Currency forwards	$	43,658	426		$	44,156	463
Equity and credit default swaps	$	7,236	156		$	7,605	71
Options other (a)	15,775		22,718		16,632		20,548
			$	25,134			$	21,183

(a) Includes 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 March 31, 2016 and December 31, 2015.



							Gross amounts not offset in the Condensed Consolidated Statement of Financial Condition
	Gross amounts recognized		Gross amounts offset on the Condensed Consolidated Statements of Financial Condition (a)		Net amounts included on the Condensed Consolidated Statements of Financial Condition		Financial instruments		Cash Collateral pledged (b)		Net amounts
	(dollars in thousands)
As of March 31, 2016
Receivable on derivative contracts, at fair value	$	45,725	$	—	$	45,725	$	—	$	7,305	$	38,420
Payable for derivative contracts, at fair value	25,134		—		25,134		—		582		24,552

As of December 31, 2015
Receivable on derivative contracts, at fair value	39,618		—		39,618		—		9,339		30,279
Payable for derivative contracts, at fair value	21,183		—		21,183		—		534		20,649


(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.

Schedule of Other Investments

As of March 31, 2016 and December 31, 2015, other investments included the following:



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
(1) Portfolio Funds, at fair value	$	118,599	$	113,281
(2) Equity method investments	47,893		27,067
(3) Lehman claims, at fair value	293		299
	$	166,785	$	140,647

Schedule of Other Investments, Portfolio Funds

The Portfolio Funds, at fair value as of March 31, 2016 and December 31, 2015, included the following:



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
HealthCare Royalty Partners (a)(*)	$	12,251	$	12,127
HealthCare Royalty Partners II (a)(*)	7,176		6,006
Orchard Square Partners Credit Fund LP (b)	4,000		4,170
Starboard Value and Opportunity Fund LP (c)(*)	21,287		20,369
Starboard Partners Fund LP (d)(*)	9,396		14,036
Starboard Leaders Fund LP (e)(*)	1,209		1,080
Formation8 Partners Fund I, L.P. (f)	20,950		19,454
Eclipse Ventures Fund I, L.P. (formerly Formation8 Partners Hardware Fund I, L.P.) (g)	1,733		1,101
RCG LV Park Lane LLC (h) (*)	575		809
RCGL 12E13th LLC (i) (*)	458		609
RCG Longview Debt Fund V, L.P. (i) (*)	18,170		18,147
RCG LPP SME Co-Invest, L.P. (j) (*)	2,468		2,468
Quadratic Fund LLC (k) (*)	4,865		—
Other private investment (l) (*)	7,534		6,909
Other affiliated funds (m)(*)	6,527		5,996
	$	118,599	$	113,281

* 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 11.


(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 lock up.


(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)	Formation8 Partners Fund I, L.P. is a private equity fund which invests in early stage and growth transformational information and energy technology companies. Distributions will be made when the underlying investments are liquidated.


(g)	Eclipse Ventures Fund I, L.P. (Formerly Formation8 Partners Hardware Fund I, L.P.) is a private equity fund which invests in early stage and growth hardware companies. Distributions will be made when the underlying investments are liquidated.


(h)	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.


(i)	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.


(j)	RCG LPP SME Co-Invest, L.P. is a single purpose entity formed to participate in a joint venture which acquired two fully entitled residential development sites in the New York City metro area. RCG LPP SME Co-Invest, L.P. is a private equity structure and therefore distributions will be made when the underlying investments are liquidated.


(k)	Quadratic Fund LLC permits redemptions on a 30 days prior written notice.


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


(m)	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.

Schedule of Other Investments, Equity Method

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



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
RCG Longview Debt Fund IV Management, LLC	$	331	$	331
RCG Longview Debt Fund V Partners, LLC	5,278		4,655
HealthCare Royalty GP, LLC	999		989
HealthCare Royalty GP II, LLC	1,215		1,017
HealthCare Royalty GP III, LLC	86		88
HealthCare Overflow Fund GP, LLC	50		—
Surf House Ocean Views Holdings, LLC	13,000		—
Starboard Value LP	22,805		15,769
RCG Longview Management, LLC	710		656
RCG Urban American, LLC	120		120
RCG Urban American Management, LLC	379		379
RCG Longview Equity Management, LLC	114		114
Urban American Real Estate Fund II, LLC	1,211		1,211
RCG Kennedy House, LLC	359		304
Other	1,236		1,434
	$	47,893	$	27,067

Schedule of Securities Sold, Not yet Purchased

As of March 31, 2016 and December 31, 2015, securities sold, not yet purchased, at fair value consisted of the following:



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
Common stocks	$	412,750	$	257,101
Corporate bonds (a)	60		58
	$	412,810	$	257,159


(a)	As of March 31, 2016 and December 31, 2015, the maturity was January 2026 with an interest rate of 5.55%.

Consolidated Funds

Investment Holdings [Line Items]

Marketable Securities

As of March 31, 2016 and December 31, 2015, securities owned, at fair value, held by the Consolidated Funds consisted of the following:



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
Preferred stock	$	28,000	$	32,000
Common stocks	7,100		—
Corporate bonds (a)	4,218		—
Term Loan	1,205		—
	$	40,523	$	32,000

(a) As of March 31, 2016, maturities ranged from March 2017 to May 2049 and interest rates ranged between 3.25% and 14.37%.

Schedule of Derivative Instruments

As of March 31, 2016, receivable on derivative contracts, at fair value, held by the Consolidated Funds are comprised of:



	As of March 31, 2016
	(dollars in thousands)
Currency forwards	$	2
Equity swaps	61
Options	62
	$	125

Payable for derivative contracts, at fair value

As of March 31, 2016, payable for derivative contracts, at fair value, held by the Consolidated Funds are comprised of currency forwards of $2.0 thousand.

Schedule of Other Investments, Portfolio Funds

Investments in Portfolio Funds, at fair value

As of March 31, 2016 and December 31, 2015, investments in Portfolio Funds, at fair value, included the following:



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
Investments of Enterprise LP	$	113,696	$	111,075
Investments of Merger Fund	280,782		74,348
Investments of Quadratic LLC	—		78,395
	$	394,478	$	263,818

Schedule of Securities Sold, Not yet Purchased

As of March 31, 2016, securities sold, not yet purchased, at fair value, held by the Consolidated Funds consisted of the following:



	As of March 31, 2016
	(dollars in thousands)
Common stocks	$	352
Corporate bonds (a)	1,015
	$	1,367

(a) As of March 31, 2016, maturities ranged from September 2019 to March 2025 and interest rates ranged between 4.38% and 9.25%.

Enterprise Master

Investment Holdings [Line Items]

Schedule of Derivative Instruments

Receivable/(Payable) on derivative contracts, at fair value, owned by Enterprise Master



	As of March 31, 2016		As of December 31, 2015
Description	(dollars in thousands)
Currency forwards	$	—	$	(4	)
	$	—	$	(4	)

Schedule of Securities Owned

Securities owned by Enterprise Master, at fair value



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
Common stock	736		724
Preferred stock	1,478		1,484
Restricted stock	124		124
Rights	—		321
Trade claims	128		128
	$	2,466	$	2,781

Schedule of Other Investments, Portfolio Funds

Portfolio Funds, owned by Enterprise Master, at fair value



		As of March 31, 2016		As of December 31, 2015
	Strategy	(dollars in thousands)
RCG Longview Equity Fund, LP*	Real Estate	$	7,407	$	7,635
RCG Longview II, LP*	Real Estate	702		698
RCG Longview Debt Fund IV, LP*	Real Estate	3,042		3,577
RCG Soundview, LLC*	Real Estate	452		452
RCG Urban American Real Estate Fund, L.P.*	Real Estate	307		312
RCG Special Opportunities Fund, Ltd*	Multi-Strategy	85,435		81,544
RCG Energy, LLC *	Energy	—		1,189
RCG Renergys, LLC*	Energy	1		1
Other Private Investments	Various	10,472		10,515
Other Real Estate Investments (*)	Real Estate	5,045		5,753
		$	112,863	$	111,676


*	Affiliates of the Company.

Merger Master

Investment Holdings [Line Items]

Marketable Securities

Securities owned by Merger Master, at fair value



	As of March 31, 2016		As of December 31, 2015
	(dollars in thousands)
Common stocks	$	814,309	$	157,429
Corporate bonds (a)	—		492
	$	814,309	$	157,921


(a)	As of December 31, 2015, the maturity was June 2024 with an interest rate of 5.25%

Schedule of Derivative Instruments

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



	As of March 31, 2016		As of December 31, 2015
Description	(dollars in thousands)
Options	$	16,582	$	1,275
Currency forwards	24		235
Equity swaps	1,289		1,001
	$	17,895	$	2,511

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



	As of March 31, 2016		As of December 31, 2015
Description	(dollars in thousands)
Options	$	1,293	$	563
Currency forwards	21		—
Equity swaps	283		30
	$	1,597	$	593