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 brokers under terms which permit the clearing broker to sell or re-pledge the securities to others subject to certain limitations.

As of September 30, 2017 and December 31, 2016, securities owned, at fair value consisted of the following:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Common stocks (b)	$	620,779	$	669,655
Preferred stock (b)	17,989		15,811
Warrants and rights (b)	9,328		8,335
U.S. Government securities (a)	2,793		3,780
Corporate bonds (d)	2,655		2,477
Convertible bonds (c)	282		250
Trade claims	5,946		562
Mutual funds (b)	—		6
	$	659,772	$	700,876


(a)	As of September 30, 2017, maturities ranged from December 2017 to June 2018 with an interest rate of 0%. As of December 31, 2016, maturities ranged from February 2017 to December 2017 with an interest rate of 0%.

(b)

The Company has elected the fair value option for investments in securities of preferred and common stocks with a fair value of $5.5 million and $5.3 million, respectively, at September 30, 2017 and $7.0 million and $5.2 million, respectively, at December 31, 2016. At September 30, 2017, the Company elected the fair value option for investments in warrants and rights with a fair value of $1.9 million. At December 31, 2016 the Company elected the fair value option for investments in mutual funds with a fair value of $0.1 million.


(c)	As of September 30, 2017, maturities ranged from February 2018 to March 2018 and interest rates ranged from 5% to 12%. As of December 31, 2016, the maturity was March 2018 with an interest rate of 8%.


(d)	As of September 30, 2017, maturities ranged from April 2019 to October 2042 and interest rates ranged from 0.00% to 10.75%. As of December 31, 2016, maturities ranged from January 2017 to January 2036 and interest rates ranged from 6.25% to 13.00%.

Receivable on and Payable for derivative contracts, at fair value

The Company's direct involvement with derivative financial instruments includes total return swaps, futures, currency forwards, equity swaps, credit default swaps and options. 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 17), the Company recognized the embedded cash conversion option at fair value of $35.7 million which is valued as of September 30, 2017 at $10.4 million and is included in payable for derivative contracts in the accompanying condensed 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 $10.4 million as of September 30, 2017 and is included in receivable on derivative contracts in the accompanying condensed 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 7,012,196 shares of the Company's Class A common stock and have an initial exercise price of $28.72 per share (share and per share amounts have been retroactively updated to reflect the one-for-four reverse stock split effective as of December 5, 2016). 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 September 30, 2017				As of December 31, 2016
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	2,972	$	15	$	12,421	$	104
Currency forwards	$	81,288	186		$	80,608	592
Swaps	$	74,571	4,923		$	46,462	468
Options other (a)	284,793		26,757		256,097		21,539
Foreign currency options	$	44,201	224		$	57,051	198
			$	32,105			$	22,901

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



Payable for derivative contracts	As of September 30, 2017				As of December 31, 2016
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	12,330	$	175	$	38,345	$	642
Currency forwards	$	32,443	18		$	—	—
Swaps	$	75,595	1,693		$	9,533	181
Options other (a)	47,564		24,431		23,726		19,939
			$	26,317			$	20,762

(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 September 30, 2017 and December 31, 2016. This table does not include the impact of over collateralization.



							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 September 30, 2017
Receivable on derivative contracts, at fair value	$	32,105	$	—	$	32,105	$	—	$	5,414	$	26,691
Payable for derivative contracts, at fair value	26,317		—		26,317		—		1,710		24,607

As of December 31, 2016
Receivable on derivative contracts, at fair value	22,901		—		22,901		—		1,382		21,519
Payable for derivative contracts, at fair value	20,762		—		20,762		—		181		20,581


(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 and $(2.8) million for the three months ended September 30, 2017 and 2016, and $(4.9) million and $(10.4) million for the nine months ended September 30, 2017 and 2016, respectively, and are included in other income in the accompanying condensed consolidated statements of operations.

Pursuant to the various derivatives transactions discussed above, except for the cash convertible note hedge (see Note 17) and exchange traded derivatives, the Company is required to post/receive collateral. As of September 30, 2017 and December 31, 2016, collateral consisting of $17.2 million and $17.1 million of cash, respectively, is included in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations on the accompanying condensed consolidated statements of financial condition. As of September 30, 2017 and December 31, 2016 all derivative contracts were with multiple major financial institutions.

Other investments

As of September 30, 2017 and December 31, 2016, other investments included the following:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Portfolio Funds, at fair value (1)	$	98,491	$	120,023
Equity method investments (2)	42,370		36,991
Lehman claims, at fair value	319		265
	$	141,180	$	157,279

(1) Portfolio Funds, at fair value

The Portfolio Funds, at fair value as of September 30, 2017 and December 31, 2016, included the following:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Starboard Value and Opportunity Fund LP (c)(*)	$	30,461	$	27,424
Formation8 Partners Fund I, L.P. (f)	28,450		22,234
RCG Longview Debt Fund V, L.P. (i)(*)	9,788		16,187
HealthCare Royalty Partners LP (a)(*)	4,171		7,147
Eclipse Ventures Fund I, L.P. (g)	3,223		1,790
Lagunita Biosciences, LLC (n)	2,635		1,698
RCG LPP2 PNW5 Co-Invest, L.P. (j)(*)	1,966		3,152
Starboard Leaders Fund LP (e)(*)	1,211		1,231
HealthCare Royalty Partners II LP (a)(*)	1,119		2,091
Quadratic Fund LLC (k) (*)	920		6,729
RCGL 12E13th LLC (i)(*)	257		348
Green Energy Metals Fund, LP (h)	—		6,241
Starboard Partners Fund LP (d)(*)	—		5,067
Orchard Square Partners Credit Fund LP (b)	—		4,327
Other private investment (l)(*)	9,925		8,548
Other affiliated funds (m)(*)	4,365		5,809
	$	98,491	$	120,023

* 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 16.


(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 had 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 permitted 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. 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)

The Green Energy Metals Fund, LP invested the vast majority of its capital in physical off-exchange traded minor metals that are crucial to the production and sustainability of clean energy, emerging technology and energy efficiency. The Company was invested in a managed account specifically targeting cobalt. The Green Energy Metals Fund, LP is a private equity structure and therefore distributions were made when the underlying investments were 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 LPP2 PNW5 Co-Invest, L.P. is a single purpose entity formed to participate in a joint venture which acquired five multi-unit residential rental properties located in the Pacific Northwest. RCG LPP2 PNW5 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 day 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.


(n)	Lagunita Biosciences, LLC, a healthcare investment company that creates and grows early stage companies to commercialize impactful translational science that addresses significant clinical needs, is a private equity structure and therefore distributions will be made when the underlying investments are liquidated.


(2)	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 57%. The Company holds a majority of the outstanding ownership interest (i.e., more than 50%) in RCG Longview Partners II, LLC and in Surf House Ocean Views Holdings, LLC (which is a joint venture in a real estate development project). The operating agreement that governs the management of day-to-day operations and affairs of these entities stipulates 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 entities requires 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 and (b) 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 private funds and related managed accounts. As part of its equity method investment in operating companies, the Company incurs certain expenses on behalf of its equity method investees. These expenses reflect direct and indirect costs associated with the respective business and are included in their respective line items in the accompanying condensed consolidated statements of operations. For the three months ended September 30, 2017 and September 30, 2016, the Company incurred $0.9 million and $1.7 million of these costs, respectively. For the nine months ended September 30, 2017 and September 30, 2016, the Company incurred $3.5 million and $6.8 million of these costs, respectively. The Company recorded no impairment charges in relation to its equity method investments for the nine months ended September 30, 2017 and 2016.

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



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Surf House Ocean Views Holdings, LLC	$	14,179	$	13,522
Starboard Value LP	15,939		12,501
RCG Longview Debt Fund V Partners, LLC	8,487		7,256
RCG Longview Management, LLC	961		656
HealthCare Royalty GP, LLC	340		583
HealthCare Royalty GP II, LLC	190		354
RCG Longview Debt Fund IV Management, LLC	331		331
HealthCare Royalty GP III, LLC	626		208
RCG Kennedy House, LLC	136		183
RCG Longview Equity Management, LLC	114		114
HealthCare Overflow Fund GP, LLC	76		68
Other	991		1,215
	$	42,370	$	36,991

For the period ended September 30, 2017, one equity method investment 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 for the significant investee for the three and nine months ended September 30, 2017 and 2016, and such information is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(dollars in thousands)
Revenues	$	9,734	$	24,865	$	27,646	$	27,592
Expenses	—		—		—		—
Net realized and unrealized gains (losses)	88		116		163		290
Net Income	$	9,822	$	24,981	$	27,809	$	27,882

As of September 30, 2017 and December 31, 2016, 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 condensed 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 $4.1 million and $(0.1) million for the three months ended September 30, 2017 and 2016, and $12.1 million and $16.0 million, for the nine months ended September 30, 2017 and 2016, respectively, and is included in net gains (losses) on securities, derivatives and other investments on the accompanying condensed consolidated statements of operations.

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 condensed 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 condensed 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 September 30, 2017 and December 31, 2016, securities sold, not yet purchased, at fair value consisted of the following:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Common stocks	$	305,022	$	263,460
Corporate bonds (a)	59		2,591
Warrants and rights	186		39
	$	305,267	$	266,090


(a)	As of September 30, 2017, the maturity was January 2026 with an interest rate of 5.55%. As of December 31, 2016, the maturities ranged from April 2021 to January 2036 with interest rates ranged from 5.50% to 6.25%.

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 September 30, 2017.



							Gross amounts not offset on the Condensed Consolidated Statements 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		Additional Amounts Available			Financial instruments		Cash Collateral pledged (b)		Net amounts
	(dollars in thousands)
As of September 30, 2017
Securities borrowed	$	371,367	$	—	$	371,367	$	(12,694	)	$	358,673	$	—	$	—
Securities loaned	414,957		—		414,957		(7,251		)	407,706		—		—


(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.

The following tables present gross obligations for securities loaned transactions by remaining contractual maturity and class of collateral pledged as of September 30, 2017:



	Open and Overnight		Up to 30 days		31 - 90 days		Greater than 90 days		Total
	(dollars in thousands)
As of September 30, 2017
Stocks	$	463,022	$	—	$	—	$	—	$	463,022

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 $4.8 billion and $562.2 million as of September 30, 2017 and $5.3 billion and $997.3 million as of December 31, 2016, respectively. In addition, the maximum exposure relating to these variable interest entities as of September 30, 2017 was $500.3 million, and as of December 31, 2016 was $508.4 million, all of which is included in other investments, at fair value in the accompanying condensed consolidated statements of financial condition. The exposure to loss primarily relates to the Consolidated Feeder Funds' investment in their Unconsolidated Master Funds and the Company's investment in unconsolidated investment companies.


b.	Consolidated Funds

Securities owned, at fair value

As of September 30, 2017 and December 31, 2016, securities owned, at fair value, held by the Consolidated Funds consisted of the following:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Preferred stock	$	18,943	$	37,343
Common stocks	73,341		28,474
U.S. Government securities (a)	21,968		6,994
Corporate bonds (b)	—		4,214
Term Loan	—		2,209
Warrants and rights	3,378		3
	$	117,630	$	79,237


(a)	As of September 30, 2017, the maturity was November 2017 with an interest rate of 0%. As of December 31, 2016, the maturity was March 2017 with an interest rate of 0%.


(b)	As of December 31, 2016, maturities ranged from October 2017 to June 2038 and interest rates ranged from 0% and 14.37%.

Securities sold, not yet purchased, at fair value

As of September 30, 2017, there were no securities sold, not yet purchased, at fair value. As of December 31, 2016, securities sold, not yet purchased, at fair value, held by the Consolidated Funds consisted of the following:



	As of December 31, 2016
	(dollars in thousands)
Corporate bonds (a)	$	672
Common stocks	211
	$	883


(a)	As of December 31, 2016, maturities ranged from September 2019 to September 2023 and interest rates ranged from 4.38% to 9.25%.

Receivable on derivative contracts

As of September 30, 2017 and December 31, 2016, receivable on derivative contracts, at fair value, held by the Consolidated Funds are comprised of:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Currency forwards	$	3	$	18
Equity swaps	809		731
Options	230		144
	$	1,042	$	893

Payable for derivative contracts

As of September 30, 2017 and December 31, 2016, payable for derivative contracts, at fair value, held by the Consolidated Funds are comprised of:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Currency forwards	$	551	$	10
Equity swaps	1,132		495
Options	64		67
	$	1,747	$	572

Other investments, at fair value

Investments in Portfolio Funds, at fair value

As of September 30, 2017 and December 31, 2016, investments in Portfolio Funds, at fair value, included the following:



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Investments of Enterprise LP	$	98,856	$	114,159
Investments of Merger Fund	302,492		281,572
Investments of Caerus LP	—		5,734
	$	401,348	$	401,465

Consolidated portfolio fund 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 $98.9 million and $114.2 million in Enterprise Master as of September 30, 2017 and December 31, 2016, 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 portfolio fund 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 $302.5 million and $281.6 million in Merger Master as of September 30, 2017 and December 31, 2016, 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 market 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.

Consolidated portfolio fund investments of Caerus LP

Prior to Caerus LP being liquidated on March 1, 2017, it operated under a “master-feeder” structure, whereby Caerus Select Master Fund Ltd's ("Caerus Master") shareholder was Caerus LP. The consolidated investments in Portfolio Funds included Caerus LP's investment of $5.7 million in Caerus Master as of December 31, 2016. Caerus Master’s investment objective was to achieve superior risk-adjusted rates of return that bear little correlation to the overall market. Caerus Master sought to achieve this objective by utilizing a long/short investment strategy, investing primarily in equities and options on equities that trade on major global market exchanges. Caerus Master focused on investments in the global consumer sector, including, but not limited to, securities in sub-sectors such as retail, apparel and footwear, restaurants, gaming and lodging, consumer products, food and beverage, consumer technology, media, transportation and homebuilding and building materials.

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 September 30, 2017 and December 31, 2016, 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 was one indirect concentration that exceeded 5% of the Company's equity as of September 30, 2017 and none at December 31, 2016.

Through its investments in a Consolidated Fund and combined with direct Company investments, the Company maintained exposure to a particular investment which accounted for 5% or more of the Company's equity.

Investment's percentage of the Company's equity at September 30, 2017

Issuer

Security Type

Country

Industry

Percentage of Equity

Market Value

(dollars in thousands)

Linkem

Equity

Italy

Wireless Broadband

6.52

55,030

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 September 30, 2017 and December 31, 2016:

Securities owned by Enterprise Master, at fair value



	As of September 30, 2017		As of December 31, 2016
	(dollars in thousands)
Preferred stock	$	487	$	1,581
Common stock	725		835
	$	1,212	$	2,416

Portfolio Funds, owned by Enterprise Master, at fair value



		As of September 30, 2017		As of December 31, 2016
	Strategy	(dollars in thousands)
RCG Special Opportunities Fund, Ltd*	Multi-Strategy	$	103,431	$	101,832
RCG Longview Equity Fund, LP*	Real Estate	1,305		4,744
RCG Longview Debt Fund IV, LP*	Real Estate	1,279		1,637
RCG Longview II, LP*	Real Estate	227		836
RCG Renergys, LLC*	Energy	—		1
Other Private Investments	Various	1,061		8,682
Other Real Estate Investments *	Real Estate	—		295
		$	107,303	$	118,027


*	Affiliates of the Company.

Merger Master

As of September 30, 2017, Merger Master held common stock, securities owned, of $801.2 million and common stock, sold not yet purchased, of $451.7 million. As of December 31, 2016, Merger Master held common stock, securities owned, of $835.7 million and common stock, sold not yet purchased, of $395.5 million, respectively.

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



	As of September 30, 2017		As of December 31, 2016
Description	(dollars in thousands)
Options	$	4,595	$	4,264
Equity swaps	3,012		255
Currency forwards	82		—
	$	7,689	$	4,519

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



	As of September 30, 2017		As of December 31, 2016
Description	(dollars in thousands)
Options	$	861	$	2,285
Equity swaps	3,540		123
	$	4,401	$	2,408

Caerus Master

As of December 31, 2016, Caerus Master held common stock, of $3.2 million and common stock, sold not yet purchased, of $2.6 million.