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Investments of Operating Entities and Consolidated Funds - (Tables)
 9 Months Ended
Sep. 30, 2017
Investment Holdings [Line Items]  
Schedule of Assets and Associated Liabilities Accounted for as Secured Borrowings [Table Text Block]
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.
Fair Value, Concentration of Risk
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
Marketable Securities
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%.
Schedule of Derivative Instruments
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.
Schedule of 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
Schedule of Other Investments, Portfolio Funds
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.
Schedule of Other Investments, Equity Method
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
Schedule of Securities Sold, Not yet Purchased
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%.
Investments Classified by Contractual Maturity Date [Table Text Block]
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
Consolidated Funds  
Investment Holdings [Line Items]  
Marketable Securities
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%.
Schedule of Derivative Instruments
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
Schedule of Other Investments, Portfolio Funds
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
Schedule of Securities Sold, Not yet Purchased
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%.
Enterprise Master  
Investment Holdings [Line Items]  
Marketable Securities
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
Schedule of Other Investments, Portfolio Funds
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  
Investment Holdings [Line Items]  
Schedule of Derivative Instruments
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