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, which are not part of the Company's self clearing securities finance activities, are pledged to external clearing brokers under terms which permit the external clearing broker to sell or re-pledge the securities to others subject to certain limitations.

As of September 30, 2018 and December 31, 2017, securities owned, at fair value consisted of the following:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Common stock (b)	$	576,720	$	640,065
Preferred stock (b)	6,466		9,604
Warrants and rights (b)	21,403		9,604
U.S. Government securities (a)	2,842		2,807
Corporate bonds (d)	30,992		4,909
Convertible bonds (c)	—		282
Trade claims	5,746		5,950
	$	644,169	$	673,221


(a)	As of September 30, 2018, maturities ranged from October 2018 to August 2019 with an interest rate of 0%. As of December 31, 2017, maturities ranged from February 2018 to June 2018 with an interest rate of 0%.

(b)

The Company has elected the fair value option for investments in securities of preferred and common stock with a fair value of $2.9 million and $6.2 million, respectively, at September 30, 2018 and $6.0 million and $5.2 million, respectively, at December 31, 2017. At September 30, 2018 and December 31, 2017, the Company elected the fair value option for investments in warrants and rights with a fair value of $1.1 million and $2.4 million.


(c)	As of December 31, 2017, maturities ranged from February 2018 to March 2018 and interest rates ranged from 5% to 12%.


(d)	As of September 30, 2018, maturities ranged from October 2018 to April 2049 and interest rates ranged from 0.50% to 14.00%. As of December 31, 2017, maturities ranged from October 2018 to May 2040 and interest rates ranged from 0.00% to 10.75%.

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 3% cash convertible senior notes due 2019 in March 2014 ("2019 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, 2018 at $0.2 million and is included in payable for derivative contracts in the accompanying condensed consolidated statement of financial condition. The Company has partially repurchased and extinguished most of the 2019 Convertible Notes (See Note 17).

Also, on the date of issuance of the 2019 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 2019 Convertible Notes and simultaneously sold an equity settled warrant with a higher strike price. The Hedge Transaction was 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 2019 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. During January 2018, the Company terminated the Hedge Transaction for a loss of $0.6 million.

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



Receivable on derivative contracts	As of September 30, 2018				As of December 31, 2017
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	—	$	—	$	3,819	$	58
Currency forwards	$	79,310	1,088		$	233	5
Swaps	$	57,926	1,203		$	164,664	10,942
Options other (a)	660,776		29,330		283,112		58,172
Pay to hold	$	—	608		$	—	—
			$	32,229			$	69,177

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



Payable for derivative contracts	As of September 30, 2018				As of December 31, 2017
	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	25,474	$	71	$	16,796	$	242
Currency forwards	$	2,897	4		$	62,439	874
Swaps	$	77,775	2,743		$	11,595	71
Options other (a)	96,500		27,184		57,043		41,563
			$	30,002			$	42,750

(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, 2018 and December 31, 2017. 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, 2018
Receivable on derivative contracts, at fair value	$	32,229	$	—	$	32,229	$	—	$	2,899	$	29,330
Payable for derivative contracts, at fair value	30,002		—		30,002		—		2,747		27,255

As of December 31, 2017
Receivable on derivative contracts, at fair value	$	69,177	$	—	$	69,177	$	—	$	10,948	$	58,229
Payable for derivative contracts, at fair value	42,750		—		42,750		—		1,031		41,719


(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 $(7.5) million and $0.5 million for the three months ended September 30, 2018 and 2017, and $6.4 million and $(4.9) million for the nine months ended September 30, 2018 and 2017, 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), exchange traded derivatives, and certain options, the Company is required to post/receive collateral. As of September 30, 2018 and December 31, 2017, collateral consisting of $9.8 million and $13.5 million of cash is included in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations, respectively, on the accompanying condensed consolidated statements of financial condition. As of September 30, 2018 and December 31, 2017 all derivative contracts were with multiple major financial institutions.

Other investments

As of September 30, 2018 and December 31, 2017, other investments included the following:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Portfolio Funds, at fair value (1)	$	125,107	$	100,148
Equity method investments (2)	42,321		41,099
Lehman claims, at fair value	—		301
	$	167,428	$	141,548

(1) Portfolio Funds, at fair value

The Portfolio Funds, at fair value as of September 30, 2018 and December 31, 2017, included the following:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Starboard Value and Opportunity Fund LP (c)(*)	$	33,321	$	32,079
Formation8 Partners Fund I, L.P. (f)	28,135		28,243
RCG Longview Debt Fund V, L.P. (g)(*)	4,537		8,892
RCG Longview II LP (g) (*)	4,160		131
Cowen Healthcare Investments II LP (j) (*)	15,875		—
Eclipse Ventures Fund I, L.P. (b)	3,575		3,428
HealthCare Royalty Partners LP (a)(*)	2,129		3,452
Lagunita Biosciences, LLC (d)	3,859		2,400
RCG IO Renergys Sarl (j) (*)	1,780		—
Starboard Leaders Fund LP (e)(*)	1,405		1,276
Eclipse SPV I, LP (k)(*)	1,447		—
RCG Longview Equity Fund, LP (g) (*)	819		—
RCG Longview Debt Fund VI, LP (g) (*)	588		1,022
RCG Park Liberty GP Member LLC (g) (*)	908		750
HealthCare Royalty Partners II LP (a)(*)	1,162		873
RCGL PE MPA, LLC (g)(*)	549		—
RCG LPP2 PNW5 Co-Invest, L.P. (h)(*)	309		3,493
Quadratic Fund LLC (i)(*)	—		906
Other private investment (l)(*)	15,997		10,133
Other affiliated funds (m)(*)	4,552		3,070
	$	125,107	$	100,148

* 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)	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.


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


(d)	Lagunita Biosciences, LLC, is 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.


(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)	RCG Longview Debt Fund V, L.P., RCG Longview II LP, RCG Park Liberty GP Member LLC, RCG Longview Equity Fund, LP, RCGL PE MPA, LLC and RCG Longview Debt Fund VI, LP are real estate private equity structures. The timing of distributions depend on the nature of the underlying investments and therefore will be made either quarterly or when the underlying investments are liquidated.


(h)	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.


(i)	Effective January 31, 2018, the Company is no longer affiliated with Quadratic Capital Management LLC.


(j)	Cowen Healthcare Investments II LP and RCG IO Renergys Sarl are private equity funds. Distributions are made from these funds when cash flows or securities are received from the underlying investments. Investors do not have redemption rights.


(k)	Eclipse SPV I, L.P. is a co-investment vehicle organized to invest in a private company focused on software-driven automation projects. Distributions will be made when the underlying investments are liquidated.


(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.


(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 13% to 56%. The Company holds a majority of the outstanding ownership interest (i.e., more than 50%) in RCG Longview Partners II, LLC and 41% 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, 2018 and 2017, the Company incurred $2.6 million and $0.9 million of these costs, respectively. For the nine months ended September 30, 2018 and 2017, the Company incurred $6.6 million and $3.5 million of these costs, respectively. During the third quarter of 2018, the Company completed an assessment of the recoverability of the Company's equity method investments and determined that the carrying value of the investment in Surf House Ocean View Holdings, LLC exceeded the estimated fair value of the Company's interest, which was other than temporary. Accordingly, an impairment charge of $7.1 million was recognized to reduce the carrying value of the investment to fair value at September 30, 2018. The Company recorded no other impairment charges in relation to its equity method investments for the nine months ended September 30, 2018 and 2017.

The Company elected to use the cumulative earnings approach for the distributions it receives from its equity method investments. Under the cumulative earnings approach, any distributions received up to the amount of cumulative earnings are treated as return on investment and classified in operating activities within the cash flows. Any excess distributions would be considered as return of investments and classified in investing activities.

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



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Surf House Ocean Views Holdings, LLC	$	7,478	$	14,179
Starboard Value LP	17,842		13,202
RCG Longview Debt Fund V Partners, LLC	10,273		9,284
RCG Longview Management, LLC	1,316		1,149
RCG Longview Debt Fund VI Partners LLC	971		—
HealthCare Royalty GP, LLC	174		281
HealthCare Royalty GP II, LLC	197		148
RCG Longview Debt Fund IV Management, LLC	331		331
HealthCare Royalty GP III, LLC	1,562		764
RCG Kennedy House, LLC	119		154
RCG Longview Equity Management, LLC	114		114
RCG LPP II GP, LLC	272		487
RCG Park Liberty GP Member Manager, LLC	1,018		428
Other	654		578
	$	42,321	$	41,099

As of September 30, 2018 and December 31, 2017, 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 as of September 30, 2018 and December 31, 2017, respectively.

The Company's income (loss) from equity method investments was $(4.7) million and $4.1 million for the three months ended September 30, 2018 and 2017, and $7.2 million and $12.1 million for the nine months ended September 30, 2018 and 2017, 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, 2018 and December 31, 2017, securities sold, not yet purchased, at fair value consisted of the following:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Common stock	$	353,113	$	342,328
Corporate bonds (a)	20,309		122
Preferred stock	836		77
Warrants and rights	260		—
	$	374,518	$	342,527


(a)	As of September 30, 2018, the maturities ranged from January 2026 to April 2049 with interest rates ranged from 5.00% to 5.55%. As of December 31, 2017, the maturities ranged from July 2025 to January 2026 with interest rates ranged from 3.78% to 5.55%.

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, 2018 and December 31, 2017.



							Gross amounts not offset on 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		Additional Amounts Available		Financial instruments		Cash Collateral pledged (b)		Net amounts
	(dollars in thousands)
As of September 30, 2018
Securities borrowed	$	713,288	$	—	$	713,288	$	—	$	684,569	$	—	$	28,719
Securities loaned	548,629		—		548,629		—		531,984		—		16,645

As of December 31, 2017
Securities borrowed	$	443,148	$	—	$	443,148	$	—	$	414,778	$	—	$	28,370
Securities loaned	456,831		—		456,831		—		439,228		—		17,603


(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, 2018 and December 31, 2017:



	Open and Overnight		Up to 30 days		31 - 90 days		Greater than 90 days		Total
	(dollars in thousands)
As of September 30, 2018
Common stock	$	548,629	$	—	$	—	$	—	$	548,629

As of December 31, 2017
Common stock	$	456,831	$	—	$	—	$	—	$	456,831

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 $5.6 billion and $346.9 million as of September 30, 2018 and $5.2 billion and $445.6 million as of December 31, 2017, respectively. In addition, the maximum exposure relating to these variable interest entities as of September 30, 2018 was $333.8 million, and as of December 31, 2017 was $471.3 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, 2018 and December 31, 2017, securities owned, at fair value, held by the Consolidated Funds consisted of the following:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Preferred stock	$	24,314	$	50,445
Common stock	55,535		77,702
U.S. Government securities (a)	20,446		34,201
Corporate bonds (b)	3,758		—
Warrants and rights	4,848		3,568
	$	108,901	$	165,916


(a)	As of September 30, 2018, maturities ranged from November 2018 to December 2018 and interest rates were 0%. As of December 31, 2017, maturities ranged from January 2018 to April 2022 and interest rates ranged from 0% to 5.75%.


(b)	As of September 30, 2018, the maturity was December 2023 with an interest rate of 5.88%.

Receivable on derivative contracts

As of September 30, 2018 and December 31, 2017, receivable on derivative contracts, at fair value, held by the Consolidated Funds are comprised of:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Currency forwards	$	27	$	524
Equity swaps	1,584		1,754
Options	300		242
	$	1,911	$	2,520

Payable for derivative contracts

As of September 30, 2018 and December 31, 2017, payable for derivative contracts, at fair value, held by the Consolidated Funds are comprised of:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Currency forwards	$	539	$	11
Equity swaps	1,590		7,042
Options	60		77
	$	2,189	$	7,130

Other investments, at fair value

Investments in Portfolio Funds, at fair value

As of September 30, 2018 and December 31, 2017, investments in Portfolio Funds, at fair value, included the following:



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Investments of Enterprise LP	$	97,026	$	87,221
Investments of Merger Fund	86,264		286,890
	$	183,290	$	374,111

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 $97.0 million and $87.2 million in Enterprise Master as of September 30, 2018 and December 31, 2017, 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 $86.3 million and $286.9 million in Merger Master as of September 30, 2018 and December 31, 2017, 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.

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, 2018 and December 31, 2017, 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, 2018 and one at December 31, 2017.

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

Issuer

Security Type

Country

Industry

Percentage of Equity

Market Value

(dollars in thousands)

As of September 30, 2018

Linkem

Equity

Italy

Wireless Broadband

8.01

64,754

As of December 31, 2017

Linkem

Equity

Italy

Wireless Broadband

7.52

56,271

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, 2018 and December 31, 2017:

Securities owned by Enterprise Master, at fair value



	As of September 30, 2018		As of December 31, 2017
	(dollars in thousands)
Common stock	$	469	$	608
	$	469	$	608

Portfolio Funds, owned by Enterprise Master, at fair value



		As of September 30, 2018		As of December 31, 2017
	Strategy	(dollars in thousands)
RCG Special Opportunities Fund, Ltd*	Multi-Strategy	$	109,518	$	97,345
RCG Longview Equity Fund, LP*	Real Estate	—		1,266
RCG Longview Debt Fund IV, LP*	Real Estate	—		99
RCG Longview II, LP*	Real Estate	—		229
Other Private Investments	Various	864		937
		$	110,382	$	99,876


*	Affiliates of the Company.

Merger Master

As of September 30, 2018, Merger Master held common stock and corporate bonds, of $342.1 million and $23.8 million, respectively, and common stock, sold not yet purchased, of $128.6 million. As of December 31, 2017, Merger Master held common stock, securities owned, of $483.2 million and common stock, sold not yet purchased, of $171.2 million, respectively.

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



	As of September 30, 2018		As of December 31, 2017
Description	(dollars in thousands)
Options	$	1,817	$	108,063
Equity swaps	1,658		14,488
Currency forwards	200		—
	$	3,675	$	122,551

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



	As of September 30, 2018		As of December 31, 2017
Description	(dollars in thousands)
Options	$	261	$	1,256
Currency forwards	—		213
Equity swaps	2,005		1,249
	$	2,266	$	2,718