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Investments of Operating Entities and Consolidated Funds - (Tables)

9 Months Ended

Sep. 30, 2020

As of September 30, 2020 and December 31, 2019, securities owned, at fair value consisted of the following:


	As of September 30, 2020		As of December 31, 2019



	(dollars in thousands)
Common stock	$	920,849	$	1,546,484
Preferred stock	63,605		12,656
Warrants and rights	20,505		22,109
Government bonds	20,324		15,916
Corporate bonds	36,701		25,500
Convertible bonds	5,081		2,500
Term loan (*)	12,111		1,067
Trade claims (*)	9,390		7,320

	$	1,088,566	$	1,633,552

(*)The Company has elected the fair value option for securities owned, at fair value with a fair value of $9.0 million and $8.4 million, respectively, at September 30, 2020 and December 31, 2019.

Schedule of Derivative Instruments

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


Receivable on derivative contracts	As of September 30, 2020				As of December 31, 2019



	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)

Currency forwards	$	82,100	$	870	$	—	$	—
Swaps	$	244,090	4,644		$	383,752	2,911
Options other (a)	256,841		52,680		550,188		60,066


			$	58,194			$	62,977

(a) Includes the volume of contracts for index, equity, commodity future and cash conversion options.


Payable for derivative contracts	As of September 30, 2020				As of December 31, 2019



	Number of contracts / Notional Value		Fair value		Number of contracts / Notional Value		Fair value
	(dollars in thousands)
Futures	$	9,895	$	123	$	10,224	$	217
Currency forwards	$	103,500	717		$	77,790	851
Swaps	$	376,331	7,514		$	607,717	23,169
Options other (a)	252,576		53,700		306,306		36,524
			$	62,054			$	60,761

(a) Includes the volume of contracts for 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, 2020 and December 31, 2019. This table does not include the impact of over-collateralization.


			Gross amounts offset on the Condensed Consolidated Statements of Financial Condition (a)		Net amounts included on the Condensed Consolidated Statements of Financial Condition		Gross amounts not offset in the Condensed Consolidated Statements of Financial Condition
	Gross amounts recognized						Financial instruments		Cash Collateral pledged		Net amounts
	(dollars in thousands)
As of September 30, 2020
Receivable on derivative contracts, at fair value	$	80,780	$	22,586	$	58,194	$	3,631	$	60	$	54,503
Payable for derivative contracts, at fair value	67,295		5,241		62,054		3,631		2,777		55,646

As of December 31, 2019
Receivable on derivative contracts, at fair value	$	66,217	$	3,240	$	62,977	$	—	$	2,911	$	60,066
Payable for derivative contracts, at fair value	64,001		3,240		60,761		—		24,020		36,741

(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.

Schedule of Other Investments

As of September 30, 2020 and December 31, 2019, other investments included the following:


	As of September 30, 2020		As of December 31, 2019



	(dollars in thousands)
Portfolio funds, at fair value (1)	$	123,787	$	114,504
Carried interest (2)	47,343		30,360
Equity method investments (3)	33,480		40,858

	$	204,610	$	185,722

Schedule of Other Investments, Portfolio Funds

The Portfolio Funds, at fair value as of September 30, 2020 and December 31, 2019, included the following:


	As of September 30, 2020		As of December 31, 2019



	(dollars in thousands)
Starboard Value and Opportunity Fund (c)(*)	$	41,354	$	37,895
Formation8 Partners Fund I, L.P. (f)	31,916		33,613
Cowen Healthcare Investments II LP (i) (*)	20,691		14,652
Lagunita Biosciences, LLC (d)	4,124		4,802
Eclipse Ventures Fund I, L.P. (b)	4,464		3,960
HealthCare Royalty Partners II LP (a)(*)	1,627		1,781
RCG Longview Debt Fund V, L.P. (g)(*)	1,232		1,732

HealthCare Royalty Partners LP (a)(*)	1,157		1,326

Starboard Leaders Fund LP (e)(*)	1,656		1,560
Eclipse SPV I, LP (j)(*)	1,680		1,447
Ramius Merger Fund LLC (m)(*)	1,952		—
TriArtisan ES Partners LLC (k)(*)	1,342		1,082
Cowen Healthcare Investments III LP (i)(*)	4,346		1,398
TriArtisan PFC Partners LLC (l)(*)	628		909
RCG Longview Equity Fund, LP (g) (*)	445		835




Difesa Partners, LP (h) (*)	681		508
BDC Fund I Coinvest 1, L.P. (n) (*)	1,250		—
Other private investment (o)(*)	315		4,448
Other affiliated funds (p)(*)	2,927		2,556
	$	123,787	$	114,504

* 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 17.

(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 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 investor's 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. and RCG Longview Equity Fund, LP are real estate private equity structures. The timing of distributions depends on the nature of the underlying investments and therefore will be made either quarterly or when the underlying investments are liquidated.

(h)Difesa Partners, LP permits semi-annual withdrawals occurring on or after the anniversary of initial contribution upon 90 days written notice.

(i)Cowen Healthcare Investments II LP and Cowen Healthcare Investments III LP are private equity funds. Distributions are made from the fund when cash flows or securities are received from the underlying investments. Investors do not have redemption rights.

(j)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.

(k)TriArtisan ES Partners LLC is a co-investment vehicle organized to invest in a privately held nuclear services company. Distributions will be made when the underlying investment is liquidated.

(l)TriArtisan PFC Partners LLC is a co-investment vehicle organized to invest in a privately held casual dining restaurant chain. Distributions will be made when the underlying investment in liquidated.

(m)Ramius Merger Fund LLC permits monthly withdrawals on 45 days prior notice.

(n)BDC Fund I Coinvest 1, L.P. is a private equity fund focused on investing in growth companies in industries disrupted by digitization. Distributions will be made when the underlying investments are liquidated.

(o)Other private investment represents the Company's closed end investment in a Portfolio Fund that invests in a wireless broadband communication provider in Italy.

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

Carried Interest

The carried interest as of September 30, 2020 and December 31, 2019, included the following:


	As of September 30, 2020		As of December 31, 2019



	(dollars in thousands)
Cowen Healthcare Investments II LP	$	35,829	$	23,759
Cowen Healthcare Investments III LP	5,357		—
TriArtisan TGIF Partners LLC	2,881		—
TriArtisan ES Partners LLC	1,354		—
TriArtisan PFC Partners LLC	1,116		—
Ramius Multi-Strategy Fund LP	612		—
Ramius Merger Fund LLC	13		—
Other private investment (a)	—		4,737
RCG IO Renergys Sarl	181		1,251
Ramius Multi-Strategy Fund LP	—		613
	$	47,343	$	30,360

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

Schedule Equity Method Investments

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



	As of September 30, 2020		As of December 31, 2019


	(dollars in thousands)
Starboard Value LP	$	25,392	$	24,292
Surf House Ocean Views Holdings, LLC	—		7,804
HealthCare Royalty GP III, LLC	2,198		2,230
RCG Longview Debt Fund V Partners, LLC	1,721		2,889
RCG Longview Management, LLC	253		583

HealthCare Royalty GP, LLC	675		108
HealthCare Royalty GP II, LLC	276		302
RCG Longview Debt Fund IV Management, LLC	331		331

RCG Longview Equity Management, LLC	105		105


HCR Stafford Fund GP, LLC	850		880
Liberty Harbor North	292		292
Other	1,387		1,042
	$	33,480	$	40,858

Schedule of Securities Sold, Not yet Purchased

As of September 30, 2020 and December 31, 2019, securities sold, not yet purchased, at fair value consisted of the following:


	As of September 30, 2020		As of December 31, 2019


	(dollars in thousands)

Common stock	$	404,409	$	425,448
Corporate bonds	15,324		5,933
Government bonds	1,500		1,950
Preferred stock	10,767		3,686
Warrants and rights	8,930		14,819
	$	440,930	$	451,836

Schedule of Assets and Associated Liabilities Accounted for as Secured Borrowings

The following tables present the contractual gross and net securities borrowing and lending agreements and securities sold under agreements to repurchase and the related offsetting amount as of September 30, 2020 and December 31, 2019.


							Gross amounts not offset on the Condensed Consolidated Statements of Financial Condition
	Gross amounts recognized, net of allowance		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, 2020
Securities borrowed	$	1,272,428	$	—	$	1,272,428	$	—	$	1,213,253	$	—	$	59,175
Securities loaned	1,326,917		—		1,326,917		—		1,278,129		—		48,788
Securities sold under agreements to repurchase	6,218		—		6,218		—		7,587		—		(1,369)

As of December 31, 2019
Securities borrowed	$	754,441	$	—	$	754,441	$	—	$	751,913	$	—	$	2,528
Securities loaned	1,601,866		—		1,601,866		—		1,585,036		—		16,830
Securities sold under agreements to repurchase	23,244		—		23,244		—		27,384		—		(4,140)

(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.

Investments Classified by Contractual Maturity Date

The following tables present gross obligations for securities loaned and securities sold under agreements to repurchase by remaining contractual maturity and class of collateral pledged as of September 30, 2020 and December 31, 2019:


	Open and Overnight		Up to 30 days		31 - 90 days		Greater than 90 days		Total
	(dollars in thousands)
As of September 30, 2020
Securities loaned
Common stock	$	933,956	$	—	$	—	$	—	$	933,956
Corporate bonds	392,961		—		—		—		392,961
Securities sold under agreements to repurchase	—		—		6,218		—		6,218
As of December 31, 2019
Securities loaned
Common stock	$	1,343,478	$	—	$	—	$	—	$	1,343,478
Corporate bonds	258,388		—		—		—		$	258,388
Securities sold under agreements to repurchase	—		—		23,244		—		$	23,244

Fair Value, Concentration of Risk

Investment's percentage of the Company's stockholders' equity

Issuer

Security Type

Country

Industry

Percentage of Stockholders' Equity

Market Value

(dollars in thousands)

As of September 30, 2020

Linkem

Equity, loans and warrants

Italy

Wireless Broadband

9.01

82,074

As of December 31, 2019

Linkem

Equity, loans and warrants

Italy

Wireless Broadband

9.53

77,142

Significant subsidiary - equity method [Member]

Investment Holdings [Line Items]

Schedule Equity Method Investments

For the periods ended September 30, 2020 and December 31, 2019 and for the nine months periods ended September 30, 2020 and September 30, 2019, certain investments subject to Regulation S-X Rule 10-01(b)(1) of the SEC guidance held by the Company have met the significance criteria as defined thereunder. As such, the Company is required to present summarized

financial information for these significant investees as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019, and such information is as follows:


Other equity method investments	As of September 30, 2020		As of December 31, 2019


	(dollars in thousands)
Assets	$	59,379	$	95,825
Liabilities	—		82,482
Equity	$	59,379	$	13,343


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(dollars in thousands)
Revenues	$	274	$	4,564	$	54,717	$	83,287
Expenses	—		—		—		—
Net realized and unrealized gains (losses)	77		55		412		717


Net income	$	351	$	4,619	$	55,129	$	84,004

Consolidated Funds

Investment Holdings [Line Items]

Marketable Securities

As of September 30, 2020 and December 31, 2019, securities owned, at fair value, held by the Consolidated Funds consisted of the following:


	As of September 30, 2020		As of December 31, 2019



	(dollars in thousands)
Preferred stock	$	—	$	4,393
Common stock	106,549		200,306
Government bonds	—		161,607
Corporate bonds	—		3,405
Convertible bonds	75,538		—
Warrants and rights	5,904		5,567
	$	187,991	$	375,278

Schedule of Derivative Instruments

As of September 30, 2020 and December 31, 2019, receivable on derivative contracts, at fair value, held by the Consolidated Funds are comprised of:


	As of September 30, 2020		As of December 31, 2019


	(dollars in thousands)
Currency forwards	$	—	$	3,302
Equity swaps	—		927
Options	—		1,604
	$	—	$	5,833

Payable for derivative contracts

As of September 30, 2020 and December 31, 2019, payable for derivative contracts, at fair value, held by the Consolidated Funds are comprised of:


	As of September 30, 2020		As of December 31, 2019


	(dollars in thousands)
Currency forwards	$	—	$	88
Equity swaps	—		3,931
Options	—		750
	$	—	$	4,769

Schedule of Other Investments, Portfolio Funds

Investments in Portfolio Funds, at fair value

As of September 30, 2020 and December 31, 2019, investments in Portfolio Funds, at fair value, included the following:


	As of September 30, 2020		As of December 31, 2019
	As of December 31,
	2020		2019
	(dollars in thousands)
Investments of Enterprise LP	$	98,016	$	99,153
Investments of Merger Fund	—		76,616

Investment of Prodigy HoldCo	251		—
	$	98,267	$	175,769

Merger Master

Investment Holdings [Line Items]

Marketable Securities

Merger Master


	As of December 31, 2019


Securities owned by Merger Master, at fair value	(dollars in thousands)

Common stock	$	76,531
Warrants and rights	748
Corporate bonds	2,074
	$	79,353

Securities sold, not yet purchased, by Merger Master, at fair value
Common stock	$	29,623
Exchange traded funds	38,527
	$	68,150

Schedule of Derivative Instruments

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


	As of December 31, 2019



Description	(dollars in thousands)
Options	$	2,047
Equity swaps	406

	$	2,453

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


	As of December 31, 2019



Description	(dollars in thousands)
Options	$	1,158

Equity swaps	268
	$	1,426