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Investments of Operating Entities and Consolidated Funds
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investments of Operating Entities and Consolidated Funds 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. Certain securities owned, at fair value, 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 December 31, 2022 and 2021, securities owned, at fair value consisted of the following:
As of December 31,
 20222021
 (dollars in thousands)
Common stock$1,802,082 $2,425,993 
Preferred stock196,807 137,757 
Warrants and rights59,051 46,459 
Government bonds113,529 16,002 
Corporate bonds219,316 21,468 
Convertible bonds13,479 5,250 
Term loan (*)12,468 4,121 
Trade claims (*)5,440 2,988 
Private investments2,022 704 
$2,424,194 $2,660,742 
(*)The Company has elected the fair value option for securities owned, at fair value with a fair value of $7.9 million and $7.1 million as of December 31, 2022 and 2021, respectively.
Receivable on and Payable for derivative contracts, at fair value
The Company predominantly enters into derivative transactions to satisfy client needs and to manage its own exposure to market and credit risks resulting from its trading activities. The Company’s direct exposure to derivative financial instruments includes futures, currency forwards, equity swaps, interest rate swaps and options. The Company's derivatives trading activities
expose 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.
The Company's long and short exposure to derivatives is as follows:
Receivable on derivative contractsAs of December 31,
20222021
 Number of contracts / Notional ValueFair valueNumber of contracts / Notional ValueFair value
 (dollars in thousands)
Currency forwards$7,817 $44 $10,727 $80 
Equity swaps$1,460,575 644,912 $1,950,181 305,370 
Options (a)116,707 31,385 217,393 61,219 
Interest rate swap (c)$— — $285,000 1,208 
Netting - swaps (b)(181,650)(81,742)
$494,691 $286,135 
Payable for derivative contracts
As of December 31,
20222021
 Number of contracts / Notional ValueFair valueNumber of contracts / Notional ValueFair value
 (dollars in thousands)
Futures$— $— $9,378 $266 
Currency forwards$212,485 2,915 $149,575 1,346 
Equity swaps$1,377,169 218,747 $988,329 114,689 
Interest rate swaps (c)$400,000 218 $— — 
Options (a)98,069 9,466 182,440 36,192 
Netting - swap (b)(161,681)(92,330)
$69,665 $60,163 
(a) Includes the volume of contracts for index, equity, commodity future and cash conversion options.
(b) Derivatives are reported on a net basis, by counterparty, when a legal right of offset exists under an enforceable netting agreement as well as net of cash collateral received or posted under enforceable credit support agreements. See Note 2f for further information on offsetting of derivative financial instruments.
(c) Interest rate swap offsetting the Company's floating rate debt on the Company's term loan. See Note 16.
The following tables present the gross and net derivative positions and the related offsetting amount, as of December 31, 2022 and 2021. This table does not include the impact of over-collateralization.
Gross amounts offset on the Consolidated Statements of Financial Condition (a)
Net amounts included on the Consolidated Statements of Financial Condition
Gross amounts not offset in the Consolidated Statements of Financial Condition
Gross amounts recognizedFinancial instruments (a)Cash Collateral pledged (a)Net amounts
(dollars in thousands)
As of December 31, 2022
Receivable on derivative contracts, at fair value$676,341 $181,650 $494,691 $8,227 $426,168 $60,296 
Payable for derivative contracts, at fair value231,346 161,681 69,665 2,922 — 66,743 
As of December 31, 2021
Receivable on derivative contracts, at fair value$367,877 $81,742 $286,135 $1,421 $211,442 $73,272 
Payable for derivative contracts, at fair value152,493 92,330 60,163 2,839 — 57,324 
(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.
The realized and unrealized gains/(losses) related to derivatives trading activities were $(149.5) million, $(205.5) million and $(146.9) million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in Investment income- Securities principal transactions, net in the accompanying consolidated statements of operations. The net gains (losses) on derivative contracts in the table above are one of a number of activities comprising the Company's business activities and are calculated before consideration of economic hedging transactions, which generally offset the net gains (losses) included above.
Pursuant to the various derivatives transactions discussed above, except for exchange traded derivatives and certain options, the Company is required to post/receive collateral. These amounts are recognized in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations respectively. As of December 31, 2022 and 2021, all derivative contracts were with major financial institutions.
Other investments
As of December 31, 2022 and 2021, other investments included the following:
As of December 31,
 20222021
 (dollars in thousands)
Portfolio funds, at fair value (1)$132,285 $137,986 
Carried interest (2)65,892 88,925 
Equity method investments (3)27,006 47,200 
$225,183 $274,111 
(1) Portfolio funds, at fair value
The portfolio funds, at fair value as of December 31, 2022 and 2021, included the following:
As of December 31,
20222021
(dollars in thousands)
HealthCare Royalty Partners LP (a)(*)$578 $832 
HealthCare Royalty Partners II LP (a)(*)1,256 1,259 
Eclipse Ventures Fund I, L.P. (b)5,361 5,829 
Eclipse Ventures Fund II, L.P. (b)2,441 2,354 
Eclipse Continuity Fund I, L.P. (b)1,587 1,641 
Starboard Value and Opportunity Fund LP (c)(*)43,958 49,252 
Starboard Value and Opportunity Fund Ltd (c) (*)2,434 2,732 
Lagunita Biosciences, LLC (d)2,264 5,671 
Starboard Leaders Fund LP (e)(*)2,882 2,823 
Formation8 Partners Fund I, L.P. (f)16,379 20,992 
BDC Fund I Coinvest 1, L.P. (g) 1,250 1,250 
Difesa Partners, LP (h) 919 1,017 
Cowen Sustainable Investments I LP (i)(*)17,004 13,102 
Cowen Healthcare Investments II LP (i) (*)11,645 13,055 
Cowen Healthcare Investments III LP (i)(*)7,680 8,426 
Cowen Healthcare Investments IV LP (i)(*)3,397 1,071 
Eclipse SPV I, LP (j)(*)1,445 1,445 
TriArtisan ES Partners LLC (k)(*)2,083 1,805 
TriArtisan PFC Partners LLC (l)(*)1,163 1,112 
Ramius Merger Fund LLC (m)(*)1,711 1,692 
Gaingels 10X Capital Diversity Fund I, LP (n)(*)600 — 
HCRX Holdings, L.P. (o)(*)3,829 — 
Other private investment (p)(*)121 303 
Other affiliated funds (q)(*)298 323 
$132,285 $137,986 
* 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 27.
(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)Each of Eclipse Ventures Fund I, L.P., Eclipse Ventures Fund II, L.P. and Eclipse Continuity Fund I, L.P. are venture capital funds which invests in early stage and growth stage hardware companies. Distributions will be made when the underlying investments are liquidated.
(c)Starboard Value and Opportunity Fund LP and Starboard Value and Opportunity Fund Ltd are hedge funds with a focused and fundamental approach to investing in publicly traded US companies. Both funds permit 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)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.
(h)Difesa Partners, LP permits semi-annual withdrawals occurring on or after the anniversary of initial contribution upon 90 days written notice.
(i)Cowen Sustainable Investments I LP, Cowen Healthcare Investments II LP, Cowen Healthcare Investments III LP and Cowen Healthcare Investments IV 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)Gaingels 10X Capital Diversity Fund I, LP is a venture capital fund that primarily invests in portfolio companies embracing diversity and inclusion. Distributions will be made when the underlying investments are liquidated.
(o)HCRX Holdings, L.P. is a private operating company focusing primarily on healthcare royalty investments. Distributions upon realization will be made upon an investor's election subsequent to January 1st, 2026.
(p)Other private investment represents the Company's closed end investment in a portfolio fund that invests in a wireless broadband communication provider in Italy.
(q)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.
(2)Carried interest
The Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model in other investments in the accompanying consolidated statements of financial condition (see Note 2w). Carried interest allocated to the Company from certain portfolio funds represents Cowen's general partner capital accounts from those funds. These balances are subject to change upon cash distributions, additional allocations or reallocations back to limited partners within the respective funds. All carried interest balances are earned from affiliates of the Company.
A portion of the Company's carried interest is granted to employees through profit sharing awards designed to more closely align compensation with the overall realized performance of the Company. These arrangements enable certain employees to earn compensation based on performance revenue earned by the Company and are recorded within compensation payable in the accompanying consolidated statements of financial condition and employee compensation and benefits expense in the accompanying consolidated statements of operation based on the probable and estimable payments under the terms of the awards. 
The carried interest as of December 31, 2022 and 2021, included the following:
As of December 31,
20222021
(dollars in thousands)
Cowen Healthcare Investments II LP$19,112 $23,327 
Cowen Healthcare Investments III LP25,671 18,523 
Cowen Sustainable Investments I LP— 7,436 
Cowen Sustainable Investments Offshore I LP— 9,196 
CSI I Prodigy Co-Investment LP1,000 2,436 
CSI PRTA Co- Investment LP3,677 9,535 
TriArtisan TGIF Partners LLC4,290 4,047 
TriArtisan ES Partners LLC4,475 3,401 
TriArtisan PFC Partners LLC7,277 9,394 
TriArtisan SBE Partners LLC358 — 
Ramius Multi-Strategy Fund LP— 587 
Ramius Merger Fund LLC 32 861 
RCG IO Renergys Sarl— 136 
Other affiliated funds— 46 
$65,892 $88,925 
(3) Equity method investments
Equity method investments include investments held by the Company in several operating companies. 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. Included in equity method investments are the investments in (a) HealthCare Royalty Partners General Partners (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 investment funds and related managed accounts and (c) operating companies whose operations primarily include the day-to-day management of real estate entities. The Company recorded no impairment charges in relation to its equity method investments for the year ended December 31, 2022, 2021 and 2020.
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 December 31,
20222021
(dollars in thousands)
Starboard Value LP$20,806 $36,889 
HealthCare Royalty GP III, LLC 1,631 1,957 
HCR Canary Fund GP, LLC319 458 
HealthCare Royalty GP IV, LLC1,923 1,716 
RCG Longview Debt Fund IV Management, LLC391 331 
HCR Overflow Fund GP, LLC578 839 
 HCRP MGS Account Management, LLC 472 598 
HCR Stafford Fund GP, LLC— 2,955 
HCR Potomac Fund, L.P.— 925 
HCRX Master GP375 — 
Other511 532 
$27,006 $47,200 
The Company's income (loss) from equity method investments was December 31, 2022, 2021 and 2020 and $9.6 million, $35.5 million and $18.9 million, respectively, and is included in net gains (losses) on other investments on the accompanying 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 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 consolidated statements of financial condition. As of December 31, 2022 and 2021, securities sold, not yet purchased, at fair value consisted of the following:
As of December 31,
 20222021
 (dollars in thousands)
Common stock$910,458 $1,192,396 
Corporate bonds31 37 
Preferred stock3,085 9,009 
Warrants and rights— 6 
$913,574 $1,201,448 
Securities purchased under agreements to resell/securities sold under agreements to repurchase and securities lending and borrowing transactions
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 December 31, 2022 and 2021.
Gross amounts not offset on the Consolidated Statements of Financial Condition
Gross amounts recognized, net of allowance
Gross amounts offset on the Consolidated Statements of Financial Condition (a)
Net amounts included on the Consolidated Statements of Financial Condition
Additional Amounts AvailableFinancial instrumentsCash Collateral pledged (b)Net amounts
(dollars in thousands)
As of December 31, 2022
Securities borrowed$1,298,056 $— $1,298,056 $— $1,244,834 $— $53,222 
Securities loaned1,199,838 — 1,199,838 — 1,199,838 — — 
Securities purchased under agreements to resell121,718 — 121,718 — 120,953 — 765 
Securities sold under agreements to repurchase133,130 — 133,130 — 133,130 — — 
As of December 31, 2021
Securities borrowed1,704,603 — 1,704,603 — 1,652,007 — 52,596 
Securities loaned1,586,572 — 1,586,572 — 1,586,572 — — 
Securities sold under agreements to repurchase$63,469 $— $63,469 $— $63,469 $— $— 
(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 and securities sold under agreements to repurchase by remaining contractual maturity and class of collateral pledged as of December 31, 2022 and 2021:
Open and OvernightUp to 30 days31 - 90 daysGreater than 90 daysTotal
(dollars in thousands)
As of December 31, 2022
Securities loaned
    Common stock$992,173 $— $— $— $992,173 
    Corporate bonds207,665 — — — 207,665 
Securities purchased under agreements to resell
    Corporate bonds121,718 — — — 121,718 
Securities sold under agreements to repurchase
    Corporate bonds72,474 60,656 — — 133,130 
As of December 31, 2021
Securities loaned
    Common stock1,570,835 — — — 1,570,835 
    Corporate bonds15,737 — — — 15,737 
Securities sold under agreements to repurchase
    Common stock$— $20,906 $42,563 $— $63,469 
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 $8.9 billion and $444.5 million as of December 31, 2022 and $9.7 billion and $744.5 million as of December 31, 2021, respectively. The carrying value of the Company's exposure to loss for these variable interest entities as of December 31, 2022 was $137.0 million, and as of December 31, 2021 was $165.5 million, all of which is included in other investments, at fair value in the accompanying consolidated statements of financial condition. Additionally, the Company's maximum exposure to loss for the variable interest entities noted above as of December 31, 2022 and 2021, was $215.0 million and $233.6 million, respectively.  The maximum exposure to loss often differs from the carrying value of exposure to loss of the variable interests. The maximum exposure to loss is dependent on the nature of the variable interests in the VIEs and is limited to the notional amounts of certain commitments and guarantees.
b.    Consolidated Funds
Other investments, at fair value
Investments in portfolio funds, at fair value
As of December 31, 2022 and 2021, investments in portfolio funds, at fair value, included the following:
As of December 31,
20222021
(dollars in thousands)
Investments of Enterprise LP$49,832 $99,067 
$49,832 $99,067 
Consolidated portfolio fund investments of Enterprise LP    
On May 12, 2010, the Company announced its intention to close its master fund, Ramius Enterprise Master Fund Ltd ("Enterprise Master"). Enterprise LP operated under a "master-feeder" structure up until January 1, 2019, when Enterprise Master distributed its capital to each feeder and was liquidated. As of December 31, 2022 and 2021, the consolidated investments in portfolio funds include Enterprise LP's investment in RCG Special Opportunities Fund, Ltd which is a portfolio fund that invests in a limited number of private equity investments directly as well as through affiliated portfolio funds.
Indirect Concentration of the Underlying Investments Held by Consolidated Funds
From time to time, either directly held by the Company, indirectly through the Company's consolidated entities 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 December 31, 2022 and 2021, 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 were two indirect concentrations that exceeded 5% of the Company's equity as of December 31, 2022 and one that exceeded 5% of the Company's equity at December 31, 2021.
Through its investments in a Consolidated Fund and combined with direct Company investments, the Company maintained exposure to Linkem S.p.A which accounted for 5% or more of the Company's equity as of both December 31, 2021 and December 31, 2022. As of December 31, 2022, through its investments in a consolidated special purpose vehicle, the Company maintained exposure to Polysign, Inc which accounted for 5% or more of the Company's equity.
Investment's percentage of the Company's stockholders' equity
IssuerSecurity TypeCountryIndustryPercentage of Stockholders' EquityMarket Value
(dollars in thousands)
As of December 31, 2022Polysign, IncPreferred - Series B and CUnited States of America Financial Technology5.37 %$57,165 
As of December 31, 2021Linkem S.p.A.Equity and warrantsItalyWireless Broadband8.22 %$83,537