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Investments

12 Months Ended

Oct. 31, 2019

Investments [Abstract]

4.Investments

The following is a summary of investments at October 31, 2019 and 2018:

	(in thousands)			2019		2018
	Investments held at fair value:
	Short-term debt securities			$	297,845	$	273,320
	Debt and equity securities held by consolidated sponsored funds				514,072		540,582
	Debt and equity securities held in separately managed accounts				76,662		89,121
	Non-consolidated sponsored funds and other				10,329		10,329
	Total investments held at fair value				898,908		913,352
	Investments held at cost				20,904		20,874
	Investments in non-consolidated CLO entities				1,417		2,895
	Investments in equity method investees				139,510		141,506
	Total investments⁽¹⁾⁽²⁾			$	1,060,739	$	1,078,627

	⁽¹⁾	Excludes bank loans and other investments held by consolidated CLO entities, which are discussed in Note 6.
	⁽²⁾	Amounts at October 31, 2019 reflect the adoption of ASU 2016-01. Amounts at October 31, 2018 reflect accounting guidance prior to the adoption of ASU 2016-01. See Note 1 for further information.

The Company recognized gains (losses) related to debt and equity securities held at fair value within gains and other investment income, net, on the Company’s Consolidated Statements of Income at October 31, 2019, 2018 and 2017 as follows.

	(in thousands)			2019		2018		2017
	Realized gains (losses) on securities sold			$	(505)	$	6,951	$	6,972
	Unrealized gains (losses) on investments held at fair value				20,416		(22,814)		15,872
	Net gains (losses) on investments held at fair value⁽¹⁾			$	19,911	$	(15,863)	$	22,844

	⁽¹⁾	Amounts for the year ended October 31, 2019 reflect the adoption of ASU 2016-01. The prior year gains and losses arising from changes in the fair value of investments reflect accounting guidance prior to the adoption of ASU 2016-01. See Note 1 for further information.

Investments held at cost

Investments held at cost primarily include the Company’s equity investment in a wealth management technology firm. At both October 31, 2019 and 2018, the carrying value of the Company’s investment in the wealth management technology firm was $19.0 million. At both October 31, 2019 and 2018, there were no indicators of impairments related to investments carried at cost.

Investments in non-consolidated CLO entities

The Company provides investment management services for, and has made direct investments in, CLO entities that it does not consolidate, as described further in Note 6. The Company’s investments in non-consolidated CLO entities are carried at amortized cost unless impaired, at which point they are written down to fair value. At October 31, 2019 and 2018, the carrying values of such investments were $1.4 million and $2.9 million, respectively. At October 31, 2019 and 2018, combined assets under management in the pools of non-consolidated CLO entities were $0.4 billion and $0.8 billion, respectively.

The Company did not recognize any impairment losses related to the Company’s investments in non-consolidated CLO entities during the year ended October 31, 2019. The Company recognized $0.2 million and $0.4 million of impairment losses related to the Company’s investments in non-consolidated CLO entities during the years ended October 31, 2018 and 2017, respectively.

Investments in equity method investees

The Company has a 49 percent interest in Hexavest Inc. (Hexavest), a Montreal, Canada-based investment adviser. The carrying value of this investment at October 31, 2019 and 2018 consisted of the following:

	(in millions)		2019		2018
	Equity in net assets of Hexavest	$	5.5	$	6.0
	Definite-lived intangible assets		19.5		21.3
	Goodwill		116.3		116.4
	Deferred tax liability		(5.3)		(5.7)
	Total carrying value	$	136.0	$	138.0

The Company’s investment in Hexavest is denominated in Canadian dollars and is subject to foreign currency translation adjustments, which are recorded in accumulated other comprehensive income (loss). The year-over-year change in the carrying value of goodwill is entirely attributable to foreign currency translation adjustments.

The Company also has a seven percent equity interest in a private equity partnership managed by a third party that invests in companies in the financial services industry. At both October 31, 2019 and 2018, the carrying value of this investment was $3.5 million.

The Company did not recognize any impairment losses related to its investments in equity method investees during the years ended October 31, 2019, 2018 or 2017.

During the years ended October 31, 2019, 2018 and 2017, the Company received dividends of $10.9 million, $12.2 million and $11.4 million, respectively, from its investments in equity method investees.