Investments

3 Months Ended

Jan. 31, 2013

Investments Disclosure [Abstract]

Investments

5. Investments

The following is a summary of investments at January 31, 2013 and October 31, 2012:

(in thousands)	January 31, 2013		October 31, 2012
Investment securities, trading:
Consolidated sponsored funds	$	176,269	$	157,405
Separately managed accounts		38,965		32,848
Total investment securities, trading		215,234		190,253
Investment securities, available-for-sale		23,072		31,148
Investment in non-consolidated CLO entity		398		350
Investments in equity method investees		236,095		257,652
Investments, other		7,530		7,530
Total investments(1)	$	482,329	$	486,933
(1) Excludes the Company's investment in its consolidated CLO entity, which is discussed in Note 9.

Investment securities, trading

Investment securities, trading, consist of debt and equity securities held in the portfolios of consolidated sponsored funds and separately managed accounts. The following is a summary of the fair value of investments classified as trading at January 31, 2013 and October 31,2012:

(in thousands)	January 31, 2013		October 31, 2012
Debt securities	$	51,882	$	70,805
Equity securities		163,352		119,448
Total investment securities, trading	$	215,234	$	190,253

The Company recognized trading gains related to trading securities still held at the reporting date of $9.5 million and $5.8 million for the three months endedJanuary 31, 2013and 2012, respectively.

Investment securities, available-for-sale

Investment securities, available-for-sale, consist exclusively of seed investments in certain Company-sponsored funds. The following is a summary of the gross unrealized gains and (losses) included in accumulated other comprehensive income related to securities classified as available-for-sale at January 31,2013and October 31,2012:

January 31, 2013				Gross Unrealized
(in thousands)	Cost		Gains		Losses		Fair Value
Sponsored funds	$	18,133	$	4,941	$	(2)	$	23,072
October 31, 2012				Gross Unrealized
(in thousands)	Cost		Gains		Losses		Fair Value
Sponsored funds	$	22,331	$	8,835	$	(18)	$	31,148

Net unrealized holding(losses) gains on investment securities, available-for-sale, included in other comprehensive (loss)incomewere $(3.9) million and $1.2 million for the three months ended January 31, 2013 and 2012respectively.

The Company reviewed gross unrealized losses of $2,000as of January 31, 2013 and determined that these losses were not other-than-temporary, primarily because the Company has both the ability and intent to hold the investments for a period of time sufficient to recover such losses. The aggregate fair value of investments with unrealized losses was $0.3 million at January 31, 2013. No investment with a gross unrealized loss has been in a loss position for greater than one year.

The following is a summary of the Company's realized gains and losses upon disposition of sponsored funds classified as available-for-sale for the three months ended January 31, 2013 and 2012:

	Three Months Ended
	January 31,
(in thousands)	2013		2012
Gains	$	4,909	$	84
Losses		-		(21)
Net realized gains	$	4,909	$	63

Investments in equity method investees

On August 6, 2012, the Company completed the purchase of a 49 percent interest in Hexavest Inc. (“Hexavest”), a Montreal, Canada-based investment advisor that provides discretionary management of equity and tactical asset allocations using a predominantly top-down investment style. The Company accounted for the purchase using the equity method. As of January 31, 2013, the investment in Hexavest was comprised of $4.5 million of equity in the net assets of Hexavest, intangible assets of $42.1 million, goodwill of $146.7 million and a deferred tax liability of $11.3 million, for a total carrying value of $182.0 million. As of October 31, 2012, the investment in Hexavest was comprised of $3.4 million of equity in the net assets of Hexavest, intangible assets of $42.7 million, goodwill of $146.6 million and a deferred tax liability of $11.5 million, for a total carrying value of $181.2 million. The Company will be obligated to make two additional payments in respect of the acquired interest if Hexavest exceeds defined annual revenue thresholds in the first and second twelve-month periods following the closing. These payments would be considered goodwill and will be recorded as additions to the carrying amount of the equity method investment. The Company's interest in finite-lived intangible assets acquired in the transaction is being amortized over an estimated useful life of seventeen years.

In connection with the transaction, the Company also acquired an option, executable in fiscal 2017, to purchase an additional 26 percent interest in Hexavest. As part of the purchase price allocation, a value of $8.3 million was assigned to this option. The option is included in other assets in the Company's Consolidated Balance Sheet at January 31, 2013 and October 31, 2012.

The Company has a 7 percentequity interest in a private equity partnership managed by a third party that invests in companies in the financial services industry. The Company's investment in the partnership was $9.5million and $9.8 million at January 31, 2013 and October 31, 2012, respectively.

The Company had equity-method investments in the following Eaton Vance-managed funds as of January 31, 2013 and October 31,2012:

		Equity Ownership Interest (%)		Carrying Value ($)(1)
		January 31,	October 31,		January 31,		October 31,
(dollar amounts in thousands)		2013	2012		2013		2012
Eaton Vance Richard Bernstein
All Asset Strategy Fund		24%	44%	$	14,166	$	23,341
Eaton Vance Real Estate Fund		39%	48%		13,213		16,494
Eaton Vance Municipal
Opportunities Fund		35%	-		11,170		-
Eaton Vance Tax-Advantaged Bond
Strategies Long Term Fund		21%	31%		6,055		10,346
AGF Floating Rate Income Fund		-	21%		-		15,334
Eaton Vance Parametric Structured
Currency Fund		-	33%		-		1,043
Total				$	44,604	$	66,558
(1)	The carrying value of equity method investments in Eaton Vance-managed funds is measured based on the funds’ net asset
	values. The Company has the ability to redeem its investments in these funds at any time. Not shown are Company investments
	in certain of the above-listed funds that were not accounted for as equity method investments as of the indicated date.

The Company did not recognize any impairment losses related to its investments in equity method investees during the three months endedJanuary 31,2013 or2012, respectively.

During the three months endedJanuary 31, 2013 and 2012, the Company received dividends of $3.1 million and $10.2 million, respectively, from its investments in equity method investees.