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Related Party Transactions
 9 Months Ended
Jul. 31, 2013
Related Party Transactions Disclosure [Abstract]  
Related Party Transactions

20. Related Party Transactions

 

Funds

 

The Company is an investment advisor to, and has administrative agreements with, certain sponsored funds, privately offered equity funds and closed-end funds for which certain employees are officers and/or directors. Substantially all of the services to these entities for which the Company earns a fee, including investment advisory, distribution, shareholder and administrative, are provided under contracts that set forth the services to be provided and the fees to be charged. These contracts are subject to annual review and approval by the funds' boards of directors or trustees. Revenue for services provided or related to these funds for the three and nine months ended July 31, 2013 and 2012 are as follows:

  Three Months Ended  Nine Months Ended
  July 31,  July 31,
(in thousands) 2013 2012  2013 2012
Investment advisory and administrative fees$ 214,894$ 183,469 $ 608,876$ 555,622
Distribution fees  20,350  19,982   60,268  60,757
Service fees  32,259  30,760   94,521  95,124
Shareholder services fees  752  616   1,840  1,843
Other revenue  442  -   845  -
Total$ 268,697$ 234,827 $ 766,350$ 713,346

For the three months ended July 31, 2013 and 2012, the Company had investment advisory agreements with certain sponsored funds pursuant to which the Company contractually waived $2.5 million and $2.1 million of investment advisory fees it was otherwise entitled to receive, respectively. For the nine months ended July 31, 2013 and 2012, the Company waived $6.9 million and $6.7 million, respectively, of investment advisory fees it was otherwise entitled to receive.

 

Sales proceeds and net realized gains (losses) from investments in sponsored funds classified as available-for-sale for the three and nine months ended July 31, 2013 and 2012 are as follows:

  Three Months Ended  Nine Months Ended
  July 31,  July 31,
(in thousands) 2013 2012  2013 2012
Proceeds from sales $ 2,927$ 16,390 $ 42,217$ 56,396
Net realized gains (losses)  180  (189)   5,431  (65)

The Company bears the non-advisory expenses of certain sponsored funds for which it earns an all-in management fee and provides subsidies to startup and other smaller sponsored funds to enhance their competitiveness. For the three months ended July 31, 2013 and 2012, expenses of $5.5 million and $5.3 million, respectively, were incurred by the Company pursuant to these arrangements. For the nine months ended July 31, 2013 and 2012, expenses of $16.2 million and $14.0 million, respectively, were incurred by the Company pursuant to these arrangements.

 

Included in investment advisory fees and other receivables at July 31, 2013 and October 31, 2012 are receivables due from sponsored funds of $92.0 million and $84.4 million, respectively.

 

Employee Loan Program

 

The Company has established an Employee Loan Program under which a program maximum of $20.0 million is available for loans to officers (other than executive officers) and other key employees of the Company for purposes of financing the exercise of employee stock options. Loans are written for a seven-year period, at varying fixed interest rates (currently ranging from 0.9 percent to 5.0 percent), are payable in annual installments commencing with the third year in which the loan is outstanding, and are collateralized by the stock issued upon exercise of the option. All loans under the program must be made on or before October 31, 2014. Loans outstanding under the program, which are full recourse in nature, are reflected as notes receivable from stock option exercises in shareholders' equity and amounted to $6.9 million and $4.2 million at July 31, 2013 and October 31, 2012, respectively.