As discussed in Note 1, accounting standards define fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standards establish a fair value measurement hierarchy that prioritizes inputs to valuation techniques and gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The following tables summarize financial assets and liabilities measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy at October 31, 2014 and 2013:

October 31, 2014
(in thousands)		Level 1		Level 2		Level 3			Other Assets Not Held at Fair Value		Total

Financial assets:
Cash equivalents	$	19,599	$	60,312	$	-		$	-	$	79,911
Investments:
Investment securities, trading:
Short-term debt		-		156,972			-		-		156,972
Other debt - consolidated sponsored funds
and separately managed accounts		10,799		73,025			-		-		83,824
Equity - consolidated sponsored funds
and separately managed accounts		86,504		53,745			-		-		140,249
Investment securities, available-for-sale		23,600		6,567		-			-		30,167
Investments in non-consolidated CLO
entities⁽¹⁾		-		-		-			4,033		4,033
Investments in equity method investees⁽²⁾		-		-		-			206,352		206,352
Investments, other⁽³⁾		-		61		-			2,947		3,008
Derivative instruments		-		4,416		-			-		4,416
Assets of consolidated CLO entity:
Cash equivalents		8,697		-		-			-		8,697
Bank loans and other investments		-		146,315		801			-		147,116
Total financial assets	$	149,199	$	501,413	$	801		$	213,332	$	864,745

Financial liabilities:
Derivative instruments	$	-	$	2,618	$	-		$	-	$	2,618
Securities sold, not yet purchased		-		981		-			-		981
Liabilities of consolidated CLO entity:
Senior and subordinated note obligations		-		2,672		149,310			-		151,982
Total financial liabilities	$	-	$	6,271	$	149,310		$	-	$	155,581

October 31, 2013
(in thousands)			Level 1		Level 2		Level 3			Other Assets Not Held at Fair Value		Total

Financial assets:
Cash equivalents		$	104,261	$	2,900	$	-		$	-	$	107,161
Investments:
Investment securities, trading:
Short-term debt			-		20,116			-		-		20,116
Other debt - consolidated sponsored funds
and separately managed accounts			7,053		90,597			-		-		97,650
Equity - consolidated sponsored funds
and separately managed accounts			61,615		56,143			-		-		117,758
Investment securities, available-for-sale			17,083		5,644			-		-		22,727
Investments in non-consolidated CLO
entities⁽¹⁾			-		-		-			5,378		5,378
Investments in equity method investees⁽²⁾			-		-		-			269,683		269,683
Investments, other⁽³⁾			-		60		-			2,951		3,011
Derivative instruments			-		334		-			-		334
Assets of consolidated CLO entities:
Cash equivalents			29,970		-		-			-		29,970
Bank loans and other investments			-		684,436		1,245			-		685,681
Total financial assets		$	219,982	$	860,230	$	1,245		$	278,012	$	1,359,469

Financial liabilities:
Derivative instruments		$	-	$	8,412	$	-		$	-	$	8,412
Securities sold, not yet purchased			-		687		-			-		687
Liabilities of consolidated CLO entities:
Senior and subordinated note obligations			-		2,651		276,476			-		279,127
Total financial liabilities		$	-	$	11,750	$	276,476		$	-	$	288,226

⁽¹⁾	The Company’s investments in these CLO entities are measured at fair value on a non-recurring basis using Level 3 inputs.
	The investments are carried at amortized cost (or cost for warehouse stage entities) unless facts and circumstances
	indicate that the investments have been impaired, at which time the investments are written down to fair value. There was
	no re-measurement of these assets during the years ended October 31, 2014 or 2013.
⁽²⁾	Investments in equity method investees are not measured at fair value in accordance with GAAP.
⁽³⁾	Investments, other, includes investments carried at cost that are not measured at fair value in accordance with GAAP.

Cash equivalents include investments in money market funds, holdings of Treasury and government agency securities, and commercial paper with original maturities of less than three months. Cash investments in actively traded money market funds are valued using published net asset values and are classified as Level 1 within the fair value measurement hierarchy. Treasury and government agency securities are valued based upon quoted market prices for similar assets in active markets, quoted prices for identical or similar assets that are not active, and inputs other than quoted prices that are observable or corroborated by observable market data. The carrying amounts of commercial paper are measured at amortized cost, which approximates fair value due to the short time between the purchase and expected maturity of the investments. Depending on the nature of the inputs, these assets are generally classified as Level 1 or 2 within the fair value measurement hierarchy.

Short-term debt securities include certificates of deposit, commercial paper and corporate debt obligations with remaining maturities from three months to 12 months. Short-term debt securities held are generally valued on the basis of valuations provided by third-party pricing services, as derived from such services' pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker-dealer quotations, prices or yields of securities with similar characteristics, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Depending on the nature of the inputs, these assets are generally classified as Level 1 or 2 within the fair value measurement hierarchy.

Other debt securities classified as trading include debt obligations held in the portfolios of consolidated sponsored funds and separately managed accounts. Other debt securities held are generally valued on the basis of valuations provided by third-party pricing services as described above for investment securities, trading – short-term debt. Other debt securities purchased with a remaining maturity of 60 days or less (excluding those that are non-U.S. denominated, which typically are valued by a third-party pricing service or dealer quotes) are generally valued at amortized cost, which approximates fair value. Depending upon the nature of the inputs, these assets are generally classified as Level 1 or 2 within the fair value measurement hierarchy.

Equity securities classified as trading include foreign and domestic equity securities held in the portfolios of consolidated sponsored funds and separately managed accounts. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices. When valuing foreign equity securities that meet certain criteria, the portfolios use a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities. In addition, the Company performs its own independent back test review of fair values versus the subsequent local market opening prices when available. Depending upon the nature of the inputs, these assets generally are classified as Level 1 or 2 within the fair value measurement hierarchy.

Investment securities classified as available-for-sale include investments in sponsored mutual funds and privately offered equity funds. Sponsored mutual funds are valued using published net asset values and are classified as Level 1 within the fair value measurement hierarchy. Investments in sponsored privately offered equity funds and portfolios that are not listed on an active exchange but have net asset values that are comparable to mutual funds and have no redemption restrictions are classified as Level 2 within the fair value measurement hierarchy.

Derivative instruments, which include foreign exchange contracts, stock index futures contracts, commodity futures contracts and interest rate futures contracts, are recorded as either other assets or other liabilities on the Company's Consolidated Balance Sheets. Foreign exchange contracts are valued by interpolating a value using the spot foreign exchange rate and forward points, which are based on spot rate and currency interest rate differentials. Stock index futures contracts, commodity futures contracts and interest rate futures contracts are valued using a third-party pricing service that determines fair value based on bid and ask prices. Derivative instruments generally are classified as Level 2 within the fair value measurement hierarchy.

Assets of consolidated CLO entities include investments in bank loans, debt securities, money market funds, equity securities and warrants. Fair value is determined utilizing unadjusted quoted market prices when available. Investments in money market funds are valued using published net asset values and are classified as Level 1 within the fair value measurement hierarchy. Debt securities, equity securities and warrants are valued using the same techniques as described above for trading securities. Interests in senior floating-rate loans for which reliable market quotations are readily available are valued generally at the average mid-point of bid and ask quotations obtained from a third-party pricing service. Fair value may also be based upon valuations obtained from independent third-party brokers or dealers utilizing matrix pricing models that consider information regarding securities with similar characteristics. In certain instances, fair value has been determined utilizing discounted cash flow analyses or single broker non-binding quotes. Depending on the nature of the inputs, these assets are classified as Level 1, 2 or 3 within the fair value measurement hierarchy.

Securities sold, not yet purchased, are recorded as other liabilities on the Company's Consolidated Balance Sheets and are valued by a third-party pricing service that determines fair value based on bid and ask prices. Securities sold, not yet purchased, generally are classified as Level 2 within the fair value measurement hierarchy.

Liabilities of consolidated CLO entities include debt securities and senior and subordinated note obligations. Debt securities are valued based upon quoted prices for identical or similar liabilities that are not active and inputs other than quoted prices that are observable or corroborated by observable market data. Senior and subordinated notes are valued utilizing an income-approach model in which one or more significant inputs are unobservable in the market. A full description of the valuation technique is included below within the valuation process disclosure. Depending on the nature of the inputs, these liabilities are classified as Level 2 or 3 within the fair value measurement hierarchy.

The following table summarizes fair value transfers between Level 1 and Level 2 of the fair value measurement hierarchy for the years ended October 31, 2014 and 2013:

(in thousands)		2014		2013
Transfers from Level 1 into Level 2⁽¹⁾		$	249	$	29
Transfers from Level 2 into Level 1⁽²⁾			1,192		1,304

⁽¹⁾	Transfers from Level 1 into Level 2 primarily represent debt and equity securities formerly classified as Level 1 for
	which unadjusted quoted market prices in active markets became unavailable in the current period.
⁽²⁾	Transfers from Level 2 into Level 1 primarily represent debt and equity securities formerly classified as Level 2 for
	which unadjusted quoted market prices in active markets became available in the current period.

As discussed more fully in Note 9, the Company deconsolidated Eaton Vance CLO 2013-1 on May 1, 2014. The following table presents a reconciliation of the beginning and ending fair value measurements of assets and liabilities valued on a recurring basis and classified as Level 3 within the fair value measurement hierarchy for the years ended October 31, 2014 and 2013:

				2014				2013
(in thousands)				Bank loans and other investments of consolidated CLO entities		Senior and subordinated note obligations and redeemable preferred shares of consolidated CLO entities		Bank loans and other investments of consolidated CLO entities		Senior and subordinated note obligations of consolidated CLO entities
Beginning balance			$	1,245	$	276,476	$	2,203	$	443,946
Issuance of senior and subordinated notes
	and redeemable preferred shares			-		421,523		-		-
Deconsolidation of senior and subordinated
	notes and redeemable preferred shares			-		(419,193)		-		-
Net gains (losses) on investments and
	note obligations included in net
	income⁽¹⁾			(183)		(1,209)		25		10,030
Sales				(1,061)		-		(132)		-
Settlements				-		-		(408)		-
Payment-in-kind				-		-		7		-
Amortization of original issue discount
	on senior notes			-		75		0		-
Principal paydown				-		(128,362)		0		(177,500)
Transfers into Level 3⁽²⁾				800		-		922		-
Transfers out of Level 3⁽³⁾				-		-		(1,372)		-
Ending balance			$	801	$	149,310	$	1,245	$	276,476
Change in unrealized gains (losses)
	included in net income relating to
	assets and liabilities held		$	35	$	(1,196)	$	25	$	10,030

(1)		Substantially all net gains (losses) on investments and note obligations and redeemable preferred shares attributable to the assets and
		borrowings of the Company's consolidated CLO entities are allocated to non-controlling and other beneficial interests on the Company's
		Consolidated Statements of Income.
(2)		Transfers into Level 3 were the result of a reduction in the availability of significant observable inputs used in determining the fair value
		of the securities, including a loan that utilized a discount applied to the demanded yield.
(3)		Transfers out of Level 3 into Level 2 of the fair value measurement hierarchy were due to an increase in the observability of the inputs
		used in determining the fair value of certain instruments.

The following table shows the valuation technique and significant unobservable inputs utilized in the fair value measurement of Level 3 liabilities of the consolidated CLO entities at October 31, 2014 and 2013:

	October 31, 2013			Valuation	Unobservable	Value/
	($ in thousands)		Fair Value	Technique	Inputs⁽¹⁾	Range

					Prepayment rate	30 percent
					Recovery rate	70 percent
	Senior and subordinated				Default rate	200 bps
	note obligations	$	276,476	Income-approach	Discount rate	105-375 bps

⁽¹⁾	Discount rate refers to spread over LIBOR. Lower spreads apply to the more senior tranches in the CLO note structure;
	higher spreads apply to the less senior tranches. The default rate refers to the constant annual default rate. The recovery rate is
	the expected recovery of defaulted amounts received through asset sales, recovery through bankruptcy restructuring or other
	settlement processes. The prepayment rate is the rate at which the underlying collateral is expected to repay principal.

Senior and subordinated note obligations of the Company's consolidated CLO entities are issued in various tranches with different risk profiles. The notes are valued on a quarterly basis by the Company's bank loan investment team utilizing an income-approach that projects the cash flows of the collateral assets using the team's projected default rate, prepayment rate, recovery rate and discount rate, as well as observable assumptions about market yields, collateral reimbursement assumptions, callability and other market factors that vary based on the nature of the investments in the underlying collateral pool. Once the undiscounted cash flows of the collateral assets have been determined, the bank loan team applies appropriate discount rates that it believes a reasonable market participant would use to determine the discounted cash flow valuation of the notes. The bank loan team routinely monitors market conditions and model inputs for cyclical and secular changes in order to identify any material factors that could influence the Company's valuation method. The bank loan team reports directly to the Chief Income Investment Officer.

For senior and subordinated notes issued by the Company's consolidated CLO entities, increases (decreases) in discount rates, default rates or prepayment rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) in recovery rates in isolation would result in higher (lower) fair value measurements. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for discount rates and a directionally opposite change in the assumptions used for prepayment and recovery rates.

Although the Company believes the valuation methods described above are appropriate, the use of different methodologies or assumptions to determine fair value could result in different estimates of fair value at the reporting date.