Fair Value Measurements

3 Months Ended

Sep. 30, 2012

Fair Value Measurements

Note 3—Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date and establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the reported date. The three levels are defined as follows:

• Level 1—unadjusted quoted prices in active markets that are available for identical assets or liabilities as of the reported date.

• Level 2—quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date.

• Level 3—prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have active markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Assets and liabilities measured and reported at fair value are classified and disclosed in one of the above categories based on the nature of the inputs that are significant to the fair value measurement in its entirety. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Investments

The underlying investments in Company-sponsored mutual funds, separate accounts, and trading securities are publicly traded equity securities which are valued under the market approach through the use of unadjusted quoted market prices available in active markets and are classified within Level 1 of the valuation hierarchy.

At September 30, 2012, the Company held less than a 2% ownership interest in a non-affiliated limited partnership. This investment is accounted for as available-for-sale and is valued based upon the Company’s ownership interest in the partnership’s net assets. The value of net assets is based on the underlying assets and liabilities of the partnership, which primarily include exchange-listed common stocks and money market funds. This investment seeks to generate capital appreciation. The Company’s investment may be redeemed as of the end of the partnership’s fiscal year, provided that 30 days prior written notice is given to the general partner. Redemptions may be more frequent at the option of the general partner. There is no lock-up and the Company has no unfunded commitments. The investment limited partnership is classified within Level 2 of the valuation hierarchy.

The following table presents, for each of the hierarchy levels previously described, the Company’s assets that are measured at fair value as of September 30, 2012 and June 30, 2012 (in thousands):

	September 30, 2012								June 30, 2012
	Fair Value Measurements		Level 1		Level 2		Level 3		Fair Value Measurements		Level 1		Level 2		Level 3
Trading securities:
Epoch Global All-Cap Fund, LLC	$	2,558	$	2,558	$	—	$	—	$	2,929	$	2,929	$	—	$	—
Epoch Global Choice Fund, LLC		—		—		—		—		2,111		2,111		—		—
Total trading securities		2,558		2,558		—		—		5,040		5,040		—		—
Available-for-sale securities:
Company-sponsored mutual funds		1,199		1,199		—		—		1,133		1,133		—		—
Epoch Global Champions separate account		1,129		1,129		—		—		1,088		1,088		—		—
Epoch U.S. Equity Shareholder Yield separate account		2,075		2,075		—		—		2,000		2,000		—		—
Investment in non-affiliated limited partnership		2,231		—		2,231		—		4,227		—		4,227		—
Total available-for-sale securities		6,634		4,403		2,231		—		8,448		4,221		4,227		—
Total investments measured at fair value	$	9,192	$	6,961	$	2,231	$	—	$	13,488	$	9,261	$	4,227	$	—

There were no transfers into or out of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the periods presented.

During the fiscal year ended June 30, 2012, we launched and seeded three new proprietary funds: the Epoch Global Shareholder Yield Fund, LLC, the Epoch Global All-Cap Fund, LLC, and the Epoch Global Choice Fund, LLC. The primary purpose of these investment vehicles is to accommodate institutional clients who do not meet our respective separate account minimums.

At June 30, 2012, the Company was the sole investor in, and managing member of, the Epoch Global All-Cap Fund, LLC and the Epoch Global Choice Fund, LLC. Therefore these investments were consolidated as trading securities. During the quarter ended September 30, 2012, several new investors joined the Epoch Global Choice Fund, LLC. As a result, the Company’s ownership in this fund was diluted to less than 2%. Furthermore, the Company can be removed by the additional investors in the fund without cause, based on a simple majority vote of the unaffiliated investors. In accordance with the Company’s consolidation policy, the Company deconsolidated its interest and now records its investment in the Epoch Global Choice Fund, LLC under the equity method.

For the Company’s equity method investments, the Company records its percentage share of net earnings or losses in other income. Consequently, these investments are not recorded at fair value, but approximate fair value. The total carrying value of these investments was $3.1 million and $2.6 million at September 30, 2012 and June 30, 2012, respectively.

The Company did not hold any financial liabilities measured at fair value at September 30, 2012 or June 30, 2012.