Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Cowen Group, Inc. | |
Entity Central Index Key | 1466538 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 111,402,554 |
Consolidated_Statements_of_Fin
Consolidated Statements of Financial Condition (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $94,666 | $129,509 |
Cash collateral pledged | 8,923 | 8,306 |
Securities owned, at fair value | 579,458 | 792,206 |
Receivable on derivative contracts, at fair value | 56,953 | 49,877 |
Securities borrowed | 0 | 676,100 |
Other investments | 157,226 | 167,464 |
Receivable from brokers | 109,522 | 84,679 |
Fees receivable, net of allowance | 66,086 | 46,498 |
Due from related parties | 23,938 | 26,315 |
Fixed assets, net of accumulated depreciation and amortization of $27,612 and $25,968, respectively | 25,006 | 26,388 |
Goodwill | 34,906 | 34,906 |
Intangible assets, net of accumulated amortization of $26,067 and $25,581, respectively | 7,997 | 8,483 |
Deferred tax assets, net | 124,201 | 129,400 |
Other assets | 52,454 | 34,230 |
Consolidated Funds | ||
Cash and cash equivalents | 643 | 501 |
Other investments | 190,287 | 189,377 |
Other assets | 687 | 1,437 |
Total Assets | 1,532,953 | 2,405,676 |
Liabilities | ||
Securities sold, not yet purchased, at fair value | 163,492 | 207,875 |
Payable for derivative contracts, at fair value | 44,226 | 41,330 |
Securities loaned | 0 | 682,493 |
Payable to brokers | 227,919 | 335,822 |
Compensation payable | 67,062 | 134,289 |
Notes payable and other debt | 68,253 | 67,144 |
Convertible debt | 119,999 | 118,475 |
Fees payable | 21,683 | 6,331 |
Due to related parties | 398 | 474 |
Accounts payable, accrued expenses and other liabilities | 43,367 | 46,606 |
Consolidated Funds | ||
Capital withdrawals payable | 213 | 864 |
Accounts payable, accrued expenses and other liabilities | 289 | 222 |
Total Liabilities | 756,901 | 1,641,925 |
Commitments and Contingencies (Note 13) | ||
Redeemable non-controlling interests | 85,965 | 86,076 |
Stockholders' equity | ||
Preferred stock, par value $0.01 per share; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 777,994 | 772,296 |
(Accumulated deficit) retained earnings | 671 | -16,027 |
Accumulated other comprehensive income (loss) | 15 | 17 |
Less: Class A common stock held in treasury, at cost, 25,397,576 and 23,507,656 shares as of March 31, 2015 and December 31, 2014, respectively. | -89,753 | -79,771 |
Total Stockholders' Equity | 690,087 | 677,675 |
Total Liabilities and Stockholders' Equity | 1,532,953 | 2,405,676 |
Common Stock Class A | ||
Stockholders' equity | ||
Common stock | 1,160 | 1,160 |
Less: Class A common stock held in treasury, at cost, 25,397,576 and 23,507,656 shares as of March 31, 2015 and December 31, 2014, respectively. | -89,753 | -79,771 |
Common Stock Class B | ||
Stockholders' equity | ||
Common stock | $0 | $0 |
Consolidated_Statements_of_Fin1
Consolidated Statements of Financial Condition (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Assets | ||
Fixed assets, accumulated depreciation and amortization (in dollars) | $27,612 | $25,968 |
Intangible assets, accumulated amortization (in dollars) | $26,067 | $25,581 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury Stock, Shares | 25,397,576 | 23,507,656 |
Common Stock Class A | ||
Stockholders' equity | ||
Treasury Stock, Shares | 25,397,576 | 23,507,656 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 136,566,473 | 135,198,855 |
Common stock, shares outstanding | 111,168,897 | 111,691,199 |
Common stock, restricted shares | 424,479 | 424,479 |
Common Stock Class B | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Investment banking | $65,233 | $49,562 |
Brokerage | 35,454 | 32,830 |
Management fees | 10,384 | 8,924 |
Incentive income | 2,372 | 2,498 |
Interest and dividends | 3,083 | 9,252 |
Reimbursement from affiliates | 3,642 | 1,900 |
Other revenue | 668 | 555 |
Consolidated Funds | ||
Interest and dividends | 244 | 486 |
Other revenues | 14 | 670 |
Total revenues | 121,094 | 106,677 |
Expenses | ||
Employee compensation and benefits | 95,864 | 67,561 |
Floor brokerage and trade execution | 5,903 | 5,655 |
Interest and dividends | 5,779 | 7,072 |
Professional, advisory and other fees | 5,128 | 3,601 |
Service fees | 1,886 | 2,142 |
Communications | 3,642 | 3,246 |
Occupancy and equipment | 6,828 | 6,397 |
Depreciation and amortization | 2,138 | 2,380 |
Client services and business development | 6,470 | 4,514 |
Other expenses | 4,810 | 3,158 |
Consolidated Funds | ||
Interest and dividends | 209 | 110 |
Professional, advisory and other fees | 90 | 134 |
Floor brokerage and trade execution | 10 | 2 |
Other expenses | 49 | 56 |
Total expenses | 138,806 | 106,028 |
Other income (loss) | ||
Net gains (losses) on securities, derivatives and other investments | 38,991 | 11,354 |
Consolidated Funds | ||
Net realized and unrealized gains (losses) on investments and other transactions | 4,720 | 2,164 |
Net realized and unrealized gains (losses) on derivatives | 397 | -21 |
Net gains (losses) on foreign currency transactions | -31 | -40 |
Total other income (loss) | 44,077 | 13,457 |
Income (loss) before income taxes | 26,365 | 14,106 |
Income tax expense (benefit) | 6,947 | 79 |
Net income (loss) | 19,418 | 14,027 |
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 2,720 | 4,187 |
Net income (loss) attributable to Cowen Group, Inc. stockholders | $16,698 | $9,840 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 112,053 | 115,680 |
Diluted (in shares) | 118,590 | 122,898 |
Earnings (loss) per share: | ||
Earnings Per Share, Basic (in dollars per share) | $0.15 | $0.09 |
Earnings Per Share, Diluted (in dollars per share) | $0.14 | $0.08 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $19,418 | $14,027 | ||
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation | -2 | [1] | 37 | [1] |
Defined benefit pension plan: | ||||
Net gain/(loss) arising during the period | 0 | -92 | ||
Amortization of prior service cost included in net periodic pension cost | 0 | 0 | ||
Total defined benefit pension plan | 0 | [1] | -92 | [1] |
Total other comprehensive income, net of tax | -2 | -55 | ||
Comprehensive income (loss) | $19,416 | $13,972 | ||
[1] | During the periods presented, the Company did not have material reclassifications out of other comprehensive income. |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings/(Accumulated deficit) | ||
In Thousands, except Share data, unless otherwise specified | ||||||||
Redeemable Noncontrolling Interest at Dec. 31, 2013 | $85,814 | |||||||
Balance at Dec. 31, 2013 | 507,766 | 1,160 | -48,084 | 737,341 | 592 | -183,243 | ||
Common Stock, Shares, Outstanding at Dec. 31, 2013 | 115,026,633 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to Cowen Group, Inc. stockholders | 9,840 | 9,840 | ||||||
Net income (loss) attributable to redeemable non-controlling interests | 4,187 | |||||||
Defined benefit plans | -92 | [1] | -92 | |||||
Foreign currency translation | 37 | [1] | 37 | |||||
Capital contributions | 6,007 | |||||||
Capital withdrawals | -10,560 | |||||||
Restricted stock awards issued, shares | 1,588,794 | |||||||
Purchase of treasury stock, at cost | -5,331 | |||||||
Purchase of treasury stock, at cost, shares | -1,262,881 | |||||||
Warrants issued | 15,218 | |||||||
Amortization of share based compensation | 4,800 | 4,800 | ||||||
Redeemable Noncontrolling Interest at Mar. 31, 2014 | 85,448 | |||||||
Balance at Mar. 31, 2014 | 532,238 | 1,160 | -53,415 | 757,359 | 537 | -173,403 | ||
Common Stock, Shares, Outstanding at Mar. 31, 2014 | 115,352,546 | |||||||
Redeemable Noncontrolling Interest at Dec. 31, 2014 | 86,076 | |||||||
Balance at Dec. 31, 2014 | 677,675 | 1,160 | -79,771 | 772,296 | 17 | -16,027 | ||
Common Stock, Shares, Outstanding at Dec. 31, 2014 | 111,691,199 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to Cowen Group, Inc. stockholders | 16,698 | 16,698 | ||||||
Net income (loss) attributable to redeemable non-controlling interests | 2,720 | |||||||
Defined benefit plans | [1] | 0 | ||||||
Foreign currency translation | -2 | [1] | -2 | |||||
Capital contributions | 3,379 | |||||||
Capital withdrawals | -6,210 | |||||||
Restricted stock awards issued, shares | 1,367,618 | |||||||
Purchase of treasury stock, at cost | -9,982 | |||||||
Purchase of treasury stock, at cost, shares | -1,889,920 | |||||||
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net | 1,536 | |||||||
Amortization of share based compensation | 4,162 | 4,162 | ||||||
Redeemable Noncontrolling Interest at Mar. 31, 2015 | 85,965 | |||||||
Balance at Mar. 31, 2015 | $690,087 | $1,160 | ($89,753) | $777,994 | $15 | $671 | ||
Common Stock, Shares, Outstanding at Mar. 31, 2015 | 111,168,897 | |||||||
[1] | During the periods presented, the Company did not have material reclassifications out of other comprehensive income. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | $19,418 | $14,027 |
Adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities: | ||
Depreciation and amortization | 2,138 | 2,380 |
Amortization of debt discount | 1,524 | 311 |
Tax benefits from share based compensation | 1,536 | 0 |
Share-based compensation | 4,162 | 4,800 |
Deferred tax benefit | 3,663 | 0 |
Deferred rent obligations | 351 | 179 |
Net loss on disposal of fixed assets | 31 | 218 |
Purchases of securities owned, at fair value | -1,026,453 | -1,086,631 |
Proceeds from sales of securities owned, at fair value | 1,252,567 | 928,377 |
Proceeds from sales of securities sold, not yet purchased, at fair value | 525,223 | 367,854 |
Payments to cover securities sold, not yet purchased, at fair value | -592,564 | -328,177 |
Net (gains) losses on securities, derivatives and other investments | -38,661 | -12,171 |
Consolidated Funds | ||
Purchases of other investments | -985 | -6,007 |
Proceeds from sales of other investments | 4,845 | 17,011 |
Net realized and unrealized (gains) losses on investments and other transactions | -4,769 | -2,913 |
(Increase) decrease in operating assets: | ||
Cash collateral pledged | -617 | -362 |
Securities owned, at fair value, held at broker dealer | 13,164 | -692 |
Receivable on derivative contracts, at fair value | -7,076 | -4,290 |
Securities borrowed | 676,100 | -392,165 |
Receivable from brokers | -24,843 | 10,034 |
Fees receivable, net of allowance | -19,588 | -12,551 |
Due from related parties | 2,377 | -1,902 |
Other assets | -3,274 | -5,308 |
Consolidated Funds | ||
Cash and cash equivalents | -142 | 223 |
Other assets | 750 | 4,935 |
Increase (decrease) in operating liabilities: | ||
Securities sold, not yet purchased, at fair value, held at broker dealer | 16,039 | -29,354 |
Payable for derivative contracts, at fair value | 2,896 | 6,648 |
Securities loaned | -682,493 | 392,326 |
Payable to brokers | -107,903 | 75,689 |
Compensation payable | -70,004 | -19,667 |
Fees payable | 15,352 | 4,509 |
Due to related parties | -76 | 26 |
Accounts payable, accrued expenses and other liabilities | -3,438 | 3,028 |
Consolidated Funds | ||
Accounts payable, accrued expenses and other liabilities | 67 | 1,030 |
Net cash provided by / (used in) operating activities | -40,683 | -68,585 |
Cash flows from investing activities: | ||
Purchases of other investments | -5,760 | -46,528 |
Payments to Acquire Loans Held-for-investment | -15,000 | 0 |
Cash convertible note economic hedge transaction | 0 | -35,710 |
Proceeds from sales of other investments | 35,050 | 11,603 |
Purchase of fixed assets | -301 | -4,279 |
Net cash provided by / (used in) investing activities | 13,989 | -74,914 |
Cash flows from financing activities: | ||
Securities sold under agreement to repurchase | 0 | -3,657 |
Proceeds from issuance of convertible debt | 0 | 149,500 |
Deferred debt issuance cost | 0 | -3,643 |
Proceeds from sale of warrant | 0 | 15,218 |
Borrowings on notes and other debt | 2,140 | 6,217 |
Repayments on notes and other debt | -1,030 | -1,137 |
Tax Benefit from share-based payment arrangements | 1,536 | 0 |
Purchase of treasury stock | -7,205 | -3,411 |
Cash paid to acquire net assets (contingent liability payable) | -108 | -76 |
Capital withdrawals to redeemable non-controlling interests in operating entities | -4,457 | -3,500 |
Consolidated Funds | ||
Capital contributions by redeemable non-controlling interests in Consolidated Funds | 3,379 | 6,007 |
Capital withdrawals to redeemable non-controlling interests in Consolidated Funds | -2,404 | -11,174 |
Net cash provided by / (used in) financing activities | -8,149 | 150,344 |
Change in cash and cash equivalents | -34,843 | 6,845 |
Cash and cash equivalents at beginning of period | 129,509 | 54,720 |
Cash and cash equivalents at end of period | 94,666 | 61,565 |
Supplemental information | ||
Purchase of treasury stock, at cost, through net settlement | 2,777 | 1,919 |
Cash conversion option | $0 | $35,710 |
Divestiture
Divestiture | 3 Months Ended |
Mar. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture |
During the fourth quarter of 2014, the Company decided to wind down the securities lending business, Cowen Equity Finance LP ("Cowen Equity Finance"). At that time, the Company recorded impairments of goodwill in the amount of $2.3 million and intangibles of $0.9 million, respectively. The Company also wrote off the remaining balance of the contingent liability due to the sellers of the former entity in the amount of $2.1 million. The Company also recognized certain expenses related to the termination of services. The Company considered the guidance for discontinued operations and determined that winding down the securities lending business did not represent a significant strategic shift in operations and therefore, the Company did not present it as discontinued operations. As of March 31, 2015, this business has been completely liquidated. |
Organization_and_Business
Organization and Business | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business |
Cowen Group, Inc., a Delaware corporation formed in 2009, is a diversified financial services firm and, together with its consolidated subsidiaries (collectively, “Cowen,” “Cowen Group” or the “Company”), provides alternative investment management, investment banking, research, and brokerage (including market-making and sales and trading) through its two business segments: alternative investment and broker-dealer. The Company's alternative investment segment, includes hedge funds, replication products, liquid alternative risk premia products, customized solutions, mutual funds, commodity pools, managed futures funds, fund of funds, real estate and healthcare royalty funds. The Company's broker-dealer segment offers research, brokerage and investment banking services to companies and institutional investor clients primarily in the healthcare, technology, media and telecommunications, information and technology services, consumer, aerospace and defense, industrials, real estate investment trusts ("REITs"), clean technology, energy, metals and mining, transportation, chemicals and agriculture sectors. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Significant Accounting Policies | Significant Accounting Policies | |
a. Basis of Presentation | ||
These unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to interim financial statements. Results for interim periods should not be considered indicative of results for any other interim period or for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013, and 2012, included in the Form 10-K of Cowen Group as filed with the SEC on February 26, 2015 and amended on March 30, 2015. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are necessary for a fair presentation of the results for the interim periods. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by US GAAP. | ||
These condensed consolidated financial statements include the accounts of the Company, its operating and other subsidiaries, and entities in which the Company has a controlling financial interest or a substantive controlling general partner interest. | ||
All material intercompany transactions and balances have been eliminated in consolidation. Certain fund entities that are consolidated in these condensed consolidated financial statements, as further discussed below, are not subject to these consolidation provisions with respect to their own investments pursuant to their specialized accounting. | ||
The Company serves as the managing member/general partner and/or investment manager to affiliated fund entities which it sponsors and manages. Funds in which the Company has a controlling financial interest are consolidated with the Company pursuant to US GAAP as described below. Consequently, the Company's condensed consolidated financial statements reflect the assets, liabilities, income and expenses of these funds on a gross basis. The ownership interests in these funds that are not owned by the Company are reflected as redeemable non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. The management fees and incentive income earned by the Company from these funds are eliminated in consolidation. | ||
b. | Principles of consolidation | |
The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting operating entity ("VOE") or a variable interest entity ("VIE") under US GAAP. | ||
Voting Operating Entities—VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact the entity's economic performance. | ||
Under US GAAP, the usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. Accordingly, the Company consolidates VOEs in which it owns a majority of the entity's voting shares or units. US GAAP also provides that a general partner of a limited partnership (or a managing member, in the case of a limited liability company) is presumed to control the partnership, and thus should consolidate it, unless a simple majority of the limited partners has the right to remove the general partner without cause or to terminate the partnership. In accordance with these standards, the Company presently consolidates two entities deemed to be VOEs for which it acts as the general partner and investment manager. | ||
As of March 31, 2015 and December 31, 2014 and during the three month periods ended March 31, 2015 and March 31, 2014, the Company consolidated the following funds: Ramius Enterprise LP (“Enterprise LP”) and Ramius Merger Fund LLC (the "Merger Fund") (collectively the "Consolidated Funds"). | ||
The Company also consolidated four investment companies i) RCG Linkem II LLC, formed to make an investment in a wireless broadband communication provider in Italy, ii) Cowen AV Investment LLC, formed to make an investment in a biotechnology company focused on developing gene therapies for certain medical needs and (during 2014) iii) Ramius Co-Investment I LLC and (iv) Ramius Co-Investment II LLC. Ramius Co-Investment I LLC, an entity that invested in a biomedical company that develops gene therapies for severe genetic disorders, was consolidated as of December 31, 2013 but was deconsolidated during the first quarter of 2014 when Ramius Co-Investment I LLC was liquidated. Ramius Co-Investment II LLC, an entity formed for the same purpose as Ramius Co-Investment I LLC, was consolidated but was liquidated during the quarter ended September 30, 2014. The Company determined that RCG Linkem II, LLC, Ramius Co-Investment I LLC (up until the first quarter of 2014), Ramius Co-Investment II LLC (up until the third quarter of 2014) and Cowen AV Investment LLC (up through the first quarter of 2015 when it was liquidated) are VOE's due to its controlling equity interests held through the managing member and/or affiliates and control exercised by the managing member who is not subject to substantive removal rights. | ||
Variable Interest Entities—VIEs are entities that lack one or more of the characteristics of a VOE. In accordance with US GAAP, an enterprise must consolidate all VIEs of which it is the primary beneficiary. Under the US GAAP consolidation model for VIEs, an enterprise that (1) has the power to direct the activities of a VIE that most significantly impacts the VIE's economic performance, and (2) has an obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. | ||
However, the Financial Accounting Standards Board ("FASB") has deferred the application of the revised consolidation model for VIEs that meet the following conditions: (a) the entity has all the attributes of an investment company as defined under AICPA Audit and Accounting Guide, Investment Companies, or does not have all the attributes of an investment company but is an entity for which it is acceptable based on industry practice to apply measurement principles that are consistent with investment companies, (b) the reporting entity does not have explicit or implicit obligations to fund any losses of the entity that could potentially be significant to the entity, and (c) the entity is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualifying special-purpose entity. The Company's involvement with its funds is such that all three of the above conditions are met for substantially all of the funds managed by the Company. Where the VIEs have qualified for the deferral, the analysis is based on previous consolidation rules. These rules require an analysis to (a) determine whether an entity in which the Company holds a variable interest is a variable interest entity and (b) whether the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees), would be expected to absorb a majority of the VIE's expected losses, receive a majority of the VIEs expected residual returns, or both. If these conditions are met, the Company is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. | ||
The Company reconsiders whether it is the primary beneficiary of a VIE by performing a periodic qualitative and/or quantitative analysis of the VIE that includes a review of, among other things, its capital structure, contractual agreements between the Company and the VIE, the economic interests that create or absorb variability, related party relationships and the design of the VIE. As of March 31, 2015 and December 31, 2014, the Company consolidated two VIEs. As of March 31, 2015 and December 31, 2014, the total net assets of the consolidated VIEs were $3.9 million and $2.0 million, respectively. The VIEs act as managing members/general partners and/or investment managers to affiliated fund entities which they sponsor and/or manage. The VIEs are financed through their operations and/or loan agreements with the Company. | ||
As of March 31, 2015 and December 31, 2014, the Company holds a variable interest in Ramius Enterprise Master Fund Ltd (“Enterprise Master”) through one of its Consolidated Funds, Enterprise LP and the Company holds a variable interest in Ramius Merger Master Fund Ltd through one of its Consolidated Funds, Merger Fund, (the “Unconsolidated Master Funds”). Investment companies, which account for their investments under the specialized industry accounting guidance for investment companies prescribed under US GAAP, are not subject to the consolidation provisions for their investments. Therefore, the Company has not consolidated the Unconsolidated Master Funds. | ||
In the ordinary course of business, the Company also sponsors various other entities that it has determined to be VIEs. These VIEs are primarily funds and real estate entities for which the Company serves as the general partner, managing member and/or investment manager with decision-making rights. | ||
The Company does not consolidate any of these funds or real estate entities that are VIEs as it has concluded that it is not the primary beneficiary in each instance. Fund investors are entitled to all of the economics of these VIEs with the exception of the management fee and incentive income, if any, earned by the Company. The Company's involvement with funds and real estate entities that are unconsolidated VIEs is limited to providing investment management services in exchange for management fees and incentive income. Although the Company may advance amounts and pay certain expenses on behalf of the funds and real estate entities that it considers to be VIEs, it does not provide, nor is it required to provide, any type of substantive financial support to these entities outside of regular investment management services (see Note 5 for additional disclosures on VIEs). | ||
Equity Method Investments—For operating entities over which the Company exercises significant influence but which do not meet the requirements for consolidation as outlined above, the Company uses the equity method of accounting. The Company's investments in equity method investees are recorded in other investments in the accompanying consolidated statements of financial condition. The Company's share of earnings or losses from equity method investees is included in net gains (losses) on securities, derivatives and other investments in the accompanying consolidated statements of operations. | ||
The Company evaluates for impairment its equity method investments whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary. | ||
Other—If the Company does not consolidate an entity, apply the equity method of accounting or account for an investment under the cost method, the Company accounts for such entities (primarily, all securities of such entity which are bought and held principally for the purpose of selling them in the near term as trading securities) in accordance with US GAAP, at fair value with unrealized gains (losses) resulting from changes in fair value reflected within net gains (losses) on securities, derivatives and other investments in the accompanying consolidated statements of operations. | ||
Retention of Specialized Accounting—The Consolidated Funds are investment companies and apply specialized industry accounting for investment companies. The Company has retained this specialized accounting for these funds pursuant to US GAAP. The Company reports its investments on the consolidated statements of financial condition at their estimated fair value, with unrealized gains (losses) resulting from changes in fair value reflected within net realized and unrealized gains (losses) on investments and other transactions. Accordingly, the accompanying condensed consolidated financial statements reflect different accounting policies for investments depending on whether or not they are held through a consolidated investment company. In addition, the Company's broker-dealer subsidiaries, Cowen and Company, ATM Execution LLC ("ATM Execution"), ATM USA, LLC ("ATM USA") (liquidated during Q1 2015), and Cowen Equity Finance (see Note 2), apply the specialized industry accounting for brokers and dealers in securities also prescribed under US GAAP. The Company also retains specialized accounting in consolidation. | ||
c. | Use of estimates | |
The preparation of the accompanying condensed consolidated financial statements in conformity with US GAAP requires the management of the Company to make estimates and assumptions that affect the fair value of securities and other investments, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accompanying condensed consolidated financial statements, the accounting for goodwill and identifiable intangible assets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. | ||
d. | Valuation of investments and derivative contracts | |
US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows: | ||
Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has | ||
the ability to access at the measurement date; | ||
Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including | ||
inputs in markets that are not considered to be active; and | ||
Level 3 Fair value is determined based on pricing inputs that are unobservable and includes situations where there is little, | ||
if any, market activity for the asset or liability. The determination of fair value for assets and liabilities in this | ||
category requires significant management judgment or estimation. | ||
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Company's perceived risk of that instrument. | ||
The Company and its operating subsidiaries act as the manager for the Consolidated Funds. Both the Company and the Consolidated Funds hold certain investments which are valued by the Company, acting as the investment manager. The fair value of these investments is generally estimated based on proprietary models developed by the Company, which include discounted cash flow analysis, public market comparables, and other techniques and may be based, at least in part, on independently sourced market information. The material estimates and assumptions used in these models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute, timing of, and estimated proceeds from expected financings. Significant judgment and estimation goes into the selection of an appropriate valuation methodology as well as the assumptions used in these models, and the timing and actual values realized with respect to investments could be materially different from values derived based on the use of those estimates. The valuation methodologies applied impact the reported value of the Company's investments and the investments held by the Consolidated Funds in the condensed consolidated financial statements. Certain of the Company's investments are relatively illiquid or thinly traded and may not be immediately liquidated on demand if needed. Fair values assigned to these investments may differ significantly from the fair values that would have been used had a ready market for the investments existed and such differences could be material. | ||
The Company primarily uses the “market approach” to value its financial instruments measured at fair value. In determining an instrument's level within the hierarchy, the Company categorizes the Company's financial instruments into three categories: securities, derivative contracts and other investments. To the extent applicable, each of these categories can further be divided between those held long or sold short. | ||
Securities—Securities with values based on quoted market prices in active markets for identical assets are classified within level 1 of the fair value hierarchy. These securities include active listed equities, certain U.S. government and sovereign obligations, ETF's, mutual funds and certain money market securities. The Company does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. | ||
Certain positions for which trading activity may not be readily visible, consisting primarily of convertible debt, corporate debt and loans and restricted equities, are stated at fair value and classified within level 2 of the fair value hierarchy. The estimated fair values assigned by management are determined in good faith and are based on available information considering, trading activity, broker quotes, quotations provided by published pricing services, counterparties and other market participants, and pricing models using quoted inputs, and do not necessarily represent the amounts which might ultimately be realized. As level 2 investments include positions that are not always traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability. | ||
Derivative contracts—Derivative contracts can be exchange-traded or privately negotiated over-the-counter (“OTC”). Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within level 1 or level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. OTC derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within level 2. OTC derivatives, such as swaps and options where market data is not readily available or observable are classified as level 3. | ||
Other investments—Other investments consist primarily of portfolio funds, real estate investments and equity method investments, which are valued as follows: | ||
i. | Portfolio funds—Portfolio funds (“Portfolio Funds”) include interests in funds and investment companies which may be managed by the Company or its affiliates. The Company follows US GAAP regarding fair value measurements and disclosures relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). The guidance permits, as a practical expedient, an entity holding investments in certain entities that either are investment companies as defined by the AICPA Audit and Accounting Guide, Investment Companies, or have attributes similar to an investment company, and calculate net asset value per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment. | |
The Company categorizes its investments in Portfolio Funds within the fair value hierarchy dependent on its ability to redeem the investment. If the Company has the ability to redeem its investment at NAV at the measurement date or within the near term, the Portfolio Fund is categorized as a level 2 investment within the fair value hierarchy. If the Company does not know when it will have the ability to redeem its investment or cannot do so in the near term, the Portfolio Fund is categorized as a level 3 investment within the fair value hierarchy. See Notes 5 and 6 for further details of the Company's investments in Portfolio Funds. | ||
ii. | Real estate investments—Real estate debt and equity investments are valued at fair value. The fair value of real estate investments are estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Real estate investments without a public market are valued based on assumptions and valuation techniques used by the Company. Such valuation techniques may include discounted cash flow analysis, prevailing market capitalization rates or earnings multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties, consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence, as well as independent external appraisals. In general, the Company considers several valuation techniques when measuring the fair value of a real estate investment. However, in certain circumstances, a single valuation technique may be appropriate. Real estate investments are reviewed on a quarterly basis by the Company for significant changes at the property level or a significant change in the overall market which would impact the value of the real estate investment resulting in unrealized appreciation or depreciation. | |
Real estate and capital markets are cyclical in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates and interest and inflation rates. In addition, the Company invests in real estate and real estate related investments for which no liquid market exists. The market prices for such investments may be volatile and may not be readily ascertainable. Amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material. | ||
The Company's real estate investments are typically categorized as a level 3 investment within the fair value hierarchy as management uses significant unobservable inputs in determining their estimated fair value. | ||
See Notes 5 and 6 for further information regarding the Company's investments, including equity method investments, and fair value measurements. | ||
e. | Securities borrowed and securities loaned | |
Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received on a gross basis. The related rebates are recorded in the statement of operations as interest income and interest expense. Securities borrowed transactions require the Company to deposit cash collateral with the lender. With respect to securities loaned, the Company receives cash collateral from the borrower. The initial collateral advanced or received approximates or is greater than the market value of securities borrowed or loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or returned, as necessary. Securities borrowed and loaned may also result in credit exposures for the Company in an event that the counterparties are unable to fulfill their contractual obligations. The Company minimizes its credit risk by continuously monitoring its credit exposure and collateral values by demanding additional or returning excess collateral in accordance with the netting provisions available in the master securities lending contracts in place with the counterparties. | ||
Fees and interest received or paid are recorded in interest and dividend income and interest expense, respectively, on an accrual basis. In cases where the fair value basis of accounting is elected, any resulting change in fair value is reported in trading revenues. Accrued interest income and expense are recorded in the same manner as under the accrual method. At March 31, 2015 and December 31, 2014, the Company does not have any securities lending transactions for which fair value basis of accounting was elected. | ||
During the fourth quarter of 2014, the Company made a decision to wind down the operations of its securities lending business (see Note 2). | ||
f. | Debt | |
Long-term debt is carried at the principal amount borrowed net of any discount/premium. The discount is accreted to interest expense using the effective interest method over the remaining life of the underlying debt obligations. Accrued but unpaid coupon interest is included in accrued expenses and other liabilities in the accompanying consolidated statements of financial condition. | ||
g. Deferred rent | ||
Deferred rent primarily consists of step rent, allowances from landlords and valuing the Company's lease properties in accordance with US GAAP. Step rent represents the difference between actual operating lease payments due and straight-line rent expense, which is recorded by the Company over the term of the lease, including the build-out period. This amount is recorded as deferred rent in the early years of the lease, when cash payments are generally lower than straight-line rent expense, and reduced in the later years of the lease when payments begin to exceed the straight-line expense. Landlord allowances are generally comprised of amounts received and/or promised to the Company by landlords and may be received in the form of cash or free rent. These allowances are part of the negotiated terms of the lease. The Company records a receivable from the landlord and a deferred rent liability when the allowances are earned. This deferred rent is amortized into income (through lower rent expense) over the term (including the pre-opening build-out period) of the applicable lease, and the receivable is reduced as amounts are received from the landlord. Liabilities resulting from valuing the Company's leased properties acquired through business combinations are quantified by comparing the current fair value of the leased space to the current rental payments on the date of acquisition. Deferred rent, included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated statements of financial condition, as of March 31, 2015 and December 31, 2014 is $12.3 million and $13.1 million, respectively. | ||
h. Recently issued accounting pronouncements | ||
In January 2015, the FASB issued a new accounting pronouncement regarding extraordinary items. The guidance eliminates the concept and presentation requirements for extraordinary items and issuers are no longer required to evaluate and present separately any transaction which is unusual and infrequent. The guidance is effective for reporting periods beginning after December 15, 2015. The Company does not expect this guidance to have any impact on its financial position and results of operations. | ||
In February 2015, the FASB issued an accounting pronouncement which amends and updates its previous guidance regarding consolidation analysis. The amendment eliminates the deferral of certain consolidation standards for entities considered to be investment companies and modifies the consolidation analysis performed on certain types of legal entities. The guidance is effective for reporting periods beginning after December 15, 2015. The Company is currently evaluating the impact of the new guidance on our consolidated financial statements. | ||
In April 2015, the FASB issued a new accounting pronouncement simplifying the presentation of debt issuance costs. The accounting guidance requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The guidance is effective for the Company retrospectively effective for reporting periods beginning after December 15, 2015 and early adoption is permitted. The adoption of this accounting guidance is not expected to have a material impact on the Company’s financial position. | ||
In May 2014, the FASB issued guidance which amends and supersedes the revenue recognition requirements and most industry-specific guidance and creates a single source of revenue guidance. The new guidance outlines the principles an entity must apply to measure and recognize revenue and related cash flows. The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain non-financial assets. The guidance is effective for reporting periods beginning after December 15, 2016. In April 2015, the FASB announced a proposal to defer the effective date by one year, with early adoption on the original effective date permitted. The Company is currently evaluating the impact of this guidance on the Company’s financial condition, results of operations and cash flows. |
Cash_Collateral_Pledged
Cash Collateral Pledged | 3 Months Ended |
Mar. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
Cash Collateral Pledged | Cash Collateral Pledged |
As of March 31, 2015 and December 31, 2014, the Company pledged cash collateral in the amount of $8.9 million and $8.3 million, respectively, which relates to letters of credit issued to the landlords of the Company's premises in New York City, Boston and San Francisco (see Note 14). |
Investments_of_Operating_Entit
Investments of Operating Entities and Consolidated Funds | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||
Investments of Operating Entities and Consolidated Funds | Investments of Operating Entities and Consolidated Funds | |||||||||||||||||||||||
a. | Operating Entities | |||||||||||||||||||||||
Securities owned, at fair value | ||||||||||||||||||||||||
Securities owned, at fair value are held by the Company and are considered held for trading. Substantially all equity securities are pledged to the clearing broker under terms which permit the clearing broker to sell or re-pledge the securities to others subject to certain limitations. | ||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, securities owned, at fair value consisted of the following: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
U.S. Government securities (a) | $ | 2,010 | $ | 2,010 | ||||||||||||||||||||
Preferred stock | 20,200 | 15,070 | ||||||||||||||||||||||
Common stocks | 481,181 | 597,476 | ||||||||||||||||||||||
Convertible bonds (b) | 879 | 900 | ||||||||||||||||||||||
Corporate bonds (c) | 55,937 | 159,557 | ||||||||||||||||||||||
Warrants and rights | 3,064 | 1,417 | ||||||||||||||||||||||
Mutual funds | 16,187 | 15,776 | ||||||||||||||||||||||
$ | 579,458 | $ | 792,206 | |||||||||||||||||||||
(a) | As of March 31, 2015, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. As of December 31, 2014, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. | |||||||||||||||||||||||
(b) | As of March 31, 2015, the maturity was July 2015 with an interest rate of 10.00%. As of December 31, 2014, the maturity was February 2015 with an interest rate of 10.00%. | |||||||||||||||||||||||
(c) | As of March 31, 2015, maturities ranged from December 2016 to February 2046 and interest rates ranged between 0.0% to 11.50%. As of December 31, 2014, maturities ranged from February 2015 to February 2046 and interest rates ranged between 5.63% to 11.54%. | |||||||||||||||||||||||
Receivable on and Payable for derivative contracts, at fair value | ||||||||||||||||||||||||
The Company's direct involvement with derivative financial instruments includes futures, currency forwards, equity swaps, and options. The Company's derivatives trading activities exposes the Company to certain risks, such as price and interest rate fluctuations, volatility risk, credit risk, counterparty risk, foreign currency movements and changes in the liquidity of markets. | ||||||||||||||||||||||||
Upon issuance of the Company's cash convertible unsecured senior notes ("Convertible Notes") (see Note 14), the Company recognized the embedded cash conversion option at fair value of $35.7 million which is valued as of March 31, 2015 at $41.6 million and is included in payable for derivative contracts in the accompanying consolidated statement of financial condition. Also, on the date of issuance of the Convertible Notes, the Company entered into a separate cash convertible note economic hedge transaction (the "Hedge Transaction") with a counterparty (the “Option Counterparty”) whereby, the Company purchased a cash settled option contract with terms identical to the conversion option embedded in the Convertible Notes and simultaneously sold an equity settled warrant with a higher strike price. The Hedge Transaction is expected to reduce the Company’s exposure to potential cash payments in excess of the principal amount of converted notes that the Company may be required to make upon conversion of the Convertible Notes. The Company paid a premium of $35.7 million for the option under the Hedge Transaction and received a premium of $15.2 million for the equity settled warrant transaction, for a net cost of $20.5 million. The Hedge Transaction is valued at $41.6 million as of March 31, 2015 and is included in receivable on derivative contracts in the accompanying consolidated statement of financial condition. Aside from the initial premium paid, the Company will not be required to make any cash payments under the Hedge Transaction and could be entitled to receive an amount of cash from the Option Counterparty generally equal to the amount by which the market price per share of common stock exceeds the strike price of the Hedge Transaction during the relevant valuation period. The warrants cover 28,048,786 shares of the Company's Class A common stock and have an initial exercise price of $7.18 per share. The warrants expire over a period of 80 trading days beginning on November 14, 2018. The warrant transaction could have a dilutive effect to the extent that the market value per share of the Company’s Class A common stock exceeds the applicable strike price of the warrants. | ||||||||||||||||||||||||
The Company's long and short exposure to derivatives is as follows: | ||||||||||||||||||||||||
Receivable on derivative contracts | As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Number of contracts / Notional Value | Fair value | Number of contracts / Notional Value | Fair value | |||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Commodity Future | $ | 46,123 | $ | 173 | $ | 3,041 | $ | 75 | ||||||||||||||||
Currency forwards | $ | 138,714 | 659 | $ | 23,961 | 310 | ||||||||||||||||||
Equity Swap | $ | 30,209 | 133 | $ | 12,904 | 251 | ||||||||||||||||||
Options other (a) | 407,859 | 54,042 | 367,441 | 48,201 | ||||||||||||||||||||
Foreign currency options | $ | 82,000 | 1,040 | 1,946 | $ | 32,200 | 1,040 | |||||||||||||||||
$ | 56,953 | $ | 49,877 | |||||||||||||||||||||
(a) Includes index, equity, commodity future and cash conversion options. | ||||||||||||||||||||||||
Payable for derivative contracts | As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Number of contracts / Notional Value | Fair value | Number of contracts / Notional Value | Fair value | |||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Futures | $ | 8,996 | $ | 49 | $ | 2,213 | $ | 33 | ||||||||||||||||
Equity and credit default swaps | $ | 17,613 | 169 | $ | 18,352 | 1,603 | ||||||||||||||||||
Options (a) | 18,204 | 44,008 | 22,043 | 39,694 | ||||||||||||||||||||
$ | 44,226 | $ | 41,330 | |||||||||||||||||||||
(a) Includes index, equity, commodity future and cash conversion options. | ||||||||||||||||||||||||
The following tables present the gross and net derivative positions and the related offsetting amount, as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||
Gross amounts not offset in the Statement of Financial Condition | ||||||||||||||||||||||||
Gross amounts recognized | Gross amounts offset on the Consolidated Statements of Financial Condition (a) | Net amounts included on the Consolidated Statements of Financial Condition | Financial instruments | Cash Collateral pledged (b) | Net amounts | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | $ | 56,953 | $ | — | $ | 56,953 | $ | — | $ | 4,714 | $ | 52,239 | ||||||||||||
Payable for derivative contracts, at fair value | 44,226 | — | 44,226 | — | 169 | 44,057 | ||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | 49,877 | — | 49,877 | — | 2,588 | 47,289 | ||||||||||||||||||
Payable for derivative contracts, at fair value | 41,330 | — | 41,330 | — | 1,603 | 39,727 | ||||||||||||||||||
(a) | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |||||||||||||||||||||||
(b) | Includes the amount of collateral held or posted. | |||||||||||||||||||||||
The realized and unrealized gains/(losses) related to derivatives trading activities were $2.1 million and $(1.8) million for the three months ended March 31, 2015 and 2014, respectively, and are included in other income in the accompanying consolidated statements of operations. | ||||||||||||||||||||||||
Pursuant to the various derivatives transactions discussed above, except for the cash convertible note hedge (see Note 14) and exchange traded derivatives, the Company is required to post/receive collateral. As of March 31, 2015 and December 31, 2014, collateral consisting of $9.7 million and $4.2 million of cash, respectively, is included in receivable from brokers and payable to brokers on the accompanying consolidated statements of financial condition. As of March 31, 2015 and December 31, 2014 all derivative contracts were with multiple major financial institutions. | ||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, other investments included the following: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
(1) Portfolio Funds, at fair value | $ | 103,156 | $ | 103,466 | ||||||||||||||||||||
(2) Real estate investments, at fair value | 1,947 | 2,175 | ||||||||||||||||||||||
(3) Equity method investments | 51,762 | 61,443 | ||||||||||||||||||||||
(4) Lehman claims, at fair value | 361 | 380 | ||||||||||||||||||||||
$ | 157,226 | $ | 167,464 | |||||||||||||||||||||
-1 | Portfolio Funds, at fair value | |||||||||||||||||||||||
The Portfolio Funds, at fair value as of March 31, 2015 and December 31, 2014, included the following: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
HealthCare Royalty Partners (a)(*) | $ | 10,939 | $ | 11,935 | ||||||||||||||||||||
HealthCare Royalty Partners II (a)(*) | 7,154 | 6,648 | ||||||||||||||||||||||
Orchard Square Partners Credit Fund LP (b) | 4,540 | 11,532 | ||||||||||||||||||||||
Starboard Value and Opportunity Fund LP (c)(*) | 23,255 | 21,792 | ||||||||||||||||||||||
Starboard Partners Fund LP (d)(*) | 14,551 | 14,652 | ||||||||||||||||||||||
Starboard Leaders Fund LP (e)(*) | 1,392 | 1,367 | ||||||||||||||||||||||
Formation 8 Partners Fund I (f) | 14,976 | 11,283 | ||||||||||||||||||||||
RCG LV Park Lane LLC (g) (*) | 735 | 642 | ||||||||||||||||||||||
RCGL 12E13th LLC (h) (*) | 685 | 638 | ||||||||||||||||||||||
RCG Longview Debt Fund V, L.P. (h) (*) | 14,764 | 12,876 | ||||||||||||||||||||||
Other private investment (i) | 6,515 | 7,324 | ||||||||||||||||||||||
Other affiliated funds (j)(*) | 3,650 | 2,777 | ||||||||||||||||||||||
$ | 103,156 | $ | 103,466 | |||||||||||||||||||||
* These portfolio funds are affiliates of the Company. | ||||||||||||||||||||||||
The Company has no unfunded commitments regarding the portfolio funds held by the Company except as noted in Note 18. | ||||||||||||||||||||||||
(a) | HealthCare Royalty Partners, L.P. and HealthCare Royalty Partners II, L.P. are private equity funds and therefore distributions will be made when cash flows are received from the underlying investments, typically on a quarterly basis. | |||||||||||||||||||||||
(b) | Orchard Square Partners Credit Fund LP has a quarterly redemption policy with a 60 day notice period and a 4% penalty on redemptions of investments of less than a year in duration. | |||||||||||||||||||||||
(c) | Starboard Value and Opportunity Fund LP permits quarterly withdrawals upon 90 days notice. | |||||||||||||||||||||||
(d) | Starboard Partners Fund LP permits redemptions on a semi-annual basis on 180 days prior written notice subsequent to an initial two year lock up. | |||||||||||||||||||||||
(e) | Starboard Leaders Fund LP does not permit withdrawals, but instead allows terminations with respect to capital commitments upon 30 days prior written notice at any time following the first anniversary of an investors initial capital contribution. | |||||||||||||||||||||||
(f) | Formation 8 Partners Fund I is a private equity fund which invests in early stage and growth transformational information and energy technology companies. Distributions will be made when the underlying investments are liquidated. | |||||||||||||||||||||||
(g) | RCG LV Park Lane LLC is a single purpose entity formed to participate in a joint venture which acquired, at a discount, the mortgage notes on a portfolio of multifamily real estate properties located in Birmingham, Alabama. RCG LV Park Lane LLC is a private equity structure and therefore distributions will be made when the underlying investments are liquidated. | |||||||||||||||||||||||
(h) | RCGL 12E13th LLC and RCG Longview Debt Fund V, L.P. are real estate private equity structures and therefore distributions will be made when the underlying investments are liquidated. | |||||||||||||||||||||||
(i) | Other private investment represents the Company's closed end investment in a portfolio fund that invests in a wireless broadband communication provider in Italy. | |||||||||||||||||||||||
(j) | The majority of these funds are affiliates of the Company or are managed by the Company and the investors can redeem from these funds as investments are liquidated. | |||||||||||||||||||||||
-2 | Real estate investments, at fair value | |||||||||||||||||||||||
Real estate investments as of March 31, 2015 and December 31, 2014 are carried at fair value and include real estate equity investments held by RCG RE Manager, LLC (“RE Manager”), a real estate operating subsidiary of the Company, of $1.9 million and $2.2 million, respectively. | ||||||||||||||||||||||||
-3 | Equity method investments | |||||||||||||||||||||||
Equity method investments include investments held by the Company in several operating companies whose operations primarily include the day to day management of a number of real estate funds, including the portfolio management and administrative services related to the acquisition, disposition, and active monitoring of the real estate funds' underlying debt and equity investments. The Company's ownership interests in these equity method investments range from 20% to 55%. The Company holds a majority of the outstanding ownership interest (i.e., more than 50%) in three of these entities: RCG Longview Debt Fund IV Management, LLC, RCG Longview Debt Fund IV Partners, LLC and RCG Longview Partners II, LLC. The operating agreements that govern the management of day-to-day operations and affairs of each of these three entities stipulate that certain decisions require support and approval from other members in addition to the support and approval of the Company. As a result, all operating decisions made in these three entities require the support of both the Company and an affirmative vote of a majority of the other managing members who are not affiliates of the Company. As the Company does not possess control over any of these entities, the presumption of consolidation has been overcome pursuant to current accounting standards and the Company accounts for these investments under the equity method of accounting. Also included in equity method investments are the investments in (a) HealthCare Royalty Partners General Partners (b) an investment in the CBOE (Chicago Board Options Exchange) Stock Exchange LLC ("CBOE SE") representing a 7.2% stake in the exchange service provider for which the Company exercises significant influence over through representation on the CBOE Board of Directors, and (c) Starboard Value (and certain related parties) which serves as an operating company whose operations primarily include the day to day management (including portfolio management) of several activist hedge funds and related managed accounts. The Company recorded no impairment charges in relation to its equity method investments for the three months ended March 31, 2015 and 2014. | ||||||||||||||||||||||||
The Starboard Value entities were formed to provide a full range of investment advisory and management services and act as a general partner, investment advisor and pension advisor or in similar capacity to clients. In accordance with the respective offering documents of the underlying funds, Starboard Value entities are entitled to fixed percentages of management fees and performance fees. The Company holds a minority interest in the Starboard Value entities. | ||||||||||||||||||||||||
The following table summarizes equity method investments held by the Company: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
RCG Longview Debt Fund IV Management, LLC | $ | 605 | $ | 676 | ||||||||||||||||||||
RCG Longview Debt Fund V Partners, LLC | 3,167 | 2,684 | ||||||||||||||||||||||
HealthCare Royalty GP, LLC | 892 | 973 | ||||||||||||||||||||||
HealthCare Royalty GP II, LLC | 1,212 | 1,125 | ||||||||||||||||||||||
HealthCare Royalty GP III, LLC | 67 | 62 | ||||||||||||||||||||||
CBOE Stock Exchange, LLC | 527 | 611 | ||||||||||||||||||||||
Starboard Value LP | 39,880 | 48,772 | ||||||||||||||||||||||
RCG Longview Partners, LLC | 237 | 237 | ||||||||||||||||||||||
RCG Longview Management, LLC | 1,174 | 1,117 | ||||||||||||||||||||||
RCG Urban American, LLC | 121 | 422 | ||||||||||||||||||||||
RCG Urban American Management, LLC | 379 | 379 | ||||||||||||||||||||||
RCG Longview Equity Management, LLC | 294 | 316 | ||||||||||||||||||||||
Urban American Real Estate Fund II, LLC | 1,844 | 2,329 | ||||||||||||||||||||||
RCG Kennedy House, LLC | 617 | 509 | ||||||||||||||||||||||
Other | 746 | 1,231 | ||||||||||||||||||||||
$ | 51,762 | $ | 61,443 | |||||||||||||||||||||
For the period ended March 31, 2015, an equity method investment held by the Company has met the significance criteria as defined under SEC guidance. As such, the Company is required to present summarized financial information for this significant investee for the three months ended March 31, 2015 and 2014. The summarized income statement information for the Company's investment in the individually significant investee is as follows: | ||||||||||||||||||||||||
Other equity method investment | Three Months Ended March 31, | |||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Revenues | $ | 10,127 | $ | 1,755 | ||||||||||||||||||||
Expenses | — | — | ||||||||||||||||||||||
Net realized and unrealized gains (losses) | 109 | 5 | ||||||||||||||||||||||
Net Income | $ | 10,236 | $ | 1,760 | ||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, the Company's share of losses in its equity method investment in RCG Longview Partners II, LLC has exceeded the carrying amount recorded in this investee. These amounts are included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated statements of financial condition. RCG Longview Partners II, LLC, as general partner to a real estate fund, has reversed previously recorded incentive income allocations and has recorded a current clawback obligation to the limited partners in the fund. This obligation is due to a change in unrealized value of the fund on which there have previously been distributed carried interest realizations; however, the settlement of a potential obligation is not due until the end of the life of the respective fund. As the Company is obligated to return previous distributions it received from RCG Longview Partners II, LLC, it has continued to record its share of gains/losses in the investee including reflecting its share of the clawback obligation in the amount of $6.2 million. | ||||||||||||||||||||||||
The Company's income (loss) from equity method investments was $14.2 million and $6.5 million for the three months ended March 31, 2015 and 2014, respectively, and is included in net gains (losses) on securities, derivatives and other investments on the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
-4 | Lehman Claims, at fair value | |||||||||||||||||||||||
Lehman Brothers International (Europe) (“LBIE”), through certain affiliates, was a prime broker to the Company, and the Company held cash and cash equivalent balances with LBIE. On September 15, 2008, LBIE was placed into administration (the “Administration”) in the United Kingdom and, as a result, the assets held by the Company in its LBIE accounts were frozen at LBIE. The assets which the Company believed were held at LBIE at the time of Administration (the “Total Net Equity Claim”) consisted of $1.0 million, which represented an unsecured claim against LBIE. The total amounts received to date in respect of the Company’s unsecured claim against LBIE are approximately $1.0 million, representing 100.0% of its agreed claim. The Company may receive further distributions in respect of its claim, but the amount and timing of these distributions remains uncertain. The Company does not expect future distributions to be material. The claim described above does not include claims held by the Company against LBIE through its investment in Enterprise Master discussed in Note 5b(2). | ||||||||||||||||||||||||
Securities sold, not yet purchased, at fair value | ||||||||||||||||||||||||
Securities sold, not yet purchased, at fair value represent obligations of the Company to deliver a specified security at a contracted price and, thereby, create a liability to purchase that security at prevailing prices. The Company's liability for securities to be delivered is measured at their fair value as of the date of the consolidated financial statements. However, these transactions result in off-balance sheet risk, as the Company's ultimate cost to satisfy the delivery of securities sold, not yet purchased, at fair value may exceed the amount reflected in the accompanying consolidated statements of financial condition. Substantially all equity securities and options are pledged to the clearing broker under terms which permit the clearing broker to sell or re-pledge the securities to others subject to certain limitations. As of March 31, 2015 and December 31, 2014, securities sold, not yet purchased, at fair value consisted of the following: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Common stocks | $ | 163,432 | $ | 207,815 | ||||||||||||||||||||
Corporate bonds (a) | 60 | 60 | ||||||||||||||||||||||
$ | 163,492 | $ | 207,875 | |||||||||||||||||||||
(a) | As of March 31, 2015 and December 31, 2014, the maturity was January 2026 with an interest rate of 5.55%. | |||||||||||||||||||||||
Securities lending and borrowing transactions | ||||||||||||||||||||||||
The following tables present the contractual gross and net securities borrowing and lending agreements and the related offsetting amount, as of December 31, 2014. As of March 31, 2015 this business has been completely liquidated (see Note 2). | ||||||||||||||||||||||||
Gross amounts not offset in the Statement of Financial Condition | ||||||||||||||||||||||||
Gross amounts recognized | Gross amounts offset on the Consolidated Statements of Financial Condition (a) | Net amounts included on the Consolidated Statements of Financial Condition | Additional Amounts Available | Financial instruments | Cash Collateral pledged (b) | Net amounts | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||
Securities borrowed | 676,100 | — | 676,100 | (15,655 | ) | (660,445 | ) | — | — | |||||||||||||||
Securities loaned | 682,493 | — | 682,493 | (2,441 | ) | (680,052 | ) | — | — | |||||||||||||||
(a) | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |||||||||||||||||||||||
(b) | Includes the amount of cash collateral held/posted. | |||||||||||||||||||||||
Variable Interest Entities | ||||||||||||||||||||||||
The total assets and liabilities of the variable interest entities for which the Company has concluded that it holds a variable interest, but for which it is not the primary beneficiary, are $2.8 billion and $342.2 million as of March 31, 2015 and $2.9 billion and $445.8 million as of December 31, 2014, respectively. In addition, the maximum exposure relating to these variable interest entities as of March 31, 2015 was $197.1 million, and as of December 31, 2014 was $210.3 million, all of which is included in other investments, at fair value in the accompanying consolidated statements of financial condition. The exposure to loss primarily relates to the Consolidated Feeder Funds' investment in their Unconsolidated Master Funds as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||
b. | Consolidated Funds | |||||||||||||||||||||||
Other investments, at fair value | ||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014 other investments, at fair value, held by the Consolidated Funds are comprised of: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
(1) Portfolio Funds | $ | 189,793 | $ | 188,884 | ||||||||||||||||||||
(2) Lehman claims | 494 | 493 | ||||||||||||||||||||||
$ | 190,287 | $ | 189,377 | |||||||||||||||||||||
-1 | Investments in Portfolio Funds, at fair value | |||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, investments in Portfolio Funds, at fair value, included the following: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Investments of Enterprise LP | $ | 135,688 | $ | 138,253 | ||||||||||||||||||||
Investments of Merger Fund | 54,105 | 50,631 | ||||||||||||||||||||||
$ | 189,793 | $ | 188,884 | |||||||||||||||||||||
Consolidated investments of Enterprise LP | ||||||||||||||||||||||||
Enterprise LP operates under a “master-feeder” structure, whereby Enterprise Master's shareholders are Enterprise LP and RCG II Intermediate Fund, L.P. The consolidated investments in Portfolio Funds include Enterprise LP's investment of $135.7 million and $138.3 million in Enterprise Master as of March 31, 2015 and December 31, 2014, respectively. On May 12, 2010, the Company announced its intention to close Enterprise Master. Prior to this announcement, strategies utilized by Enterprise Master included merger arbitrage and activist investing, investments in distressed securities, convertible hedging, capital structure arbitrage, equity market neutral, investments in private placements of convertible securities, proprietary mortgages, structured credit investments, investments in mortgage backed securities and other structured finance products, investments in real estate and real property interests, structured private placements and other relative value strategies. Enterprise Master had broad investment powers and maximum flexibility in seeking to achieve its investment objective. Enterprise Master was permitted to invest in equity securities, debt instruments, options, futures, swaps, credit default swaps and other derivatives. As Enterprise Master winds down its positions, it will return capital to its investors. There are no unfunded commitments at Enterprise LP. | ||||||||||||||||||||||||
Consolidated investments of Merger Fund | ||||||||||||||||||||||||
The Merger Fund operates under a “master-feeder” structure, whereby Ramius Merger Master Ltd's ("Merger Master") shareholders are Merger Fund and Ramius Merger Fund Ltd. The consolidated investments in Portfolio Funds include Merger Fund's investment of $54.1 million and $50.6 million in Merger Master as of March 31, 2015 and December 31, 2014, respectively. The Merger Master’s investment objective is to achieve consistent absolute returns while emphasizing the preservation of investor capital. The Merger Master seeks to achieve these objectives by taking a fundamental, research-driven approach to investing, primarily in the securities of issuers engaged in, or subject to, announced (or unannounced but otherwise anticipated) extraordinary corporate transactions, which may include, but are not limited to, mergers, acquisitions, leveraged buyouts, tender offers, hostile takeover bids, sale processes, exchange offers, and recapitalizations. Merger Master invests in the securities of one or more issuers engaged in or subject to such extraordinary corporate transactions. Merger Master typically seeks to derive a profit by realizing the price differential, or “spread,” between the market price of securities purchased or sold short and the market price or value of securities realized in connection with the completion or termination of the extraordinary corporate transaction, or in connection with the adjustment of market prices in anticipation thereof, while seeking to minimize the market risk associated with the aforementioned investment activities. Merger Master will, depending on markets conditions, generally focus the majority of its investment program on announced transactions. If the investment manager of Merger Master considers it necessary, it may either alone or as part of a group, also initiate shareholder actions seeking to maximize value. Such shareholder actions may include, but are not limited to, re-orienting management’s focus or initiating the sale of the company (or one or more of its divisions) to a third party. There are no unfunded commitments at Merger Fund. | ||||||||||||||||||||||||
-2 | Lehman Claims, at fair value | |||||||||||||||||||||||
With respect to the aforementioned Lehman claims, the Total Net Equity Claim of Enterprise Master based on the value of assets at the time of Lehman's insolvency held directly by Enterprise Master and through Enterprise Master's ownership interest in affiliated funds consisted of $24.3 million. As of March 31, 2015, Enterprise Master has received distributions totaling approximately $36.2 million in respect of its claim. After giving effect to the distributions received by the Enterprise Master, the remaining Net Equity Claim for Enterprise Master held directly and through its ownership interest in affiliated funds was $0.7 million as of March 31, 2015. Of the $0.7 million current valuation of Enterprise Master's claim, $0.5 million was attributable to Enterprise LP based on its ownership percentage in Enterprise Master at the time of the Administration. The Company expects Enterprise Master to receive additional distributions from LBIE before the end of 2015, but the amount of those distributions remains uncertain. The Company does not expect future distributions to be material. | ||||||||||||||||||||||||
Indirect Concentration of the Underlying Investments Held by Consolidated Funds | ||||||||||||||||||||||||
From time to time, either directly or indirectly through its investments in the Consolidated Funds, the Company may maintain exposure to a particular issue or issuer (both long and/or short) which may account for 5% or more of the Company's equity. Based on information that is available to the Company as of March 31, 2015 and December 31, 2014, the Company assessed whether or not its interests in an issuer for which the Company's pro-rata share exceeds 5% of the Company's equity. There were no indirect concentrations that exceed 5% of the Company's equity as of March 31, 2015 or December 31, 2014. | ||||||||||||||||||||||||
Underlying Investments of Unconsolidated Funds Held by Consolidated Funds | ||||||||||||||||||||||||
Enterprise Master and Merger Master | ||||||||||||||||||||||||
Enterprise LP's investment in Enterprise Master represents Enterprise LP's proportionate share of Enterprise Master's net assets; as a result, the investment balances of Enterprise Master reflected below may exceed the net investment which Enterprise LP has recorded. Merger Fund's investment in Merger Master represents Merger Fund's proportionate share of Merger Master's net assets; as a result, the investment balances of Merger Master reflected below may exceed the net investment which Merger Fund has recorded.The following tables present summarized investment information for the underlying investments and derivatives held by Enterprise Master and Merger Master as of March 31, 2015 and December 31, 2014: | ||||||||||||||||||||||||
Securities owned by Enterprise Master, at fair value | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Bank debt | $ | 20 | $ | 20 | ||||||||||||||||||||
Common stock | 1,676 | 1,659 | ||||||||||||||||||||||
Preferred stock | 576 | 576 | ||||||||||||||||||||||
Private equity | 597 | 587 | ||||||||||||||||||||||
Restricted stock | 124 | 124 | ||||||||||||||||||||||
Rights | 2,490 | 2,802 | ||||||||||||||||||||||
Trade claims | 128 | 128 | ||||||||||||||||||||||
$ | 5,611 | $ | 5,896 | |||||||||||||||||||||
Receivable on derivative contracts, at fair value, owned by Enterprise Master | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Description | (dollars in thousands) | |||||||||||||||||||||||
Currency forwards | $ | 29 | $ | 64 | ||||||||||||||||||||
$ | 29 | $ | 64 | |||||||||||||||||||||
Portfolio Funds, owned by Enterprise Master, at fair value | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Strategy | (dollars in thousands) | |||||||||||||||||||||||
RCG Longview Equity Fund, LP* | Real Estate | $ | 9,370 | $ | 9,090 | |||||||||||||||||||
RCG Longview II, LP* | Real Estate | 752 | 747 | |||||||||||||||||||||
RCG Longview Debt Fund IV, LP* | Real Estate | 5,316 | 5,348 | |||||||||||||||||||||
RCG Longview, LP* | Real Estate | 40 | 40 | |||||||||||||||||||||
RCG Soundview, LLC* | Real Estate | 452 | 452 | |||||||||||||||||||||
RCG Urban American Real Estate Fund, L.P.* | Real Estate | 1,161 | 1,161 | |||||||||||||||||||||
RCG International Sarl* | Multi-Strategy | 1,079 | 2,113 | |||||||||||||||||||||
RCG Special Opportunities Fund, Ltd* | Multi-Strategy | 93,715 | 92,405 | |||||||||||||||||||||
RCG Energy, LLC * | Energy | 2,155 | 2,294 | |||||||||||||||||||||
RCG Renergys, LLC* | Energy | 1 | 1 | |||||||||||||||||||||
Other Private Investments | Various | 11,776 | 12,057 | |||||||||||||||||||||
Other Real Estate Investments (*) | Real Estate | 9,174 | 10,138 | |||||||||||||||||||||
$ | 134,991 | $ | 135,846 | |||||||||||||||||||||
* | Affiliates of the Company. | |||||||||||||||||||||||
Merger Master | ||||||||||||||||||||||||
Securities owned by Merger Master, at fair value | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Common stocks | $ | 133,725 | $ | 133,510 | ||||||||||||||||||||
Corporate bonds (a) | — | 3,383 | ||||||||||||||||||||||
Options | 992 | 541 | ||||||||||||||||||||||
$ | 134,717 | $ | 137,434 | |||||||||||||||||||||
(a) | As of December 31, 2014, maturities ranged from February 2017 to June 2019 and interest rates ranged between 8.50% and 9.75%. | |||||||||||||||||||||||
Securities sold, not yet purchased, by Merger Master, at fair value | ||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, Merger Master held common stock, sold not yet purchased, of $28.8 million and $39.9 million, respectively and options, sold not yet purchased, of $0.2 million and $0.2 million, respectively. | ||||||||||||||||||||||||
Receivable on derivative contracts, at fair value, owned by Merger Master | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Description | (dollars in thousands) | |||||||||||||||||||||||
Equity swaps | $ | 70 | $ | 78 | ||||||||||||||||||||
$ | 70 | $ | 78 | |||||||||||||||||||||
Payable for derivative contracts, at fair value, owned by Merger Master | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Description | (dollars in thousands) | |||||||||||||||||||||||
Equity swaps | $ | 85 | $ | 58 | ||||||||||||||||||||
$ | 85 | $ | 58 | |||||||||||||||||||||
Fair_Value_Measurements_for_Op
Fair Value Measurements for Operating Entities and Consolidated Funds | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||
Fair Value Measurements for Operating Entities and Consolidated Funds | Fair Value Measurements for Operating Entities and Consolidated Funds | |||||||||||||||||||||||||||||||
The following table presents the assets and liabilities that are measured at fair value on a recurring basis on the accompanying consolidated statements of financial condition by caption and by level within the valuation hierarchy as of March 31, 2015 and December 31, 2014: | ||||||||||||||||||||||||||||||||
Operating Entities | ||||||||||||||||||||||||||||||||
Assets at Fair Value as of March 31, 2015 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities owned | ||||||||||||||||||||||||||||||||
US Government securities | $ | 2,010 | $ | — | $ | — | $ | 2,010 | ||||||||||||||||||||||||
Preferred stock | 720 | — | 19,480 | 20,200 | ||||||||||||||||||||||||||||
Common stocks | 478,230 | 2,540 | 411 | 481,181 | ||||||||||||||||||||||||||||
Convertible bonds | — | — | 879 | 879 | ||||||||||||||||||||||||||||
Corporate bonds | — | 55,937 | — | 55,937 | ||||||||||||||||||||||||||||
Warrants and rights | 505 | — | 2,559 | 3,064 | ||||||||||||||||||||||||||||
Mutual funds | 16,187 | — | — | 16,187 | ||||||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 173 | — | — | 173 | ||||||||||||||||||||||||||||
Currency forwards | — | 659 | — | 659 | ||||||||||||||||||||||||||||
Equity swaps | — | 133 | — | 133 | ||||||||||||||||||||||||||||
Options | 10,424 | 3,922 | 41,642 | 55,988 | ||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | — | 38,714 | 64,442 | 103,156 | ||||||||||||||||||||||||||||
Real estate investments | — | — | 1,947 | 1,947 | ||||||||||||||||||||||||||||
Lehman claim | — | — | 361 | 361 | ||||||||||||||||||||||||||||
$ | 508,249 | $ | 101,905 | $ | 131,721 | $ | 741,875 | |||||||||||||||||||||||||
Liabilities at Fair Value as of March 31, 2015 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities sold, not yet purchased | ||||||||||||||||||||||||||||||||
Common stocks | $ | 163,432 | $ | — | $ | — | $ | 163,432 | ||||||||||||||||||||||||
Corporate bonds | — | 60 | — | 60 | ||||||||||||||||||||||||||||
Payable for derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 49 | — | — | 49 | ||||||||||||||||||||||||||||
Equity and credit default swaps | — | 169 | — | 169 | ||||||||||||||||||||||||||||
Options | 2,366 | — | 41,642 | 44,008 | ||||||||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | ||||||||||||||||||||||||||||||||
Contingent consideration liability (a) | $ | — | $ | — | $ | 3,974 | $ | 3,974 | ||||||||||||||||||||||||
$ | 165,847 | $ | 229 | $ | 45,616 | $ | 211,692 | |||||||||||||||||||||||||
(a) In accordance with the terms of a purchase agreement for an acquisition that closed during 2012, the Company is required to pay to the sellers a portion of future net income of the acquired business, if certain revenue targets are achieved through the period ended August 2016. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of March 31, 2015 can range from $0.1 million to $6.1 million. | ||||||||||||||||||||||||||||||||
Assets at Fair Value as of December 31, 2014 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities owned | ||||||||||||||||||||||||||||||||
US Government securities | $ | 2,010 | $ | — | $ | — | $ | 2,010 | ||||||||||||||||||||||||
Preferred stock | — | 2,553 | 12,517 | 15,070 | ||||||||||||||||||||||||||||
Common stocks | 578,934 | 18,130 | 412 | 597,476 | ||||||||||||||||||||||||||||
Convertible bonds | — | — | 900 | 900 | ||||||||||||||||||||||||||||
Corporate bonds | — | 159,557 | — | 159,557 | ||||||||||||||||||||||||||||
Warrants and rights | 95 | — | 1,322 | 1,417 | ||||||||||||||||||||||||||||
Mutual funds | 15,776 | — | — | 15,776 | ||||||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 75 | — | — | 75 | ||||||||||||||||||||||||||||
Currency forwards | — | 310 | — | 310 | ||||||||||||||||||||||||||||
Equity swaps | — | 251 | — | 251 | ||||||||||||||||||||||||||||
Options | 10,462 | 1,972 | 36,807 | 49,241 | ||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | — | 37,195 | 66,271 | 103,466 | ||||||||||||||||||||||||||||
Real estate investments | — | — | 2,175 | 2,175 | ||||||||||||||||||||||||||||
Lehman claim | — | — | 380 | 380 | ||||||||||||||||||||||||||||
$ | 607,352 | $ | 219,968 | $ | 120,784 | $ | 948,104 | |||||||||||||||||||||||||
Liabilities at Fair Value as of December 31, 2014 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities sold, not yet purchased | ||||||||||||||||||||||||||||||||
Common stocks | $ | 207,815 | $ | — | $ | — | $ | 207,815 | ||||||||||||||||||||||||
Corporate bonds | — | 60 | — | 60 | ||||||||||||||||||||||||||||
Payable for derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 33 | — | — | 33 | ||||||||||||||||||||||||||||
Equity and credit default swaps | — | 1,603 | — | 1,603 | ||||||||||||||||||||||||||||
Options | 2,887 | — | 36,807 | 39,694 | ||||||||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | ||||||||||||||||||||||||||||||||
Contingent consideration liability (a) | — | — | 4,083 | 4,083 | ||||||||||||||||||||||||||||
$ | 210,735 | $ | 1,663 | $ | 40,890 | $ | 253,288 | |||||||||||||||||||||||||
(a) In accordance with the terms of a purchase agreement for an acquisitions that closed during 2012, the Company is required to pay to the sellers a portion of future net income of the acquired businesses, if certain revenue targets are achieved through the period ended August 2016. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts can range from $0.9 million to $7.1 million. | ||||||||||||||||||||||||||||||||
Consolidated Funds' investments | ||||||||||||||||||||||||||||||||
Assets at Fair Value as of March 31, 2015 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | $ | — | $ | 54,105 | $ | 135,688 | $ | 189,793 | ||||||||||||||||||||||||
Lehman claims | — | — | 494 | 494 | ||||||||||||||||||||||||||||
$ | — | $ | 54,105 | $ | 136,182 | $ | 190,287 | |||||||||||||||||||||||||
Assets at Fair Value as of December 31, 2014 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | $ | — | $ | 50,631 | $ | 138,253 | $ | 188,884 | ||||||||||||||||||||||||
Lehman claims | — | — | 493 | 493 | ||||||||||||||||||||||||||||
$ | — | $ | 50,631 | $ | 138,746 | $ | 189,377 | |||||||||||||||||||||||||
The following table includes a rollforward of the amounts for the three months ended March 31, 2015 and 2014, for financial instruments classified within level 3. The classification of a financial instrument within level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement. | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at March 31, 2015 | Change in unrealized gains/losses relating to instruments still held (1) | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Operating Entities | ||||||||||||||||||||||||||||||||
Preferred stock | $ | 12,517 | $ | — | $ | — | $ | 7,375 | $ | — | $ | (412 | ) | $ | 19,480 | $ | (412 | ) | ||||||||||||||
Common stocks | 412 | — | — | — | (3 | ) | 2 | 411 | 5 | |||||||||||||||||||||||
Convertible bonds | 900 | — | — | — | — | (21 | ) | 879 | (21 | ) | ||||||||||||||||||||||
Options, asset | 36,807 | — | — | — | — | 4,835 | 41,642 | 4,835 | ||||||||||||||||||||||||
Options, liability | 36,807 | — | — | — | — | 4,835 | 41,642 | 4,835 | ||||||||||||||||||||||||
Warrants and Rights | 1,322 | — | (14 | ) | 26 | — | 1,225 | 2,559 | 1,224 | |||||||||||||||||||||||
Portfolio Funds | 66,271 | — | — | 3,972 | (8,350 | ) | 2,549 | 64,442 | 5,303 | |||||||||||||||||||||||
Real estate | 2,175 | — | — | — | (216 | ) | (12 | ) | 1,947 | (12 | ) | |||||||||||||||||||||
Lehman claim | 380 | — | — | — | — | (19 | ) | 361 | (19 | ) | ||||||||||||||||||||||
Contingent consideration liability | 4,083 | — | — | — | (109 | ) | — | 3,974 | — | |||||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||||||||||||||
Portfolio Funds | 138,253 | — | — | — | (4,234 | ) | 1,669 | 135,688 | 1,925 | |||||||||||||||||||||||
Lehman claim | 493 | — | — | — | — | 1 | 494 | 1 | ||||||||||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2013 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at March 31, 2014 | Change in unrealized gains/losses relating to instruments still held (1) | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Operating Entities | ||||||||||||||||||||||||||||||||
Preferred stock | $ | 324 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 324 | $ | — | ||||||||||||||||
Common stocks | 3,559 | — | — | — | — | 5,724 | 9,283 | 5,724 | ||||||||||||||||||||||||
Convertible bonds | 1,950 | — | — | — | — | — | 1,950 | — | ||||||||||||||||||||||||
Options, asset | — | — | — | 35,710 | — | 7,146 | 42,856 | 7,146 | ||||||||||||||||||||||||
Options, liability | — | — | — | 35,710 | — | 7,146 | 42,856 | 7,146 | ||||||||||||||||||||||||
Warrants and Rights, asset | 5,805 | — | — | — | (1,328 | ) | (1,209 | ) | 3,268 | 137 | ||||||||||||||||||||||
Portfolio Funds | 51,649 | — | — | 4,385 | (1,242 | ) | 3,791 | 58,583 | 3,847 | |||||||||||||||||||||||
Real estate | 2,088 | — | — | 40,000 | (27 | ) | 222 | 42,283 | 222 | |||||||||||||||||||||||
Lehman claim | 378 | — | — | — | — | 12 | 390 | 12 | ||||||||||||||||||||||||
Contingent consideration liability | 6,937 | — | — | (76 | ) | — | — | 6,861 | — | |||||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||||||||||||||
Portfolio Funds | 155,674 | — | — | — | (15,944 | ) | 3,329 | 143,059 | 3,329 | |||||||||||||||||||||||
Lehman claim | 4,842 | — | — | — | (980 | ) | (86 | ) | 3,776 | (86 | ) | |||||||||||||||||||||
(1) Unrealized gains/losses are reported in other income (loss) in the accompanying consolidated statements of | ||||||||||||||||||||||||||||||||
operations. | ||||||||||||||||||||||||||||||||
All realized and unrealized gains (losses) in the table above are reflected in other income (loss) in the accompanying consolidated statements of operations. | ||||||||||||||||||||||||||||||||
Certain assets and liabilities are measured at fair value on a nonrecurring basis and therefore are not included in the tables above. | ||||||||||||||||||||||||||||||||
The Company recognizes all transfers and the related unrealized gain (loss) at the beginning of the reporting period. | ||||||||||||||||||||||||||||||||
Transfers between level 1 and 2 generally relate to whether the principal market for the security becomes active or inactive. Transfers between level 2 and 3 generally relate to whether significant relevant observable inputs are available for the fair value measurements or due to change in liquidity restrictions for the investments. | ||||||||||||||||||||||||||||||||
During the three months ended March 31, 2015 and 2014, there were no transfers between level 1 and level 2 assets and liabilities. | ||||||||||||||||||||||||||||||||
The following table includes quantitative information as of March 31, 2015 and December 31, 2014 for financial instruments classified within level 3. The table below quantifies information about the significant unobservable inputs used in the fair value measurement of the Company's level 3 financial instruments. | ||||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||||||
Fair Value at March 31, 2015 | Valuation techniques | Unobservable Inputs | Range | |||||||||||||||||||||||||||||
Level 3 Assets | ||||||||||||||||||||||||||||||||
Common and preferred stocks | $ | 19,231 | Market/transaction multiples and option pricing method | Volatility Market multiples | 38% 1x to 6x | |||||||||||||||||||||||||||
Convertible bonds | 879 | Recovery analysis | Recovery rate | 50% | ||||||||||||||||||||||||||||
Warrants and rights, net | 2,559 | Model based | Volatility | 20% to 60% (weighted average 41%) | ||||||||||||||||||||||||||||
Options | 41,642 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Other level 3 assets (a) | 203,592 | |||||||||||||||||||||||||||||||
Total level 3 assets | 267,903 | |||||||||||||||||||||||||||||||
Level 3 Liabilities | ||||||||||||||||||||||||||||||||
Options | 41,642 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Contingent consideration | 3,974 | Discounted cash flows | Projected cash flow and discount rate | 9% | ||||||||||||||||||||||||||||
Total level 3 liabilities | $ | 45,616 | ||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||||||
Fair Value at December 31, 2014 | Valuation techniques | Unobservable Inputs | Range | |||||||||||||||||||||||||||||
Level 3 Assets | ||||||||||||||||||||||||||||||||
Common and preferred stocks | $ | 12,269 | Market multiples and option pricing method | Volatility Market multiples | 45% 1x to 6x | |||||||||||||||||||||||||||
Convertible bonds | 900 | Recovery analysis | Recovery rate | 50% | ||||||||||||||||||||||||||||
Warrants and rights, net | 1,322 | Model based | Volatility | 20% to 60% (weighted average 34%) | ||||||||||||||||||||||||||||
Options | 36,807 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Other level 3 assets (a) | 208,232 | |||||||||||||||||||||||||||||||
Total level 3 assets | 259,530 | |||||||||||||||||||||||||||||||
Level 3 Liabilities | ||||||||||||||||||||||||||||||||
Options | 36,807 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Contingent consideration | 4,083 | Discounted cash flows | Projected cash flow and discount rate | 9% | ||||||||||||||||||||||||||||
Total level 3 liabilities | 40,890 | |||||||||||||||||||||||||||||||
(a) | Quantitative disclosures of unobservable inputs and assumptions are not required for investments for which NAV per share is used as a practical expedient to determine fair value, as their redemption features rather than observability of inputs cause them to be classified as a level 3 type asset within the fair value hierarchy. In addition, the fair value of the Consolidated Funds' investments are determined based on net asset value and therefore quantitative disclosures are not included in the table above. The quantitative disclosures also exclude financial instruments for which the determination of fair value is based on prices from prior transactions. | |||||||||||||||||||||||||||||||
The Company has established valuation policies and procedures and an internal control infrastructure over its fair value measurement of financial instruments which includes ongoing oversight by the valuation committee as well as periodic audits performed by the Company's internal audit group. The valuation committee is comprised of senior management, including non-investment professionals, who are responsible for overseeing and monitoring the pricing of the Company's investments, including the review of the results of the independent price verification process, approval of new trading asset classes and use of applicable pricing models and approaches. | ||||||||||||||||||||||||||||||||
The US GAAP fair value leveling hierarchy is designated and monitored on an ongoing basis. In determining the designation, the Company takes into consideration a number of factors including the observability of inputs, liquidity of the investment and the significance of a particular input to the fair value measurement. Designations, models, pricing vendors, third party valuation providers and inputs used to derive fair market value are subject to review by the valuation committee and the internal audit group. The Company reviews its valuation policy guidelines on an ongoing basis and may adjust them in light of, improved valuation metrics and models, the availability of reliable inputs and information, and prevailing market conditions. The Company reviews a daily profit and loss report, as well as other periodic reports, and analyzes material changes from period-to-period in the valuation of its investments as part of its control procedures. The Company also performs back testing on a regular basis by comparing prices observed in executed transactions to previous valuations. | ||||||||||||||||||||||||||||||||
The fair market value for level 3 securities may be highly sensitive to the use of industry standard models, unobservable inputs and subjective assumptions. The degree of fair market value sensitivity is also contingent upon the subjective weight given to specific inputs and valuation metrics. The Company holds various equity and debt instruments where different weight may be applied to industry standard models representing standard valuation metrics such as: discounted cash flows, market multiples, comparative transactions, capital rates, recovery rates and timing, and bid levels. Generally, changes in the weights ascribed to the various valuation metrics and the significant unobservable inputs in isolation may result in significantly lower or higher fair value measurements. Volatility levels for warrants and options are not readily observable and subject to interpretation. Changes in capital rates, discount rates and replacement costs could significantly increase or decrease the valuation of the real estate investments. The interrelationship between unobservable inputs may vary significantly amongst level 3 securities as they are generally highly idiosyncratic. Significant increases (decreases) in any of those inputs in isolation can result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
Other financial assets and liabilities measured at fair value | ||||||||||||||||||||||||||||||||
The following table presents the carrying values and estimated fair values, at March 31, 2015 and December 31, 2014, of financial assets and liabilities and information on their classification within the fair value hierarchy which are measured at fair value on a recurring basis. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value see Note 3. | ||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | Fair Value Hierarchy | ||||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Operating companies | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 94,666 | $ | 94,666 | $ | 129,509 | $ | 129,509 | Level 1 | |||||||||||||||||||||||
Cash collateral pledged | 8,923 | 8,923 | 8,306 | 8,306 | Level 2 | |||||||||||||||||||||||||||
Securities borrowed | — | 676,100 | 660,445 | Level 1 | ||||||||||||||||||||||||||||
Consolidated funds | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 643 | 643 | 501 | 501 | Level 1 | |||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Securities loaned | — | — | 682,493 | 661,533 | Level 1 | |||||||||||||||||||||||||||
Convertible debt | 119,999 | (a) | 170,056 | (b) | 118,475 | (a) | 160,713 | (c) | Level 2 | |||||||||||||||||||||||
Notes payable and other debt | 68,253 | 72,329 | 67,144 | 69,548 | Level 2 | |||||||||||||||||||||||||||
(a) | The carrying amount of the convertible debt includes an unamortized discount of $29.5 million and $31.0 million as of March 31, 2015 and December 31, 2014. | |||||||||||||||||||||||||||||||
(b) | The convertible debt include the conversion option and is based on the last broker quote available. |
Receivables_from_and_Payable_t
Receivables from and Payable to Brokers | 3 Months Ended |
Mar. 31, 2015 | |
Brokers and Dealers [Abstract] | |
Receivables from and Payable to Brokers | Receivables from and Payable to Brokers |
Receivables from and payable to brokers includes cash held at the clearing brokers, amounts receivable or payable for unsettled transactions, monies borrowed and proceeds from short sales (including commissions and fees related to securities transactions) equal to the fair value of securities sold, not yet purchased, which are restricted until the Company purchases the securities sold short. Pursuant to the master netting agreements the Company entered into with its brokers, these balances are presented net (assets less liabilities) across balances with the same broker. As of March 31, 2015 and December 31, 2014, receivable from brokers was $109.5 million and $84.7 million, respectively. Payable to brokers was $227.9 million and $335.8 million as of March 31, 2015 and December 31, 2014, respectively. The Company's receivables from and payable to brokers balances are held at multiple financial institutions. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill |
In accordance with US GAAP, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. Under US GAAP, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amounts as a basis for determining if it is necessary to perform the two-step approach. Periodically estimating the fair value of a reporting unit requires significant judgment and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. | |
No impairment charges for goodwill were recognized during the three months ended March 31, 2015 and 2014, respectively. |
Redeemable_NonControlling_Inte
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds | Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds | ||||||||
Redeemable non-controlling interests in consolidated subsidiaries and funds and the related net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds are comprised as follows: | |||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||
(dollars in thousands) | |||||||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | |||||||||
Operating companies | $ | 8,474 | $ | 9,619 | |||||
Consolidated funds | 77,491 | 76,457 | |||||||
$ | 85,965 | $ | 86,076 | ||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(dollars in thousands) | |||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | |||||||||
Operating companies | $ | 918 | $ | 3,439 | |||||
Consolidated funds | 1,802 | 748 | |||||||
$ | 2,720 | $ | 4,187 | ||||||
ShareBased_Compensation_and_Em
Share-Based Compensation and Employee Ownership Plans | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Share-Based Compensation and Employee Ownership Plans | Share-Based and Deferred Compensation and Employee Ownership Plans | |||||||||||||
The Company issues share based compensation under the 2006 Equity and Incentive Plan, the 2007 Equity and Incentive Plan (both established prior to the November 2009 transaction between Ramius and Cowen) and the Cowen Group, Inc. 2010 Equity and Incentive Plan (collectively, the “Equity Plans”). The Equity Plans permit the grant of options, restricted shares, restricted stock units, stock appreciation rights ("SAR's") and other equity based awards to the Company's employees, consultants and directors. Stock options granted generally vest over two-to-five-year periods and expire seven years from the date of grant. Restricted shares and restricted share units issued may be immediately vested or may generally vest over a two-to-five-year period. SAR's vest and expire after five years from grant date. Awards are subject to the risk of forfeiture. As of March 31, 2015, there were approximately 4.0 million shares available for future issuance under the Equity Plans. | ||||||||||||||
Under the 2010 Equity Plan, the Company awarded $12.5 million of deferred cash awards to its employees during the three months ended March 31, 2015. These awards vest over a four year period and accrue interest between 0.70% to 0.75% per year. As of March 31, 2015, the Company had unrecognized compensation expense related to deferred cash awards of $42.0 million. | ||||||||||||||
The Company measures compensation cost for share based awards according to the equity method. In accordance with the expense recognition provisions of those standards, the Company amortizes unearned compensation associated with share based awards on a straight-line basis over the vesting period of the option or award. In relation to awards under the Equity Plans, the Company recognized expense of $4.2 million and $4.8 million for the three months ended March 31, 2015 and 2014, respectively. The income tax effect recognized for the Equity Plans was a benefit of $0.1 million and $1.0 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||
Stock Options and Stock Appreciation Rights | ||||||||||||||
The Company values options and SAR's on grant date using the Black-Scholes valuation model which requires the Company to make assumptions regarding the expected term, volatility, risk-free rate and dividend yield: | ||||||||||||||
Expected term. Expected term represents the period of time that awards granted are expected to be outstanding. The Company elected to use the "simplified" calculation method, as applicable to companies that lack extensive historical data. The mid-point between the vesting date and the contractual expiration date is used as the expected term under this method. | ||||||||||||||
Expected volatility. The Company bases its expected volatility on its own stock price history. | ||||||||||||||
Risk free rate. The risk-free rate for periods within the expected term of the award is based on the interest rate of a traded zero-coupon U.S. Treasury bond with a term equal to the awards' expected term on the date of grant. | ||||||||||||||
Dividend yield. The Company has not paid and does not expect to pay dividends in the foreseeable future. Accordingly, the assumed dividend yield is zero. | ||||||||||||||
The following table summarizes the Company's stock option activity for the three months ended March 31, 2015: | ||||||||||||||
Shares Subject | Weighted Average | Weighted Average | Aggregate Intrinsic | |||||||||||
to Option | Exercise Price/Share | Remaining Term | Value(1) | |||||||||||
(in years) | (dollars in thousands) | |||||||||||||
Balance outstanding at December 31, 2014 | 216,672 | $ | 5.65 | 1.6 | $ | 87 | ||||||||
Options granted | — | — | — | — | ||||||||||
Options exercised | — | — | — | — | ||||||||||
Options expired | — | — | — | — | ||||||||||
Balance outstanding at March 31, 2015 | 216,672 | $ | 5.65 | 1.35 | $ | 129 | ||||||||
Options exercisable at March 31, 2015 | 216,672 | $ | 5.65 | 1.35 | $ | — | ||||||||
-1 | Based on the Company's closing stock price of $5.20 on March 31, 2015 and $4.80 on December 31, 2014. | |||||||||||||
As of March 31, 2015, the unrecognized compensation expense related to the Company's grant of stock options was insignificant. | ||||||||||||||
The following table summarizes the Company's SAR's for the three months ended March 31, 2015: | ||||||||||||||
Shares Subject | Weighted Average | Weighted Average | Aggregate Intrinsic | |||||||||||
to Option | Exercise Price/Share | Remaining Term | Value(1) | |||||||||||
(in years) | (dollars in thousands) | |||||||||||||
Balance outstanding at December 31, 2014 | 400,000 | $ | 2.9 | 3.21 | 913 | |||||||||
SAR's granted | — | — | — | — | ||||||||||
SAR's acquired | — | — | — | — | ||||||||||
SAR's expired | — | — | — | — | ||||||||||
Balance outstanding at March 31, 2015 | 400,000 | $ | 2.9 | 2.96 | $ | 1,055 | ||||||||
SAR's exercisable at March 31, 2015 | — | $ | — | 0 | $ | — | ||||||||
-1 | Based on the Company's closing stock price of $5.20 on March 31, 2015 and $4.80 on December 31, 2014. | |||||||||||||
As of March 31, 2015 and December 31, 2014, the unrecognized compensation expense related to the Company's grant of SAR's was $0.2 million and $0.2 million, respectively. | ||||||||||||||
Restricted Shares and Restricted Stock Units Granted to Employees | ||||||||||||||
Restricted shares and restricted stock units are referred to collectively as restricted stock. The following table summarizes the Company's restricted share and restricted stock unit activity for the three months ended March 31, 2015: | ||||||||||||||
Nonvested Restricted Shares and Restricted Stock Units | Weighted-Average | |||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Balance outstanding at December 31, 2014 | 17,654,582 | $ | 3.7 | |||||||||||
Granted | 5,635,310 | 4.77 | ||||||||||||
Vested | (1,729,896 | ) | 2.97 | |||||||||||
Canceled | — | — | ||||||||||||
Forfeited | (560,955 | ) | 3.04 | |||||||||||
Balance outstanding at March 31, 2015 (1) | 20,999,041 | $ | 4.07 | |||||||||||
(1) Performance linked restricted stock units of 1,925,750 were awarded to employees of the Company in December 2013 and January 2014. Of the awards granted, 281,250 have been forfeited through March 31, 2015. The remaining awards, included in the outstanding balance as of March 31, 2015, will vest on June 10, 2019 and will be earned only to the extent that the Company attains specified performance goals relating to its volume-weighted average share price and the aggregate net income for the years from 2014 to 2018. The actual number of RSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 100% of the targeted award. Each RSU is equal to the one share of the Company’s Class A common stock. Compensation expense is recognized to the extent that it is probable that the Company will attain the performance goals. | ||||||||||||||
The fair value of restricted stock (excluding performance linked units which are valued using the Monte Carlo valuation model) is determined based on the number of shares granted and the quoted price of the Company's common stock on the date of grant. | ||||||||||||||
As of March 31, 2015, there was $65.3 million of unrecognized compensation expense related to the Company's grant of nonvested restricted shares and restricted stock units to employees. Unrecognized compensation expense related to nonvested restricted shares and restricted stock units granted to employees is expected to be recognized over a weighted-average period of 1.93 years. | ||||||||||||||
Restricted Shares and Restricted Stock Units Granted to Non-employee Board Members | ||||||||||||||
There were no restricted stock units awarded during the three months ended March 31, 2015. As of March 31, 2015 there were 424,479 restricted stock units outstanding. |
Defined_Benefit_Plan
Defined Benefit Plan | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Compensation and Retirement Disclosure [Abstract] | ||||
Defined Benefit Plan | Defined Benefit Plan | |||
On December 1, 2005, the Company adopted a defined benefit plan ("Cash Balance Plan") to provide retirement income to all eligible employees of the Company and its subsidiaries in accordance with the terms and conditions in the Cash Balance Plan. As previously stated, the Company made the decision to terminate the Cash Balance Plan effective December 31, 2013. On May 12, 2014 Cowen received a favorable determination letter from the IRS approving the termination of the Cash Balance Plan. Subsequently, steps were taken to process the distributions based on participant distribution elections by December 15, 2014 and the Company will file a final Form 5500 for the Plan Year 2014. | ||||
The amounts contained in the following table relate to the Company's defined benefit plan(s) for the three months ended March 31, 2014: | ||||
Three Months Ended March 31, | ||||
2014 | ||||
Components of net periodic benefit cost included in employee compensation and benefits | ||||
Service cost | $ | — | ||
Interest cost | 33 | |||
Expected return on plan assets | (66 | ) | ||
Amortization of loss / (gain) | — | |||
Amortization of prior service cost | — | |||
Effect of settlement | — | |||
Net periodic benefit cost | $ | (33 | ) |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
The taxable results of the Company’s U.S. operations are included in the consolidated income tax returns of Cowen Group, Inc. as well as stand‑alone state and local tax returns. The Company has subsidiaries that are resident in foreign countries where tax filings have to be submitted on a stand‑alone basis. These subsidiaries are subject to tax in their respective countries and the Company is responsible for and, thus, reports all taxes incurred by these subsidiaries. The countries where the Company owns subsidiaries with tax filing obligations are United Kingdom, Luxembourg, Gibralter and Hong Kong. | |
The Company calculates its U.S. tax provision using the estimated annual effective tax rate methodology. The tax expense or benefit caused by an unusual or infrequent item is recorded in the quarter in which it occurs. The Company uses the discrete methodology to calculate its income tax provision for its foreign subsidiaries. Based on these methodologies, the Company’s effective income tax rate was 26.35% and (0.56)% for the three months ended March 31, 2015 and 2014, respectively. During the three months ended March 31, 2015, the unusual or infrequent item whose tax impact was recorded discretely primarily related to state taxes, the impact of change in tax legislation in New York and the tax provisions of the Company’s foreign subsidiaries. | |
For the three months ended March 31, 2015 and 2014, the effective tax rate differs from the statutory rate of 35% primarily due to a change in the Company's state taxes, stock compensation and other nondeductible expenses. | |
The Company records deferred tax assets and liabilities for the future tax benefit or expense that will result from differences between the carrying value of its assets for income tax purposes and for financial reporting purposes, as well as for operating or capital loss and tax credit carryovers. A valuation allowance is recorded to bring the net deferred tax assets to a level that, in management's view, is more likely than not to be realized in the foreseeable future. This level will be estimated based on a number of factors, especially the amount of net deferred tax assets of the Company that are actually expected to be realized, for tax purposes, in the foreseeable future. As of March 31, 2015, the Company recorded no valuation allowance against its federal and state net deferred tax assets and a full valuation allowance against its foreign net deferred tax assets. | |
The Company is subject to examination by the United States Internal Revenue Service, the United Kingdom Inland Revenue Service as well as state, local and foreign tax authorities in jurisdictions where the Company has significant business operations, such as New York. Currently, the Company is under audit by New York State for the 2009 to 2012 tax years. Management is not expecting a material tax liability to result from this audit. | |
The Company intends to permanently reinvest the capital and accumulated earnings of its foreign subsidiaries in the respective subsidiary, but remits the current earnings of its foreign subsidiaries to the United States to the extent permissible under local regulatory rules. The undistributed earnings of the Company’s foreign subsidiaries totaled $0.1 million and $1.1 million as of March 31, 2015 and December 31, 2014, respectively, and the tax liability that would arise if these earnings were remitted to the United States would be approximately $0.01 million and $0.2 million, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Commitments and Contingencies | Commitments and Contingencies | |||||||||||
Lease Obligations | ||||||||||||
The Company has entered into leases for office space and equipment. These leases contain rent escalation clauses. The Company records rent expense on a straight-line basis over the lease term, including any rent holiday periods. Rent expense was $4.4 million and $4.2 million, for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
As of March 31, 2015, future minimum annual lease and service payments for the Company were as follows: | ||||||||||||
Equipment Leases (a) | Service Payments | Facility Leases (b) | ||||||||||
(dollars in thousands) | ||||||||||||
2015 | $ | 2,052 | $ | 10,583 | $ | 13,705 | ||||||
2016 | 2,437 | 9,000 | 16,688 | |||||||||
2017 | 2,245 | 4,672 | 13,271 | |||||||||
2018 | 2,198 | 3,958 | 13,003 | |||||||||
2019 | 813 | 1,375 | 12,460 | |||||||||
Thereafter | — | — | 40,970 | |||||||||
$ | 9,745 | $ | 29,588 | $ | 110,097 | |||||||
(a) | Equipment Leases include the Company's commitments relating to operating and capital leases. See Note 14 for further information on the capital lease minimum payments which are included in the table. | |||||||||||
(b) | The Company has entered into various agreements to sublease certain of its premises. The Company recorded sublease income related to these leases of $0.5 million and $0.3 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||
Clawback Obligations | ||||||||||||
For financial reporting purposes, the general partners of a real estate fund have recorded a liability for potential clawback obligations to the limited partners, due to changes in the unrealized value of the fund's remaining investments and where the fund's general partner has previously received carried interest distributions. The clawback liability, however, is not realized until the end of the fund's life. The life of the real estate fund's with a potential clawback obligation is currently in a winding-up phase whereby the remaining assets of the fund are being liquidated as promptly as possible so as to maximize value, however a final date for liquidation has not been set. The fund is currently winding-down and as of both March 31, 2015 and December 31, 2014, and the clawback obligation was $6.2 million. | ||||||||||||
The Company serves as the general partner/managing member and/or investment manager to various affiliated and sponsored funds. As such, the Company is contingently liable for obligations for those entities. These amounts are not included above as the Company believes that the assets in these funds are sufficient to discharge any liabilities. | ||||||||||||
Unfunded Commitments | ||||||||||||
As of March 31, 2015, the Company had unfunded commitments of $9.9 million pertaining to capital commitments in four real estate investments held by the Company, all of which pertain to related party investments. Such commitments can be called at any time, subject to advance notice. The Company, as a limited partner of the HealthCare Royalty Partners funds and also as a member of HealthCare Royalty Partners General Partners, has committed to invest $45.4 million in the Healthcare Royalty Partners funds which are managed by Healthcare Royalty Management. This commitment is expected to be called over a two to five year period. The Company will make its pro-rata investment in the HealthCare Royalty Partners funds along with the other limited partners. Through March 31, 2015, the Company has funded $35.7 million towards these commitments. In April 2013, the Company committed $1.0 million to Starboard Leaders Fund LP, which may increase or decrease over time, and, as of March 31, 2015, has funded $0.9 million towards this commitment. As of March 31, 2015, the Company has an unfunded commitment to Formation 8 Partners Fund I LP of $1.4 million. The remaining capital commitment is expected to be called over a one year period. | ||||||||||||
Litigation | ||||||||||||
In the ordinary course of business, the Company and its affiliates and subsidiaries and current and former officers, directors and employees (the "Company and Related Parties") are named as defendants in, or as parties to, various legal actions and proceedings. Certain of these actions and proceedings assert claims or seek relief in connection with alleged violations of securities, banking, anti-fraud, anti-money laundering, employment and other statutory and common laws. Certain of these actual or threatened legal actions and proceedings include claims for substantial or indeterminate compensatory or punitive damages, or for injunctive relief. | ||||||||||||
In the ordinary course of business, the Company and Related Parties are also subject to governmental and regulatory examinations, information gathering requests (both formal and informal), certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Certain affiliates and subsidiaries of the Company are investment banks, registered broker-dealers, futures commission merchants, investment advisers or other regulated entities and, in those capacities, are subject to regulation by various U.S., state and foreign securities, commodity futures and other regulators. In connection with formal and informal inquiries by these regulators, the Company and such affiliates and subsidiaries receive requests, and orders seeking documents and other information in connection with various aspects of their regulated activities. | ||||||||||||
Due to the global scope of the Company's operations, and its presence in countries around the world, the Company and Related Parties may be subject to litigation, and governmental and regulatory examinations, information gathering requests, investigations and proceedings (both formal and informal), in multiple jurisdictions with legal and regulatory regimes that may differ substantially, and present substantially different risks, from those the Company and Related Parties are subject to in the United States. | ||||||||||||
The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interests of the Company and its shareholders, and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. | ||||||||||||
In accordance with US GAAP, the Company establishes reserves for contingencies when the Company believes that it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. The Company discloses a contingency if there is at least a reasonable possibility that a loss may have been incurred and there is no reserve for the loss because the conditions above are not met. The Company's disclosure includes an estimate of the reasonably possible loss or range of loss for those matters, for which an estimate can be made. Neither a reserve nor disclosure is required for losses that are deemed remote. | ||||||||||||
The Company appropriately reserves for certain matters where, in the opinion of management, the likelihood of liability is probable and the extent of such liability is reasonably estimable. Such amounts are included within accounts payable, accrued expenses and other liabilities in the accompanying consolidated statements of financial condition. Estimates, by their nature, are based on judgment and currently available information and involve a variety of factors, including, but not limited to, the type and nature of the litigation, claim or proceeding, the progress of the matter, the advice of legal counsel, the Company's defenses and its experience in similar cases or proceedings as well as its assessment of matters, including settlements, involving other defendants in similar or related cases or proceedings. The Company may increase or decrease its legal reserves in the future, on a matter-by-matter basis, to account for developments in such matters. The Company accrues legal fees as incurred. | ||||||||||||
The following information reflects developments with respect to the Company's legal proceedings that occurred in the quarter ended March 31, 2015. These items should be read together with the Company's discussion in Note 18 "Commitments and Contingencies" in the Notes to Consolidated Financial Statements in Part IV and the Company's discussion set forth under Legal Proceedings in Part I, Item 3 of the Company's Annual Report on Form 10-K for the year ended December 31, 2014. | ||||||||||||
On May 28, 2014, Energy Intelligence Group, Inc. and Energy Intelligence Group UK (collectively, "EIG") filed a lawsuit against Cowen and Company, LLC in the United States Court for the Southern District of New York (Energy Intelligence Group, Inc. and Energy Intelligence Group UK v. Cowen and Company, LLC, No. 14-CV-3789). The complaint alleges copyright infringement based on alleged impermissible distribution of EIG's publication, Oil Daily, by Cowen and Company, LLC, and Dahlman Rose & Company, LLC, as Cowen's alleged predecessor-in-interest. EIG is seeking statutory damages based on alleged willful infringement of their copyrights. The Company intends to vigorously defend against this lawsuit. On November 12, 2014, the Company filed an answer and affirmative defenses to the EIG complaint. On March 23, 2015, the parties attended a further mediation by telephonic conference before the federal Magistrate Judge. Subsequent to the March 23, 2015 telephonic conference, the case was referred back to District Court Judge for further adjudication. On April 15, 2015, the parties attended an initial conference with the District Court Judge for the purpose of setting a schedule for the case. The case is in its preliminary stages therefore the Company cannot predict the outcome at this time but does not currently expect this case to have a material effect on its financial position but it could have a material effect on the Company’s results of operations in a future period. |
Convertible_Debt_and_Notes_Pay
Convertible Debt and Notes Payable | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Convertible Debt and Notes Payable | Convertible Debt and Notes Payable | |||||||||||||||
As of March 31, 2015 and December 31, 2014, the Company's outstanding debt was as follows: | ||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||
(dollars in thousands) | ||||||||||||||||
Convertible debt | $ | 119,999 | $ | 118,475 | ||||||||||||
Note Payable | 63,250 | 63,250 | ||||||||||||||
Other Note payable | 1,415 | — | ||||||||||||||
Capital lease obligations | 3,588 | 3,894 | ||||||||||||||
$ | 188,252 | $ | 185,619 | |||||||||||||
Convertible Debt | ||||||||||||||||
On March 10, 2014, the Company issued $149.5 million of 3.0% cash convertible senior notes ("Convertible Notes"). The Convertible Notes are due on March 15, 2019 unless earlier repurchased by the Company or converted by the holder into cash in accordance with their terms prior to such date. The interest on the Convertible Notes is payable semi-annually on March 15 and September 15 of each year. The Convertible Notes are senior unsecured obligations and rank senior in right of payments to other obligations. The Convertible Notes may be converted into cash, upon the occurrence of certain events, whereby a holder will receive, per $1,000 principal amount of notes being converted, an amount equal to the sum of principal amount outstanding and the conversion amount based on the current conversion price (the "Conversion Option"). The Convertible Notes were issued with an initial conversion price of $5.33 per share. | ||||||||||||||||
The Company recorded interest expense related to the coupon of $1.1 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively. The initial unamortized discount on the Convertible Notes was $35.7 million and is shown net in convertible debt in the accompanying consolidated statements of financial condition. Amortization on the discount for the three months ended March 31, 2015 and 2014, respectively, included within interest expense in the accompanying consolidated statements of operations is $1.5 million and $0.3 million based on an effective interest rate of 8.89%. The Company capitalized the debt issuance costs in the amount of $3.7 million, which is included in other assets in the accompanying consolidated statements of financial condition, and will be amortized over the life of the Convertible Notes. As of March 31, 2015, the Company is in compliance with all covenants included in the indenture governing the Convertible Notes. | ||||||||||||||||
Of the net proceeds from the sale of the Convertible Notes, approximately $20.5 million was applied to pay the net cost of a cash convertible note economic hedge and warrant transaction which increases the effective conversion price to $7.18 (see Note 5), and approximately $0.3 million was applied to repurchase shares of Cowen Class A common stock. The remainder of the net proceeds is being used for general corporate purposes. | ||||||||||||||||
Note Payable | ||||||||||||||||
On October 10, 2014 the Company completed its public offering of $63.3 million aggregate principal amount of 8.25% senior notes due on October 15, 2021 ("2021 Notes"). Interest on the 2021 Notes is payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing on January 15, 2015. The Company recorded interest expense related to the coupon of $1.3 million for the three months ended March 31, 2015. The Company capitalized debt issuance costs of approximately $2.9 million which are included in other assets in the accompanying consolidated statements of financial condition and will be amortized over the life of the 2021 Notes. As of March 31, 2015, the Company is in compliance with all covenants included in the indenture governing the 2021 Notes. The Company intends to use the proceeds from the offering of the 2021 Notes to pursue direct investment and financing opportunities, to continue expanding its existing businesses and for other general corporate purposes. | ||||||||||||||||
Other Note Payable | ||||||||||||||||
During January 2015, the Company borrowed $2.0 million to fund insurance premium payments. This note has an effective interest rate of 1.33% and is due on December 1, 2015, with monthly payment requirements of $0.2 million. As of March 31, 2015, the outstanding balance on this note payable was $1.4 million. Interest expense for the three months ended March 31, 2015 was insignificant. | ||||||||||||||||
During January 2014, the Company borrowed $2.0 million to fund insurance premium payments. This note has an effective interest rate of 1.55% and was due on December 1, 2014, with monthly payment requirements of $0.2 million. As of December 31, 2014, the outstanding balance on this note payable was fully repaid. Interest expense for the three months ended March 31, 2014 was insignificant. | ||||||||||||||||
Capital Lease Obligations | ||||||||||||||||
The Company entered into several capital leases for computer equipment during the fourth quarter of 2010 and one in January 2014. These leases amount to $7.6 million and are recorded in fixed assets and as capital lease obligations, which are included in short-term borrowings and other debt in the accompanying consolidated statements of financial condition, and have lease terms that range from 48 to 60 months and interest rates that range from 0.60% to 6.03%. As of March 31, 2015, the remaining balance on these capital leases was $3.6 million. Interest expense was $0.1 million and $0.1 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||
Annual scheduled maturities of debt and minimum payments for all debt outstanding as of March 31, 2015, is as follows: | ||||||||||||||||
Convertible Debt | Note Payable | Other Note Payable | Capital Lease | |||||||||||||
Obligation | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
2015 | $ | 2,242 | $ | 3,914 | $ | 1,425 | $ | 987 | ||||||||
2016 | 4,485 | 5,218 | — | 1,025 | ||||||||||||
2017 | 4,485 | 5,218 | — | 938 | ||||||||||||
2018 | 4,485 | 5,218 | — | 938 | ||||||||||||
2019 | 151,743 | 5,218 | — | 78 | ||||||||||||
Thereafter | — | 73,686 | — | — | ||||||||||||
Subtotal | 167,440 | 98,472 | 1,425 | 3,966 | ||||||||||||
Less: Amount representing interest (a) | (47,441 | ) | (35,222 | ) | (10 | ) | (378 | ) | ||||||||
Total | $ | 119,999 | $ | 63,250 | $ | 1,415 | $ | 3,588 | ||||||||
(a) | Amount necessary to reduce net minimum payments to present value calculated at the Company's implicit rate at inception. This amount also includes the unamortized discount on the convertible debt. | |||||||||||||||
Letters of Credit | ||||||||||||||||
As of March 31, 2015, the Company has the following seven irrevocable letters of credit related to leased office space, for which there is cash collateral pledged, which the Company pays a fee on the stated amount of the letter of credit. | ||||||||||||||||
Location | Amount | Maturity | ||||||||||||||
(dollars in thousands) | ||||||||||||||||
San Francisco | $ | 82 | May-15 | |||||||||||||
Boston | $ | 382 | Mar-16 | |||||||||||||
New York | $ | 794 | Aug-15 | |||||||||||||
New York | $ | 3,935 | Dec-15 | |||||||||||||
New York | $ | 1,000 | Feb-16 | |||||||||||||
New York | $ | 1,861 | Jun-15 | |||||||||||||
New York | $ | 127 | Sep-15 | |||||||||||||
To the extent any letter of credit is drawn upon, interest will be assessed at the prime commercial lending rate. As of March 31, 2015 and December 31, 2014, there were no amounts due related to these letters of credit. |
Treasury_Stock
Treasury Stock | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Equity [Abstract] | |||||||||||
Treasury Stock | Treasury Stock | ||||||||||
Treasury stock of $89.8 million as of March 31, 2015, compared to $79.8 million as of December 31, 2014, resulted from $2.8 million acquired through repurchases of shares to cover employee minimum tax withholding obligations related to stock compensation vesting events under the Company's Equity Plan or other similar transactions and $7.2 million purchased in connection with a share repurchase program. | |||||||||||
The following represents the activity relating to the treasury stock held by the Company during the three months ended March 31, 2015: | |||||||||||
Treasury stock shares | Cost | Average cost | |||||||||
(dollars in thousands) | per share | ||||||||||
Balance outstanding at December 31, 2014 | 23,507,656 | $ | 79,771 | $ | 3.39 | ||||||
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | 529,905 | 2,777 | 5.24 | ||||||||
Treasury stock reissued | — | — | — | ||||||||
Purchase of treasury stock | 1,360,015 | 7,205 | 5.3 | ||||||||
Balance outstanding at March 31, 2015 | 25,397,576 | $ | 89,753 | $ | 3.53 | ||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) (Notes) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Accumulated Other Comprehensive Income / (Loss) [Abstract] | ||||||||||||
Accumulated other comprehensive income (loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||
Accumulated other comprehensive income includes the after tax change in unrealized gains and losses on foreign currency translation adjustments and net gain (loss) and amortization of prior service costs related to the Company's defined benefit plans. | ||||||||||||
Foreign currency translation (a) | Defined benefit plans (a) | Total | ||||||||||
(dollars in thousands) | ||||||||||||
Balance at December 31, 2014 | 17 | — | 17 | |||||||||
Net change | (2 | ) | — | (2 | ) | |||||||
Balance at March 31, 2015 | $ | 15 | $ | — | $ | 15 | ||||||
Foreign currency translation (a) | Defined benefit plans (a) | Total | ||||||||||
(dollars in thousands) | ||||||||||||
Balance at December 31, 2013 | $ | 248 | $ | 344 | $ | 592 | ||||||
Net change | 37 | (92 | ) | (55 | ) | |||||||
Balance at March 31, 2014 | $ | 285 | $ | 252 | $ | 537 | ||||||
(a) During the periods presented, the Company did not have material reclassifications out of other comprehensive income. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings Per Share | Earnings Per Share | |||||||
The Company calculates its basic and diluted earnings per share in accordance with US GAAP. Basic earnings per share is calculated by dividing net income attributable to the Company's stockholders by the weighted average number of common shares outstanding for the period. As of March 31, 2015, there were 111,168,897 shares outstanding. The Company has included 424,479 fully vested, unissued restricted stock units in its calculation of basic earnings per share. | ||||||||
Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive nonvested restricted stock and stock options. The Company uses the treasury stock method to reflect the potential dilutive effect of the warrants, unexercised stock options, unvested restricted shares, restricted stock units, and SAR's. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options and warrants are assumed to have been exercised, on the grant date. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the sum of (a) the amount of compensation cost attributed to future services and not yet recognized and (b) the amount of tax benefit that would be credited to additional paid-in capital assuming vesting and delivery of the restricted stock. The tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense recognized for financial statement reporting purposes. All outstanding stock options and warrants were not included in the computation of diluted net income (loss) per common share for the three months ended March 31, 2015 and 2014, respectively, as their inclusion would have been anti-dilutive. | ||||||||
The computation of earnings per share is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(dollars in thousands, except per share data) | ||||||||
Net income (loss) | $ | 19,418 | $ | 14,027 | ||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 2,720 | 4,187 | ||||||
Net income (loss) attributable to Cowen Group, Inc. stockholders | $ | 16,698 | $ | 9,840 | ||||
Shares for basic and diluted calculations: | ||||||||
Weighted average shares used in basic computation | 112,053 | 115,680 | ||||||
Warrants | — | — | ||||||
Stock options | — | — | ||||||
Performance based restricted stock | 411 | — | ||||||
Stock appreciation rights | 119 | 54 | ||||||
Restricted stock | 6,007 | 7,164 | ||||||
Weighted average shares used in diluted computation | 118,590 | 122,898 | ||||||
Earnings (loss) per share: | ||||||||
Basic | $ | 0.15 | $ | 0.09 | ||||
Diluted | $ | 0.14 | $ | 0.08 | ||||
Segment_Reporting
Segment Reporting | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||
Segment Reporting | Segment Reporting | |||||||||||||||||||||||||
The Company conducts its operations through two segments: the alternative investment segment and the broker‑dealer segment. These activities are conducted primarily in the United States and substantially all of its revenues are generated domestically. The performance measure for these segments is Economic Income (Loss), which management uses to evaluate the financial performance of and make operating decisions for the segments including determining appropriate compensation levels. Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors. | ||||||||||||||||||||||||||
In general, Economic Income (Loss) is a pre-tax measure that (i) eliminates the impact of consolidation for consolidated funds and (ii) excludes certain other acquisition-related and/or reorganization expenses (see Note 2). In addition, Economic Income (Loss) revenues include investment income that represents the income the Company has earned in investing its own capital, including realized and unrealized gains and losses, interest and dividends, net of associated investment related expenses. For US GAAP purposes, these items are included in each of their respective line items. Economic Income (Loss) revenues also include management fees, incentive income and investment income earned through the Company's investment as a general partner in certain real estate entities and the Company's investment in the activist business. For US GAAP purposes, all of these items are recorded in other income (loss). In addition, Economic Income (Loss) expenses are reduced by reimbursement from affiliates, which for US GAAP purposes is presented gross as part of revenue. | ||||||||||||||||||||||||||
As further stated below, one major difference between Economic Income (Loss) and US GAAP net income (loss) is that Economic Income (Loss) presents the segments' results of operations without the impact resulting from the full consolidation of any of the Consolidated Funds. Consolidation of these funds results in including in income the pro rata share of the income or loss attributable to other owners of such entities which is reflected in net income (loss) attributable to redeemable non-controlling interest in consolidated subsidiaries in the accompanying consolidated statements of operations. This pro rata share has no effect on the overall financial performance for the alternative investment segment, as ultimately, this income or loss is not income or loss for the alternative investment segment itself. Included in Economic Income (Loss) is the actual pro rata share of the income or loss attributable to the Company as an investor in such entities, which is relevant in management making operating decisions and evaluating financial performance. | ||||||||||||||||||||||||||
The following tables set forth operating results for the Company's alternative investment and broker dealer segments and related adjustments necessary to reconcile the Company's Economic Income (Loss) measure to arrive at the Company's consolidated US GAAP net income (loss): | ||||||||||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||
Alternative | Broker-Dealer | Total Economic Income/(Loss) | Funds | Other | US GAAP | |||||||||||||||||||||
Investment | Consolidation | Adjustments | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Investment banking | $ | — | $ | 65,233 | $ | 65,233 | $ | — | $ | — | $ | 65,233 | ||||||||||||||
Brokerage | 18 | 35,505 | 35,523 | — | (69 | ) | (e) | 35,454 | ||||||||||||||||||
Management fees | 16,607 | — | 16,607 | (238 | ) | (5,985 | ) | (a) | 10,384 | |||||||||||||||||
Incentive income | 15,363 | — | 15,363 | (183 | ) | (12,808 | ) | (a) | 2,372 | |||||||||||||||||
Investment income | 21,830 | 7,050 | 28,880 | — | (28,880 | ) | (c) | — | ||||||||||||||||||
Interest and dividends | — | — | — | — | 3,083 | (c)(e) | 3,083 | |||||||||||||||||||
Reimbursement from affiliates | — | — | — | (85 | ) | 3,727 | (f) | 3,642 | ||||||||||||||||||
Other revenue | 21 | 48 | 69 | — | 599 | (c) | 668 | |||||||||||||||||||
Consolidated Funds revenues | — | — | — | 258 | — | 258 | ||||||||||||||||||||
Total revenues | 53,839 | 107,836 | 161,675 | (248 | ) | (40,333 | ) | 121,094 | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Non interest expense | 34,834 | 96,329 | 131,163 | — | 1,506 | (c)(d) | 132,669 | |||||||||||||||||||
Interest and dividends | 3,044 | 978 | 4,022 | — | 1,757 | (c)(e) | 5,779 | |||||||||||||||||||
Consolidated Funds expenses | — | — | — | 358 | — | 358 | ||||||||||||||||||||
Total expenses | 37,878 | 97,307 | 135,185 | 358 | 3,263 | 138,806 | ||||||||||||||||||||
Total other income (loss) | — | — | — | 2,407 | 41,670 | (c) | 44,077 | |||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 6,947 | (b) | 6,947 | |||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | (2,845 | ) | — | (2,845 | ) | (1,801 | ) | 1,926 | (2,720 | ) | ||||||||||||||||
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders | $ | 13,116 | $ | 10,529 | $ | 23,645 | $ | — | $ | (6,947 | ) | $ | 16,698 | |||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||
Alternative | Broker-Dealer | Total Economic Income/(Loss) | Funds | Other | US GAAP | |||||||||||||||||||||
Investment | Consolidation | Adjustments | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Investment banking | $ | — | $ | 49,562 | $ | 49,562 | $ | — | $ | — | $ | 49,562 | ||||||||||||||
Brokerage | — | 34,349 | 34,349 | — | (1,519 | ) | (e) | 32,830 | ||||||||||||||||||
Management fees | 14,089 | — | 14,089 | (234 | ) | (4,931 | ) | (a) | 8,924 | |||||||||||||||||
Incentive income | 4,594 | — | 4,594 | — | (2,096 | ) | (a) | 2,498 | ||||||||||||||||||
Investment income | 8,328 | (156 | ) | 8,172 | — | (8,172 | ) | (c) | — | |||||||||||||||||
Interest and dividends | — | — | — | — | 9,252 | (c)(e) | 9,252 | |||||||||||||||||||
Reimbursement from affiliates | — | — | — | (80 | ) | 1,980 | (f) | 1,900 | ||||||||||||||||||
Other revenue | (43 | ) | (102 | ) | (145 | ) | — | 700 | (c) | 555 | ||||||||||||||||
Consolidated Funds revenues | — | — | — | 1,156 | — | 1,156 | ||||||||||||||||||||
Total revenues | 26,968 | 83,653 | 110,621 | 842 | (4,786 | ) | 106,677 | |||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Non interest expense | 21,172 | 76,179 | 97,351 | — | 1,303 | (c)(d) | 98,654 | |||||||||||||||||||
Interest and dividends | 609 | 34 | 643 | — | 6,429 | (c)(e) | 7,072 | |||||||||||||||||||
Consolidated Funds expenses | — | — | — | 302 | — | 302 | ||||||||||||||||||||
Total expenses | 21,781 | 76,213 | 97,994 | 302 | 7,732 | 106,028 | ||||||||||||||||||||
Total other income (loss) | — | — | — | 207 | 13,250 | (c) | 13,457 | |||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 79 | (b) | 79 | |||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | (2,625 | ) | — | (2,625 | ) | (747 | ) | (815 | ) | (4,187 | ) | |||||||||||||||
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders | $ | 2,562 | $ | 7,440 | $ | 10,002 | $ | — | $ | (162 | ) | $ | 9,840 | |||||||||||||
The following is a summary of the adjustments made to US GAAP net income (loss) for the segment to arrive at | ||||||||||||||||||||||||||
Economic Income (Loss): | ||||||||||||||||||||||||||
Funds Consolidation: The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP net income (loss) include elimination of incentive income and management fees earned from the Consolidated Funds and addition of fund expenses excluding management fees paid, fund revenues and investment income (loss). | ||||||||||||||||||||||||||
Other Adjustments: | ||||||||||||||||||||||||||
(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share | ||||||||||||||||||||||||||
of management and incentive fees of certain real estate operating entities and the activist business. | ||||||||||||||||||||||||||
(b) Economic Income (Loss) excludes income taxes as management does not consider this item when evaluating the | ||||||||||||||||||||||||||
performance of the segment. | ||||||||||||||||||||||||||
(c) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends) net | ||||||||||||||||||||||||||
of related expenses. | ||||||||||||||||||||||||||
(d) Economic Income (Loss) recognizes the Company's proportionate share of expenses for certain real estate and other | ||||||||||||||||||||||||||
operating entities for which the investments are recorded under the equity method of accounting for investments. | ||||||||||||||||||||||||||
(e) Economic Income (Loss) recognizes stock borrow/loan activity and other brokerage dividends as brokerage revenue. | ||||||||||||||||||||||||||
(f) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of | ||||||||||||||||||||||||||
revenues under US GAAP. | ||||||||||||||||||||||||||
For the three months ended March 31, 2015 and 2014, there was no one fund or other customer which represented more than 10% of the Company's total revenues. |
Regulatory_Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2015 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Regulatory Requirements |
As registered broker-dealers, Cowen and Company and ATM Execution are subject to the SEC's Uniform Net Capital Rule 15c3-1 (the “Rule”), which requires the maintenance of minimum net capital. Under the alternative method permitted by the Rule, Cowen and Company's minimum net capital requirement, as defined, is $1.0 million. Under the alternative method ATM Execution is required to maintain minimum net capital, as defined, equal to $250,000. The broker-dealers are not permitted to withdraw equity if certain minimum net capital requirements are not met. As of March 31, 2015, Cowen and Company had total net capital of approximately $65.5 million, which was approximately $64.5 million in excess of its minimum net capital requirement of $1.0 million. As of March 31, 2015, ATM Execution had total net capital of approximately $3.3 million, which was approximately $3.1 million in excess of its minimum net capital requirement of $250,000. In January 2015, ATM USA and Cowen Equity Finance each filed form BDW Uniform Requests for Withdrawal from Broker-Dealer Registration with FINRA which have been approved. Accordingly both broker dealers were not subject to the SEC's Uniform Net Capital Rule 15c3-1 as of March 31, 2015. | |
Cowen and Company and ATM Execution claim exemption from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as their activities are limited to those set forth in the conditions for exemption appearing in paragraph (k)(2)(ii) of the Rule. | |
Proprietary accounts of broker dealers (“PAB”) held at the clearing broker are considered allowable assets for net capital purposes, pursuant to agreements between Cowen and Company and ATM Execution and the clearing broker, which require, among other things, that the clearing broker performs computations for PAB and segregates certain balances on behalf of Cowen and Company and ATM Execution, if applicable. | |
Ramius UK Ltd. ("Ramius UK") and Cowen International Limited ("CIL") are subject to the capital requirements of the Financial Conduct Authority (“FCA”) of the UK. Financial Resources, as defined, must exceed the requirement of the FCA. As of March 31, 2015, Ramius UK's Financial Resources of $0.30 million exceeded its minimum requirement of $0.05 million by $0.25 million. As of March 31, 2015, CIL's Financial Resources of $3.2 million exceeded its minimum requirement of $1.9 million by $1.3 million. | |
Cowen and Company (Asia) Limited (“Cowen Asia”) is subject to the financial resources requirements of the Securities and Futures Commission (“SFC”) of Hong Kong. Financial Resources, as defined, must exceed the Total Financial Resources requirement of the SFC. As of March 31, 2015, Cowen Asia's Financial Resources of $0.5 million exceeded the minimum requirement of $0.4 million by $0.1 million. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions |
The Company and its affiliated entities are the managing member, general partner and/or investment manager to the Company's alternative asset management products and certain managed accounts. Management fees and incentive income are primarily earned from affiliated entities. As of March 31, 2015 and December 31, 2014, $7.4 million and $5.1 million, respectively, included in fees receivable are earned from related parties. The Company may, at its discretion, reimburse certain fees charged to the funds that it manages to avoid duplication of fees when such funds have an underlying investment in another affiliated investment fund. The Company reimbursed the funds it manages an insignificant amount for the three months ended March 31, 2015 and $0.5 million for the three months ended March 31, 2014 which were recorded net in management fees and incentive income in the accompanying consolidated statements of operations. As of March 31, 2015 and December 31, 2014, related amounts still payable were $0.1 million and $0.1 million, respectively, and were reflected in fees payable in the accompanying consolidated statements of financial condition. Fees receivable and fees payable are recorded at carrying value, which approximates fair value. | |
The Company may also make loans to employees or other affiliates, excluding executive officers of the Company. These loans are interest bearing and settle pursuant to the agreed-upon terms with such employees or affiliates and are included in due from related parties in the accompanying consolidated statements of financial condition. As of March 31, 2015 and December 31, 2014, loans to employees of $4.7 million and $6.1 million, respectively, were included in due from related parties on the accompanying consolidated statements of financial condition. Of these amounts $2.7 million and $3.9 million, respectively, are related to forgivable loans. These forgivable loans provide for a cash payment up-front to employees, with the amount due back to the Company forgiven over a vesting period. An employee that voluntarily ceases employment, or is terminated with cause, is generally required to pay back to the Company any unvested forgivable loans granted to them. The forgivable loans are recorded as an asset to the Company on the date of grant and payment, and then amortized to compensation expense on a straight-line basis over the vesting period. The vesting period on forgivable loans is generally one to three years. The Company recorded compensation expense of $1.3 million and $0.8 million, for the three months ended March 31, 2015 and 2014, respectively. This expense is included in employee compensation and benefits in the accompanying consolidated statement of operations. For the three months ended March 31, 2015, and 2014, the interest income was insignificant for all loans and advances. The remaining balance included in due from related parties primarily relates to amounts due to the Company from affiliated funds and real estate entities due to expenses paid on their behalf. | |
Included in due to related parties is approximately $0.4 million and $0.5 million as of March 31, 2015 and December 31, 2014, respectively, related to a subordination agreement with an investor in certain real estate funds. This total is based on a hypothetical liquidation of the real estate funds as of the balance sheet date. | |
During March 2015, the Company issued a $15.0 million unsecured loan to its real estate business with maturity of June 29, 2015 and an effective annualized interest rate of 8.8%. This balance is included in other assets in the accompanying consolidated statements of financial condition. The interest expense for the three months ended March 31, 2015 was insignificant. |
Guarantees_and_OffBalance_Shee
Guarantees and Off-Balance Sheet Arrangements | 3 Months Ended |
Mar. 31, 2015 | |
Guarantees and Off Balance Sheet Arrangements [Abstract] | |
Guarantees and Off-Balance Sheet Arrangements | Guarantees and Off-Balance Sheet Arrangements |
Guarantees | |
US GAAP requires the Company to disclose information about its obligations under certain guarantee arrangements. Those standards define guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying security (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Those standards also define guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement as well as indirect guarantees of the indebtedness of others. | |
In the normal course of its operations, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of loss to be remote. | |
The Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make significant payments under these arrangements and has not recorded any contingent liability in the consolidated financial statements for these indemnifications. | |
The Company is a member of various securities exchanges. Under the standard membership agreements, members are required to guarantee the performance of other members and, accordingly, if another member becomes unable to satisfy its obligations to the exchange, all other members would be required to meet the shortfall. The Company's liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted as collateral. However, management believes that the potential for the Company to be required to make payments under these arrangements is remote. Accordingly, no contingent liability is recorded in the accompanying consolidated statements of financial condition for these arrangements. | |
The Company also provides representations and warranties to counterparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. The Company may also provide standard indemnifications to some counterparties to protect them in the event additional taxes are owed or payments are withheld, due either to a change in or adverse application of certain tax laws. These indemnifications generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the accompanying consolidated financial statements for these indemnifications. | |
Off-Balance Sheet Arrangements | |
The Company has no material off-balance sheet arrangements as of March 31, 2015 and December 31, 2014. However, through indemnification provisions in the clearing agreement, customer activities may expose the Company to off-balance-sheet credit risk. Pursuant to the clearing agreement, the Company is required to reimburse the Company's clearing broker, without limit, for any losses incurred due to a counterparty's failure to satisfy its contractual obligations. However, these transactions are collateralized by the underlying security, thereby reducing the associated risk to changes in the market value of the security through the settlement date. | |
In addition, during the normal course of business, the Company has exposure to a number of risks including market risk, currency risk, credit risk, operational risk, liquidity risk and legal risk. As part of the Company's risk management process, these risks are monitored on a regular basis throughout the course of the year. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
The Company has evaluated events that have occurred after the balance sheet date but before the financial statements are issued and has determined that there were no additional subsequent events requiring adjustment or disclosure in the consolidated financial statements. |
Significant_Accounting_Policie1
Significant Accounting Policies - Quarterly (Policies) | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Basis of presentation | Basis of Presentation | |
These unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to interim financial statements. Results for interim periods should not be considered indicative of results for any other interim period or for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013, and 2012, included in the Form 10-K of Cowen Group as filed with the SEC on February 26, 2015 and amended on March 30, 2015. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are necessary for a fair presentation of the results for the interim periods. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by US GAAP. | ||
These condensed consolidated financial statements include the accounts of the Company, its operating and other subsidiaries, and entities in which the Company has a controlling financial interest or a substantive controlling general partner interest. | ||
All material intercompany transactions and balances have been eliminated in consolidation. Certain fund entities that are consolidated in these condensed consolidated financial statements, as further discussed below, are not subject to these consolidation provisions with respect to their own investments pursuant to their specialized accounting. | ||
The Company serves as the managing member/general partner and/or investment manager to affiliated fund entities which it sponsors and manages. Funds in which the Company has a controlling financial interest are consolidated with the Company pursuant to US GAAP as described below. Consequently, the Company's condensed consolidated financial statements reflect the assets, liabilities, income and expenses of these funds on a gross basis. The ownership interests in these funds that are not owned by the Company are reflected as redeemable non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. The management fees and incentive income earned by the Company from these funds are eliminated in consolidation. | ||
Principles of consolidation | Principles of consolidation | |
The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting operating entity ("VOE") or a variable interest entity ("VIE") under US GAAP. | ||
Voting Operating Entities—VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact the entity's economic performance. | ||
Under US GAAP, the usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. Accordingly, the Company consolidates VOEs in which it owns a majority of the entity's voting shares or units. US GAAP also provides that a general partner of a limited partnership (or a managing member, in the case of a limited liability company) is presumed to control the partnership, and thus should consolidate it, unless a simple majority of the limited partners has the right to remove the general partner without cause or to terminate the partnership. In accordance with these standards, the Company presently consolidates two entities deemed to be VOEs for which it acts as the general partner and investment manager. | ||
As of March 31, 2015 and December 31, 2014 and during the three month periods ended March 31, 2015 and March 31, 2014, the Company consolidated the following funds: Ramius Enterprise LP (“Enterprise LP”) and Ramius Merger Fund LLC (the "Merger Fund") (collectively the "Consolidated Funds"). | ||
The Company also consolidated four investment companies i) RCG Linkem II LLC, formed to make an investment in a wireless broadband communication provider in Italy, ii) Cowen AV Investment LLC, formed to make an investment in a biotechnology company focused on developing gene therapies for certain medical needs and (during 2014) iii) Ramius Co-Investment I LLC and (iv) Ramius Co-Investment II LLC. Ramius Co-Investment I LLC, an entity that invested in a biomedical company that develops gene therapies for severe genetic disorders, was consolidated as of December 31, 2013 but was deconsolidated during the first quarter of 2014 when Ramius Co-Investment I LLC was liquidated. Ramius Co-Investment II LLC, an entity formed for the same purpose as Ramius Co-Investment I LLC, was consolidated but was liquidated during the quarter ended September 30, 2014. The Company determined that RCG Linkem II, LLC, Ramius Co-Investment I LLC (up until the first quarter of 2014), Ramius Co-Investment II LLC (up until the third quarter of 2014) and Cowen AV Investment LLC (up through the first quarter of 2015 when it was liquidated) are VOE's due to its controlling equity interests held through the managing member and/or affiliates and control exercised by the managing member who is not subject to substantive removal rights. | ||
Variable Interest Entities—VIEs are entities that lack one or more of the characteristics of a VOE. In accordance with US GAAP, an enterprise must consolidate all VIEs of which it is the primary beneficiary. Under the US GAAP consolidation model for VIEs, an enterprise that (1) has the power to direct the activities of a VIE that most significantly impacts the VIE's economic performance, and (2) has an obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. | ||
However, the Financial Accounting Standards Board ("FASB") has deferred the application of the revised consolidation model for VIEs that meet the following conditions: (a) the entity has all the attributes of an investment company as defined under AICPA Audit and Accounting Guide, Investment Companies, or does not have all the attributes of an investment company but is an entity for which it is acceptable based on industry practice to apply measurement principles that are consistent with investment companies, (b) the reporting entity does not have explicit or implicit obligations to fund any losses of the entity that could potentially be significant to the entity, and (c) the entity is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualifying special-purpose entity. The Company's involvement with its funds is such that all three of the above conditions are met for substantially all of the funds managed by the Company. Where the VIEs have qualified for the deferral, the analysis is based on previous consolidation rules. These rules require an analysis to (a) determine whether an entity in which the Company holds a variable interest is a variable interest entity and (b) whether the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees), would be expected to absorb a majority of the VIE's expected losses, receive a majority of the VIEs expected residual returns, or both. If these conditions are met, the Company is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. | ||
The Company reconsiders whether it is the primary beneficiary of a VIE by performing a periodic qualitative and/or quantitative analysis of the VIE that includes a review of, among other things, its capital structure, contractual agreements between the Company and the VIE, the economic interests that create or absorb variability, related party relationships and the design of the VIE. As of March 31, 2015 and December 31, 2014, the Company consolidated two VIEs. As of March 31, 2015 and December 31, 2014, the total net assets of the consolidated VIEs were $3.9 million and $2.0 million, respectively. The VIEs act as managing members/general partners and/or investment managers to affiliated fund entities which they sponsor and/or manage. The VIEs are financed through their operations and/or loan agreements with the Company. | ||
As of March 31, 2015 and December 31, 2014, the Company holds a variable interest in Ramius Enterprise Master Fund Ltd (“Enterprise Master”) through one of its Consolidated Funds, Enterprise LP and the Company holds a variable interest in Ramius Merger Master Fund Ltd through one of its Consolidated Funds, Merger Fund, (the “Unconsolidated Master Funds”). Investment companies, which account for their investments under the specialized industry accounting guidance for investment companies prescribed under US GAAP, are not subject to the consolidation provisions for their investments. Therefore, the Company has not consolidated the Unconsolidated Master Funds. | ||
In the ordinary course of business, the Company also sponsors various other entities that it has determined to be VIEs. These VIEs are primarily funds and real estate entities for which the Company serves as the general partner, managing member and/or investment manager with decision-making rights. | ||
The Company does not consolidate any of these funds or real estate entities that are VIEs as it has concluded that it is not the primary beneficiary in each instance. Fund investors are entitled to all of the economics of these VIEs with the exception of the management fee and incentive income, if any, earned by the Company. The Company's involvement with funds and real estate entities that are unconsolidated VIEs is limited to providing investment management services in exchange for management fees and incentive income. Although the Company may advance amounts and pay certain expenses on behalf of the funds and real estate entities that it considers to be VIEs, it does not provide, nor is it required to provide, any type of substantive financial support to these entities outside of regular investment management services (see Note 5 for additional disclosures on VIEs). | ||
Equity Method Investments—For operating entities over which the Company exercises significant influence but which do not meet the requirements for consolidation as outlined above, the Company uses the equity method of accounting. The Company's investments in equity method investees are recorded in other investments in the accompanying consolidated statements of financial condition. The Company's share of earnings or losses from equity method investees is included in net gains (losses) on securities, derivatives and other investments in the accompanying consolidated statements of operations. | ||
The Company evaluates for impairment its equity method investments whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary. | ||
Other—If the Company does not consolidate an entity, apply the equity method of accounting or account for an investment under the cost method, the Company accounts for such entities (primarily, all securities of such entity which are bought and held principally for the purpose of selling them in the near term as trading securities) in accordance with US GAAP, at fair value with unrealized gains (losses) resulting from changes in fair value reflected within net gains (losses) on securities, derivatives and other investments in the accompanying consolidated statements of operations. | ||
Retention of Specialized Accounting—The Consolidated Funds are investment companies and apply specialized industry accounting for investment companies. The Company has retained this specialized accounting for these funds pursuant to US GAAP. The Company reports its investments on the consolidated statements of financial condition at their estimated fair value, with unrealized gains (losses) resulting from changes in fair value reflected within net realized and unrealized gains (losses) on investments and other transactions. Accordingly, the accompanying condensed consolidated financial statements reflect different accounting policies for investments depending on whether or not they are held through a consolidated investment company. In addition, the Company's broker-dealer subsidiaries, Cowen and Company, ATM Execution LLC ("ATM Execution"), ATM USA, LLC ("ATM USA") (liquidated during Q1 2015), and Cowen Equity Finance (see Note 2), apply the specialized industry accounting for brokers and dealers in securities also prescribed under US GAAP. The Company also retains specialized accounting in consolidation. | ||
Use of estimates | Use of estimates | |
The preparation of the accompanying condensed consolidated financial statements in conformity with US GAAP requires the management of the Company to make estimates and assumptions that affect the fair value of securities and other investments, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accompanying condensed consolidated financial statements, the accounting for goodwill and identifiable intangible assets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. | ||
Valuation of investments and derivative contracts | Valuation of investments and derivative contracts | |
US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows: | ||
Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has | ||
the ability to access at the measurement date; | ||
Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including | ||
inputs in markets that are not considered to be active; and | ||
Level 3 Fair value is determined based on pricing inputs that are unobservable and includes situations where there is little, | ||
if any, market activity for the asset or liability. The determination of fair value for assets and liabilities in this | ||
category requires significant management judgment or estimation. | ||
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Company's perceived risk of that instrument. | ||
The Company and its operating subsidiaries act as the manager for the Consolidated Funds. Both the Company and the Consolidated Funds hold certain investments which are valued by the Company, acting as the investment manager. The fair value of these investments is generally estimated based on proprietary models developed by the Company, which include discounted cash flow analysis, public market comparables, and other techniques and may be based, at least in part, on independently sourced market information. The material estimates and assumptions used in these models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute, timing of, and estimated proceeds from expected financings. Significant judgment and estimation goes into the selection of an appropriate valuation methodology as well as the assumptions used in these models, and the timing and actual values realized with respect to investments could be materially different from values derived based on the use of those estimates. The valuation methodologies applied impact the reported value of the Company's investments and the investments held by the Consolidated Funds in the condensed consolidated financial statements. Certain of the Company's investments are relatively illiquid or thinly traded and may not be immediately liquidated on demand if needed. Fair values assigned to these investments may differ significantly from the fair values that would have been used had a ready market for the investments existed and such differences could be material. | ||
The Company primarily uses the “market approach” to value its financial instruments measured at fair value. In determining an instrument's level within the hierarchy, the Company categorizes the Company's financial instruments into three categories: securities, derivative contracts and other investments. To the extent applicable, each of these categories can further be divided between those held long or sold short. | ||
Securities—Securities with values based on quoted market prices in active markets for identical assets are classified within level 1 of the fair value hierarchy. These securities include active listed equities, certain U.S. government and sovereign obligations, ETF's, mutual funds and certain money market securities. The Company does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. | ||
Certain positions for which trading activity may not be readily visible, consisting primarily of convertible debt, corporate debt and loans and restricted equities, are stated at fair value and classified within level 2 of the fair value hierarchy. The estimated fair values assigned by management are determined in good faith and are based on available information considering, trading activity, broker quotes, quotations provided by published pricing services, counterparties and other market participants, and pricing models using quoted inputs, and do not necessarily represent the amounts which might ultimately be realized. As level 2 investments include positions that are not always traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability. | ||
Derivative contracts—Derivative contracts can be exchange-traded or privately negotiated over-the-counter (“OTC”). Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within level 1 or level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. OTC derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within level 2. OTC derivatives, such as swaps and options where market data is not readily available or observable are classified as level 3. | ||
Other investments—Other investments consist primarily of portfolio funds, real estate investments and equity method investments, which are valued as follows: | ||
i. | Portfolio funds—Portfolio funds (“Portfolio Funds”) include interests in funds and investment companies which may be managed by the Company or its affiliates. The Company follows US GAAP regarding fair value measurements and disclosures relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). The guidance permits, as a practical expedient, an entity holding investments in certain entities that either are investment companies as defined by the AICPA Audit and Accounting Guide, Investment Companies, or have attributes similar to an investment company, and calculate net asset value per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment. | |
The Company categorizes its investments in Portfolio Funds within the fair value hierarchy dependent on its ability to redeem the investment. If the Company has the ability to redeem its investment at NAV at the measurement date or within the near term, the Portfolio Fund is categorized as a level 2 investment within the fair value hierarchy. If the Company does not know when it will have the ability to redeem its investment or cannot do so in the near term, the Portfolio Fund is categorized as a level 3 investment within the fair value hierarchy. See Notes 5 and 6 for further details of the Company's investments in Portfolio Funds. | ||
ii. | Real estate investments—Real estate debt and equity investments are valued at fair value. The fair value of real estate investments are estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Real estate investments without a public market are valued based on assumptions and valuation techniques used by the Company. Such valuation techniques may include discounted cash flow analysis, prevailing market capitalization rates or earnings multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties, consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence, as well as independent external appraisals. In general, the Company considers several valuation techniques when measuring the fair value of a real estate investment. However, in certain circumstances, a single valuation technique may be appropriate. Real estate investments are reviewed on a quarterly basis by the Company for significant changes at the property level or a significant change in the overall market which would impact the value of the real estate investment resulting in unrealized appreciation or depreciation. | |
Real estate and capital markets are cyclical in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates and interest and inflation rates. In addition, the Company invests in real estate and real estate related investments for which no liquid market exists. The market prices for such investments may be volatile and may not be readily ascertainable. Amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material. | ||
The Company's real estate investments are typically categorized as a level 3 investment within the fair value hierarchy as management uses significant unobservable inputs in determining their estimated fair value. | ||
See Notes 5 and 6 for further information regarding the Company's investments, including equity method investments, and fair value measurements. | ||
Securities borrowed and securities loaned and repurchase agreements | Securities borrowed and securities loaned | |
Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received on a gross basis. The related rebates are recorded in the statement of operations as interest income and interest expense. Securities borrowed transactions require the Company to deposit cash collateral with the lender. With respect to securities loaned, the Company receives cash collateral from the borrower. The initial collateral advanced or received approximates or is greater than the market value of securities borrowed or loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or returned, as necessary. Securities borrowed and loaned may also result in credit exposures for the Company in an event that the counterparties are unable to fulfill their contractual obligations. The Company minimizes its credit risk by continuously monitoring its credit exposure and collateral values by demanding additional or returning excess collateral in accordance with the netting provisions available in the master securities lending contracts in place with the counterparties. | ||
Fees and interest received or paid are recorded in interest and dividend income and interest expense, respectively, on an accrual basis. In cases where the fair value basis of accounting is elected, any resulting change in fair value is reported in trading revenues. Accrued interest income and expense are recorded in the same manner as under the accrual method. At March 31, 2015 and December 31, 2014, the Company does not have any securities lending transactions for which fair value basis of accounting was elected. | ||
During the fourth quarter of 2014, the Company made a decision to wind down the operations of its securities lending business (see Note 2). | ||
Debt | Debt | |
Long-term debt is carried at the principal amount borrowed net of any discount/premium. The discount is accreted to interest expense using the effective interest method over the remaining life of the underlying debt obligations. Accrued but unpaid coupon interest is included in accrued expenses and other liabilities in the accompanying consolidated statements of financial condition. | ||
Deferred rent | Deferred rent | |
Deferred rent primarily consists of step rent, allowances from landlords and valuing the Company's lease properties in accordance with US GAAP. Step rent represents the difference between actual operating lease payments due and straight-line rent expense, which is recorded by the Company over the term of the lease, including the build-out period. This amount is recorded as deferred rent in the early years of the lease, when cash payments are generally lower than straight-line rent expense, and reduced in the later years of the lease when payments begin to exceed the straight-line expense. Landlord allowances are generally comprised of amounts received and/or promised to the Company by landlords and may be received in the form of cash or free rent. These allowances are part of the negotiated terms of the lease. The Company records a receivable from the landlord and a deferred rent liability when the allowances are earned. This deferred rent is amortized into income (through lower rent expense) over the term (including the pre-opening build-out period) of the applicable lease, and the receivable is reduced as amounts are received from the landlord. Liabilities resulting from valuing the Company's leased properties acquired through business combinations are quantified by comparing the current fair value of the leased space to the current rental payments on the date of acquisition. Deferred rent, included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated statements of financial condition, as of March 31, 2015 and December 31, 2014 is $12.3 million and $13.1 million, respectively. | ||
New accounting pronouncements | Recently issued accounting pronouncements | |
In January 2015, the FASB issued a new accounting pronouncement regarding extraordinary items. The guidance eliminates the concept and presentation requirements for extraordinary items and issuers are no longer required to evaluate and present separately any transaction which is unusual and infrequent. The guidance is effective for reporting periods beginning after December 15, 2015. The Company does not expect this guidance to have any impact on its financial position and results of operations. | ||
In February 2015, the FASB issued an accounting pronouncement which amends and updates its previous guidance regarding consolidation analysis. The amendment eliminates the deferral of certain consolidation standards for entities considered to be investment companies and modifies the consolidation analysis performed on certain types of legal entities. The guidance is effective for reporting periods beginning after December 15, 2015. The Company is currently evaluating the impact of the new guidance on our consolidated financial statements. | ||
In April 2015, the FASB issued a new accounting pronouncement simplifying the presentation of debt issuance costs. The accounting guidance requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The guidance is effective for the Company retrospectively effective for reporting periods beginning after December 15, 2015 and early adoption is permitted. The adoption of this accounting guidance is not expected to have a material impact on the Company’s financial position. | ||
In May 2014, the FASB issued guidance which amends and supersedes the revenue recognition requirements and most industry-specific guidance and creates a single source of revenue guidance. The new guidance outlines the principles an entity must apply to measure and recognize revenue and related cash flows. The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain non-financial assets. The guidance is effective for reporting periods beginning after December 15, 2016. In April 2015, the FASB announced a proposal to defer the effective date by one year, with early adoption on the original effective date permitted. The Company is currently evaluating the impact of this guidance on the Company’s financial condition, results of operations and cash flows. | ||
Earnings Per Share | Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive nonvested restricted stock and stock options. The Company uses the treasury stock method to reflect the potential dilutive effect of the warrants, unexercised stock options, unvested restricted shares, restricted stock units, and SAR's. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options and warrants are assumed to have been exercised, on the grant date. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the sum of (a) the amount of compensation cost attributed to future services and not yet recognized and (b) the amount of tax benefit that would be credited to additional paid-in capital assuming vesting and delivery of the restricted stock. The tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense recognized for financial statement reporting purposes. All outstanding stock options and warrants were not included in the computation of diluted net income (loss) per common share for the three months ended March 31, 2015 and 2014, respectively, as their inclusion would have been anti-dilutive. | |
Segment Reporting | The performance measure for these segments is Economic Income (Loss), which management uses to evaluate the financial performance of and make operating decisions for the segments including determining appropriate compensation levels. Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors. | |
In general, Economic Income (Loss) is a pre-tax measure that (i) eliminates the impact of consolidation for consolidated funds and (ii) excludes certain other acquisition-related and/or reorganization expenses (see Note 2). In addition, Economic Income (Loss) revenues include investment income that represents the income the Company has earned in investing its own capital, including realized and unrealized gains and losses, interest and dividends, net of associated investment related expenses. For US GAAP purposes, these items are included in each of their respective line items. Economic Income (Loss) revenues also include management fees, incentive income and investment income earned through the Company's investment as a general partner in certain real estate entities and the Company's investment in the activist business. For US GAAP purposes, all of these items are recorded in other income (loss). In addition, Economic Income (Loss) expenses are reduced by reimbursement from affiliates, which for US GAAP purposes is presented gross as part of revenue. | ||
As further stated below, one major difference between Economic Income (Loss) and US GAAP net income (loss) is that Economic Income (Loss) presents the segments' results of operations without the impact resulting from the full consolidation of any of the Consolidated Funds. Consolidation of these funds results in including in income the pro rata share of the income or loss attributable to other owners of such entities which is reflected in net income (loss) attributable to redeemable non-controlling interest in consolidated subsidiaries in the accompanying consolidated statements of operations. This pro rata share has no effect on the overall financial performance for the alternative investment segment, as ultimately, this income or loss is not income or loss for the alternative investment segment itself. Included in Economic Income (Loss) is the actual pro rata share of the income or loss attributable to the Company as an investor in such entities, which is relevant in management making operating decisions and evaluating financial performance. |
Investments_of_Operating_Entit1
Investments of Operating Entities and Consolidated Funds - Quarterly (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||
Marketable Securities | As of March 31, 2015 and December 31, 2014, securities owned, at fair value consisted of the following: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
U.S. Government securities (a) | $ | 2,010 | $ | 2,010 | ||||||||||||||||||||
Preferred stock | 20,200 | 15,070 | ||||||||||||||||||||||
Common stocks | 481,181 | 597,476 | ||||||||||||||||||||||
Convertible bonds (b) | 879 | 900 | ||||||||||||||||||||||
Corporate bonds (c) | 55,937 | 159,557 | ||||||||||||||||||||||
Warrants and rights | 3,064 | 1,417 | ||||||||||||||||||||||
Mutual funds | 16,187 | 15,776 | ||||||||||||||||||||||
$ | 579,458 | $ | 792,206 | |||||||||||||||||||||
(a) | As of March 31, 2015, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. As of December 31, 2014, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. | |||||||||||||||||||||||
(b) | As of March 31, 2015, the maturity was July 2015 with an interest rate of 10.00%. As of December 31, 2014, the maturity was February 2015 with an interest rate of 10.00%. | |||||||||||||||||||||||
(c) | As of March 31, 2015, maturities ranged from December 2016 to February 2046 and interest rates ranged between 0.0% to 11.50%. As of December 31, 2014, maturities ranged from February 2015 to February 2046 and interest rates ranged between 5.63% to 11.54%. | |||||||||||||||||||||||
Schedule of Derivative Instruments | The Company's long and short exposure to derivatives is as follows: | |||||||||||||||||||||||
Receivable on derivative contracts | As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Number of contracts / Notional Value | Fair value | Number of contracts / Notional Value | Fair value | |||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Commodity Future | $ | 46,123 | $ | 173 | $ | 3,041 | $ | 75 | ||||||||||||||||
Currency forwards | $ | 138,714 | 659 | $ | 23,961 | 310 | ||||||||||||||||||
Equity Swap | $ | 30,209 | 133 | $ | 12,904 | 251 | ||||||||||||||||||
Options other (a) | 407,859 | 54,042 | 367,441 | 48,201 | ||||||||||||||||||||
Foreign currency options | $ | 82,000 | 1,040 | 1,946 | $ | 32,200 | 1,040 | |||||||||||||||||
$ | 56,953 | $ | 49,877 | |||||||||||||||||||||
(a) Includes index, equity, commodity future and cash conversion options. | ||||||||||||||||||||||||
Payable for derivative contracts | As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Number of contracts / Notional Value | Fair value | Number of contracts / Notional Value | Fair value | |||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Futures | $ | 8,996 | $ | 49 | $ | 2,213 | $ | 33 | ||||||||||||||||
Equity and credit default swaps | $ | 17,613 | 169 | $ | 18,352 | 1,603 | ||||||||||||||||||
Options (a) | 18,204 | 44,008 | 22,043 | 39,694 | ||||||||||||||||||||
$ | 44,226 | $ | 41,330 | |||||||||||||||||||||
(a) Includes index, equity, commodity future and cash conversion options. | ||||||||||||||||||||||||
The following tables present the gross and net derivative positions and the related offsetting amount, as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||
Gross amounts not offset in the Statement of Financial Condition | ||||||||||||||||||||||||
Gross amounts recognized | Gross amounts offset on the Consolidated Statements of Financial Condition (a) | Net amounts included on the Consolidated Statements of Financial Condition | Financial instruments | Cash Collateral pledged (b) | Net amounts | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | $ | 56,953 | $ | — | $ | 56,953 | $ | — | $ | 4,714 | $ | 52,239 | ||||||||||||
Payable for derivative contracts, at fair value | 44,226 | — | 44,226 | — | 169 | 44,057 | ||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | 49,877 | — | 49,877 | — | 2,588 | 47,289 | ||||||||||||||||||
Payable for derivative contracts, at fair value | 41,330 | — | 41,330 | — | 1,603 | 39,727 | ||||||||||||||||||
(a) | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |||||||||||||||||||||||
(b) | Includes the amount of collateral held or posted. | |||||||||||||||||||||||
Schedule of Other Investments | As of March 31, 2015 and December 31, 2014, other investments included the following: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
(1) Portfolio Funds, at fair value | $ | 103,156 | $ | 103,466 | ||||||||||||||||||||
(2) Real estate investments, at fair value | 1,947 | 2,175 | ||||||||||||||||||||||
(3) Equity method investments | 51,762 | 61,443 | ||||||||||||||||||||||
(4) Lehman claims, at fair value | 361 | 380 | ||||||||||||||||||||||
$ | 157,226 | $ | 167,464 | |||||||||||||||||||||
Schedule of Other Investments, Portfolio Funds | The Portfolio Funds, at fair value as of March 31, 2015 and December 31, 2014, included the following: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
HealthCare Royalty Partners (a)(*) | $ | 10,939 | $ | 11,935 | ||||||||||||||||||||
HealthCare Royalty Partners II (a)(*) | 7,154 | 6,648 | ||||||||||||||||||||||
Orchard Square Partners Credit Fund LP (b) | 4,540 | 11,532 | ||||||||||||||||||||||
Starboard Value and Opportunity Fund LP (c)(*) | 23,255 | 21,792 | ||||||||||||||||||||||
Starboard Partners Fund LP (d)(*) | 14,551 | 14,652 | ||||||||||||||||||||||
Starboard Leaders Fund LP (e)(*) | 1,392 | 1,367 | ||||||||||||||||||||||
Formation 8 Partners Fund I (f) | 14,976 | 11,283 | ||||||||||||||||||||||
RCG LV Park Lane LLC (g) (*) | 735 | 642 | ||||||||||||||||||||||
RCGL 12E13th LLC (h) (*) | 685 | 638 | ||||||||||||||||||||||
RCG Longview Debt Fund V, L.P. (h) (*) | 14,764 | 12,876 | ||||||||||||||||||||||
Other private investment (i) | 6,515 | 7,324 | ||||||||||||||||||||||
Other affiliated funds (j)(*) | 3,650 | 2,777 | ||||||||||||||||||||||
$ | 103,156 | $ | 103,466 | |||||||||||||||||||||
* These portfolio funds are affiliates of the Company. | ||||||||||||||||||||||||
The Company has no unfunded commitments regarding the portfolio funds held by the Company except as noted in Note 18. | ||||||||||||||||||||||||
(a) | HealthCare Royalty Partners, L.P. and HealthCare Royalty Partners II, L.P. are private equity funds and therefore distributions will be made when cash flows are received from the underlying investments, typically on a quarterly basis. | |||||||||||||||||||||||
(b) | Orchard Square Partners Credit Fund LP has a quarterly redemption policy with a 60 day notice period and a 4% penalty on redemptions of investments of less than a year in duration. | |||||||||||||||||||||||
(c) | Starboard Value and Opportunity Fund LP permits quarterly withdrawals upon 90 days notice. | |||||||||||||||||||||||
(d) | Starboard Partners Fund LP permits redemptions on a semi-annual basis on 180 days prior written notice subsequent to an initial two year lock up. | |||||||||||||||||||||||
(e) | Starboard Leaders Fund LP does not permit withdrawals, but instead allows terminations with respect to capital commitments upon 30 days prior written notice at any time following the first anniversary of an investors initial capital contribution. | |||||||||||||||||||||||
(f) | Formation 8 Partners Fund I is a private equity fund which invests in early stage and growth transformational information and energy technology companies. Distributions will be made when the underlying investments are liquidated. | |||||||||||||||||||||||
(g) | RCG LV Park Lane LLC is a single purpose entity formed to participate in a joint venture which acquired, at a discount, the mortgage notes on a portfolio of multifamily real estate properties located in Birmingham, Alabama. RCG LV Park Lane LLC is a private equity structure and therefore distributions will be made when the underlying investments are liquidated. | |||||||||||||||||||||||
(h) | RCGL 12E13th LLC and RCG Longview Debt Fund V, L.P. are real estate private equity structures and therefore distributions will be made when the underlying investments are liquidated. | |||||||||||||||||||||||
(i) | Other private investment represents the Company's closed end investment in a portfolio fund that invests in a wireless broadband communication provider in Italy. | |||||||||||||||||||||||
(j) | The majority of these funds are affiliates of the Company or are managed by the Company and the investors can redeem from these funds as investments are liquidated. | |||||||||||||||||||||||
Schedule of Other Investments, Equity Method | For the period ended March 31, 2015, an equity method investment held by the Company has met the significance criteria as defined under SEC guidance. As such, the Company is required to present summarized financial information for this significant investee for the three months ended March 31, 2015 and 2014. The summarized income statement information for the Company's investment in the individually significant investee is as follows: | |||||||||||||||||||||||
Other equity method investment | Three Months Ended March 31, | |||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Revenues | $ | 10,127 | $ | 1,755 | ||||||||||||||||||||
Expenses | — | — | ||||||||||||||||||||||
Net realized and unrealized gains (losses) | 109 | 5 | ||||||||||||||||||||||
Net Income | $ | 10,236 | $ | 1,760 | ||||||||||||||||||||
The following table summarizes equity method investments held by the Company: | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
RCG Longview Debt Fund IV Management, LLC | $ | 605 | $ | 676 | ||||||||||||||||||||
RCG Longview Debt Fund V Partners, LLC | 3,167 | 2,684 | ||||||||||||||||||||||
HealthCare Royalty GP, LLC | 892 | 973 | ||||||||||||||||||||||
HealthCare Royalty GP II, LLC | 1,212 | 1,125 | ||||||||||||||||||||||
HealthCare Royalty GP III, LLC | 67 | 62 | ||||||||||||||||||||||
CBOE Stock Exchange, LLC | 527 | 611 | ||||||||||||||||||||||
Starboard Value LP | 39,880 | 48,772 | ||||||||||||||||||||||
RCG Longview Partners, LLC | 237 | 237 | ||||||||||||||||||||||
RCG Longview Management, LLC | 1,174 | 1,117 | ||||||||||||||||||||||
RCG Urban American, LLC | 121 | 422 | ||||||||||||||||||||||
RCG Urban American Management, LLC | 379 | 379 | ||||||||||||||||||||||
RCG Longview Equity Management, LLC | 294 | 316 | ||||||||||||||||||||||
Urban American Real Estate Fund II, LLC | 1,844 | 2,329 | ||||||||||||||||||||||
RCG Kennedy House, LLC | 617 | 509 | ||||||||||||||||||||||
Other | 746 | 1,231 | ||||||||||||||||||||||
$ | 51,762 | $ | 61,443 | |||||||||||||||||||||
Schedule of Securities Sold, Not yet Purchased | As of March 31, 2015 and December 31, 2014, securities sold, not yet purchased, at fair value consisted of the following: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Common stocks | $ | 163,432 | $ | 207,815 | ||||||||||||||||||||
Corporate bonds (a) | 60 | 60 | ||||||||||||||||||||||
$ | 163,492 | $ | 207,875 | |||||||||||||||||||||
(a) | As of March 31, 2015 and December 31, 2014, the maturity was January 2026 with an interest rate of 5.55% | |||||||||||||||||||||||
Securities Borrowed and Securities Loaned | The following tables present the contractual gross and net securities borrowing and lending agreements and the related offsetting amount, as of December 31, 2014. As of March 31, 2015 this business has been completely liquidated (see Note 2). | |||||||||||||||||||||||
Gross amounts not offset in the Statement of Financial Condition | ||||||||||||||||||||||||
Gross amounts recognized | Gross amounts offset on the Consolidated Statements of Financial Condition (a) | Net amounts included on the Consolidated Statements of Financial Condition | Additional Amounts Available | Financial instruments | Cash Collateral pledged (b) | Net amounts | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||
Securities borrowed | 676,100 | — | 676,100 | (15,655 | ) | (660,445 | ) | — | — | |||||||||||||||
Securities loaned | 682,493 | — | 682,493 | (2,441 | ) | (680,052 | ) | — | — | |||||||||||||||
(a) | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |||||||||||||||||||||||
(b) | Includes the amount of cash collateral held/posted. | |||||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||
Schedule of Other Investments | As of March 31, 2015 and December 31, 2014 other investments, at fair value, held by the Consolidated Funds are comprised of: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
(1) Portfolio Funds | $ | 189,793 | $ | 188,884 | ||||||||||||||||||||
(2) Lehman claims | 494 | 493 | ||||||||||||||||||||||
$ | 190,287 | $ | 189,377 | |||||||||||||||||||||
Schedule of Other Investments, Portfolio Funds | As of March 31, 2015 and December 31, 2014, investments in Portfolio Funds, at fair value, included the following: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Investments of Enterprise LP | $ | 135,688 | $ | 138,253 | ||||||||||||||||||||
Investments of Merger Fund | 54,105 | 50,631 | ||||||||||||||||||||||
$ | 189,793 | $ | 188,884 | |||||||||||||||||||||
Enterprise Master | ||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||
Schedule of Derivative Instruments | Receivable on derivative contracts, at fair value, owned by Enterprise Master | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Description | (dollars in thousands) | |||||||||||||||||||||||
Currency forwards | $ | 29 | $ | 64 | ||||||||||||||||||||
$ | 29 | $ | 64 | |||||||||||||||||||||
Schedule of Securities Owned | Securities owned by Enterprise Master, at fair value | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Bank debt | $ | 20 | $ | 20 | ||||||||||||||||||||
Common stock | 1,676 | 1,659 | ||||||||||||||||||||||
Preferred stock | 576 | 576 | ||||||||||||||||||||||
Private equity | 597 | 587 | ||||||||||||||||||||||
Restricted stock | 124 | 124 | ||||||||||||||||||||||
Rights | 2,490 | 2,802 | ||||||||||||||||||||||
Trade claims | 128 | 128 | ||||||||||||||||||||||
$ | 5,611 | $ | 5,896 | |||||||||||||||||||||
Schedule of Other Investments, Portfolio Funds | Portfolio Funds, owned by Enterprise Master, at fair value | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Strategy | (dollars in thousands) | |||||||||||||||||||||||
RCG Longview Equity Fund, LP* | Real Estate | $ | 9,370 | $ | 9,090 | |||||||||||||||||||
RCG Longview II, LP* | Real Estate | 752 | 747 | |||||||||||||||||||||
RCG Longview Debt Fund IV, LP* | Real Estate | 5,316 | 5,348 | |||||||||||||||||||||
RCG Longview, LP* | Real Estate | 40 | 40 | |||||||||||||||||||||
RCG Soundview, LLC* | Real Estate | 452 | 452 | |||||||||||||||||||||
RCG Urban American Real Estate Fund, L.P.* | Real Estate | 1,161 | 1,161 | |||||||||||||||||||||
RCG International Sarl* | Multi-Strategy | 1,079 | 2,113 | |||||||||||||||||||||
RCG Special Opportunities Fund, Ltd* | Multi-Strategy | 93,715 | 92,405 | |||||||||||||||||||||
RCG Energy, LLC * | Energy | 2,155 | 2,294 | |||||||||||||||||||||
RCG Renergys, LLC* | Energy | 1 | 1 | |||||||||||||||||||||
Other Private Investments | Various | 11,776 | 12,057 | |||||||||||||||||||||
Other Real Estate Investments (*) | Real Estate | 9,174 | 10,138 | |||||||||||||||||||||
$ | 134,991 | $ | 135,846 | |||||||||||||||||||||
* | Affiliates of the Company. | |||||||||||||||||||||||
Merger Master | ||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||
Marketable Securities | Securities owned by Merger Master, at fair value | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Common stocks | $ | 133,725 | $ | 133,510 | ||||||||||||||||||||
Corporate bonds (a) | — | 3,383 | ||||||||||||||||||||||
Options | 992 | 541 | ||||||||||||||||||||||
$ | 134,717 | $ | 137,434 | |||||||||||||||||||||
(a) | As of December 31, 2014, maturities ranged from February 2017 to June 2019 and interest rates ranged between 8.50% and 9.75%. | |||||||||||||||||||||||
Schedule of Derivative Instruments | Receivable on derivative contracts, at fair value, owned by Merger Master | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Description | (dollars in thousands) | |||||||||||||||||||||||
Equity swaps | $ | 70 | $ | 78 | ||||||||||||||||||||
$ | 70 | $ | 78 | |||||||||||||||||||||
Payable for derivative contracts, at fair value, owned by Merger Master | ||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||
Description | (dollars in thousands) | |||||||||||||||||||||||
Equity swaps | $ | 85 | $ | 58 | ||||||||||||||||||||
$ | 85 | $ | 58 | |||||||||||||||||||||
Fair_Value_Measurements_for_Op1
Fair Value Measurements for Operating Entities and Consolidated Funds (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the assets and liabilities that are measured at fair value on a recurring basis on the accompanying consolidated statements of financial condition by caption and by level within the valuation hierarchy as of March 31, 2015 and December 31, 2014: | |||||||||||||||||||||||||||||||
Operating Entities | ||||||||||||||||||||||||||||||||
Assets at Fair Value as of March 31, 2015 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities owned | ||||||||||||||||||||||||||||||||
US Government securities | $ | 2,010 | $ | — | $ | — | $ | 2,010 | ||||||||||||||||||||||||
Preferred stock | 720 | — | 19,480 | 20,200 | ||||||||||||||||||||||||||||
Common stocks | 478,230 | 2,540 | 411 | 481,181 | ||||||||||||||||||||||||||||
Convertible bonds | — | — | 879 | 879 | ||||||||||||||||||||||||||||
Corporate bonds | — | 55,937 | — | 55,937 | ||||||||||||||||||||||||||||
Warrants and rights | 505 | — | 2,559 | 3,064 | ||||||||||||||||||||||||||||
Mutual funds | 16,187 | — | — | 16,187 | ||||||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 173 | — | — | 173 | ||||||||||||||||||||||||||||
Currency forwards | — | 659 | — | 659 | ||||||||||||||||||||||||||||
Equity swaps | — | 133 | — | 133 | ||||||||||||||||||||||||||||
Options | 10,424 | 3,922 | 41,642 | 55,988 | ||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | — | 38,714 | 64,442 | 103,156 | ||||||||||||||||||||||||||||
Real estate investments | — | — | 1,947 | 1,947 | ||||||||||||||||||||||||||||
Lehman claim | — | — | 361 | 361 | ||||||||||||||||||||||||||||
$ | 508,249 | $ | 101,905 | $ | 131,721 | $ | 741,875 | |||||||||||||||||||||||||
Liabilities at Fair Value as of March 31, 2015 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities sold, not yet purchased | ||||||||||||||||||||||||||||||||
Common stocks | $ | 163,432 | $ | — | $ | — | $ | 163,432 | ||||||||||||||||||||||||
Corporate bonds | — | 60 | — | 60 | ||||||||||||||||||||||||||||
Payable for derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 49 | — | — | 49 | ||||||||||||||||||||||||||||
Equity and credit default swaps | — | 169 | — | 169 | ||||||||||||||||||||||||||||
Options | 2,366 | — | 41,642 | 44,008 | ||||||||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | ||||||||||||||||||||||||||||||||
Contingent consideration liability (a) | $ | — | $ | — | $ | 3,974 | $ | 3,974 | ||||||||||||||||||||||||
$ | 165,847 | $ | 229 | $ | 45,616 | $ | 211,692 | |||||||||||||||||||||||||
(a) In accordance with the terms of a purchase agreement for an acquisition that closed during 2012, the Company is required to pay to the sellers a portion of future net income of the acquired business, if certain revenue targets are achieved through the period ended August 2016. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of March 31, 2015 can range from $0.1 million to $6.1 million. | ||||||||||||||||||||||||||||||||
Assets at Fair Value as of December 31, 2014 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities owned | ||||||||||||||||||||||||||||||||
US Government securities | $ | 2,010 | $ | — | $ | — | $ | 2,010 | ||||||||||||||||||||||||
Preferred stock | — | 2,553 | 12,517 | 15,070 | ||||||||||||||||||||||||||||
Common stocks | 578,934 | 18,130 | 412 | 597,476 | ||||||||||||||||||||||||||||
Convertible bonds | — | — | 900 | 900 | ||||||||||||||||||||||||||||
Corporate bonds | — | 159,557 | — | 159,557 | ||||||||||||||||||||||||||||
Warrants and rights | 95 | — | 1,322 | 1,417 | ||||||||||||||||||||||||||||
Mutual funds | 15,776 | — | — | 15,776 | ||||||||||||||||||||||||||||
Receivable on derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 75 | — | — | 75 | ||||||||||||||||||||||||||||
Currency forwards | — | 310 | — | 310 | ||||||||||||||||||||||||||||
Equity swaps | — | 251 | — | 251 | ||||||||||||||||||||||||||||
Options | 10,462 | 1,972 | 36,807 | 49,241 | ||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | — | 37,195 | 66,271 | 103,466 | ||||||||||||||||||||||||||||
Real estate investments | — | — | 2,175 | 2,175 | ||||||||||||||||||||||||||||
Lehman claim | — | — | 380 | 380 | ||||||||||||||||||||||||||||
$ | 607,352 | $ | 219,968 | $ | 120,784 | $ | 948,104 | |||||||||||||||||||||||||
Liabilities at Fair Value as of December 31, 2014 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Securities sold, not yet purchased | ||||||||||||||||||||||||||||||||
Common stocks | $ | 207,815 | $ | — | $ | — | $ | 207,815 | ||||||||||||||||||||||||
Corporate bonds | — | 60 | — | 60 | ||||||||||||||||||||||||||||
Payable for derivative contracts, at fair value | ||||||||||||||||||||||||||||||||
Futures | 33 | — | — | 33 | ||||||||||||||||||||||||||||
Equity and credit default swaps | — | 1,603 | — | 1,603 | ||||||||||||||||||||||||||||
Options | 2,887 | — | 36,807 | 39,694 | ||||||||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | ||||||||||||||||||||||||||||||||
Contingent consideration liability (a) | — | — | 4,083 | 4,083 | ||||||||||||||||||||||||||||
$ | 210,735 | $ | 1,663 | $ | 40,890 | $ | 253,288 | |||||||||||||||||||||||||
(a) In accordance with the terms of a purchase agreement for an acquisitions that closed during 2012, the Company is required to pay to the sellers a portion of future net income of the acquired businesses, if certain revenue targets are achieved through the period ended August 2016. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts can range from $0.9 million to $7.1 million. | ||||||||||||||||||||||||||||||||
Consolidated Funds' investments | ||||||||||||||||||||||||||||||||
Assets at Fair Value as of March 31, 2015 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | $ | — | $ | 54,105 | $ | 135,688 | $ | 189,793 | ||||||||||||||||||||||||
Lehman claims | — | — | 494 | 494 | ||||||||||||||||||||||||||||
$ | — | $ | 54,105 | $ | 136,182 | $ | 190,287 | |||||||||||||||||||||||||
Assets at Fair Value as of December 31, 2014 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Portfolio Funds | $ | — | $ | 50,631 | $ | 138,253 | $ | 188,884 | ||||||||||||||||||||||||
Lehman claims | — | — | 493 | 493 | ||||||||||||||||||||||||||||
$ | — | $ | 50,631 | $ | 138,746 | $ | 189,377 | |||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table includes a rollforward of the amounts for the three months ended March 31, 2015 and 2014, for financial instruments classified within level 3. The classification of a financial instrument within level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement. | |||||||||||||||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at March 31, 2015 | Change in unrealized gains/losses relating to instruments still held (1) | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Operating Entities | ||||||||||||||||||||||||||||||||
Preferred stock | $ | 12,517 | $ | — | $ | — | $ | 7,375 | $ | — | $ | (412 | ) | $ | 19,480 | $ | (412 | ) | ||||||||||||||
Common stocks | 412 | — | — | — | (3 | ) | 2 | 411 | 5 | |||||||||||||||||||||||
Convertible bonds | 900 | — | — | — | — | (21 | ) | 879 | (21 | ) | ||||||||||||||||||||||
Options, asset | 36,807 | — | — | — | — | 4,835 | 41,642 | 4,835 | ||||||||||||||||||||||||
Options, liability | 36,807 | — | — | — | — | 4,835 | 41,642 | 4,835 | ||||||||||||||||||||||||
Warrants and Rights | 1,322 | — | (14 | ) | 26 | — | 1,225 | 2,559 | 1,224 | |||||||||||||||||||||||
Portfolio Funds | 66,271 | — | — | 3,972 | (8,350 | ) | 2,549 | 64,442 | 5,303 | |||||||||||||||||||||||
Real estate | 2,175 | — | — | — | (216 | ) | (12 | ) | 1,947 | (12 | ) | |||||||||||||||||||||
Lehman claim | 380 | — | — | — | — | (19 | ) | 361 | (19 | ) | ||||||||||||||||||||||
Contingent consideration liability | 4,083 | — | — | — | (109 | ) | — | 3,974 | — | |||||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||||||||||||||
Portfolio Funds | 138,253 | — | — | — | (4,234 | ) | 1,669 | 135,688 | 1,925 | |||||||||||||||||||||||
Lehman claim | 493 | — | — | — | — | 1 | 494 | 1 | ||||||||||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2013 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at March 31, 2014 | Change in unrealized gains/losses relating to instruments still held (1) | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Operating Entities | ||||||||||||||||||||||||||||||||
Preferred stock | $ | 324 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 324 | $ | — | ||||||||||||||||
Common stocks | 3,559 | — | — | — | — | 5,724 | 9,283 | 5,724 | ||||||||||||||||||||||||
Convertible bonds | 1,950 | — | — | — | — | — | 1,950 | — | ||||||||||||||||||||||||
Options, asset | — | — | — | 35,710 | — | 7,146 | 42,856 | 7,146 | ||||||||||||||||||||||||
Options, liability | — | — | — | 35,710 | — | 7,146 | 42,856 | 7,146 | ||||||||||||||||||||||||
Warrants and Rights, asset | 5,805 | — | — | — | (1,328 | ) | (1,209 | ) | 3,268 | 137 | ||||||||||||||||||||||
Portfolio Funds | 51,649 | — | — | 4,385 | (1,242 | ) | 3,791 | 58,583 | 3,847 | |||||||||||||||||||||||
Real estate | 2,088 | — | — | 40,000 | (27 | ) | 222 | 42,283 | 222 | |||||||||||||||||||||||
Lehman claim | 378 | — | — | — | — | 12 | 390 | 12 | ||||||||||||||||||||||||
Contingent consideration liability | 6,937 | — | — | (76 | ) | — | — | 6,861 | — | |||||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||||||||||||||
Portfolio Funds | 155,674 | — | — | — | (15,944 | ) | 3,329 | 143,059 | 3,329 | |||||||||||||||||||||||
Lehman claim | 4,842 | — | — | — | (980 | ) | (86 | ) | 3,776 | (86 | ) | |||||||||||||||||||||
(1) Unrealized gains/losses are reported in other income (loss) in the accompanying consolidated statements of | ||||||||||||||||||||||||||||||||
operations. | ||||||||||||||||||||||||||||||||
Fair Value Inputs, Assets, Quantitative Information | The following table includes quantitative information as of March 31, 2015 and December 31, 2014 for financial instruments classified within level 3. The table below quantifies information about the significant unobservable inputs used in the fair value measurement of the Company's level 3 financial instruments. | |||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||||||
Fair Value at March 31, 2015 | Valuation techniques | Unobservable Inputs | Range | |||||||||||||||||||||||||||||
Level 3 Assets | ||||||||||||||||||||||||||||||||
Common and preferred stocks | $ | 19,231 | Market/transaction multiples and option pricing method | Volatility Market multiples | 38% 1x to 6x | |||||||||||||||||||||||||||
Convertible bonds | 879 | Recovery analysis | Recovery rate | 50% | ||||||||||||||||||||||||||||
Warrants and rights, net | 2,559 | Model based | Volatility | 20% to 60% (weighted average 41%) | ||||||||||||||||||||||||||||
Options | 41,642 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Other level 3 assets (a) | 203,592 | |||||||||||||||||||||||||||||||
Total level 3 assets | 267,903 | |||||||||||||||||||||||||||||||
Level 3 Liabilities | ||||||||||||||||||||||||||||||||
Options | 41,642 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Contingent consideration | 3,974 | Discounted cash flows | Projected cash flow and discount rate | 9% | ||||||||||||||||||||||||||||
Total level 3 liabilities | $ | 45,616 | ||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||||||
Fair Value at December 31, 2014 | Valuation techniques | Unobservable Inputs | Range | |||||||||||||||||||||||||||||
Level 3 Assets | ||||||||||||||||||||||||||||||||
Common and preferred stocks | $ | 12,269 | Market multiples and option pricing method | Volatility Market multiples | 45% 1x to 6x | |||||||||||||||||||||||||||
Convertible bonds | 900 | Recovery analysis | Recovery rate | 50% | ||||||||||||||||||||||||||||
Warrants and rights, net | 1,322 | Model based | Volatility | 20% to 60% (weighted average 34%) | ||||||||||||||||||||||||||||
Options | 36,807 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Other level 3 assets (a) | 208,232 | |||||||||||||||||||||||||||||||
Total level 3 assets | 259,530 | |||||||||||||||||||||||||||||||
Level 3 Liabilities | ||||||||||||||||||||||||||||||||
Options | 36,807 | Option pricing models | Volatility Credit spreads | 30% to 40% 500bps - 750 bps | ||||||||||||||||||||||||||||
Contingent consideration | 4,083 | Discounted cash flows | Projected cash flow and discount rate | 9% | ||||||||||||||||||||||||||||
Total level 3 liabilities | 40,890 | |||||||||||||||||||||||||||||||
(a) | Quantitative disclosures of unobservable inputs and assumptions are not required for investments for which NAV per share is used as a practical expedient to determine fair value, as their redemption features rather than observability of inputs cause them to be classified as a level 3 type asset within the fair value hierarchy. In addition, the fair value of the Consolidated Funds' investments are determined based on net asset value and therefore quantitative disclosures are not included in the table above. The quantitative disclosures also exclude financial instruments for which the determination of fair value is based on prices from prior transactions. | |||||||||||||||||||||||||||||||
Fair Value Measurements, Nonrecurring | The following table presents the carrying values and estimated fair values, at March 31, 2015 and December 31, 2014, of financial assets and liabilities and information on their classification within the fair value hierarchy which are measured at fair value on a recurring basis. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value see Note 3. | |||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | Fair Value Hierarchy | ||||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Operating companies | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 94,666 | $ | 94,666 | $ | 129,509 | $ | 129,509 | Level 1 | |||||||||||||||||||||||
Cash collateral pledged | 8,923 | 8,923 | 8,306 | 8,306 | Level 2 | |||||||||||||||||||||||||||
Securities borrowed | — | 676,100 | 660,445 | Level 1 | ||||||||||||||||||||||||||||
Consolidated funds | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 643 | 643 | 501 | 501 | Level 1 | |||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Securities loaned | — | — | 682,493 | 661,533 | Level 1 | |||||||||||||||||||||||||||
Convertible debt | 119,999 | (a) | 170,056 | (b) | 118,475 | (a) | 160,713 | (c) | Level 2 | |||||||||||||||||||||||
Notes payable and other debt | 68,253 | 72,329 | 67,144 | 69,548 | Level 2 | |||||||||||||||||||||||||||
(a) | The carrying amount of the convertible debt includes an unamortized discount of $29.5 million and $31.0 million as of March 31, 2015 and December 31, 2014. | |||||||||||||||||||||||||||||||
(b) | The convertible debt include the conversion option and is based on the last broker quote available. |
Redeemable_NonControlling_Inte1
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | Redeemable non-controlling interests in consolidated subsidiaries and funds and the related net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds are comprised as follows: | ||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||
(dollars in thousands) | |||||||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | |||||||||
Operating companies | $ | 8,474 | $ | 9,619 | |||||
Consolidated funds | 77,491 | 76,457 | |||||||
$ | 85,965 | $ | 86,076 | ||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(dollars in thousands) | |||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | |||||||||
Operating companies | $ | 918 | $ | 3,439 | |||||
Consolidated funds | 1,802 | 748 | |||||||
$ | 2,720 | $ | 4,187 | ||||||
ShareBased_Compensation_and_Em1
Share-Based Compensation and Employee Ownership Plans (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the Company's stock option activity for the three months ended March 31, 2015: | |||||||||||||
Shares Subject | Weighted Average | Weighted Average | Aggregate Intrinsic | |||||||||||
to Option | Exercise Price/Share | Remaining Term | Value(1) | |||||||||||
(in years) | (dollars in thousands) | |||||||||||||
Balance outstanding at December 31, 2014 | 216,672 | $ | 5.65 | 1.6 | $ | 87 | ||||||||
Options granted | — | — | — | — | ||||||||||
Options exercised | — | — | — | — | ||||||||||
Options expired | — | — | — | — | ||||||||||
Balance outstanding at March 31, 2015 | 216,672 | $ | 5.65 | 1.35 | $ | 129 | ||||||||
Options exercisable at March 31, 2015 | 216,672 | $ | 5.65 | 1.35 | $ | — | ||||||||
-1 | Based on the Company's closing stock price of $5.20 on March 31, 2015 and $4.80 on December 31, 2014. | |||||||||||||
Schedule of Share-based Compensation, Stock Appreciation Rights, Activity | As of March 31, 2015, the unrecognized compensation expense related to the Company's grant of stock options was insignificant. | |||||||||||||
The following table summarizes the Company's SAR's for the three months ended March 31, 2015: | ||||||||||||||
Shares Subject | Weighted Average | Weighted Average | Aggregate Intrinsic | |||||||||||
to Option | Exercise Price/Share | Remaining Term | Value(1) | |||||||||||
(in years) | (dollars in thousands) | |||||||||||||
Balance outstanding at December 31, 2014 | 400,000 | $ | 2.9 | 3.21 | 913 | |||||||||
SAR's granted | — | — | — | — | ||||||||||
SAR's acquired | — | — | — | — | ||||||||||
SAR's expired | — | — | — | — | ||||||||||
Balance outstanding at March 31, 2015 | 400,000 | $ | 2.9 | 2.96 | $ | 1,055 | ||||||||
SAR's exercisable at March 31, 2015 | — | $ | — | 0 | $ | — | ||||||||
-1 | Based on the Company's closing stock price of $5.20 on March 31, 2015 and $4.80 on December 31, 2014. | |||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Restricted shares and restricted stock units are referred to collectively as restricted stock. The following table summarizes the Company's restricted share and restricted stock unit activity for the three months ended March 31, 2015: | |||||||||||||
Nonvested Restricted Shares and Restricted Stock Units | Weighted-Average | |||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Balance outstanding at December 31, 2014 | 17,654,582 | $ | 3.7 | |||||||||||
Granted | 5,635,310 | 4.77 | ||||||||||||
Vested | (1,729,896 | ) | 2.97 | |||||||||||
Canceled | — | — | ||||||||||||
Forfeited | (560,955 | ) | 3.04 | |||||||||||
Balance outstanding at March 31, 2015 (1) | 20,999,041 | $ | 4.07 | |||||||||||
(1) Performance linked restricted stock units of 1,925,750 were awarded to employees of the Company in December 2013 and January 2014. Of the awards granted, 281,250 have been forfeited through March 31, 2015. The remaining awards, included in the outstanding balance as of March 31, 2015, will vest on June 10, 2019 and will be earned only to the extent that the Company attains specified performance goals relating to its volume-weighted average share price and the aggregate net income for the years from 2014 to 2018. The actual number of RSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 100% of the targeted award. Each RSU is equal to the one share of the Company’s Class A common stock. Compensation expense is recognized to the extent that it is probable that the Company will attain the performance goals. |
Defined_Benefit_Plan_Quarterly
Defined Benefit Plan - Quarterly (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Compensation and Retirement Disclosure [Abstract] | ||||
Schedule of Net Periodic Benefit Cost | The amounts contained in the following table relate to the Company's defined benefit plan(s) for the three months ended March 31, 2014: | |||
Three Months Ended March 31, | ||||
2014 | ||||
Components of net periodic benefit cost included in employee compensation and benefits | ||||
Service cost | $ | — | ||
Interest cost | 33 | |||
Expected return on plan assets | (66 | ) | ||
Amortization of loss / (gain) | — | |||
Amortization of prior service cost | — | |||
Effect of settlement | — | |||
Net periodic benefit cost | $ | (33 | ) |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Future Minimum Annual Lease and Service Payments | As of March 31, 2015, future minimum annual lease and service payments for the Company were as follows: | |||||||||||
Equipment Leases (a) | Service Payments | Facility Leases (b) | ||||||||||
(dollars in thousands) | ||||||||||||
2015 | $ | 2,052 | $ | 10,583 | $ | 13,705 | ||||||
2016 | 2,437 | 9,000 | 16,688 | |||||||||
2017 | 2,245 | 4,672 | 13,271 | |||||||||
2018 | 2,198 | 3,958 | 13,003 | |||||||||
2019 | 813 | 1,375 | 12,460 | |||||||||
Thereafter | — | — | 40,970 | |||||||||
$ | 9,745 | $ | 29,588 | $ | 110,097 | |||||||
(a) | Equipment Leases include the Company's commitments relating to operating and capital leases. See Note 14 for further information on the capital lease minimum payments which are included in the table. | |||||||||||
(b) | The Company has entered into various agreements to sublease certain of its premises. The Company recorded sublease income related to these leases of $0.5 million and $0.3 million for the three months ended March 31, 2015 and 2014, respectively. |
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Schedule of Debt and Capital Lease Obligations | As of March 31, 2015 and December 31, 2014, the Company's outstanding debt was as follows: | |||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||
(dollars in thousands) | ||||||||||||||||
Convertible debt | $ | 119,999 | $ | 118,475 | ||||||||||||
Note Payable | 63,250 | 63,250 | ||||||||||||||
Other Note payable | 1,415 | — | ||||||||||||||
Capital lease obligations | 3,588 | 3,894 | ||||||||||||||
$ | 188,252 | $ | 185,619 | |||||||||||||
Schedule of Maturities of Debt and Future Minimum Lease Payments for Capital Leases | Annual scheduled maturities of debt and minimum payments for all debt outstanding as of March 31, 2015, is as follows: | |||||||||||||||
Convertible Debt | Note Payable | Other Note Payable | Capital Lease | |||||||||||||
Obligation | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
2015 | $ | 2,242 | $ | 3,914 | $ | 1,425 | $ | 987 | ||||||||
2016 | 4,485 | 5,218 | — | 1,025 | ||||||||||||
2017 | 4,485 | 5,218 | — | 938 | ||||||||||||
2018 | 4,485 | 5,218 | — | 938 | ||||||||||||
2019 | 151,743 | 5,218 | — | 78 | ||||||||||||
Thereafter | — | 73,686 | — | — | ||||||||||||
Subtotal | 167,440 | 98,472 | 1,425 | 3,966 | ||||||||||||
Less: Amount representing interest (a) | (47,441 | ) | (35,222 | ) | (10 | ) | (378 | ) | ||||||||
Total | $ | 119,999 | $ | 63,250 | $ | 1,415 | $ | 3,588 | ||||||||
(a) | Amount necessary to reduce net minimum payments to present value calculated at the Company's implicit rate at inception. This amount also includes the unamortized discount on the convertible debt. | |||||||||||||||
Schedule of Line of Credit Facilities | As of March 31, 2015, the Company has the following seven irrevocable letters of credit related to leased office space, for which there is cash collateral pledged, which the Company pays a fee on the stated amount of the letter of credit. | |||||||||||||||
Location | Amount | Maturity | ||||||||||||||
(dollars in thousands) | ||||||||||||||||
San Francisco | $ | 82 | May-15 | |||||||||||||
Boston | $ | 382 | Mar-16 | |||||||||||||
New York | $ | 794 | Aug-15 | |||||||||||||
New York | $ | 3,935 | Dec-15 | |||||||||||||
New York | $ | 1,000 | Feb-16 | |||||||||||||
New York | $ | 1,861 | Jun-15 | |||||||||||||
New York | $ | 127 | Sep-15 | |||||||||||||
Treasury_Stock_Tables
Treasury Stock (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Equity [Abstract] | |||||||||||
Treasury Stock Activity | The following represents the activity relating to the treasury stock held by the Company during the three months ended March 31, 2015: | ||||||||||
Treasury stock shares | Cost | Average cost | |||||||||
(dollars in thousands) | per share | ||||||||||
Balance outstanding at December 31, 2014 | 23,507,656 | $ | 79,771 | $ | 3.39 | ||||||
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | 529,905 | 2,777 | 5.24 | ||||||||
Treasury stock reissued | — | — | — | ||||||||
Purchase of treasury stock | 1,360,015 | 7,205 | 5.3 | ||||||||
Balance outstanding at March 31, 2015 | 25,397,576 | $ | 89,753 | $ | 3.53 | ||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Accumulated Other Comprehensive Income / (Loss) [Abstract] | ||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | ||||||||||||
Foreign currency translation (a) | Defined benefit plans (a) | Total | ||||||||||
(dollars in thousands) | ||||||||||||
Balance at December 31, 2014 | 17 | — | 17 | |||||||||
Net change | (2 | ) | — | (2 | ) | |||||||
Balance at March 31, 2015 | $ | 15 | $ | — | $ | 15 | ||||||
Foreign currency translation (a) | Defined benefit plans (a) | Total | ||||||||||
(dollars in thousands) | ||||||||||||
Balance at December 31, 2013 | $ | 248 | $ | 344 | $ | 592 | ||||||
Net change | 37 | (92 | ) | (55 | ) | |||||||
Balance at March 31, 2014 | $ | 285 | $ | 252 | $ | 537 | ||||||
(a) During the periods presented, the Company did not have material reclassifications out of other comprehensive income. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings Per Share, Basic and Diluted | The computation of earnings per share is as follows: | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(dollars in thousands, except per share data) | ||||||||
Net income (loss) | $ | 19,418 | $ | 14,027 | ||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 2,720 | 4,187 | ||||||
Net income (loss) attributable to Cowen Group, Inc. stockholders | $ | 16,698 | $ | 9,840 | ||||
Shares for basic and diluted calculations: | ||||||||
Weighted average shares used in basic computation | 112,053 | 115,680 | ||||||
Warrants | — | — | ||||||
Stock options | — | — | ||||||
Performance based restricted stock | 411 | — | ||||||
Stock appreciation rights | 119 | 54 | ||||||
Restricted stock | 6,007 | 7,164 | ||||||
Weighted average shares used in diluted computation | 118,590 | 122,898 | ||||||
Earnings (loss) per share: | ||||||||
Basic | $ | 0.15 | $ | 0.09 | ||||
Diluted | $ | 0.14 | $ | 0.08 | ||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||
Segment Reporting Information, by Segment | The following tables set forth operating results for the Company's alternative investment and broker dealer segments and related adjustments necessary to reconcile the Company's Economic Income (Loss) measure to arrive at the Company's consolidated US GAAP net income (loss): | |||||||||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||
Alternative | Broker-Dealer | Total Economic Income/(Loss) | Funds | Other | US GAAP | |||||||||||||||||||||
Investment | Consolidation | Adjustments | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Investment banking | $ | — | $ | 65,233 | $ | 65,233 | $ | — | $ | — | $ | 65,233 | ||||||||||||||
Brokerage | 18 | 35,505 | 35,523 | — | (69 | ) | (e) | 35,454 | ||||||||||||||||||
Management fees | 16,607 | — | 16,607 | (238 | ) | (5,985 | ) | (a) | 10,384 | |||||||||||||||||
Incentive income | 15,363 | — | 15,363 | (183 | ) | (12,808 | ) | (a) | 2,372 | |||||||||||||||||
Investment income | 21,830 | 7,050 | 28,880 | — | (28,880 | ) | (c) | — | ||||||||||||||||||
Interest and dividends | — | — | — | — | 3,083 | (c)(e) | 3,083 | |||||||||||||||||||
Reimbursement from affiliates | — | — | — | (85 | ) | 3,727 | (f) | 3,642 | ||||||||||||||||||
Other revenue | 21 | 48 | 69 | — | 599 | (c) | 668 | |||||||||||||||||||
Consolidated Funds revenues | — | — | — | 258 | — | 258 | ||||||||||||||||||||
Total revenues | 53,839 | 107,836 | 161,675 | (248 | ) | (40,333 | ) | 121,094 | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Non interest expense | 34,834 | 96,329 | 131,163 | — | 1,506 | (c)(d) | 132,669 | |||||||||||||||||||
Interest and dividends | 3,044 | 978 | 4,022 | — | 1,757 | (c)(e) | 5,779 | |||||||||||||||||||
Consolidated Funds expenses | — | — | — | 358 | — | 358 | ||||||||||||||||||||
Total expenses | 37,878 | 97,307 | 135,185 | 358 | 3,263 | 138,806 | ||||||||||||||||||||
Total other income (loss) | — | — | — | 2,407 | 41,670 | (c) | 44,077 | |||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 6,947 | (b) | 6,947 | |||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | (2,845 | ) | — | (2,845 | ) | (1,801 | ) | 1,926 | (2,720 | ) | ||||||||||||||||
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders | $ | 13,116 | $ | 10,529 | $ | 23,645 | $ | — | $ | (6,947 | ) | $ | 16,698 | |||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||
Alternative | Broker-Dealer | Total Economic Income/(Loss) | Funds | Other | US GAAP | |||||||||||||||||||||
Investment | Consolidation | Adjustments | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Investment banking | $ | — | $ | 49,562 | $ | 49,562 | $ | — | $ | — | $ | 49,562 | ||||||||||||||
Brokerage | — | 34,349 | 34,349 | — | (1,519 | ) | (e) | 32,830 | ||||||||||||||||||
Management fees | 14,089 | — | 14,089 | (234 | ) | (4,931 | ) | (a) | 8,924 | |||||||||||||||||
Incentive income | 4,594 | — | 4,594 | — | (2,096 | ) | (a) | 2,498 | ||||||||||||||||||
Investment income | 8,328 | (156 | ) | 8,172 | — | (8,172 | ) | (c) | — | |||||||||||||||||
Interest and dividends | — | — | — | — | 9,252 | (c)(e) | 9,252 | |||||||||||||||||||
Reimbursement from affiliates | — | — | — | (80 | ) | 1,980 | (f) | 1,900 | ||||||||||||||||||
Other revenue | (43 | ) | (102 | ) | (145 | ) | — | 700 | (c) | 555 | ||||||||||||||||
Consolidated Funds revenues | — | — | — | 1,156 | — | 1,156 | ||||||||||||||||||||
Total revenues | 26,968 | 83,653 | 110,621 | 842 | (4,786 | ) | 106,677 | |||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Non interest expense | 21,172 | 76,179 | 97,351 | — | 1,303 | (c)(d) | 98,654 | |||||||||||||||||||
Interest and dividends | 609 | 34 | 643 | — | 6,429 | (c)(e) | 7,072 | |||||||||||||||||||
Consolidated Funds expenses | — | — | — | 302 | — | 302 | ||||||||||||||||||||
Total expenses | 21,781 | 76,213 | 97,994 | 302 | 7,732 | 106,028 | ||||||||||||||||||||
Total other income (loss) | — | — | — | 207 | 13,250 | (c) | 13,457 | |||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 79 | (b) | 79 | |||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | (2,625 | ) | — | (2,625 | ) | (747 | ) | (815 | ) | (4,187 | ) | |||||||||||||||
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders | $ | 2,562 | $ | 7,440 | $ | 10,002 | $ | — | $ | (162 | ) | $ | 9,840 | |||||||||||||
The following is a summary of the adjustments made to US GAAP net income (loss) for the segment to arrive at | ||||||||||||||||||||||||||
Economic Income (Loss): | ||||||||||||||||||||||||||
Funds Consolidation: The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP net income (loss) include elimination of incentive income and management fees earned from the Consolidated Funds and addition of fund expenses excluding management fees paid, fund revenues and investment income (loss). | ||||||||||||||||||||||||||
Other Adjustments: | ||||||||||||||||||||||||||
(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share | ||||||||||||||||||||||||||
of management and incentive fees of certain real estate operating entities and the activist business. | ||||||||||||||||||||||||||
(b) Economic Income (Loss) excludes income taxes as management does not consider this item when evaluating the | ||||||||||||||||||||||||||
performance of the segment. | ||||||||||||||||||||||||||
(c) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends) net | ||||||||||||||||||||||||||
of related expenses. | ||||||||||||||||||||||||||
(d) Economic Income (Loss) recognizes the Company's proportionate share of expenses for certain real estate and other | ||||||||||||||||||||||||||
operating entities for which the investments are recorded under the equity method of accounting for investments. | ||||||||||||||||||||||||||
(e) Economic Income (Loss) recognizes stock borrow/loan activity and other brokerage dividends as brokerage revenue. | ||||||||||||||||||||||||||
(f) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of | ||||||||||||||||||||||||||
revenues under US GAAP. |
Divestiture_Narrative_Interim_
Divestiture Narrative - Interim (Details) (Cowen Equity Finance, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Cowen Equity Finance | |
Significant Acquisitions and Disposals [Line Items] | |
Goodwill impairment | $2,334,000 |
Impairment of Intangible Assets, Finite-lived | 900,000 |
Contingent liability adjustment | $2,055,000 |
Organization_and_Business_Deta
Organization and Business (Details) | 3 Months Ended |
Mar. 31, 2015 | |
segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
Significant_Accounting_Policie2
Significant Accounting Policies All Other - Quarterly (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Redeemable Noncontrolling Interest [Line Items] | ||
Total net assets of consolidated VIEs | $3,900,000 | $2,000,000 |
Deferred rent | $12,343,000 | $13,142,000 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Number of funds, Consolidated | 2 | |
Other investment companies | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Number of funds, Consolidated | 2 | |
Investment Company | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Number of funds, Consolidated | 4 |
Cash_Collateral_Pledged_Detail
Cash Collateral Pledged (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Cash and Cash Equivalents [Abstract] | ||
Cash collateral pledged | $8,923 | $8,306 |
Investments_of_Operating_Entit2
Investments of Operating Entities and Consolidated Funds - Securities Owned at Fair Value - Quarterly (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | ||
Investment Holdings [Line Items] | ||||
Concentration Risk, Market Risk | 0 | |||
Securities owned, at fair value | 579,458 | 792,206 | ||
US Government Securities | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Debt | 2,010 | [1] | 2,010 | [1] |
US Government Securities | Minimum | ||||
Investment Holdings [Line Items] | ||||
Debt securities, interest rate | 0.00% | 0.00% | ||
US Government Securities | Maximum | ||||
Investment Holdings [Line Items] | ||||
Debt securities, interest rate | 5.95% | 5.95% | ||
Preferred Stock | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Equity | 20,200 | 15,070 | ||
Common Stock | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Equity | 481,181 | 597,476 | ||
Convertible Bonds | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Debt | 879 | [2] | 900 | [2] |
Debt securities, interest rate | 10.00% | 10.00% | ||
Corporate Bonds | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Debt | 55,937 | [3] | 159,557 | [3] |
Corporate Bonds | Minimum | ||||
Investment Holdings [Line Items] | ||||
Debt securities, interest rate | 0.00% | 5.63% | ||
Corporate Bonds | Maximum | ||||
Investment Holdings [Line Items] | ||||
Debt securities, interest rate | 11.50% | 11.54% | ||
Warrants and Rights | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Equity | 3,064 | 1,417 | ||
Mutual Funds | ||||
Investment Holdings [Line Items] | ||||
Trading Securities, Equity | 16,187 | 15,776 | ||
Enterprise Master | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 5,611 | 5,896 | ||
Enterprise Master | Debt | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 20 | 20 | ||
Enterprise Master | Trade Claims | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 128 | 128 | ||
Enterprise Master | Preferred Stock | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 576 | 576 | ||
Enterprise Master | Private Equity | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 597 | 587 | ||
Enterprise Master | Common Stock | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 1,676 | 1,659 | ||
Enterprise Master | Restricted Stock | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 124 | 124 | ||
Enterprise Master | Rights | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 2,490 | 2,802 | ||
Merger Master | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 134,717 | 137,434 | ||
Merger Master | Common Stock | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 133,725 | 133,510 | ||
Merger Master | Corporate Bonds | ||||
Investment Holdings [Line Items] | ||||
Securities owned, at fair value | 0 | [4] | 3,383 | [4] |
Merger Master | Corporate Bonds | Minimum | ||||
Investment Holdings [Line Items] | ||||
Debt securities, interest rate | 8.50% | |||
Merger Master | Corporate Bonds | Maximum | ||||
Investment Holdings [Line Items] | ||||
Debt securities, interest rate | 9.75% | |||
[1] | As of MarchB 31, 2015, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. As of DecemberB 31, 2014, maturities ranged from May 2015 to April 2016 with interest rates ranged between 0% to 5.95%. | |||
[2] | As of MarchB 31, 2015, the maturity was July 2015 with an interest rate of 10.00%. As of DecemberB 31, 2014, the maturity was February 2015 with an interest rate of 10.00%. | |||
[3] | As of MarchB 31, 2015, maturities ranged from December 2016 to February 2046 and interest rates ranged between 0.0% to 11.50%. As of DecemberB 31, 2014, maturities ranged from February 2015 to February 2046 and interest rates ranged between 5.63% to 11.54%. | |||
[4] | As of DecemberB 31, 2014, maturities ranged from February 2017 to June 2019 and interest rates ranged between 8.50% and 9.75%. |
Investments_of_Operating_Entit3
Investments of Operating Entities and Consolidated Funds - Derivatives (Details) (USD $) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 10, 2014 | |||
Derivative [Line Items] | ||||||
Derivative Asset, Fair Value, Gross Asset | $56,953,000 | $49,877,000 | ||||
Call Option, Fair Value | 41,600,000 | 35,700,000 | ||||
Warrants issued | 15,218,000 | |||||
Cost of hedge transaction and warrant, net | 20,500,000 | |||||
Receivable on derivative contracts, at fair value | 56,953,000 | 49,877,000 | ||||
Derivative Asset, Fair Value, Amount Offset Against Collateral | 0 | [1] | 0 | [1] | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 4,714,000 | [2] | 2,588,000 | [2] | ||
Derivative asset, net of offset | 52,239,000 | 47,289,000 | ||||
Derivative Liability, Fair Value, Gross Liability | 44,226,000 | 41,330,000 | ||||
Derivative liabilities | 44,226,000 | 41,330,000 | ||||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | 0 | 0 | ||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | 0 | [1] | 0 | [1] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 169,000 | [2] | 1,603,000 | [2] | ||
Derivative Liability, net of offset | 44,057,000 | 39,727,000 | ||||
Trading days for expiration | 80 days | |||||
Futures | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 173,000 | 75,000 | ||||
Derivative liabilities | 49,000 | 33,000 | ||||
Derivative Asset, Notional Amount | 46,123,000 | 3,041,000 | ||||
Derivative Liability, Notional Amount | 8,996,000 | 2,213,000 | ||||
Currency Forwards | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 659,000 | 310,000 | ||||
Derivative Asset, Notional Amount | 138,714,000 | 23,961,000 | ||||
Equity Swaps | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 133,000 | 251,000 | ||||
Derivative liabilities | 169,000 | 1,603,000 | ||||
Derivative Asset, Notional Amount | 30,209,000 | 12,904,000 | ||||
Derivative Liability, Notional Amount | 17,613,000 | 18,352,000 | ||||
Options | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 54,042,000 | [3] | 48,201,000 | [3] | ||
Derivative Asset, Number of Instruments Held | 407,859 | [3] | 367,441 | [3] | ||
Put Option | ||||||
Derivative [Line Items] | ||||||
Derivative liabilities | 44,008,000 | [3] | 39,694,000 | [3] | ||
Derivative Liability, Number of Instruments Held | 18,204 | [3] | 22,043 | [3] | ||
Foreign Exchange Option [Member] | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 1,946,000 | 1,040,000 | ||||
Derivative Asset, Number of Instruments Held | 82,000,000 | 32,200,000 | ||||
Receivables from Brokers-Dealers and Clearing Organizations | ||||||
Derivative [Line Items] | ||||||
Collateral posted | 9,700,000 | 4,200,000 | ||||
Other Income | ||||||
Derivative [Line Items] | ||||||
Realized and unrealized gains/(losses) related to derivatives trading activities | 2,100,000 | -1,800,000 | ||||
Enterprise Master | ||||||
Derivative [Line Items] | ||||||
Derivative, Fair Value, Net | 29,000 | 64,000 | ||||
Merger Master | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 70,000 | 78,000 | ||||
Derivative liabilities | 85,000 | 58,000 | ||||
Common Stock Class A | ||||||
Derivative [Line Items] | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 28,048,786 | |||||
Class of Warrant, Exercise Price of Warrants or Rights | $7.18 | |||||
Currency Forwards | Enterprise Master | ||||||
Derivative [Line Items] | ||||||
Derivative, Fair Value, Net | 29,000 | 64,000 | ||||
Equity Swaps | Merger Master | ||||||
Derivative [Line Items] | ||||||
Receivable on derivative contracts, at fair value | 70,000 | 78,000 | ||||
Derivative liabilities | 85,000 | 58,000 | ||||
Convertible Debt | ||||||
Derivative [Line Items] | ||||||
Embedded cash conversion value | $41,600,000 | $35,700,000 | ||||
Class of Warrant, Exercise Price of Warrants or Rights | $7.18 | |||||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |||||
[2] | Includes the amount of collateral held or posted. | |||||
[3] | Includes index, equity, commodity future and cash conversion options. |
Investments_of_Operating_Entit4
Investments of Operating Entities and Consolidated Funds - Other Investments - Quarterly (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Investment Holdings [Line Items] | ||
Other Investments, Consolidated Funds | $190,287 | $189,377 |
Other investments | 157,226 | 167,464 |
Portfolio Funds, at fair value | ||
Investment Holdings [Line Items] | ||
Other Investments, Consolidated Funds | 189,793 | 188,884 |
Other investments | 103,156 | 103,466 |
Real Estate Equity Investment | ||
Investment Holdings [Line Items] | ||
Other investments | 1,947 | 2,175 |
Equity Method Investments | ||
Investment Holdings [Line Items] | ||
Other investments | 51,762 | 61,443 |
Lehman claims, at fair value | ||
Investment Holdings [Line Items] | ||
Other Investments, Consolidated Funds | 494 | 493 |
Other investments | $361 | $380 |
Investments_of_Operating_Entit5
Investments of Operating Entities and Consolidated Funds - Portfolio Funds - Quarterly (Details) (Details) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | ||
Investment Holdings [Line Items] | |||||
Portfolio Funds, Consolidated Funds | $189,793 | $188,884 | |||
Other investments | 157,226 | 167,464 | |||
Enterprise LP | |||||
Investment Holdings [Line Items] | |||||
Portfolio Funds, Consolidated Funds | 135,688 | 138,253 | |||
Merger Fund | |||||
Investment Holdings [Line Items] | |||||
Portfolio Funds, Consolidated Funds | 54,105 | 50,631 | |||
Portfolio Funds | |||||
Investment Holdings [Line Items] | |||||
Other investments | 103,156 | 103,466 | |||
Portfolio Funds | Healthcare Royalty Partners | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 10,939 | [1],[2] | 11,935 | [1],[2] | |
Portfolio Funds | Healthcare Royalty Partners II | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 7,154 | [1],[2] | 6,648 | [1],[2] | |
Portfolio Funds | Orchard Square Partners Credit Fund LP | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 4,540 | [3] | 11,532 | [3] | |
Required notice period, redemption | 60 days | 60 days | |||
Penalty on redemptions of less than one year | 4.00% | 4.00% | |||
Portfolio Funds | Starboard Value and Opportunity Fund LP | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 23,255 | [2],[4] | 21,792 | [2],[4] | |
Required notice period, withdrawal | 90 days | 90 days | |||
Portfolio Funds | Starboard Partners Fund LP | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 14,551 | [2],[5] | 14,652 | [2],[5] | |
Portfolio Funds | Starboard Leaders Fund LP | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 1,392 | [2],[6] | 1,367 | [2],[6] | |
Portfolio Funds | Formation 8 Partners Fund I LP | |||||
Investment Holdings [Line Items] | |||||
Other investments | 14,976 | [7] | 11,283 | [7] | |
Portfolio Funds | RCG LV Park Lane LLC | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 735 | [2],[8] | 642 | [2],[8] | |
Portfolio Funds | RCGL 12E13th LLC | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 685 | [2],[9] | 638 | [2],[9] | |
Portfolio Funds | RCGLongview Debt Fund V, L.P. | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 14,764 | [2],[9] | 12,876 | [2],[9] | |
Portfolio Funds | Other Funds | |||||
Investment Holdings [Line Items] | |||||
Other investments | 6,515 | [10] | 7,324 | [10] | |
Portfolio Funds | Other Funds | Affiliated Entity | |||||
Investment Holdings [Line Items] | |||||
Other investments | 3,650 | [11],[2] | 2,777 | [11],[2] | |
Portfolio Funds | Enterprise Master | |||||
Investment Holdings [Line Items] | |||||
Other investments | 134,991 | 135,846 | |||
Portfolio Funds | Enterprise Master | RCG Longview Equity Fund, LP | Affiliated Entity | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 9,370 | [12] | 9,090 | [12] | |
Portfolio Funds | Enterprise Master | RCG Longview II, LP | Affiliated Entity | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 752 | [12] | 747 | [12] | |
Portfolio Funds | Enterprise Master | RCG Longview Debt Fund IV, LP | Affiliated Entity | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 5,316 | [12] | 5,348 | [12] | |
Portfolio Funds | Enterprise Master | RCG Longview, LP | Affiliated Entity | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 40 | [12] | 40 | [12] | |
Portfolio Funds | Enterprise Master | RCG Soundview, LLC | Affiliated Entity | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 452 | [12] | 452 | [12] | |
Portfolio Funds | Enterprise Master | RCG Urban American Real Estate Fund, L.P. | Affiliated Entity | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 1,161 | [12] | 1,161 | [12] | |
Portfolio Funds | Enterprise Master | RCG International Sarl | Affiliated Entity | Multi-strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 1,079 | [12] | 2,113 | [12] | |
Portfolio Funds | Enterprise Master | RCG Special Opportunities Fund, Ltd | Affiliated Entity | Multi-strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 93,715 | [12] | 92,405 | [12] | |
Portfolio Funds | Enterprise Master | RCG Energy, LLC | Affiliated Entity | Energy Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 2,155 | [12] | 2,294 | [12] | |
Portfolio Funds | Enterprise Master | RCG Renergys, LLC | Affiliated Entity | Energy Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | 1 | [12] | 1 | [12] | |
Portfolio Funds | Enterprise Master | Other Private Investment | Various Strategies | |||||
Investment Holdings [Line Items] | |||||
Other investments | 11,776 | 12,057 | |||
Portfolio Funds | Enterprise Master | Real Estate Funds | Real Estate Strategy | |||||
Investment Holdings [Line Items] | |||||
Other investments | $9,174 | [12] | $10,138 | [12] | |
[1] | HealthCare Royalty Partners, L.P. and HealthCare Royalty Partners II, L.P. are private equity funds and therefore distributions will be made when cash flows are received from the underlying investments, typically on a quarterly basis. | ||||
[2] | These portfolio funds are affiliates of the Company. | ||||
[3] | Orchard Square Partners Credit Fund LP has a quarterly redemption policy with a 60 day notice period and a 4% penalty on redemptions of investments of less than a year in duration. | ||||
[4] | Starboard Value and Opportunity FundB LP permits quarterly withdrawals upon 90 days notice. | ||||
[5] | Starboard Partners Fund LP permits redemptions on a semi-annual basis on 180 days prior written notice subsequent to an initial two year lock up. | ||||
[6] | Starboard Leaders Fund LP does not permit withdrawals, but instead allows terminations with respect to capital commitments upon 30 days prior written notice at any time following the first anniversary of an investors initial capital contribution. | ||||
[7] | Formation 8 Partners Fund I is a private equity fund which invests in early stage and growth transformational information and energy technology companies. Distributions will be made when the underlying investments are liquidated. | ||||
[8] | RCG LV Park Lane LLC is a single purpose entity formed to participate in a joint venture which acquired, at a discount, the mortgage notes on a portfolio of multifamily real estate properties located in Birmingham, Alabama. RCG LV Park Lane LLC is a private equity structure and therefore distributions will be made when the underlying investments are liquidated. | ||||
[9] | RCGL 12E13th LLC and RCG Longview Debt Fund V, L.P. are real estate private equity structures and therefore distributions will be made when the underlying investments are liquidated. | ||||
[10] | Other private investment represents the Company's closed end investment in a portfolio fund that invests in a wireless broadband communication provider in Italy. | ||||
[11] | The majority of these funds are affiliates of the Company or are managed by the Company and the investors can redeem from these funds as investments are liquidated. | ||||
[12] | Affiliates of the Company. |
Investments_of_Operating_Entit6
Investments of Operating Entities and Consolidated Funds - Real Estate (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Other investments | $157,226 | $167,464 |
Real Estate Equity Investment | ||
Other investments | 1,947 | 2,175 |
Real Estate Equity Investment | RCG RE Manager, LLC | ||
Other investments | $1,900 | $2,200 |
Investments_of_Operating_Entit7
Investments of Operating Entities and Consolidated Funds - Equity Method Investments - Quarterly (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Number of Entities that Parent Owns a Majority Interest | 3 | ||
Other investments | $157,226,000 | $167,464,000 | |
Net Gains (Losses) on Securities, Derivatives and Other Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (Loss) from Equity Method Investments | 14,200,000 | 6,500,000 | |
Clawback Obligation | |||
Schedule of Equity Method Investments [Line Items] | |||
Other Commitment | 6,200,000 | 6,200,000 | |
Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 51,762,000 | 61,443,000 | |
RCG Longview Debt Fund IV Management, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 605,000 | 676,000 | |
RCG Longview Debt Fund V Partners, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 3,167,000 | 2,684,000 | |
Healthcare Royalty GP, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 892,000 | 973,000 | |
Healthcare Royalty GP II, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 1,212,000 | 1,125,000 | |
Healthcare Royalty GP III, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 67,000 | 62,000 | |
CBOE Stock Exchange, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 7.20% | ||
CBOE Stock Exchange, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 527,000 | 611,000 | |
Starboard Value LP | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 39,880,000 | 48,772,000 | |
RCG Longview Partners, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 237,000 | 237,000 | |
RCG Longview Management, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 1,174,000 | 1,117,000 | |
RCG Urban American, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 121,000 | 422,000 | |
RCG Urban American Management, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 379,000 | 379,000 | |
RCG Longview Equity Management, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 294,000 | 316,000 | |
Urban American Real Estate Fund II, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 1,844,000 | 2,329,000 | |
RCG Kennedy House, LLC | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 617,000 | 509,000 | |
Equity Method Investee, Other | Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Other investments | 746,000 | 1,231,000 | |
Equity Method Investee, Exceeded Threshold for Income Test | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Summarized Financial Information, Revenue | 10,127,000 | 1,755,000 | |
Equity Method Investment, Summarized Financial Information, Expenses | 0 | 0 | |
Equity Method Investment, Summarized Financial Information, Gain (Loss) on Investments | 109,000 | 5,000 | |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 10,236,000 | 1,760,000 | |
RCG Longview Partners II, LLC | Clawback Obligation | |||
Schedule of Equity Method Investments [Line Items] | |||
Other Commitment | $6,200,000 | ||
Minimum | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 20.00% | ||
Maximum | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 55.00% |
Investments_of_Operating_Entit8
Investments of Operating Entities and Consolidated Funds - Lehman Claims (Details) (Lehman claims, at fair value, USD $) | Mar. 31, 2015 | Sep. 15, 2008 |
In Millions, unless otherwise specified | ||
Investment Holdings [Line Items] | ||
Initial value | $1 | |
Total Dividend Amount Received | 1 | |
Total Dividend percent received | 100.00% | |
Enterprise Master | ||
Investment Holdings [Line Items] | ||
Initial value | 24.3 | |
Total Dividend Amount Received | 36.2 | |
Other Investments, initial claim current value | 0.7 | |
Enterprise LP | ||
Investment Holdings [Line Items] | ||
Other Investments, initial claim current value | $0.50 |
Investments_of_Operating_Entit9
Investments of Operating Entities and Consolidated Funds - Securities Sold, Not Yet Purchased (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Receivable on derivative contracts, at fair value | $56,953 | $49,877 | ||
Securities owned, at fair value | 579,458 | 792,206 | ||
Securities sold, not yet purchased, at fair value | 163,492 | 207,875 | ||
Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Receivable on derivative contracts, at fair value | 70 | 78 | ||
Securities owned, at fair value | 134,717 | 137,434 | ||
Options | Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities sold, not yet purchased, at fair value | 200 | 200 | ||
Corporate Bonds | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities sold, not yet purchased, at fair value | 60 | [1] | 60 | [1] |
Securities sold, not yet purchased, interest rate | 5.55% | 5.55% | ||
Common Stock | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities sold, not yet purchased, at fair value | 163,432 | 207,815 | ||
Common Stock | Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities sold, not yet purchased, at fair value | 28,800 | 39,900 | ||
Equity Swaps | Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Receivable on derivative contracts, at fair value | 70 | 78 | ||
Options | Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities owned, at fair value | 992 | 541 | ||
Corporate Bonds | Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities owned, at fair value | 0 | [2] | 3,383 | [2] |
Common Stock | Merger Master | ||||
Investments Sold, Not yet Purchased [Line Items] | ||||
Securities owned, at fair value | $133,725 | $133,510 | ||
[1] | As of MarchB 31, 2015 and DecemberB 31, 2014, the maturity was January 2026 with an interest rate of 5.55% | |||
[2] | As of DecemberB 31, 2014, maturities ranged from February 2017 to June 2019 and interest rates ranged between 8.50% and 9.75%. |
Recovered_Sheet1
Investments of Operating Entities and Consolidated Funds - Securities Lending and Borrowing Transactions (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | |
In Thousands, unless otherwise specified | |||
Securities borrowed | $0 | $676,100 | |
Securities Borrowed, Amount Offset Against Collateral | 0 | [1] | |
Securities Borrowed | 676,100 | ||
Securities Borrowed, Not Offset, Policy Election Deduction | -15,655 | ||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | 0 | 0 | |
Securities Borrowed, Not Offset against Collateral | 0 | [2] | |
Securities Borrowed, net | 0 | ||
Securities loaned | 0 | 682,493 | |
Securities Loaned, Amount Offset Against Collateral | 0 | [1] | |
Securities Loaned | 682,493 | ||
Securities Loaned, Not Offset, Policy Election Deduction | -2,441 | ||
Securities Loaned, Fair Value of Collateral | 0 | [2] | |
Securities Loaned, Not Offset Against Collateral | 0 | ||
securities borrowed [Member] | |||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | -660,445 | ||
securities loaned [Member] | |||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | ($680,052) | ||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | ||
[2] | Includes the amount of cash collateral held/posted. |
Recovered_Sheet2
Investments of Operating Entities and Consolidated Funds - Variable Interest Entities (Details) (Variable Interest Entity, Not Primary Beneficiary, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Total assets of nonconsolidated variable interest entities | $2,800,000,000 | $2,900,000,000 |
Total liabilities of nonconsolidated variable interest entities | 342,200,000 | 445,800,000 |
Maximum exposure regarding nonconsolidated variable interest entities | $197,100,000 | $210,300,000 |
Fair_Value_Measurements_for_Op2
Fair Value Measurements for Operating Entities and Consolidated Funds Assets and Liabilities at Fair Value on a Recurring Basis (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | $741,875,000 | $948,104,000 | ||
Financial Liabilities Fair Value Disclosure | 211,692,000 | 253,288,000 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | 100,000 | 900,000 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 6,100,000 | 7,100,000 | ||
Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 508,249,000 | 607,352,000 | ||
Financial Liabilities Fair Value Disclosure | 165,847,000 | 210,735,000 | ||
Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 101,905,000 | 219,968,000 | ||
Financial Liabilities Fair Value Disclosure | 229,000 | 1,663,000 | ||
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 131,721,000 | 120,784,000 | ||
Financial Liabilities Fair Value Disclosure | 45,616,000 | 40,890,000 | ||
Common Stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 163,432,000 | 207,815,000 | ||
Common Stock | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 163,432,000 | 207,815,000 | ||
Common Stock | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Common Stock | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Corporate Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 60,000 | 60,000 | ||
Corporate Bonds | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Corporate Bonds | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 60,000 | 60,000 | ||
Corporate Bonds | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Contingent liability payable | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 3,974,000 | [1] | 4,083,000 | [2] |
Contingent liability payable | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | [1] | 0 | [2] |
Contingent liability payable | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | [1] | 0 | [2] |
Contingent liability payable | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 3,974,000 | [1] | 4,083,000 | [2] |
Futures | Derivative Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 49,000 | 33,000 | ||
Futures | Derivative Liabilities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 49,000 | 33,000 | ||
Futures | Derivative Liabilities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Futures | Derivative Liabilities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Equity Swaps | Derivative Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 169,000 | 1,603,000 | ||
Equity Swaps | Derivative Liabilities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Equity Swaps | Derivative Liabilities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 169,000 | 1,603,000 | ||
Equity Swaps | Derivative Liabilities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Options, liability | Derivative Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 44,008,000 | 39,694,000 | ||
Options, liability | Derivative Liabilities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 2,366,000 | 2,887,000 | ||
Options, liability | Derivative Liabilities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 0 | 0 | ||
Options, liability | Derivative Liabilities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financial Liabilities Fair Value Disclosure | 41,642,000 | 36,807,000 | ||
US Government Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 2,010,000 | 2,010,000 | ||
US Government Securities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 2,010,000 | 2,010,000 | ||
US Government Securities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
US Government Securities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Preferred Stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 20,200,000 | 15,070,000 | ||
Preferred Stock | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 720,000 | 0 | ||
Preferred Stock | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 2,553,000 | ||
Preferred Stock | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 19,480,000 | 12,517,000 | ||
Common Stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 481,181,000 | 597,476,000 | ||
Common Stock | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 478,230,000 | 578,934,000 | ||
Common Stock | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 2,540,000 | 18,130,000 | ||
Common Stock | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 411,000 | 412,000 | ||
Convertible Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 879,000 | 900,000 | ||
Convertible Bonds | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Convertible Bonds | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Convertible Bonds | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 879,000 | 900,000 | ||
Corporate Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 55,937,000 | 159,557,000 | ||
Corporate Bonds | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Corporate Bonds | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 55,937,000 | 159,557,000 | ||
Corporate Bonds | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Warrants and Rights | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 3,064,000 | 1,417,000 | ||
Warrants and Rights | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 505,000 | 95,000 | ||
Warrants and Rights | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Warrants and Rights | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 2,559,000 | 1,322,000 | ||
Mutual Funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 16,187,000 | 15,776,000 | ||
Mutual Funds | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 16,187,000 | 15,776,000 | ||
Mutual Funds | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Mutual Funds | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Futures | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 173,000 | 75,000 | ||
Derivative Assets | Futures | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 173,000 | 75,000 | ||
Derivative Assets | Futures | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Futures | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Forward Contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 659,000 | 310,000 | ||
Derivative Assets | Forward Contracts | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Forward Contracts | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 659,000 | 310,000 | ||
Derivative Assets | Forward Contracts | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Equity Swaps | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 133,000 | 251,000 | ||
Derivative Assets | Equity Swaps | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Equity Swaps | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 133,000 | 251,000 | ||
Derivative Assets | Equity Swaps | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Derivative Assets | Options, asset | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 55,988,000 | 49,241,000 | ||
Derivative Assets | Options, asset | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 10,424,000 | 10,462,000 | ||
Derivative Assets | Options, asset | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 3,922,000 | 1,972,000 | ||
Derivative Assets | Options, asset | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 41,642,000 | 36,807,000 | ||
Portfolio Funds, at fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 103,156,000 | 103,466,000 | ||
Portfolio Funds, at fair value | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Portfolio Funds, at fair value | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 38,714,000 | 37,195,000 | ||
Portfolio Funds, at fair value | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 64,442,000 | 66,271,000 | ||
Real Estate Investments, at fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 1,947,000 | 2,175,000 | ||
Real Estate Investments, at fair value | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Real Estate Investments, at fair value | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Real Estate Investments, at fair value | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 1,947,000 | 2,175,000 | ||
Lehman claims, at fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 361,000 | 380,000 | ||
Lehman claims, at fair value | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Lehman claims, at fair value | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Lehman claims, at fair value | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 361,000 | 380,000 | ||
Consolidated Funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 190,287,000 | 189,377,000 | ||
Consolidated Funds | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Consolidated Funds | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 54,105,000 | 50,631,000 | ||
Consolidated Funds | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 136,182,000 | 138,746,000 | ||
Consolidated Funds | Portfolio Funds, at fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 189,793,000 | 188,884,000 | ||
Consolidated Funds | Portfolio Funds, at fair value | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Consolidated Funds | Portfolio Funds, at fair value | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 54,105,000 | 50,631,000 | ||
Consolidated Funds | Portfolio Funds, at fair value | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 135,688,000 | 138,253,000 | ||
Consolidated Funds | Lehman claims, at fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 494,000 | 493,000 | ||
Consolidated Funds | Lehman claims, at fair value | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Consolidated Funds | Lehman claims, at fair value | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | ||
Consolidated Funds | Lehman claims, at fair value | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets, Fair Value Disclosure, Recurring | $494,000 | $493,000 | ||
[1] | In accordance with the terms of a purchase agreement for an acquisition that closed during 2012, the Company is required to pay to the sellers a portion of future net income of the acquired business, if certain revenue targets are achieved through the period ended August 2016. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of MarchB 31, 2015 can range from $0.1 million to $6.1 million. | |||
[2] | In accordance with the terms of a purchase agreement for an acquisitions that closed during 2012, the Company is required to pay to the sellers a portion of future net income of the acquired businesses, if certain revenue targets are achieved through the period ended August 2016. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts can range from $0.9 million to $7.1 million. |
Fair_Value_Measurements_for_Op3
Fair Value Measurements for Operating Entities and Consolidated Funds Unobservable Input Roll Forward (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | $259,530,000 | ||||
Balance Liability Value | 40,890,000 | ||||
Balance Asset Value | 267,903,000 | 259,530,000 | |||
Balance Liability Value | 45,616,000 | 40,890,000 | |||
Fair value, Between Level 1 and 2 transfers, amount | 0 | ||||
Preferred Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 12,517,000 | 324,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 7,375,000 | 0 | |||
(Sales)/short buys | 0 | 0 | |||
Realized and unrealized gains (losses), asset | -412,000 | 0 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | -412,000 | [1] | 0 | [1] | |
Balance Asset Value | 19,480,000 | 324,000 | |||
Common Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 412,000 | 3,559,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 0 | |||
(Sales)/short buys | -3,000 | 0 | |||
Realized and unrealized gains (losses), asset | 2,000 | 5,724,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | 5,000 | [1] | 5,724,000 | [1] | |
Balance Asset Value | 411,000 | 9,283,000 | |||
Convertible Bonds | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 900,000 | 1,950,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 0 | |||
(Sales)/short buys | 0 | 0 | |||
Realized and unrealized gains (losses), asset | -21,000 | 0 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | -21,000 | [1] | |||
Balance Asset Value | 879,000 | 1,950,000 | |||
Options, asset | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 36,807,000 | 0 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 35,710,000 | |||
(Sales)/short buys | 0 | 0 | |||
Realized and unrealized gains (losses), asset | 4,835,000 | 7,146,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | 4,835,000 | [1] | |||
Balance Asset Value | 41,642,000 | 42,856,000 | |||
Warrants and Rights | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 1,322,000 | 5,805,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | -14,000 | 0 | |||
Purchases/(covers) | 26,000 | 0 | |||
(Sales)/short buys | 0 | -1,328,000 | |||
Realized and unrealized gains (losses), asset | 1,225,000 | -1,209,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | 1,224,000 | [1] | 137,000 | [1] | |
Balance Asset Value | 2,559,000 | 3,268,000 | |||
Portfolio Funds, at fair value | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 66,271,000 | 51,649,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 3,972,000 | 4,385,000 | |||
(Sales)/short buys | -8,350,000 | -1,242,000 | |||
Realized and unrealized gains (losses), asset | 2,549,000 | 3,791,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | 5,303,000 | [1] | 3,847,000 | [1] | |
Balance Asset Value | 64,442,000 | 58,583,000 | |||
Real Estate Investments, at fair value | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 2,175,000 | 2,088,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 40,000,000 | |||
(Sales)/short buys | -216,000 | -27,000 | |||
Realized and unrealized gains (losses), asset | -12,000 | 222,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | -12,000 | [1] | 222,000 | [1] | |
Balance Asset Value | 1,947,000 | 42,283,000 | |||
Lehman claims, at fair value | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 380,000 | 378,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 0 | |||
(Sales)/short buys | 0 | 0 | |||
Realized and unrealized gains (losses), asset | -19,000 | 12,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | -19,000 | [1] | 12,000 | [1] | |
Balance Asset Value | 361,000 | 390,000 | |||
Consolidated Funds | Portfolio Funds, at fair value | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 138,253,000 | 155,674,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 0 | |||
(Sales)/short buys | -4,234,000 | -15,944,000 | |||
Realized and unrealized gains (losses), asset | 1,669,000 | 3,329,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | 1,925,000 | [1] | 3,329,000 | [1] | |
Balance Asset Value | 135,688,000 | 143,059,000 | |||
Consolidated Funds | Lehman claims, at fair value | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 493,000 | 4,842,000 | |||
Asset, Transfers In | 0 | 0 | |||
Asset, Transfers Out | 0 | 0 | |||
Purchases/(covers) | 0 | 0 | |||
(Sales)/short buys | 0 | -980,000 | |||
Realized and unrealized gains (losses), asset | 1,000 | -86,000 | |||
Change in Unrealized Gain (Loss), instruments still held, asset | 1,000 | [1] | -86,000 | [1] | |
Balance Asset Value | 494,000 | 3,776,000 | |||
Options, liability | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Asset Value | 0 | ||||
Balance Liability Value | 36,807,000 | ||||
Asset, Transfers In | 0 | ||||
Liability, Transfers In | 0 | ||||
Liability, Transfers Out | 0 | ||||
Asset, Transfers Out | 0 | ||||
Purchases/(covers) | 35,710,000 | ||||
Liability, Purchases | 0 | ||||
(Sales)/short buys | 0 | ||||
Liability, Sales | 0 | ||||
Realized and unrealized gains (losses), asset | 7,146,000 | ||||
Realized and unrealized gains (losses), liability | 4,835,000 | ||||
Change in Unrealized Gain (Loss), instruments still held, liabilities | 4,835,000 | [1] | |||
Balance Asset Value | 42,856,000 | ||||
Balance Liability Value | 41,642,000 | ||||
Contingent liability payable | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance Liability Value | 4,083,000 | 6,937,000 | |||
Liability, Transfers In | 0 | 0 | |||
Liability, Transfers Out | 0 | 0 | |||
Liability, Purchases | 0 | -76,000 | |||
Liability, Sales | -109,000 | 0 | |||
Realized and unrealized gains (losses), liability | 0 | 0 | |||
Change in Unrealized Gain (Loss), instruments still held, liabilities | 0 | [1] | 0 | [1] | |
Balance Liability Value | $3,974,000 | $6,861,000 | |||
[1] | Unrealized gains/losses are reported in other income (loss) in the accompanying consolidated statements of operations. |
Fair_Value_Measurements_for_Op4
Fair Value Measurements for Operating Entities and Consolidated Funds Fair Value Inputs, Unobservable Inputs, Quantitative Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Asset Value | 267,903 | 259,530 | ||||
Balance Liability Value | 45,616 | 40,890 | ||||
Options | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Liability Value | 41,642 | 36,807 | ||||
Contingent liability payable | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Liability Value | 3,974 | 4,083 | 6,861 | 6,937 | ||
Common and Preferred Stock | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Asset Value | 19,231 | 12,269 | ||||
Convertible Debt Securities [Member] | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Asset Value | 879 | 900 | 1,950 | 1,950 | ||
Warrants and Rights | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Asset Value | 2,559 | 1,322 | 3,268 | 5,805 | ||
Options | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Asset Value | 41,642 | 36,807 | ||||
Other Investments | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Balance Asset Value | 203,592 | [1] | 208,232 | [1] | ||
Level 3 | Options | Market Approach Valuation Technique | Minimum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 30.00% | 30.00% | ||||
Fair Value Assumptions, Credit Spread | 5.00% | 5.00% | ||||
Level 3 | Options | Market Approach Valuation Technique | Maximum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 40.00% | 40.00% | ||||
Fair Value Assumptions, Credit Spread | 7.50% | 7.50% | ||||
Level 3 | Contingent liability payable | Income Approach and Market Approach Valuation Techniques | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
DCF discount rate | 9.00% | 9.00% | ||||
Level 3 | Common and Preferred Stock | Income Approach and Market Approach Valuation Techniques | Maximum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Market multiple | 6 | |||||
Level 3 | Common and Preferred Stock | Market Approach Valuation Technique | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 38.00% | 45.00% | ||||
Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | Minimum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Market multiple | 1 | 1 | ||||
Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | Maximum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Market multiple | 6 | |||||
Level 3 | Convertible Debt Securities [Member] | Cost Approach Valuation Technique [Member] | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair Value Inputs, Recovery Rate | 50.00% | 50.00% | ||||
Level 3 | Warrants and Rights | Market Approach Valuation Technique | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair Value Assumptions, Weighted Average Volatility Rate | 41.00% | 34.00% | ||||
Level 3 | Warrants and Rights | Market Approach Valuation Technique | Minimum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 20.00% | 20.00% | ||||
Level 3 | Warrants and Rights | Market Approach Valuation Technique | Maximum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 60.00% | 60.00% | ||||
Level 3 | Options | Market Approach Valuation Technique | Minimum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 30.00% | 30.00% | ||||
Fair Value Assumptions, Credit Spread | 5.00% | 5.00% | ||||
Level 3 | Options | Market Approach Valuation Technique | Maximum | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Volatility | 40.00% | 40.00% | ||||
Fair Value Assumptions, Credit Spread | 7.50% | 7.50% | ||||
[1] | Quantitative disclosures of unobservable inputs and assumptions are not required for investments for which NAV per share is used as a practical expedient to determine fair value, as their redemption features rather than observability of inputs cause them to be classified as a level 3 type asset within the fair value hierarchy. In addition, the fair value of the Consolidated Funds' investments are determined based on net asset value and therefore quantitative disclosures are not included in the table above. The quantitative disclosures also exclude financial instruments for which the determination of fair value is based on prices from prior transactions. |
Fair_Value_Measurements_for_Op5
Fair Value Measurements for Operating Entities and Consolidated Funds Carrying Value Disclosures (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | ||
Cash and cash equivalents | $94,666,000 | $129,509,000 | $61,565,000 | $54,720,000 | ||
Cash collateral pledged | 8,923,000 | 8,306,000 | ||||
Securities borrowed | 0 | 676,100,000 | ||||
Cash and cash equivalents, Consolidated Funds | 643,000 | 501,000 | ||||
Securities loaned | 0 | 682,493,000 | ||||
Convertible debt | 119,999,000 | 118,475,000 | ||||
Notes payable and other debt | 68,253,000 | 67,144,000 | ||||
Convertible Debt | ||||||
Convertible debt | 119,999,000 | 118,475,000 | ||||
Convertible debt, unamortized premium | 29,500,000 | 31,000,000 | ||||
Level 1 | ||||||
Cash and cash equivalents, Fair Value | 94,666,000 | 129,509,000 | ||||
Securities borrowed, Fair Value | 660,445,000 | |||||
Cash and cash equivalents, Consolidated Funds, Fair Value | 643,000 | 501,000 | ||||
Securities Loaned, Fair Value | 0 | 661,533,000 | ||||
Level 2 | ||||||
Cash collateral pledged, Fair Value | 8,923,000 | 8,306,000 | ||||
Convertible debt, Fair Value | 170,056,000 | [1] | 160,713,000 | [1] | ||
Notes payable and other debt, Fair Value | $72,329,000 | $69,548,000 | ||||
[1] | The convertible debt include the conversion option and is based on the last broker quote available. |
Receivables_from_and_Payable_t1
Receivables from and Payable to Brokers (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Brokers and Dealers [Abstract] | ||
Receivable from brokers | $109,522 | $84,679 |
Payable to brokers | $227,919 | $335,822 |
Redeemable_NonControlling_Inte2
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Noncontrolling Interest [Line Items] | |||
Redeemable non-controlling interests in consolidated subsidiaries and funds | $85,965 | $86,076 | |
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 2,720 | 4,187 | |
Operating Entities | |||
Noncontrolling Interest [Line Items] | |||
Redeemable non-controlling interests in consolidated subsidiaries and funds | 8,474 | 9,619 | |
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 918 | 3,439 | |
Consolidated Funds | |||
Noncontrolling Interest [Line Items] | |||
Redeemable non-controlling interests in consolidated subsidiaries and funds | 77,491 | 76,457 | |
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | $1,802 | $748 |
ShareBased_Compensation_and_Em2
Share-Based Compensation and Employee Ownership Plans Narrative (Details) (USD $) | 3 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Equity Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance under compensation plan, in shares | 4,000,000 | |||
Stock-compensation expense recognized in connection with compensation plan | $4.20 | $4.80 | ||
Tax benefit of stock-compensation expense recognized in connection with compensation plan | 0.1 | 1 | ||
Equity Plans | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, initial term | 7 years | |||
Equity Plans | Employee Stock Option | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation award, vesting period | 2 years | |||
Equity Plans | Employee Stock Option | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation award, vesting period | 5 years | |||
Equity Plans | Restricted Shares and Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | 65.3 | |||
Vested, shares | 1,729,896 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 20,999,041 | [1] | 17,654,582 | |
Equity Plans | Restricted Stock | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation award, vesting period | 2 years | |||
Equity Plans | Restricted Stock | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation award, vesting period | 5 years | |||
Equity Plans | Restricted Stock Units (RSUs) | Non-employee Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, shares | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 424,479 | |||
Equity Plans | Stock Appreciation Rights (SARs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | 0.2 | 0.2 | ||
SAR's, initial term | 5 years | |||
Vested, shares | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 400,000 | 400,000 | ||
Deferred Cash Award | Cowen Group, Inc. 2010 Equity and Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation award, vesting period | 4 years | |||
Deferred cash awards, unrecognized compensation expense | $42 | |||
Deferred Cash Award | Cowen Group, Inc. 2010 Equity and Incentive Plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Deferred cash award, interest rate | 0.70% | |||
Deferred Cash Award | Cowen Group, Inc. 2010 Equity and Incentive Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Deferred cash award, interest rate | 0.75% | |||
[1] | Performance linked restricted stock units of 1,925,750 were awarded to employees of the Company in December 2013 and January 2014. Of the awards granted, 281,250 have been forfeited through MarchB 31, 2015. The remaining awards, included in the outstanding balance as of MarchB 31, 2015, will vest on June 10, 2019 and will be earned only to the extent that the Company attains specified performance goals relating to its volume-weighted average share price and the aggregate net income for the years from 2014 to 2018. The actual number of RSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 100% of the targeted award. Each RSU is equal to the one share of the Companybs Class A common stock. Compensation expense is recognized to the extent that it is probable that the Company will attain the performance goals. |
ShareBased_Compensation_and_Em3
Share-Based Compensation and Employee Ownership Plans Deferred Cash (Details) (Cowen Group, Inc. 2010 Equity and Incentive Plan, Deferred Cash Award, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Deferred cash awards granted | $12.50 |
Deferred cash awards, vesting period | 4 years |
Deferred cash awards, unrecognized compensation expense | $42 |
Minimum | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Deferred cash award, interest rate | 0.70% |
Maximum | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Deferred cash award, interest rate | 0.75% |
ShareBased_Compensation_and_Em4
Share-Based Compensation and Employee Ownership Plans Stock Options (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||
Weighted Average Exercise Price/Share | ||||
Weighted average remaining term, options outstanding | 1 year 4 months 6 days | 1 year 7 months 6 days | ||
Weighted average remaining term, options exercisable | 1 year 4 months 6 days | |||
Aggregate Intrinsic Value | ||||
Closing stock price, in dollars per share | $5.20 | $4.80 | ||
Equity Plans | ||||
Shares Subject to Option | ||||
Balance outstanding, beginning of period, shares | 216,672 | |||
Options granted, shares | 0 | |||
Options exercised, shares | 0 | |||
Options expired, shares | 0 | |||
Balance outstanding, end of period, shares | 216,672 | |||
Options exercisable, shares | 216,672 | |||
Weighted Average Exercise Price/Share | ||||
Balance outstanding, beginning of period, in dollars per share | $5.65 | |||
Options granted, in dollars per share | $0 | |||
Options exercised, in dollars per share | $0 | |||
Options expired, in dollars per share | $0 | |||
Balance outstanding, end of period, in dollars per share | $5.65 | |||
Options exercisable, in dollars per share | $5.65 | |||
Aggregate Intrinsic Value | ||||
Balance outstanding, beginning of period | $87 | [1] | ||
Balance outstanding, end of period | 129 | [1] | ||
Options exercisable | $0 | [1] | ||
[1] | Based on the Company's closing stock price of $5.20 on MarchB 31, 2015 and $4.80 on DecemberB 31, 2014. |
ShareBased_Compensation_and_Em5
Share-Based Compensation and Employee Ownership Plans SARs (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |||
Aggregate Intrinsic Value | |||||
Closing stock price, in dollars per share | $5.20 | $4.80 | |||
Stock Appreciation Rights | |||||
Aggregate Intrinsic Value | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 0 | ||||
Equity Plans | |||||
Aggregate Intrinsic Value | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $0 | [1] | |||
Equity Plans | Stock Appreciation Rights | |||||
Shares Subject to Option | |||||
Balance outstanding, beginning of period, shares | 400,000 | ||||
Granted, shares | 0 | ||||
Acquired, shares | 0 | ||||
Expired, shares | 0 | ||||
Balance outstanding, end of period, shares | 400,000 | ||||
Balance exercisable, shares | 0 | ||||
Weighted Average Exercise Price/Share | |||||
Balance outstanding, beginning of period, in dollars per share | $2.90 | ||||
Granted, in dollars per share | $0 | ||||
Acquired, in dollars per share | $0 | ||||
Expired, in dollars per share | $0 | ||||
Balance outstanding, end of period, in dollars per share | $2.90 | ||||
Balance exercisable, in dollars per share | $0 | ||||
Weighted Average Remaining Term Outstanding | 2 years 11 months 16 days | 3 years 2 months 16 days | |||
Aggregate Intrinsic Value | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | 1,055,000 | [1] | 913,000 | [1] | |
Unrecognized compensation expense | $200,000 | $200,000 | |||
[1] | Based on the Company's closing stock price of $5.20 on MarchB 31, 2015 and $4.80 on DecemberB 31, 2014. |
ShareBased_Compensation_and_Em6
Share-Based Compensation and Employee Ownership Plans Restricted Shares and Restricted Stock Units (Details) (Equity Plans, USD $) | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | |
Weighted-Average Grant Date Fair Value | |||
Allocated Share-based Compensation Expense | $4.20 | $4.80 | |
Restricted Shares and Restricted Stock Units (RSUs) | |||
Nonvested Restricted Shares and Restricted Stock Units | |||
Balance outstanding, beginning of period, shares | 17,654,582 | ||
Granted, shares | 5,635,310 | ||
Vested, shares | -1,729,896 | ||
Cancelled, shares | 0 | ||
Forfeited, shares | -560,955 | ||
Balance outstanding, end of period, shares | 20,999,041 | [1] | |
Weighted-Average Grant Date Fair Value | |||
Balance outstanding, beginning of period, in dollars per share | $3.70 | ||
Granted, in dollars per share | $4.77 | ||
Vested, in dollars per share | $2.97 | ||
Cancelled, in dollars per share | $0 | ||
Forfeited, in dollars per share | $3.04 | ||
Balance outstanding, end of period, in dollars per share | $4.07 | [1] | |
Unrecognized compensation expense | $65.30 | ||
Weighted-average recognition period for unrecognized compensation expense | 1 year 11 months 4 days | ||
Performance based restricted stock | |||
Nonvested Restricted Shares and Restricted Stock Units | |||
Granted, shares | 1,925,750 | ||
Forfeited, shares | -281,250 | ||
[1] | Performance linked restricted stock units of 1,925,750 were awarded to employees of the Company in December 2013 and January 2014. Of the awards granted, 281,250 have been forfeited through MarchB 31, 2015. The remaining awards, included in the outstanding balance as of MarchB 31, 2015, will vest on June 10, 2019 and will be earned only to the extent that the Company attains specified performance goals relating to its volume-weighted average share price and the aggregate net income for the years from 2014 to 2018. The actual number of RSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 100% of the targeted award. Each RSU is equal to the one share of the Companybs Class A common stock. Compensation expense is recognized to the extent that it is probable that the Company will attain the performance goals. |
Defined_Benefit_Plan_Quarterly1
Defined Benefit Plan - Quarterly (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | |
Service cost | $0 |
Interest cost | 33 |
Expected return on plan assets | -66 |
Amortization of loss / (gain) | 0 |
Amortization of prior service cost | 0 |
Effect of settlement | 0 |
Net periodic benefit cost | ($33) |
Income_Taxes_Quarterly_Details
Income Taxes - Quarterly (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate, Percent | 26.35% | -0.56% | |
Statutory rate, Percent | 35.00% | 35.00% | |
Undistributed Earnings of Foreign Subsidiaries | $0.10 | $1.10 | |
Tax Liabilities, Undistributed Foreign Earnings | $0.01 | $0.20 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Apr. 30, 2013 | ||
Lease Obligations | |||||
Net rent expense | $4,400,000 | $4,200,000 | |||
Future minimum annual lease and service payments | |||||
Sublease income related to operating leases | 500,000 | 300,000 | |||
Affiliated Entity | |||||
Future minimum annual lease and service payments | |||||
Other commitments, unfunded amount | 9,900,000 | ||||
Affiliated Entity | Healthcare Royalty Partners | |||||
Future minimum annual lease and service payments | |||||
Contractual obligation | 45,400,000 | ||||
Funding toward commitments | 35,700,000 | ||||
Affiliated Entity | Healthcare Royalty Partners | Minimum | |||||
Future minimum annual lease and service payments | |||||
Expected call period | 2 years | ||||
Affiliated Entity | Healthcare Royalty Partners | Maximum | |||||
Future minimum annual lease and service payments | |||||
Expected call period | 5 years | ||||
Affiliated Entity | Starboard Leaders Fund LP | |||||
Future minimum annual lease and service payments | |||||
Funding toward commitments | 900,000 | ||||
Affiliated Entity | Formation 8 Partners Fund I LP | |||||
Future minimum annual lease and service payments | |||||
Other commitments, unfunded amount | 1,400,000 | ||||
Clawback Obligation | |||||
Future minimum annual lease and service payments | |||||
Contractual obligation | 6,200,000 | 6,200,000 | |||
Commitment to Invest | Affiliated Entity | Starboard Leaders Fund LP | |||||
Future minimum annual lease and service payments | |||||
Contractual obligation | 1,000,000 | ||||
Commitment to Invest | Affiliated Entity | Formation 8 Partners Fund I LP | |||||
Future minimum annual lease and service payments | |||||
Term of capital commitment | 1 year | ||||
Unfunded Commitments | |||||
Future minimum annual lease and service payments | |||||
Number of real estate investments, in investments | 4 | ||||
RCG Longview Partners II, LLC | Clawback Obligation | |||||
Future minimum annual lease and service payments | |||||
Contractual obligation | 6,200,000 | ||||
Equipment Leases | |||||
Future minimum annual lease and service payments | |||||
Contractual Obligation, Due in remainder of current year | 2,052,000 | [1] | |||
Contractual Obligation, Due in Second Year | 2,437,000 | [1] | |||
Contractual Obligation, Due in Third Year | 2,245,000 | [1] | |||
Contractual Obligation, Due in Fourth Year | 2,198,000 | [1] | |||
Contractual Obligation, Due in Fifth Year | 813,000 | [1] | |||
Thereafter | 0 | [1] | |||
Future minimum annual lease and service payments | 9,745,000 | [1] | |||
Service Payments | |||||
Future minimum annual lease and service payments | |||||
Contractual Obligation, Due in remainder of current year | 10,583,000 | ||||
Contractual Obligation, Due in Second Year | 9,000,000 | ||||
Contractual Obligation, Due in Third Year | 4,672,000 | ||||
Contractual Obligation, Due in Fourth Year | 3,958,000 | ||||
Contractual Obligation, Due in Fifth Year | 1,375,000 | ||||
Thereafter | 0 | ||||
Future minimum annual lease and service payments | 29,588,000 | ||||
Facility Leases | |||||
Future minimum annual lease and service payments | |||||
Contractual Obligation, Due in remainder of current year | 13,705,000 | [2] | |||
Contractual Obligation, Due in Second Year | 16,688,000 | [2] | |||
Contractual Obligation, Due in Third Year | 13,271,000 | [2] | |||
Contractual Obligation, Due in Fourth Year | 13,003,000 | [2] | |||
Contractual Obligation, Due in Fifth Year | 12,460,000 | [2] | |||
Thereafter | 40,970,000 | [2] | |||
Future minimum annual lease and service payments | $110,097,000 | [2] | |||
[1] | Equipment Leases include the Company's commitments relating to operating and capital leases. See NoteB 14 for further information on the capital lease minimum payments which are included in the table. | ||||
[2] | The Company has entered into various agreements to sublease certain of its premises. The Company recorded sublease income related to these leases of $0.5 million and $0.3 million for the three months ended MarchB 31, 2015 and 2014, respectively. |
Convertible_Debt_and_Notes_Pay1
Convertible Debt and Notes Payable (Details) (USD $) | 3 Months Ended | 40 Months Ended | 0 Months Ended | ||||||
Mar. 31, 2015 | Mar. 31, 2014 | Jan. 31, 2014 | Oct. 10, 2014 | Dec. 31, 2014 | Mar. 10, 2014 | Jan. 30, 2015 | Jan. 30, 2014 | ||
letters_of_credit | |||||||||
Components of short-term borrowings and other debt | |||||||||
Convertible debt | $119,999,000 | $118,475,000 | |||||||
Capital lease obligations | 3,588,000 | 3,894,000 | |||||||
Debt, Long-term and Short-term, Combined Amount | 188,252,000 | 185,619,000 | |||||||
Amortization of debt discount | 1,524,000 | 311,000 | |||||||
Cash convertible note hedge transaction | 0 | 149,500,000 | |||||||
Capital Lease Obligations Incurred | 7,600,000 | ||||||||
Capital lease interest expense | 100,000 | 100,000 | |||||||
Future minimum lease payments for capital lease obligations | |||||||||
2015 | 987,000 | ||||||||
2016 | 1,025,000 | ||||||||
2017 | 938,000 | ||||||||
2018 | 938,000 | ||||||||
2019 | 78,000 | ||||||||
Thereafter | 0 | ||||||||
Subtotal | 3,966,000 | ||||||||
Less: Amount representing interest | -378,000 | [1] | |||||||
Capital lease obligations | 3,588,000 | 3,894,000 | |||||||
Number of Letters of Credit | 7 | ||||||||
Minimum | |||||||||
Components of short-term borrowings and other debt | |||||||||
Capital Lease Obligation, Initial Term | 48 months | ||||||||
Capital leases, interest rate | 0.60% | ||||||||
Maximum | |||||||||
Components of short-term borrowings and other debt | |||||||||
Capital Lease Obligation, Initial Term | 60 months | ||||||||
Capital leases, interest rate | 6.03% | ||||||||
Transaction [Domain] | |||||||||
Components of short-term borrowings and other debt | |||||||||
Cash convertible note hedge transaction | 20,500,000 | ||||||||
Treasury Stock | |||||||||
Components of short-term borrowings and other debt | |||||||||
Cash convertible note hedge transaction | 300,000 | ||||||||
Letter of Credit, San Francisco Office, Expires May 2015 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 82,000 | ||||||||
Letter of Credit, Boston Office, Expires March 2016 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 382,000 | ||||||||
Letter of Credit, NY Office, Expires August 2015 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 794,000 | ||||||||
Letter of Credit, NY Office, Expires December 2015 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 3,935,000 | ||||||||
Letter of Credit, NY Office, Expires February 2016 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 1,000,000 | ||||||||
Letter of Credit, NY Office, Expires June 2015 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 1,861,000 | ||||||||
Letter of Credit, NY Office, Expires September 2015 | Letter of Credit | |||||||||
Future minimum lease payments for capital lease obligations | |||||||||
Letter of credit, borrowing capacity | 127,000 | ||||||||
Convertible Debt | |||||||||
Components of short-term borrowings and other debt | |||||||||
Convertible debt | 119,999,000 | 118,475,000 | |||||||
Debt Instrument, Face Amount | 149,500,000 | ||||||||
Interest rate | 3.00% | ||||||||
Principal amount of notes being converted | 1,000 | ||||||||
Interest on Convertible Debt, Net of Tax | 1,100,000 | 200,000 | |||||||
Debt Instrument, Convertible, Conversion Price | $5.33 | ||||||||
Discount on debt | 35,700,000 | ||||||||
Amortization of debt discount | 1,500,000 | 300,000 | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.89% | ||||||||
Debt Issuance Cost | 3,700,000 | ||||||||
Class of Warrant, Exercise Price of Warrants or Rights | $7.18 | ||||||||
Repayments on long-term and short-term borrowings | |||||||||
2015 | 2,242,000 | ||||||||
2016 | 4,485,000 | ||||||||
2017 | 4,485,000 | ||||||||
2018 | 4,485,000 | ||||||||
2019 | 151,743,000 | ||||||||
Thereafter | 0 | ||||||||
Subtotal | 167,440,000 | ||||||||
Less: Amount representing interest | -47,441,000 | [1] | |||||||
Senior Notes | |||||||||
Components of short-term borrowings and other debt | |||||||||
Notes Payable | 63,250,000 | 63,250,000 | |||||||
Debt Instrument, Face Amount | 63,300,000 | ||||||||
Interest rate | 8.25% | ||||||||
Interest on Convertible Debt, Net of Tax | 1,300,000 | ||||||||
Debt Issuance Cost | 2,900,000 | ||||||||
Repayments on long-term and short-term borrowings | |||||||||
2015 | 3,914,000 | ||||||||
2016 | 5,218,000 | ||||||||
2017 | 5,218,000 | ||||||||
2018 | 5,218,000 | ||||||||
2019 | 5,218,000 | ||||||||
Thereafter | 73,686,000 | ||||||||
Subtotal | 98,472,000 | ||||||||
Less: Amount representing interest | -35,222,000 | [1] | |||||||
Insurance Note | |||||||||
Components of short-term borrowings and other debt | |||||||||
Other Note payable | 1,415,000 | 0 | 2,000,000 | 2,000,000 | |||||
Interest rate | 1.33% | 1.55% | |||||||
Monthly payment | 200,000 | ||||||||
Repayments on long-term and short-term borrowings | |||||||||
2015 | 1,425,000 | ||||||||
2016 | 0 | ||||||||
2017 | 0 | ||||||||
2018 | 0 | ||||||||
2019 | 0 | ||||||||
Thereafter | 0 | ||||||||
Subtotal | 1,425,000 | ||||||||
Less: Amount representing interest | ($10,000) | [1] | |||||||
[1] | Amount necessary to reduce net minimum payments to present value calculated at the Company's implicit rate at inception. This amount also includes the unamortized discount on the convertible debt. |
Treasury_Stock_Treasury_Stock_
Treasury Stock Treasury Stock - Quarterly (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Treasury Stock, Shares [Roll Forward] | ||
Treasury stock, shares, beginning of period | 23,507,656 | |
Treasury stock, shares, end of period | 25,397,576 | |
Treasury stock, cost, beginning of period | $79,771 | |
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | 2,777 | 1,919 |
Treasury stock reissued, cost | 0 | |
Treasury stock, cost, end of period | 89,753 | |
Treasury Stock | ||
Treasury Stock, Shares [Roll Forward] | ||
Shares Paid for Tax Withholding for Share Based Compensation | 529,905 | |
Treasury stock reissued, shares | 0 | |
Purchase of treasury stock, shares | 1,360,015 | |
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | 2,777 | |
Purchase of treasury stock, cost | $7,205 | |
Treasury stock, average cost per share, beginning of period, in dollars per share | $3.39 | |
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions, Average Cost Per Share | $5.24 | |
Treasury stock reissued, average cost per share, in dollars per share | $0 | |
Purchase of treasury stock, average cost per share, in dollars per share | $5.30 | |
Treasury stock, average cost per share, end of period, in dollars per share | $3.53 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Accumulated Other Comprehensive Income / (Loss) [Abstract] | ||||||||
Foreign Currency Translations | $15 | [1] | $285 | [1] | $17 | [1] | $248 | [1] |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | -2 | [1] | 37 | [1] | ||||
Defined Benefit Plans | 0 | [1] | 252 | [1] | 0 | [1] | 344 | [1] |
Total defined benefit pension plan | 0 | [1] | 92 | [1] | ||||
Accumulated other comprehensive income (loss) | 15 | 537 | 17 | 592 | ||||
Other Comprehensive Income (Loss), Net of Tax | ($2) | ($55) | ||||||
[1] | During the periods presented, the Company did not have material reclassifications out of other comprehensive income. |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Computation of earnings per share: | |||
Net income (loss) | $19,418 | $14,027 | |
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 2,720 | 4,187 | |
Net income (loss) attributable to Cowen Group, Inc. stockholders | $16,698 | $9,840 | |
Shares for basic and diluted calculations: | |||
Weighted average shares used in basic computation, shares | 112,053,000 | 115,680,000 | |
Weighted average shares used in diluted computation, shares | 118,590,000 | 122,898,000 | |
Earnings (loss) per share: | |||
Earnings Per Share, Basic (in dollars per share) | $0.15 | $0.09 | |
Earnings Per Share, Diluted (in dollars per share) | $0.14 | $0.08 | |
Warrants | |||
Shares for basic and diluted calculations: | |||
Shares attributable to share-based payment awards, shares | 0 | 0 | |
Stock Options | |||
Shares for basic and diluted calculations: | |||
Shares attributable to share-based payment awards, shares | 0 | 0 | |
Performance based restricted stock | |||
Shares for basic and diluted calculations: | |||
Shares attributable to share-based payment awards, shares | 411,000 | 0 | |
Stock Appreciation Rights | |||
Shares for basic and diluted calculations: | |||
Shares attributable to share-based payment awards, shares | 119,000 | 54,000 | |
Restricted Stock | |||
Shares for basic and diluted calculations: | |||
Shares attributable to share-based payment awards, shares | 6,007,000 | 7,164,000 | |
Common Stock Class A | |||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Common stock, shares outstanding, shares | 111,168,897 | 111,691,199 | |
Common stock, restricted shares, shares | 424,479 | 424,479 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | |||
customer | customer | customer | |||
segment | |||||
Segment Reporting Information [Line Items] | |||||
Number of Operating Segments | 2 | ||||
Revenues | |||||
Investment banking | $65,233,000 | $49,562,000 | |||
Brokerage | 35,454,000 | 32,830,000 | |||
Management fees | 10,384,000 | 8,924,000 | |||
Incentive income | 2,372,000 | 2,498,000 | |||
Investment Income | 0 | 0 | |||
Interest and dividends | 3,083,000 | 9,252,000 | |||
Reimbursement from affiliates | 3,642,000 | 1,900,000 | |||
Other revenue | 668,000 | 555,000 | |||
Total revenues | 121,094,000 | 106,677,000 | |||
Expenses | |||||
Non-interest expense | 132,669,000 | 98,654,000 | |||
Interest and dividends | 5,779,000 | 7,072,000 | |||
Total expenses | 138,806,000 | 106,028,000 | |||
Other income (loss) | |||||
Total other income (loss) | 44,077,000 | 13,457,000 | |||
Income tax expense (benefit) | 6,947,000 | 79,000 | |||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries | -2,720,000 | -4,187,000 | |||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders | 16,698,000 | 9,840,000 | |||
Number of major customers | 0 | 0 | 0 | ||
Reported Under Economic Income / (Loss) | |||||
Revenues | |||||
Investment banking | 65,233,000 | 49,562,000 | |||
Brokerage | 35,523,000 | 34,349,000 | |||
Management fees | 16,607,000 | 14,089,000 | |||
Incentive income | 15,363,000 | 4,594,000 | |||
Investment Income | 28,880,000 | 8,172,000 | |||
Interest and dividends | 0 | 0 | |||
Reimbursement from affiliates | 0 | 0 | |||
Other revenue | 69,000 | -145,000 | |||
Total revenues | 161,675,000 | 110,621,000 | |||
Expenses | |||||
Non-interest expense | 131,163,000 | 97,351,000 | |||
Interest and dividends | 4,022,000 | 643,000 | |||
Total expenses | 135,185,000 | 97,994,000 | |||
Other income (loss) | |||||
Total other income (loss) | 0 | 0 | |||
Income tax expense (benefit) | 0 | 0 | |||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries | -2,845,000 | -2,625,000 | |||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders | 23,645,000 | 10,002,000 | |||
Alternative Investment | Reported Under Economic Income / (Loss) | |||||
Revenues | |||||
Investment banking | 0 | 0 | |||
Brokerage | 18,000 | 0 | |||
Management fees | 16,607,000 | 14,089,000 | |||
Incentive income | 15,363,000 | 4,594,000 | |||
Investment Income | 21,830,000 | 8,328,000 | |||
Interest and dividends | 0 | 0 | |||
Reimbursement from affiliates | 0 | 0 | |||
Other revenue | 21,000 | -43,000 | |||
Total revenues | 53,839,000 | 26,968,000 | |||
Expenses | |||||
Non-interest expense | 34,834,000 | 21,172,000 | |||
Interest and dividends | 3,044,000 | 609,000 | |||
Total expenses | 37,878,000 | 21,781,000 | |||
Other income (loss) | |||||
Total other income (loss) | 0 | 0 | |||
Income tax expense (benefit) | 0 | 0 | |||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries | -2,845,000 | -2,625,000 | |||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders | 13,116,000 | 2,562,000 | |||
Broker-Dealer | Reported Under Economic Income / (Loss) | |||||
Revenues | |||||
Investment banking | 65,233,000 | 49,562,000 | |||
Brokerage | 35,505,000 | 34,349,000 | |||
Management fees | 0 | 0 | |||
Incentive income | 0 | 0 | |||
Investment Income | 7,050,000 | -156,000 | |||
Interest and dividends | 0 | 0 | |||
Reimbursement from affiliates | 0 | 0 | |||
Other revenue | 48,000 | -102,000 | |||
Total revenues | 107,836,000 | 83,653,000 | |||
Expenses | |||||
Non-interest expense | 96,329,000 | 76,179,000 | |||
Interest and dividends | 978,000 | 34,000 | |||
Total expenses | 97,307,000 | 76,213,000 | |||
Other income (loss) | |||||
Total other income (loss) | 0 | 0 | |||
Income tax expense (benefit) | 0 | 0 | |||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries | 0 | 0 | |||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders | 10,529,000 | 7,440,000 | |||
Funds Consolidation | Reconciliation from Economic Income / (Loss) to U.S. GAAP | |||||
Revenues | |||||
Investment banking | 0 | 0 | |||
Brokerage | 0 | 0 | |||
Management fees | -238,000 | -234,000 | |||
Incentive income | -183,000 | 0 | |||
Investment Income | 0 | 0 | |||
Interest and dividends | 0 | 0 | |||
Reimbursement from affiliates | -85,000 | -80,000 | |||
Other revenue | 0 | 0 | |||
Total revenues | -248,000 | 842,000 | |||
Expenses | |||||
Non-interest expense | 0 | 0 | |||
Interest and dividends | 0 | 0 | |||
Total expenses | 358,000 | 302,000 | |||
Other income (loss) | |||||
Total other income (loss) | 2,407,000 | 207,000 | |||
Income tax expense (benefit) | 0 | 0 | |||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries | -1,801,000 | -747,000 | |||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders | 0 | 0 | |||
Significant Reconciling Items | Reconciliation from Economic Income / (Loss) to U.S. GAAP | |||||
Revenues | |||||
Investment banking | 0 | 0 | |||
Brokerage | -69,000 | [1] | -1,519,000 | [1] | |
Management fees | -5,985,000 | [2] | -4,931,000 | [2] | |
Incentive income | -12,808,000 | [2] | -2,096,000 | [2] | |
Investment Income | -28,880,000 | [3] | -8,172,000 | [3] | |
Interest and dividends | 3,083,000 | [1],[3] | 9,252,000 | [1],[3] | |
Reimbursement from affiliates | 3,727,000 | [4] | 1,980,000 | [4] | |
Other revenue | 599,000 | [3] | 700,000 | [3] | |
Total revenues | -40,333,000 | -4,786,000 | |||
Expenses | |||||
Non-interest expense | 1,506,000 | [3],[5] | 1,303,000 | [3],[5] | |
Interest and dividends | 1,757,000 | [1],[3] | 6,429,000 | [1],[3] | |
Total expenses | 3,263,000 | 7,732,000 | |||
Other income (loss) | |||||
Total other income (loss) | 41,670,000 | [3] | 13,250,000 | [3] | |
Income tax expense (benefit) | 6,947,000 | [6] | 79,000 | [6] | |
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries | 1,926,000 | -815,000 | |||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders | -6,947,000 | -162,000 | |||
Consolidated Funds | |||||
Revenues | |||||
Total revenues | 258,000 | 1,156,000 | |||
Expenses | |||||
Total expenses | 358,000 | 302,000 | |||
Consolidated Funds | Reported Under Economic Income / (Loss) | |||||
Revenues | |||||
Total revenues | 0 | 0 | |||
Expenses | |||||
Total expenses | 0 | 0 | |||
Consolidated Funds | Alternative Investment | Reported Under Economic Income / (Loss) | |||||
Revenues | |||||
Total revenues | 0 | 0 | |||
Expenses | |||||
Total expenses | 0 | 0 | |||
Consolidated Funds | Broker-Dealer | Reported Under Economic Income / (Loss) | |||||
Revenues | |||||
Total revenues | 0 | 0 | |||
Expenses | |||||
Total expenses | 0 | 0 | |||
Consolidated Funds | Funds Consolidation | Reconciliation from Economic Income / (Loss) to U.S. GAAP | |||||
Revenues | |||||
Total revenues | 258,000 | 1,156,000 | |||
Expenses | |||||
Total expenses | 358,000 | 302,000 | |||
Consolidated Funds | Significant Reconciling Items | Reconciliation from Economic Income / (Loss) to U.S. GAAP | |||||
Revenues | |||||
Total revenues | 0 | 0 | |||
Expenses | |||||
Total expenses | $0 | $0 | |||
[1] | Economic Income (Loss) recognizes stock borrow/loan activity and other brokerage dividends as brokerage revenue. | ||||
[2] | Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share of management and incentive fees of certain real estate operating entities and the activist business. | ||||
[3] | Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends) net | ||||
[4] | Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. | ||||
[5] | Economic Income (Loss) recognizes the Company's proportionate share of expenses for certain real estate and other operating entities for which the investments are recorded under the equity method of accounting for investments. | ||||
[6] | Economic Income (Loss) excludes income taxes as management does not consider this item when evaluating the performance of the segment. |
Regulatory_Requirements_Detail
Regulatory Requirements (Details) (USD $) | Mar. 31, 2015 |
Cowen and Company | |
Regulatory Requirements for Broker-Dealers [Line Items] | |
Net capital requirement under alternative method | $1,000,000 |
Net capital | 65,500,000 |
Excess capital | 64,500,000 |
ATM Execution | |
Regulatory Requirements for Broker-Dealers [Line Items] | |
Minimum net capital required | 250,000 |
Net capital | 3,300,000 |
Excess capital | 3,100,000 |
U.K. Financial Services Authority | Raimus U.K., Ltd. | |
Regulatory Requirements for Broker-Dealers [Line Items] | |
Financial resources | 300,000 |
Financial resources requirement | 50,000 |
Excess financial resources | 250,000 |
U.K. Financial Services Authority | Cowen International Limited | |
Regulatory Requirements for Broker-Dealers [Line Items] | |
Financial resources | 3,200,000 |
Financial resources requirement | 1,900,000 |
Excess financial resources | 1,300,000 |
H.K. Securities and Futures Commission | Cowen and Company (Asia) Limited | |
Regulatory Requirements for Broker-Dealers [Line Items] | |
Financial resources | 500,000 |
Financial resources requirement | 400,000 |
Excess financial resources | $100,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Fees receivable, net of allowance | $66,086,000 | $46,498,000 | |
Employee Loans | Minimum | |||
Related Party Transaction [Line Items] | |||
Forgivable Loans, Vesting Period | 1 year | ||
Employee Loans | Maximum | |||
Related Party Transaction [Line Items] | |||
Forgivable Loans, Vesting Period | 3 years | ||
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Fees receivable, net of allowance | 7,400,000 | 5,100,000 | |
Affiliated Entity | Fees Payable | |||
Related Party Transaction [Line Items] | |||
Fees payable to related parties | 100,000 | 100,000 | |
Affiliated Entity | Management Fee and Incentive Income | |||
Related Party Transaction [Line Items] | |||
Reimbursement to affiliated funds | 500,000 | ||
Employees | |||
Related Party Transaction [Line Items] | |||
Due from employees | 4,700,000 | 6,100,000 | |
Forgivable Loan Balances | 2,700,000 | 3,900,000 | |
Amortization on Forgivable Loans | 1,300,000 | 800,000 | |
Investor | |||
Related Party Transaction [Line Items] | |||
Due to Affiliate | 400,000 | 500,000 | |
Real Estate Equity Investment | |||
Related Party Transaction [Line Items] | |||
Real estate loan | $15,000,000 | ||
Effective interest rate | 8.82% |