Fair Value (Tables)

9 Months Ended

Sep. 30, 2015

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Valuation of our financial instruments by pricing observability levels as of September 30, 2015 and December 31, 2014 was as follows (in thousands):



	Level 1		Level 2		Level 3		Total
September 30, 2015:
Money markets	$	261,553	$	—	$	—	$	261,553
U.S. Treasury Bills	—		374,998		—		374,998
Available-for-sale
Equity securities	135		—		—		135
Fixed income securities	190		—		—		190
Trading
Equity securities	320,051		20,962		119		341,132
Fixed income securities	170,572		2,033		—		172,605
Long exchange-traded options	11,178		—		—		11,178
Derivatives	2,740		15,999		—		18,739
Private equity	14,388		—		49,467		63,855
Total assets measured at fair value	$	780,807	$	413,992	$	49,586	$	1,244,385

Securities sold not yet purchased
Short equities – corporate	$	26,606	$	—	$	—	$	26,606
Short exchange-traded options	4,103		—		—		4,103
Derivatives	264		11,090		—		11,354
Contingent payment arrangements	—		—		38,817		38,817
Total liabilities measured at fair value	$	30,973	$	11,090	$	38,817	$	80,880

December 31, 2014:
Money markets	$	89,566	$	—	$	—	$	89,566
U.S. Treasury Bills	—		444,152		—		444,152
Available-for-sale
Equity securities	5,951		—		—		5,951
Fixed income securities	221		—		—		221
Trading
Equity securities	387,495		7		—		387,502
Fixed income securities	164,317		2,742		—		167,059
Long exchange-traded options	22,290		—		—		22,290
Derivatives	571		6,216		—		6,787
Private equity	12,162		—		58,926		71,088
Total assets measured at fair value	$	682,573	$	453,117	$	58,926	$	1,194,616

Securities sold not yet purchased
Short equities – corporate	$	81,784	$	—	$	—	$	81,784
Short exchange-traded options	7,118		—		—		7,118
Derivatives	2,438		6,954		—		9,392
Contingent payment arrangements	—		—		42,436		42,436
Total liabilities measured at fair value	$	91,340	$	6,954	$	42,436	$	140,730

Schedule of Change in Carrying Value Level 3 Financial Instruments

The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as private equity investments and trading equity securities, is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)

Balance as of beginning of period	$	50,854		$	53,006		$	58,926		$	52,081
Transfer out	—			(1,607		)	(26		)	(1,607		)
Purchases	—			—			198			2,821
Sales	—			—			(18,042		)	(1,121		)
Realized gains (losses), net	—			—			4,920			721
Unrealized (losses) gains, net	(1,268		)	2,250			3,610			754
Balance as of end of period	$	49,586		$	53,649		$	49,586		$	53,649

Summary of Information About Level 3 Fair Value Measurements

Quantitative information about private equity Level 3 fair value measurements as of September 30, 2015 and December 31, 2014 is as follows:



	Fair value as of September 30, 2015		Valuation Technique	Unobservable Input	Range
	(in thousands)
Private Equity:
Technology, Media and Telecommunications	$	10,115	Market comparable companies	Revenue multiple	2.1 - 5.3
				Marketability discount	30	%

Also, as of September 30, 2015, we have an investment in a private equity fund focused exclusively on the energy sector (fair value of $6.5 million) that is classified as Level 3. This investment’s valuation is based on a market approach, considering recent transactions of the fund and the industry.



	Fair value as of December 31, 2014		Valuation Technique	Unobservable Input	Range
	(in thousands)
Private Equity:
Technology, Media and Telecommunications	$	20,112	Market comparable companies	Revenue multiple	2.0 - 3.5
				Discount rate	18	%
				Discount years	2.0 years

Schedule of Contingent Payment Arrangements Level 3 Financial Instruments

The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as contingent payment arrangements, is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)

Balance as of beginning of period	$	42,032		$	46,924		$	42,436		$	38,205
Addition	—			450			—			9,365
Accretion	443			476			1,328			1,117
Payments	(3,658		)	(948		)	(4,947		)	(1,785		)
Balance as of end of period	$	38,817		$	46,902		$	38,817		$	46,902