Investments in Equity Method Affiliates

6 Months Ended

Jun. 30, 2012

Investments in Equity Method Affiliates [Abstract]

INVESTMENTS IN EQUITY METHOD AFFILIATES

9. INVESTMENTS IN EQUITY METHOD AFFILIATES

The Company has several investments that are accounted for under the equity method. Equity method accounting requires that the Company record its investment on the consolidated balance sheets and recognize its share of the affiliate’s net income as earnings each year. Investment in equity method affiliates is included as a component of other assets on the Company’s consolidated balance sheets.

The Company has certain equity method affiliates for which it has elected the fair value option. The Company elected the fair value option for its investments in Muni Funding Company of America (“MFCA”) effective January 1, 2008 and effective with the ownership increase in Star Asia in March 2010, which qualified it for equity method treatment, the Company continued its fair value election regarding Star Asia. See notes 5 and 6. Prior to this increase, Star Asia had been treated as an available for sale security for which the fair value option had been elected.

During the six months ended June 30, 2012, the Company had the following equity method investees (excluding equity method affiliates for which it had adopted the fair value option): (i) Star Asia Manager; (ii) Deep Value GP; (iii) Deep Value GP II; (iv) Star Asia SPV; (v) Star Asia Opportunity; (vi) Star Asia Capital Management; and (vii) Duart Capital. The following table summarizes the activity and the earnings of the Company’s equity method affiliates.

INVESTMENT IN EQUITY METHOD AFFILIATES

(Dollars in Thousands)

	Investment in																			Total
	Star Asia Manager			Deep Value GP			Deep Value GP II		Star Asia SPV			Star  Asia Opportunity			Star Asia Capital Management			Duart Capital and Other
Balance at January 1, 2012	$	1,046		$	21		$	33	$	466		$	4,460		$	50		$	—	$	6,076
Investments / advances		—			—			—		—			—			6			—		6
Distributions/repayments		(1,050	)		—			—		(526	)		(3,908	)		(250	)		—		(5,734	)
Earnings / (loss) realized		580			(14	)		3		724			619			130			—		2,042
Balance at June 30, 2012	$	576		$	7		$	36	$	664		$	1,171		$	(64	)	$	—	$	2,390

The following table summarizes the combined financial information for all equity method investees, including equity method investees for which the fair value option was elected. This aggregated summarized financial data does not represent the Company’s proportionate share of equity method investees’ assets or earnings.

SUMMARY DATA OF EQUITY METHOD INVESTEES

(unaudited)

(Dollars in Thousands)

	June 30, 2012		December 31, 2011
Total Assets	$	257,864	$	257,735
Liabilities	$	95,063	$	68,530
Equity attributable to the investees		162,044		188,170
Non-controlling interest		757		1,035
Liabilities & Equity	$	257,864	$	257,735

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Net income / (loss)	$	5,767	$	17,783	$	(10,119	)	$	1,952
Net income / (loss) attributable to the investees	$	5,730	$	18,207	$	(9,841	)	$	2,666

See note 20 for information regarding transactions with the Company’s equity method investees.