Investments

At December 31, 2014, the Company’s investments consist of investments in certain previously sponsored merchant banking funds: Greenhill Capital Partners (“GCP I”) and Greenhill Capital Partners II (“GCP II”) and an interest in Barrow Street III, a real estate investment fund.

The carrying value of the Company’s investments in previously sponsored and other merchant banking funds are as follows:



	As of December 31,
	2014		2013
	(in thousands)
Investment in GCP I	$	1,600	$	2,257
Investment in GCP II	907		7,690
Investment in other merchant banking funds	1,666		1,798
Total investments in merchant banking funds	$	4,173	$	11,745

Merchant Banking Funds

In December 2009, in order to focus entirely on the advisory business, the Company sold certain assets related to the merchant banking business to GCP Capital Partners Holdings LLC (or “GCP Capital”), an entity principally owned by former Greenhill employees and independent from the Company, which took over the management of our merchant banking funds. Prior to that time, the Company's merchant banking activities consisted primarily of management of and investment in certain previously sponsored merchant banking funds: GCP I, GCP II, Greenhill Capital Partners Europe ("GCPE"), Greenhill SAV Partners ("GSAVP") and a limited partnership interest in Greenhill Capital Partners III ("GCP III"). Under the terms of the sale, the Company continues to retain control only of the general partner of GCP I and GCP II and consolidates the results of each such general partner.

Shortly after our sale of the merchant banking business, the Company began the monetization of its merchant banking investments. In 2011, the Company sold substantially all its interest in GCP II. As part of that sale the purchasers had the right to cause the Company to repurchase each of the capital account interests attributable to two specified portfolio companies of GCP II at an aggregate price of $15.6 million (the "Put Options"). In December 2012, substantially all of the purchasers of the Put Options exercised their rights to have the Company repurchase their interests.

In 2012, the Company also sold its entire interest in GCPE for proceeds of $27.2 million, which represented approximately 90% of book value. The Company recognized a loss of $3.4 million as result of this sale.

In 2013, the Company sold all of its limited partnership interest in GCP III for approximately $2.0 million, which represented the book value of the investment. In connection with that sale, the purchasers assumed any remaining undrawn commitments to the fund.

The Company recognized a gain at the time of the exit from the merchant banking business, which is amortizing over a five year period ending in 2014. For the years ended December 31, 2014, 2013 and 2012, deferred gains of $0.2 million, $0.2 million and $0.3 million were recognized, respectively.

The investment in GCP I includes $0.1 million at each December 31, 2014 and 2013 related to the noncontrolling interests in the managing general partner of GCP I. The investment in GCP II represents the noncontrolling interests in the general partner of GCP II of $0.6 million and $0.9 million at December 31, 2014 and 2013, respectively. For the year ended December 31, 2013 the investment in GCP II also included the capital interest in one portfolio company, which was sold in 2014.

Investments in other merchant banking funds include the Company's investment in Barrow Street III. At December 31, 2014, $0.3 million of the Company's commitment remains unfunded and may be drawn any time prior to the expiration of the fund in June 2015.

Iridium Common Stock

Beginning in October 2011, the Company initiated a plan to sell its entire interest in Iridium common stock systematically over a period of two or more years. Under this plan, the Company sold 3,850,000 common shares of Iridium at an average price per share of $7.91 during the year ended December 31, 2012. In 2013, the Company completed its liquidation of the investment with the sale of an additional 5,084,016 common shares of Iridium at an average price per share of $6.73. As of December 31, 2013, the Company had sold its entire interest in Iridium.

Investment revenues

The Company’s investment revenues, by source, are as follows:



	For the Years Ended December 31,
	2014			2013			2012
	(in thousands)
Net realized and unrealized (losses) on investments in merchant banking funds	$	(6,567	)	$	(1,884	)	$	(3,422	)
Net realized and unrealized gains (losses) on investments in Iridium	—			862			(4,980		)
Deferred gain on sale of certain merchant banking assets	195			195			260
Interest income	1,154			1,071			1,676
Total investment revenues (losses)	$	(5,218	)	$	244		$	(6,466	)

Fair Value Hierarchy

Assets and liabilities are classified in their entirety based on their lowest level of input that is significant to the fair value measurement. There were no assets or liabilities measured at fair value at December 31, 2014 or 2013.

The investments in previously sponsored merchant banking funds are recorded under the equity method of accounting and are therefore not included in the fair value measurements