Note 8 – Investments

The Company’s investments reported on the Unaudited Condensed Consolidated Statements of Financial Condition consist of investments in private equity partnerships and other investments in unconsolidated affiliated companies. The Company’s investments are relatively high-risk and illiquid assets. Realized and unrealized gains and losses on the private equity investments are included within Investment Management Revenue. The Company’s share of earnings (losses) on the investments in G5, ABS Investment Management, LLC (“ABS”) and Evercore Pan-Asset Capital Management (“Pan”) are included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

Investments in Private Equity

The Company’s investments in private equity partnerships include investments in Evercore Capital Partners II L.P. and its affiliated entities (“ECP II”), Discovery Americas I, L.P. (the “Discovery Fund”), Evercore Mexico Capital Partners II (“EMCP II”), Evercore Mexico Capital Partners III (“EMCP III”), CSI Capital, L.P. (“CSI Capital”) and Trilantic Capital Partners Associates IV L.P. (“Trilantic IV”). Portfolio holdings of the private equity funds are carried at fair value. Accordingly, the Company reflects its pro rata share of the unrealized gains and losses occurring from changes in fair value. Additionally, the Company reflects its pro rata share of realized gains, losses and carried interest associated with any investment realizations.

In February 2013, the Company held a third closing on EMCP III, a private equity fund focused on middle market investments in Mexico. The closing subscribed capital commitments of $18,300, which included a capital commitment of $915 by the Company.

A summary of the Company’s investment in the private equity funds as of March 31, 2013 and December 31, 2012 was as follows:


	March 31, 2013		December 31, 2012
ECP II	$	3,830	$	3,793
Discovery Fund		3,534		3,060
EMCP II		10,887		10,400
EMCP III		2,603		1,696
CSI Capital		3,035		3,056
Trilantic IV		4,660		4,573

Total Private Equity Funds	$	28,549	$	26,578

Net realized and unrealized gains (losses) on private equity fund investments, including performance fees, were $477 and ($307) for the three months ended March 31, 2013 and 2012, respectively. In the event the funds perform poorly, the Company may be obligated to repay certain carried interest previously distributed. As of March 31, 2013, the Company had $2,701 of previously received carried interest that may be subject to repayment.

Trilantic Capital Partners

During the first quarter of 2010, the Company made an investment in Trilantic Capital Partners (“Trilantic”). See Note 12 for further information. This investment had a balance of $14,999 as of March 31, 2013 and December 31, 2012.

Equity Method Investments

A summary of the Company’s other equity investments as of March 31, 2013 and December 31, 2012 was as follows:


	March 31, 2013		December 31, 2012
G5	$	20,323	$	19,720
ABS		43,634		46,851
Pan		—		2,749

Total	$	63,957	$	69,320

In 2010, the Company made an equity method investment in G5. At March 31, 2013, the Company’s economic ownership interest in G5 was 49%. This investment resulted in earnings (losses) of ($63) and $1,363 for the three months ended March 31, 2013 and 2012, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

ABS

During the fourth quarter of 2011, the Company made an equity method investment in ABS. At March 31, 2013, the Company’s economic ownership interest in ABS was 45%. This investment resulted in earnings of $874 and $710 for the three months ended March 31, 2013 and 2012, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

Pan

In 2008, the Company made an equity method investment of $4,158 in Pan. This investment resulted in earnings (losses) of ($55) and $312 for the three months ended March 31, 2013 and 2012, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

In 2011 and 2012, the Company concluded that Pan was a VIE, and that the Company was not the primary beneficiary of the VIE. On March 15, 2013, the Company exchanged its notes receivable from Pan for additional common equity, increasing its common equity ownership interest to 68% from 50%. The Company viewed this transaction as a reconsideration event and concluded that, as a result, it became the primary beneficiary of Pan, and therefore consolidated Pan in the Company’s unaudited condensed consolidated financial statements as of that date. The Company’s assessment of the primary beneficiary of Pan included assessing which parties have the power to significantly impact the economic performance of Pan and the obligation to absorb losses of Pan, which could be potentially significant to Pan, or the right to receive benefits from Pan that could be potentially significant. Specifically, the Company concluded that it is the primary beneficiary of Pan. The Company recorded assets of $731 and liabilities of $490 on the Company’s Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2013 as a result of the consolidation. The consolidation also resulted in goodwill of $3,020 and intangible assets relating to client relationships of $1,440, recognized in the Investment Management Segment. The intangible assets are being amortized over an estimated useful life of seven years.

Other

The Company allocates the purchase price of its equity method investments, in part, to the inherent finite-lived identifiable intangible assets of the investees. The Company’s share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets inherent in the investments of $647 and $747 for the three months ended March 31, 2013 and 2012, respectively.