Investments

9 Months Ended

Sep. 30, 2012

Investments

3. Investments

A summary of the carrying value of total investments is as follows:

(Dollar amounts in millions)	September 30, 2012		December 31, 2011
Available-for-sale investments	$	192	$	52
Held-to-maturity investments		103		105
Trading investments:
Consolidated sponsored investment funds		67		214
Other equity securities and debt securities		4		7
Deferred compensation plan mutual funds		53		46
Total trading investments		124		267
Other investments:
Consolidated sponsored investment funds		436		373
Equity method investments		509		457
Deferred compensation plan hedge fund equity method investments		10		19
Cost method investments(1)		365		337
Carried interest		125		21
Total other investments		1,445		1,207
Total investments	$	1,864	$	1,631

⁽¹⁾  Amounts primarily include Federal Reserve Bank Stock

At September 30, 2012, the Company consolidated $503 million of investments held by consolidated sponsored investment funds (non-variable interest entities (“VIEs”)) of which $67 million and $436 million were classified as trading investments and other investments, respectively. At December 31, 2011, the Company consolidated $587 million of investments held by consolidated sponsored investment funds (non-VIEs) of which $214 million and $373 million were classified as trading investments and other investments, respectively.

Available-for-Sale Investments

A summary of the cost and carrying value of investments classified as available-for-sale investments is as follows:

(Dollar amounts in millions)	Cost		Gross Unrealized					Carrying Value
September 30, 2012			Gains		Losses
Equity securities:
Sponsored investment funds	$	180	$	10	($	1	)	$	189
Collateralized debt obligations (“CDOs”)		1		—		—			1
Debt securities:
Asset-backed debt		1		1		—			2
Total available-for-sale investments	$	182	$	11	($	1	)	$	192
	Cost		Gross Unrealized					Carrying Value
December 31, 2011			Gains		Losses
Equity securities:
Sponsored investment funds	$	52	$	—	($	2	)	$	50
CDOs		1		—		—			1
Debt securities:
Asset-backed debt		1		—		—			1
Total available-for-sale investments	$	54	$	—	($	2	)	$	52

Available-for-sale investments included seed investments in BlackRock sponsored investment mutual funds.

Held-to-Maturity Investments

The carrying value of held-to-maturity investments was $103 million and $105 million at September 30, 2012 and December 31, 2011, respectively. Held-to-maturity investments included foreign government debt held for regulatory purposes and the amortized cost (carrying value) of these investments approximated fair value. The amortized cost of debt securities classified as held-to-maturity at September 30, 2012 by maturity date was as follows:

(Dollar amounts in millions)	1 Year or less		After 1 Year through 5 Years		After 5 Years through 10 Years		After 10 Years		Total
Foreign government debt	$	88	$	4	$	—	$	11	$	103

Trading Investments

A summary of the cost and carrying value of trading investments is as follows:

	September 30, 2012				December 31, 2011
(Dollar amounts in millions)	Cost		Carrying Value		Cost		Carrying Value
Trading investments:
Deferred compensation plan mutual funds	$	46	$	53	$	45	$	46
Equity/Multi-asset class mutual funds		62		65		174		169
Debt securities:
Foreign debt		—		—		12		12
Corporate debt		6		6		39		40
Total trading investments	$	114	$	124	$	270	$	267

At September 30, 2012, trading investments included $61 million of equity securities and $6 million of debt securities held by consolidated sponsored investment funds, $53 million of certain deferred compensation plan mutual fund investments and $4 million of equity and debt securities held in separate investment accounts for the purpose of establishing an investment history in various investment strategies before being marketed to investors.

Other Investments

A summary of the cost and carrying value of other investments is as follows:

	September 30, 2012				December 31, 2011
(Dollar amounts in millions)	Cost		Carrying Value		Cost		Carrying Value
Other investments:
Consolidated sponsored investment funds	$	396	$	436	$	345	$	373
Equity method		465		509		487		457
Deferred compensation plan hedge fund equity method investments		15		10		17		19
Cost method investments:
Federal Reserve Bank stock		330		330		328		328
Other		35		35		9		9
Total cost method investments		365		365		337		337
Carried interest		—		125		—		21
Total other investments	$	1,241	$	1,445	$	1,186	$	1,207

Consolidated sponsored investment funds include third-party private equity funds, direct investments in private companies and third-party hedge funds held by BlackRock sponsored investment funds.

Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.

Cost method investments include non-marketable securities, including Federal Reserve Bank stock, which is held for regulatory purposes and is restricted from sale. At September 30, 2012, there were no indicators of impairment on these investments.

Carried interest represents allocations to BlackRock general partner capital accounts from certain funds. These balances are subject to change upon cash distributions, additional allocations or reallocations back to limited partners within the respective funds.