Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

Note 17. Segment Information:

The Company considers its capital markets and principal investing operations to be separate reportable segments. The capital markets segment includes the Company’s investment banking and institutional sales, trading and research operations. These businesses operate as a single integrated unit to deliver capital raising, advisory and sales and trading services to corporate and institutional clients. Principal investing includes investments in investment funds, merchant banking and other equity investments, and corporate debt investments.

The Company has developed systems and methodologies to allocate overhead costs to its business units and, accordingly, presents segment information consistent with internal management reporting. Revenue generating transactions between the individual segments have been included in the net revenue and pre-tax income of each segment.

The decrease in the principal investing segment’s total assets as of December 31, 2015 compared to December 31, 2014 was a result of investing activities during the year ended December 31, 2015, in particular the settlement of a short-sale of a $75,000 face value, 7.25% U.S. Treasury security that was outstanding at December 31, 2014, and net reductions to the Company’s investment fund positions and other securities.  The increase in the capital markets segment’s total assets as of December 31, 2014 compared to December 31, 2013 that is specified in the tables below was due primarily to the purchase of a securities lending business resulting in an increase in securities borrowed, an asset, of $594,674 which was offset by securities loaned, a liability, of $595,717 (see Note 4 Securities Lending). The increase in the principal investing segment’s total assets as of December 31, 2014 compared to December 31, 2013 was a result of investing activities during the year ended December 31, 2014, in particular a short-sale of a $75,000 face value, 7.25% U.S. Treasury security that was outstanding at December 31, 2014, and net additions to the Company’s long positions in investment funds and other securities.

The following tables illustrate the financial information for the Company’s segments for the periods indicated:

	Year Ended December 31, 2015
	Capital Markets			Principal Investing			Total
Revenues, net of interest expense:
Investment banking	$	71,091		$	—		$	71,091
Institutional brokerage		45,442			—			45,442
Net investment income		—			5,433			5,433
Interest		31,745			29			31,774
Dividends and other		1,103			589			1,692
Total  revenues		149,381			6,051			155,432
Interest expense		23,877			11,160			35,037
Revenues, net of interest expense		125,504			(5,109	)		120,395
Operating expenses:
Variable		35,651			37			35,688
Fixed		98,331			2,134			100,465
Total		133,982			2,171			136,153
Pre-tax loss	$	(8,478	)	$	(7,280	)	$	(15,758	)
Compensation and benefits:
Variable	$	18,889		$	—		$	18,889
Fixed		57,165			1,409			58,574
Total	$	76,054		$	1,409		$	77,463
Total assets	$	834,205		$	99,211		$	933,416

	Year Ended December 31, 2014
	Capital Markets		Principal Investing		Total
Revenues, net of interest expense:
Investment banking	$	115,255	$	—	$	115,255
Institutional brokerage		56,182		—		56,182
Net investment income		—		17,774		17,774
Interest		12,945		122		13,067
Dividends and other		549		481		1,030
Total  revenues		184,931		18,377		203,308
Interest expense		9,505		11,678		21,183
Revenues, net of interest expense		175,426		6,699		182,125
Operating expenses:
Variable		59,500		316		59,816
Fixed		102,426		2,523		104,949
Total		161,926		2,839		164,765
Pre-tax income	$	13,500	$	3,860	$	17,360
Compensation and benefits:
Variable	$	42,408	$	305	$	42,713
Fixed		59,639		1,459		61,098
Total	$	102,047	$	1,764	$	103,811
Total assets	$	830,938	$	204,159	$	1,035,097

	Year Ended December 31, 2013
	Capital Markets		Principal Investing		Total
Revenues, net of interest expense:
Investment banking	$	196,213	$	—	$	196,213
Institutional brokerage		53,738		—		53,738
Net investment income		—		6,920		6,920
Interest		1,050		740		1,790
Dividends and other		432		728		1,160
Total  revenues		251,433		8,388		259,821
Interest expense		—		—		—
Revenues, net of interest expense		251,433		8,388		259,821
Operating expenses:
Variable		103,755		1,179		104,934
Fixed		96,121		1,496		97,617
Total		199,876		2,675		202,551
Pre-tax income	$	51,557	$	5,713	$	57,270
Compensation and benefits:
Variable	$	89,574	$	1,172	$	90,746
Fixed		53,013		961		53,974
Total	$	142,587	$	2,133	$	144,720
Total assets	$	308,870	$	101,702	$	410,572

During the first quarter of 2016, based on changes in the Company’s business profile since its IPO in 2007, including significant changes in capital allocation and revenue mix that have occurred over that time, the Company will revise its segment reporting structure. Beginning with the first quarter of 2016, the Company’s investment activities will be included within its capital markets segment and not as a separate reportable segment. This change is consistent with how the Company’s chief operating decision maker evaluates performance and allocates resources.