Investments

Investments comprise strategic investments, deferred compensation investments, and investment in the Deephaven Funds. Investments consist of the following (in thousands):



	December 31, 2014		December 31, 2013
Strategic investments:
Investments accounted for under the equity method	$	86,328	$	110,460
Investments held at fair value	4,435		3,925
Common stock or equivalent of companies representing less than 20% equity ownership held at adjusted cost	8,949		8,953
Total Strategic investments	99,712		123,338
Deferred compensation investments	868		117
Investment in Deephaven Funds	146		1,958
Total Investments	$	100,726	$	125,413

Investments held at fair value are accounted for as available for sale securities and any unrealized gains or losses are recorded in Other comprehensive income.

Merger of BATS and Direct Edge

In January 2014, BATS and Direct Edge, each of whose equity the Company held as an investment, completed their previously announced merger into BATS. Prior to the merger, the Company accounted for its investment in BATS under the cost method and accounted for its investment in Direct Edge under the equity method. Following the merger, the Company owns 16.7% of the overall equity of BATS and holds 19.9% of the voting equity and a board seat. Based on these facts, the Company will account for its interest in BATS under the equity method. This change in accounting principle is applied retrospectively and, as such, the Company has presented the adjustment as a prior period adjustment to the 2013 consolidated results of operations. See Footnote 3 "Significant Accounting Policies" for a discussion of the effect of this retrospective adjustment.

The Company received approximately $42.2 million from the aggregate distributions paid by BATS and Direct Edge at or around the close of the merger, which the Company recorded as a return of capital under the equity method of accounting.

During the first quarter of 2014 the Company recognized income of $9.6 million related to the merger of BATS and Direct Edge which is recorded within Investment income and other, net in the Consolidated Statements of Operations. The $9.6 million comprises a partial realized gain with respect to the Company's investment in Direct Edge of $16.2 million offset, in part, by the Company's share of BATS' and Direct Edge's merger related transaction costs that were charged against their respective earnings of $6.6 million.

tradeMONSTER Group, Inc.

Prior to August 2014, the Company held an investment in tradeMONSTER Group, Inc. ("tradeMONSTER") which it accounted for under the equity method of accounting. In August 2014, tradeMONSTER combined with OptionsHouse LLC ("OptionsHouse") to form TM Holdings, L.P. (“TM Holdings”). The Company will continue to account for its interest in TM Holdings under the equity method of accounting.

During the third quarter of 2014 the Company recognized a net gain of $15.1 million related to the combination, which is recorded within Investment income and other, net in the Consolidated Statements of Operations. The net gain of $15.1 million comprises a gain on the Company's exchange of its investment in tradeMONSTER for its investment in TM Holdings of $17.6 million offset, in part, by the Company's share of tradeMONSTER’s transaction costs.