Investments

3 Months Ended

Jan. 31, 2020

Investments [Abstract]

Investments

3.  Investments

The following is a summary of investments:

(in thousands)			January 31,		October 31,
			2020		2019
Investments held at fair value:
Short-term debt securities		$	280,590	$	297,845
Debt and equity securities held by consolidated sponsored funds			563,742		514,072
Debt and equity securities held in separately managed accounts			79,512		76,662
Non-consolidated sponsored funds and other			10,502		10,329
Total investments held at fair value			934,346		898,908
Investments held at cost			20,904		20,904
Investments in non-consolidated CLO entities			1,399		1,417
Investments in equity method investees			138,454		139,510
Total investments(1)		$	1,095,103	$	1,060,739
(1)	Excludes bank loans and other investments held by consolidated CLO entities, which are discussed in Note 4.

Investments held at fair value

The Company recognized gains (losses) related to debt and equity securities held at fair value within gains and other investment income, net, in the Company’s Consolidated Statements of Income as follows:

	Three Months Ended
	January 31,
(in thousands)	2020		2019
Realized gains (losses) on securities sold	$	3,875	$	(4,395)
Unrealized gains (losses) on investments
held at fair value		7,637		3,305
Net gains (losses) on investments held at fair value	$	11,512	$	(1,090)

Investments held at cost

Investments held at cost primarily include the Company’s equity investment in a wealth management technology firm. At both January 31, 2020 and October 31, 2019, the carrying value of the Company’s investment in the wealth management technology firm was $19.0 million. At both January 31, 2020 and October 31, 2019, there were no indicators of impairments related to investments carried at cost.

Investments in non-consolidated CLO entities

The Company provides investment management services for, and has made direct investments in, CLO entities that it does not consolidate, as described further in Note 4. The Company’s investments in non-consolidated CLO entities are carried at amortized cost unless impaired, at which point they are written down to fair value. At both January 31, 2020 and October 31, 2019, the carrying values of such

investments were $1.4 million. At both January 31, 2020 and October 31, 2019, combined assets under management in the pools of non-consolidated CLO entities were $0.4 billion.

The Company did not recognize any impairment losses related to the Company’s investments in non-consolidated CLO entities for the three months ended January 31, 2020 and 2019, respectively.

Investments in equity method investees

The Company has a 49 percent equity interest in Hexavest Inc. (Hexavest), a Montreal, Canada-based investment adviser. The carrying value of this investment consisted of the following:

(in thousands)		January 31,		October 31,
		2020		2019
Equity in net assets of Hexavest	$	5,536	$	5,466
Definite-lived intangible assets		18,905		19,486
Goodwill		115,598		116,319
Deferred tax liability		(5,086)		(5,243)
Total carrying value	$	134,953	$	136,028

The Company’s investment in Hexavest is denominated in Canadian dollars and is subject to foreign currency translation adjustments, which are recorded in accumulated other comprehensive income (loss). Changes in the carrying value of goodwill is entirely attributable to foreign currency translation adjustments.

The Company also has a seven percent equity interest in a private equity partnership managed by a third party that invests in companies in the financial services industry. At both January 31, 2020 and October 31, 2019, the carrying value of this investment was $3.5 million.

The Company did not recognize any impairment losses related to its investments in equity method investees for the three month periods ended January 31, 2020 or 2019.

During the three months ended January 31, 2020 and 2019, the Company received dividends of $2.5 million and $2.9 million, respectively, from its investments in equity method investees.