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Investments
9 Months Ended
Sep. 30, 2011
Investments 
Investments

10.      Investments

 

Refer to Note 1 within the footnotes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, for a detailed discussion of the accounting policies related to the Company’s investments included within the policy titled “Securities Transactions and Investments” and Note 8 herein for additional information regarding valuation techniques and inputs related to the Company’s investment in FATV.  The Company’s investment portfolio includes interests in publicly and privately held companies and private equity securities.  Information regarding these investments has been aggregated and is presented below.

 

(In thousands of dollars)

 

September 30,
2011

 

December 31,
2010

 

Fair Value

 

 

 

 

 

Investment in FATV

 

$

16,568

 

$

16,800

 

Consolidation of EIF, net of Company’s ownership interest

 

1,255

 

1,284

 

Other investment

 

1,200

 

 

Total Investments

 

$

19,023

 

$

18,084

 

 

Investment gains and losses are comprised of the following:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

(In thousands of dollars)

 

2011

 

2010

 

2011

 

2010

 

Investments (realized and unrealized gains/(losses))

 

$

2,857

 

$

979

 

$

2,539

 

$

(533

)

 

The Company had an investment in FATV of approximately $16.6 million and approximately $16.8 million at September 30, 2011 and December 31, 2010, respectively.  FATV’s primary purpose is to provide investment returns consistent with the risk of investing in venture capital.   FA Technology Ventures Corporation, a wholly-owned subsidiary of the Company, is the investment advisor to FATV.  As of September 30, 2011, the Company had a commitment to invest an additional $0.2 million in FATV.  At September 30, 2011 and December 31, 2010, total Partnership capital for all investors in FATV equaled $64.1 million and $65.0 million, respectively.  The Partnership was scheduled to end in July 2011, subject to extension by the vote of a majority of the limited partners, as provided in the limited partnership agreement applicable to the Partnership (the “Partnership Agreement”).  The term of the Partnership was extended for one year pursuant to such provision and is now scheduled to terminate on July 19, 2012.  Although the term may be again extended for another one-year period under the Partnership Agreement, the Company currently expects the Partnership to terminate on such date.  The Partnership is considered a variable interest entity. The Company is not the primary beneficiary, due to other investors’ level of investment in the Partnership.  Accordingly, the Company has not consolidated the Partnership in these consolidated financial statements, but has only recorded the fair value of its investment, which also represented the Company’s maximum exposure to loss in the Partnership at September 30, 2011 and December 31, 2010.  The Company’s share of management fee income derived from the Partnership for the three months ended September 30, 2011 and 2010 were $0.2 million and $0.1 million, respectively, and were $0.5 million and $0.5 million for the nine months ended September 30, 2011 and 2010, respectively.

 

The Employee Investment Funds (“EIF”) consist of limited liability companies, established by the Company for the purpose of having select employees invest in private equity securities.  The EIF is managed by Broadpoint Management Corp., a wholly-owned subsidiary of the Company, which has contracted with FATV to act as an investment advisor with respect to funds invested in parallel with the Partnership.  The Company has consolidated the EIF resulting, in approximately $1.3 million of Investments and a corresponding Payable to others being recorded in the Consolidated Statements of Financial Condition as of September 30, 2011 and December 31, 2010, respectively.  Management fees are not material.

 

Other investment is an investment in a privately held company.