|
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For the fiscal year ended:
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December 31, 2011
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Commission file number: 001-34516
|
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Delaware
(State or other jurisdiction of
incorporation or organization)
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27-0423711
(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Exchange on Which Registered
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Class A Common Stock, par value $0.01 per share
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The Nasdaq Global Market
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Large accelerated filer
o
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Accelerated filer
Q
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Non-accelerated filer
o
(Do not check if a smaller
reporting company)
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Smaller reporting company
o
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Item No.
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Page No.
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•
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the difficulty of identifying appropriate acquisitions, investments, strategic allies or opportunities on terms acceptable to us;
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•
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the possibility that senior management may be required to spend considerable time negotiating agreements and monitoring these arrangements;
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•
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potential regulatory issues applicable to the financial services business;
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•
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the loss or reduction in value of the capital investment;
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•
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our inability to capitalize on the opportunities presented by these arrangements; and
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•
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the possibility of insolvency of a strategic ally.
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•
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problems with the effective integration of operations;
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•
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inability to maintain key pre-acquisition business relationships;
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•
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increased operating costs;
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•
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exposure to unanticipated liabilities; and
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•
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difficulties in realizing projected efficiencies, synergies and cost savings.
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•
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Generally, there are few limitations on hedge funds' investment strategies, which are often subject to the sole discretion of the management company or the general partner of such funds.
|
•
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Hedge funds may engage in short selling, which is subject to a theoretically unlimited risk of loss because there is no limit on how much the price of a security sold short may appreciate before the short position is closed out. A fund may be subject to losses if a security lender demands return of the lent securities and an alternative lending source cannot be found or if the fund is otherwise unable to borrow securities that are necessary to hedge its positions. Furthermore, recent rulemaking by the SEC and other regulatory authorities outside the United States have imposed trading restrictions and reporting requirements on short selling, which in certain circumstances may impair hedge funds' ability to use short selling effectively.
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•
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The efficacy of investment and trading strategies depend largely on the ability to establish and maintain an overall market position through a combination of financial instruments. A hedge fund's trading orders may not be executed in a timely and efficient manner due to various circumstances, including systems failures or human error. In such event, the fund might only be able to acquire some but not all of the components of the position, or if the overall position were in need of adjustment, the fund might not be able to make such an adjustment. As a result, a hedge fund would not be able to achieve the market position selected by the management company or general partner of such fund, and might incur a loss in liquidating its position.
|
•
|
Credit risk may arise through a default by one of several large institutions that are dependent on one another to meet their respective liquidity or operational needs, so that a default by one institution causes a series of defaults by the other institutions. This "systemic risk" may adversely affect the financial intermediaries (such as clearing agencies, clearing houses, banks, securities firms, other counterparties and exchanges) with which the hedge funds interact on a daily basis.
|
•
|
Hedge funds are subject to risks due to the potential illiquidity of assets. Hedge funds may make investments or hold trading positions in markets that are volatile and which may become illiquid. The timely sale of trading positions can be impaired by decreased trading volume, increased price volatility, concentrated trading positions, limitations on the ability to transfer positions in highly specialized or structured transactions to which they may be a party, and changes in industry and government regulations. It may be impossible or highly costly for hedge funds to liquidate positions rapidly to meet margin calls, redemption requests or otherwise, particularly if there are other market participants seeking to dispose of similar assets at the same time, if the relevant market is otherwise moving against a position or in the event of trading halts or daily price movement limitations on the market. In addition, increased levels of redemptions may result in increased illiquidity as more liquid assets are sold to fund redemptions. Moreover, these risks may be exacerbated for the Company's fund of funds platform. For example, if the Company's fund of funds platform invested in two or more hedge funds that each had illiquid positions in the same issuer, the illiquidity risk for the Company's fund of funds portfolios would be compounded. Furthermore, certain of the investments of the Company's fund of funds platform were in third party hedge funds that halted redemptions in the recent past in the face of illiquidity and other issues, and could do so again in the future.
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•
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Hedge fund investments are subject to risks relating to investments in commodities, futures, options and other derivatives, the prices of which are highly volatile and may be subject to the theoretically unlimited risk of loss in certain circumstances. Price movements of commodities, futures and options contracts and payments pursuant to swap agreements are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political
|
•
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it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or
|
•
|
absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
|
2011 Fiscal Year
|
High
|
|
Low
|
||||
First Quarter
|
$
|
5.02
|
|
|
$
|
3.74
|
|
Second Quarter
|
4.42
|
|
|
3.41
|
|
||
Third Quarter
|
4.28
|
|
|
2.56
|
|
||
Fourth Quarter
|
3.00
|
|
|
2.32
|
|
||
|
|
|
|
||||
2010 Fiscal Year
|
High
|
|
Low
|
||||
First Quarter
|
$
|
6.02
|
|
|
$
|
4.84
|
|
Second Quarter
|
6.02
|
|
|
3.87
|
|
||
Third Quarter
|
4.51
|
|
|
2.99
|
|
||
Fourth Quarter
|
5.04
|
|
|
3.25
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
|
|
|||||
|
|
|
|
|
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|
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|
|||||
Month 1 (July 1, 2011 – July 31, 2011)
|
|
|
|
|
|
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|
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|
|||||
Common stock repurchases(1)
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
(3)
|
Employee transactions(2)
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
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|
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|
|||||
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|||||
Month 2 (August 1, 2011 – August 31, 2011)
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|||||
Common stock repurchases(1)
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1,104,326
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|
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$
|
3.41
|
|
|
—
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|
|
—
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(3)
|
Employee transactions(2)
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|
114,482
|
|
|
$
|
3.57
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
|
|
|
|
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|||||
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|||||
Month 3 (September 1, 2011 – September 30, 2011)
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|||||
Common stock repurchases(1)
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1,352,013
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$
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3.30
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|
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—
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|
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—
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(3)
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Employee transactions(2)
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338,769
|
|
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$
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3.45
|
|
|
—
|
|
|
—
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|
|
Total
|
|
|
|
|
|
|
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|
|||||
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|
|||||
Month 4 (October 1, 2011 – October 31, 2011)
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|
|||||
Common stock repurchases(1)
|
|
—
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|
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$
|
—
|
|
|
—
|
|
|
—
|
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(3)
|
Employee transactions(2)
|
|
134,035
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|
|
$
|
2.90
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
|
|
|
|
|
|
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|
|||||
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|
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|
|||||
Month 5 (November 1, 2011 – November 30, 2011)
|
|
|
|
|
|
|
|
|
|
|||||
Common stock repurchases(1)
|
|
659,161
|
|
|
$
|
2.63
|
|
|
—
|
|
|
—
|
|
(3)
|
Employee transactions(2)
|
|
540,479
|
|
|
$
|
2.75
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Month 6 (December 1, 2011 – December 31, 2011)
|
|
|
|
|
|
|
|
|
|
|||||
Common stock repurchases(1)
|
|
528,820
|
|
|
$
|
2.66
|
|
|
—
|
|
|
—
|
|
(3)
|
Employee transactions(2)
|
|
74,917
|
|
|
$
|
2.52
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Total (July 1, 2011 – December 31, 2011)
|
|
|
|
|
|
|
|
|
|
|||||
Common stock repurchases(1)
|
|
3,644,320
|
|
|
$
|
3.12
|
|
|
—
|
|
|
—
|
|
(3)
|
Employee transactions(2)
|
|
1,202,682
|
|
|
$
|
3.02
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
(1)
|
As announced in July 2011, the Company's Board of Directors authorized the repurchase, subject to market conditions, of up to $20 million of the Company's outstanding common stock.
|
(2)
|
Represents shares of common stock withheld in satisfaction of tax withholding obligations upon the vesting of equity awards.
|
(3)
|
Board approval of repurchases is based on dollar amount. The Company cannot estimate the number of shares that may yet be purchased.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
|
(in thousands except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment banking
|
$
|
50,976
|
|
|
$
|
38,965
|
|
|
$
|
10,557
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Brokerage
|
99,611
|
|
|
112,217
|
|
|
17,812
|
|
|
—
|
|
|
—
|
|
|||||
Management fees
|
52,466
|
|
|
38,847
|
|
|
41,694
|
|
|
70,818
|
|
|
73,950
|
|
|||||
Incentive income
|
3,265
|
|
|
11,363
|
|
|
1,911
|
|
|
—
|
|
|
60,491
|
|
|||||
Interest and dividends
|
22,306
|
|
|
11,547
|
|
|
477
|
|
|
1,993
|
|
|
16,356
|
|
|||||
Reimbursement from affiliates
|
4,322
|
|
|
6,816
|
|
|
10,326
|
|
|
16,330
|
|
|
7,086
|
|
|||||
Other revenues
|
1,583
|
|
|
1,936
|
|
|
4,732
|
|
|
6,853
|
|
|
5,086
|
|
|||||
Consolidated Funds revenues
|
749
|
|
|
12,119
|
|
|
36,392
|
|
|
31,739
|
|
|
25,253
|
|
|||||
Total revenues
|
235,278
|
|
|
233,810
|
|
|
123,901
|
|
|
127,733
|
|
|
188,222
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
203,767
|
|
|
194,919
|
|
|
96,592
|
|
|
84,769
|
|
|
123,511
|
|
|||||
Non-compensation expense
|
161,955
|
|
|
136,902
|
|
|
69,818
|
|
|
54,856
|
|
|
79,020
|
|
|||||
Goodwill impairment
|
7,151
|
|
|
—
|
|
|
—
|
|
|
10,200
|
|
|
—
|
|
|||||
Consolidated Funds expenses
|
2,782
|
|
|
8,121
|
|
|
23,581
|
|
|
34,268
|
|
|
21,014
|
|
|||||
Total expenses
|
375,655
|
|
|
339,942
|
|
|
189,991
|
|
|
184,093
|
|
|
223,545
|
|
|||||
Other income (loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net gain (loss) on securities, derivatives and other investments
|
15,128
|
|
|
21,980
|
|
|
(2,154
|
)
|
|
(2,006
|
)
|
|
94,078
|
|
|||||
Bargain purchase gain
|
22,244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consolidated Funds net gains (losses)
|
4,395
|
|
|
31,062
|
|
|
20,999
|
|
|
(198,485
|
)
|
|
84,846
|
|
|||||
Total other income (loss)
|
41,767
|
|
|
53,042
|
|
|
18,845
|
|
|
(200,491
|
)
|
|
178,924
|
|
|||||
Income (loss) before income taxes
|
(98,610
|
)
|
|
(53,090
|
)
|
|
(47,245
|
)
|
|
(256,851
|
)
|
|
143,601
|
|
|||||
Income tax expense (benefit)
|
(20,073
|
)
|
|
(21,400
|
)
|
|
(8,206
|
)
|
|
(1,301
|
)
|
|
1,397
|
|
|||||
Net income (loss) from continuing operations
|
(78,537
|
)
|
|
(31,690
|
)
|
|
(39,039
|
)
|
|
(255,550
|
)
|
|
142,204
|
|
|||||
Net income (loss) from discontinued operations, net of tax
|
(23,646
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
(102,183
|
)
|
|
(31,690
|
)
|
|
(39,039
|
)
|
|
(255,550
|
)
|
|
142,204
|
|
|||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
5,827
|
|
|
13,727
|
|
|
16,248
|
|
|
(113,786
|
)
|
|
66,343
|
|
|||||
Special allocation to managing member
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,551
|
|
|||||
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
(108,010
|
)
|
|
$
|
(45,417
|
)
|
|
$
|
(55,287
|
)
|
|
$
|
(141,764
|
)
|
|
$
|
49,310
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
95,532
|
|
|
73,149
|
|
|
41,001
|
|
|
37,537
|
|
|
37,537
|
|
|||||
Diluted
|
95,532
|
|
|
73,149
|
|
|
41,001
|
|
|
37,537
|
|
|
37,537
|
|
|||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
|
$
|
(0.88
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
(3.78
|
)
|
|
$
|
1.31
|
|
Income (loss) from discontinued operations
|
$
|
(0.25
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from continuing operations
|
$
|
(0.88
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
(3.78
|
)
|
|
$
|
1.31
|
|
Income (loss) from discontinued operations
|
$
|
(0.25
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
As of December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
Consolidated Statements of Financial Condition Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,535,838
|
|
|
$
|
1,247,170
|
|
|
$
|
959,441
|
|
|
$
|
797,831
|
|
|
$
|
2,113,532
|
|
Total liabilities
|
922,786
|
|
|
653,568
|
|
|
255,091
|
|
|
182,003
|
|
|
1,430,029
|
|
|||||
Redeemable non-controlling interests
|
104,587
|
|
|
144,346
|
|
|
230,825
|
|
|
284,936
|
|
|
203,523
|
|
|||||
Total Stockholders' Equity
|
$
|
508,465
|
|
|
$
|
449,256
|
|
|
$
|
473,525
|
|
|
$
|
330,892
|
|
|
$
|
479,980
|
|
•
|
Assets under management.
Our revenues from management fees are directly linked to assets under management. As a result, the future performance of our alternative investment management business will depend on, among other things, our ability to retain assets under management and to grow assets under management from existing and new products. In addition, positive performance increases assets under management which results in higher management fees. As previously disclosed, redemptions in Ramius Multi-Strategy Fund Ltd triggered certain contractual rights of affiliates of UniCredit S.p.A (“UniCredit S.p.A”), which would have allowed them to withdraw their assets held in that fund
|
•
|
Investment performance.
Our revenues from incentive income are linked to the performance of the funds and accounts that we manage. Performance also affects assets under management because it influences investors' decisions to invest assets in, or withdraw assets from, the funds and accounts managed by us.
|
•
|
Fee and allocation rates.
Our management fee revenues are linked to the management fee rates we charge as a percentage of assets under management. Our incentive income revenues are linked to the incentive allocation rates we charge as a percentage of performance-driven asset growth. Our incentive allocations are generally subject to “high-water marks,” whereby incentive income is generally earned by us only to the extent that the net asset value of a fund at the end of a measurement period exceeds the highest net asset value as of the end of the earlier measurement period for which we earned incentive income. Our incentive allocations, in some cases, are subject to performance hurdles. As of December 31, 2011, the Global Credit Fund was not above its "high-water mark".
|
•
|
Investment performance of our own capital.
We invest our own capital and the performance of such invested capital affects our revenues. As of
January 1, 2012
, we had investments of approximately
$125.8 million, $149.7 million and $35.6 million
in the Enterprise Fund (an entity which invests its capital in Ramius Enterprise Master Fund Ltd), Cowen Overseas Investment LP (“COIL”) and Ramius Optimum Investments LLC (“ROIL”), respectively. Enterprise Fund is a fund vehicle that currently has external investors, is closed to new investors and is in liquidation. COIL and ROIL are wholly owned entities managed by Ramius that the Company uses solely for the firm's invested capital.
|
•
|
Underwriting, private placement and strategic/financial advisory fees.
Our revenues from investment banking are directly linked to the underwriting fees we earn in securities offerings in which the Company acts as an underwriter, private placement fees earned in non-underwritten transactions and success fees earned in connection with advising both buyers and sellers, principally in mergers and acquisitions. As a result, the future performance of our investment banking business will depend on, among other things, our ability to secure lead manager and co-manager roles in clients capital raising transactions as well as our ability to secure mandates as a client's strategic financial advisor.
|
•
|
Commissions.
We receive commissions from executing customer transactions. Our commission revenues depend for the most part on our customer trading volumes.
|
•
|
Principal transactions.
Principal transactions revenue includes net trading gains and losses from the Company's market-making activities and net trading gains and losses on inventory and other firm positions. Commissions associated with these transactions are also included herein. In certain cases, the Company provides liquidity to clients buying or selling blocks of shares of listed stocks without previously identifying the other side of the trade at execution, which subjects the Company to market risk.
|
•
|
Equity research fees.
Equity research fees are paid to the Company for providing equity research. The Company also permits institutional customers to allocate a portion of their commissions to pay for research products and other services provided by third parties. Our ability to generate revenues relating to our equity research depends on the quality of our research and its relevance to our institutional customers and other clients.
|
•
|
Our alternative investment management business was affected by the conditions impacting the global financial markets and the hedge fund industry during 2008, which was characterized by substantial declines in investment performance and unanticipated levels of requested redemptions. While the environment for investing in alternative investment products has since improved, the variability of redemptions could continue to affect our alternative investment management business, and it is possible that we could intermittently experience redemptions above historical levels, regardless of fund performance.
|
•
|
Our broker-dealer business has been, and may continue to be, adversely affected by market conditions. Increased competition continues to affect our investment banking and capital markets businesses. The same factors also affect trading volumes in secondary financial markets, which affect our brokerage business. Commission rates, market volatility, increased competition from larger financial firms and other factors also affect our brokerage revenues and may cause these revenues to vary from period to period.
|
•
|
Our broker-dealer business focuses primarily on small to mid-capitalization and private companies in specific industry sectors. These sectors may experience growth or downturns independent of general economic and market conditions, or may face market conditions that are disproportionately better or worse than those impacting the economy and markets generally. In addition, increased government regulation has had, and may continue to have, a disproportionate adverse effect on capital formation by smaller companies. Therefore, our broker-dealer business could be affected differently than overall market trends.
|
•
|
Hedge Funds
.
Management fees for the Company's hedge funds are generally charged at an annual rate of up to 2% of assets under management. Management fees are generally calculated monthly based on assets under management at the end of each month before incentive income.
|
•
|
Alternative Solutions.
Management fees for the Alternative Solutions business are generally charged at an annual rate of up to 2% of assets under management. Management fees are generally calculated monthly based on assets under management at the end of each month before incentive income or based on assets under management at the beginning of the month. Management fees earned from the Alternative Solutions business are based and initially calculated on estimated net asset values and actual fees ultimately earned could be impacted to the extent of any changes in these estimates.
|
•
|
Real Estate Funds.
Management fees from the Company's real estate funds are generally charged by their general partners at an annual rate between 1% to 1.5% of total capital commitments during the investment period and of invested capital or net asset value of the applicable fund after the investment period has ended. Management fees are typically paid to the general partners on a quarterly basis, at the beginning of the quarter in arrears, and are prorated for changes in capital commitments throughout the investment period and invested capital after the investment period. The general partners of the Company's real estate funds are owned jointly by the Company and third parties. Accordingly, the management fees (in addition to incentive income and investment income) generated by these real estate funds are split between the Company and the other general partners. Pursuant to US GAAP, these fees and other income received by the general partners that are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the consolidated statements of operations.
|
•
|
CHRP Funds.
During the investment period (as defined in the management agreement of the CHRP Funds), management fees for the CHRP Funds are generally charged at an annual rate of up to 2% of committed capital. After the investment period, management fees are generally charged at an annual rate of up to 2% of assets under management. Management fees for the CHRP Funds are calculated on a quarterly basis.
|
•
|
Ramius Trading Strategies.
Management fees and platform fees for the Company's private commodity trading advisory business are generally charged at an annual rate of up to 3% and 1.50%, respectively, for the levered vehicle and 1% and 0.50%, respectively, for the unlevered vehicle. In addition, management fees for Ramius Trading Strategies Managed Futures Fund, a mutual fund launched in September 2011, are 1.60% per annum (subject to an overall expense cap of 1.85%). Management and platform fees are generally calculated monthly based on assets under management at the end of each month.
|
•
|
Other.
The Company also provides other investment advisory services. Other management fees are primarily earned from the Company's cash management business and range from annual rates of 0.04% to 0.20% of assets, based on the average daily balances of the assets under management.
|
•
|
Underwriting fees.
The Company earns underwriting revenues in securities offerings in which the Company acts as an underwriter, such as initial public offerings, follow-on equity offerings, debt offerings, and convertible security offerings. Underwriting revenues include management fees, selling concessions and underwriting fees. Fee revenue relating to underwriting commitments is recorded when all significant items relating to the underwriting process have been completed and the amount of the underwriting revenue has been determined. This generally is the point at which all of the following have occurred: (i) the issuer's registration statement has become effective with the SEC, or the other offering documents are finalized; (ii) the Company has made a firm commitment for the purchase of securities from the issuer; and (iii) the Company has been informed of the number of securities that it has been allotted.
|
•
|
Strategic/financial advisory fees.
The Company's strategic advisory revenues include success fees earned in connection with advising companies, principally in mergers and acquisitions and liability management transactions. The Company also earns fees for related advisory work such as providing fairness opinions. The Company records strategic advisory revenues when the services for the transactions are completed under the terms of each assignment or engagement and collection is reasonably assured. Expenses associated with such transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded.
|
•
|
Private placement fees.
The Company earns agency placement fees in non-underwritten transactions such as private placements of debt and equity securities, including, private investment in public equity transactions (“PIPEs”) and
|
•
|
Commissions.
Commission revenue includes fees from executing client transactions. These fees are recognized on a trade date basis. The Company permits institutional customers to allocate a portion of their commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. Commissions on soft dollar brokerage are recorded net of the related expenditures on an accrual basis. During the years ended December 31, 2011, 2010 and 2009, the Company earned $66.0 million, $69.3 million and $9.3 million of revenues from commissions, respectively.
|
•
|
Principal Transactions.
Principal transaction, net revenue includes net trading gains and losses from the Company's market-making activities in fixed income and over-the-counter equity securities, listed options trading, trading of convertible securities, and trading gains and losses on inventory and other firm positions, which include warrants previously received as part of investment banking transactions. Commissions associated with these transactions are also included herein. In certain cases, the Company provides liquidity to clients buying or selling blocks of shares of listed stocks without previously identifying the other side of the trade at execution, which subjects the Company to market risk. These positions are typically held for a very short duration. During the years ended December 31, 2011, 2010 and 2009, the Company earned $27.1 million, $36.1 million and $7.0 million of revenues from principal transactions, net, respectively.
|
•
|
Equity Research Fees.
Equity research fees are paid to the Company for providing equity research. Revenue is recognized once an arrangement exists, access to research has been provided, the fee amount is fixed or determinable, and collection is reasonably assured. During the years ended December 31, 2011, 2010 and 2009, the Company earned $6.5 million, $6.8 million and $1.5 million of revenues from equity research fees, respectively.
|
•
|
Compensation and Benefits.
Compensation and benefits is comprised of salaries, benefits, discretionary cash bonuses and equity-based compensation. Annual incentive compensation is variable, and the amount paid is generally based on a combination of employees' performance, their contribution to their business segment, and the Company's performance. Generally, compensation and benefits comprise a significant portion of total expenses, with annual incentive compensation comprising a significant portion of total compensation and benefits expenses.
|
•
|
Interest and Dividends.
Interest and dividends expense relates primarily to interest on our credit facility (which was
|
•
|
General, Administrative and Other.
General, administrative and other expenses are primarily related to professional services, occupancy and equipment, business development expenses, communications, insurance and other miscellaneous expenses. These expenses may also include certain one-time charges and non-cash expenses.
|
•
|
Consolidated Funds Expenses.
Certain funds are consolidated by the Company pursuant to US GAAP. As such, the Company's consolidated financial statements reflect the expenses of these consolidated entities and the portion attributable to other investors is allocated to a redeemable non-controlling interest.
|
Platform
|
|
Total Assets
under Management |
|
Primary Strategies
|
|
|
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
Hedge Funds (1)
|
|
1,918
|
|
(2)
|
Multi-Strategy
|
|
|
|
|
Single Strategy
|
|
|
|
|
|
|
|
Alternative Solutions (3)
|
|
1,894
|
|
|
Multi-Strategy
|
|
|
|
|
Single Strategy
|
|
|
|
|
|
Customized Solutions
|
|
|
|
|
|
Hedging Strategies
|
|
|
|
|
|
|
|
|
|
855
|
|
|
Advisory
|
|
|
|
|
|
|
Ramius Trading Strategies (4)
|
|
262
|
|
|
Commodity Trading Advisory
|
|
|
|
|
|
|
Real Estate (1)
|
|
1,628
|
|
(7)
|
Debt
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Cowen Healthcare Royalty Partners (5)
|
|
1,473
|
|
(7)
|
Royalty Interests
|
|
|
|
|
|
|
Other (6)
|
|
2,235
|
|
|
Cash Management
|
|
|
|
|
Mortgage Advisory
|
|
Total
|
|
10,265
|
|
|
|
(1)
|
The Company owns between 30% and 55% of the general partners of the real estate business and of the activist business (one of the single strategy hedge funds). We do not possess unilateral control over any of these general partners.
|
(2)
|
This amount includes the Company's invested capital of approximately $125.8 million as of
January 1, 2012
.
|
(3)
|
This amount includes the Company's invested capital of approximately $5.2 million as of
January 1, 2012
.
|
(4)
|
This amount includes three funds: RTS Global Fund, LP, RTS Global 3X Funds, LP, Ramius Trading Strategies Managed Futures Fund. This amount includes the Company's invested capital of approximately $22.3 million (which includes the notional amount of the Company's investment in RTS Global 3X Fund LP) as of
January 1, 2012
.
|
(5)
|
The Company shares the management fees from the CHRP Funds equally with the founders of the CHRP Funds. In addition, the Company receives a share of the carried interests of the general partners of the CHRP Funds of between 27% and 40.2%.
|
(6)
|
The Company's cash management services business provides clients with investment guidelines for managing cash and establishes investment programs for managing their cash in separately managed accounts. The Company also provides mortgage advisory services where the Company manages collateralized debt obligations held by investors.
|
(7)
|
This amount reflects committed capital.
|
(1)
|
Net performance is net of all management and incentive fees and includes the effect of any foreign exchange translation adjustments and leverage in certain funds.
|
(2)
|
Net redemptions for 2009 include $807 million of capital commitments to the CHRP Funds that were part of Cowen Holdings prior to the Transactions.
|
Strategy
|
Net Value
|
|
% of Stockholders' Equity
|
||
|
(dollars in millions)
|
|
|
||
|
|
|
|
||
Trading
|
$
|
293.8
|
|
|
58%
|
Merchant Banking
|
100.0
|
|
|
20%
|
|
Real Estate
|
48.3
|
|
|
9%
|
|
Total
|
442.1
|
|
|
87%
|
|
Stockholders' Equity
|
508.5
|
|
|
100%
|
|
Year ended December 31,
|
|
Period to Period
|
|||||||||||
|
2011
|
|
2010
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Investment banking
|
$
|
50,976
|
|
|
$
|
38,965
|
|
|
$
|
12,011
|
|
|
31
|
%
|
Brokerage
|
99,611
|
|
|
112,217
|
|
|
(12,606
|
)
|
|
(11
|
)%
|
|||
Management fees
|
52,466
|
|
|
38,847
|
|
|
13,619
|
|
|
35
|
%
|
|||
Incentive income
|
3,265
|
|
|
11,363
|
|
|
(8,098
|
)
|
|
(71
|
)%
|
|||
Interest and dividends
|
22,306
|
|
|
11,547
|
|
|
10,759
|
|
|
93
|
%
|
|||
Reimbursement from affiliates
|
4,322
|
|
|
6,816
|
|
|
(2,494
|
)
|
|
(37
|
)%
|
|||
Other revenues
|
1,583
|
|
|
1,936
|
|
|
(353
|
)
|
|
(18
|
)%
|
|||
Consolidated Funds revenues
|
749
|
|
|
12,119
|
|
|
(11,370
|
)
|
|
(94
|
)%
|
|||
Total revenues
|
235,278
|
|
|
233,810
|
|
|
1,468
|
|
|
1
|
%
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
203,767
|
|
|
194,919
|
|
|
8,848
|
|
|
5
|
%
|
|||
Interest and dividends
|
8,839
|
|
|
8,971
|
|
|
(132
|
)
|
|
(1
|
)%
|
|||
General, administrative and other expenses
|
153,116
|
|
|
127,931
|
|
|
25,185
|
|
|
20
|
%
|
|||
Goodwill impairment
|
7,151
|
|
|
—
|
|
|
7,151
|
|
|
NM
|
|
|||
Consolidated Funds expenses
|
2,782
|
|
|
8,121
|
|
|
(5,339
|
)
|
|
(66
|
)%
|
|||
Total expenses
|
375,655
|
|
|
339,942
|
|
|
35,713
|
|
|
11
|
%
|
|||
Other income (loss)
|
|
|
|
|
|
|
|
|||||||
Net gain (loss) on securities, derivatives and other investments
|
15,128
|
|
|
21,980
|
|
|
(6,852
|
)
|
|
(31
|
)%
|
|||
Bargain purchase gain
|
22,244
|
|
|
—
|
|
|
22,244
|
|
|
NM
|
|
|||
Consolidated Funds net gains (losses)
|
4,395
|
|
|
31,062
|
|
|
(26,667
|
)
|
|
(86
|
)%
|
|||
Total other income (loss)
|
41,767
|
|
|
53,042
|
|
|
(11,275
|
)
|
|
(21
|
)%
|
|||
Income (loss) before income taxes
|
(98,610
|
)
|
|
(53,090
|
)
|
|
(45,520
|
)
|
|
86
|
%
|
|||
Income taxes expense (benefit)
|
(20,073
|
)
|
|
(21,400
|
)
|
|
1,327
|
|
|
(6
|
)%
|
|||
Net income (loss) from continuing operations
|
(78,537
|
)
|
|
(31,690
|
)
|
|
(46,847
|
)
|
|
148
|
%
|
|||
Net income (loss) from discontinued operations, net of tax
|
(23,646
|
)
|
|
—
|
|
|
(23,646
|
)
|
|
NM
|
|
|||
Net income (loss)
|
(102,183
|
)
|
|
(31,690
|
)
|
|
(70,493
|
)
|
|
222
|
%
|
|||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
5,827
|
|
|
13,727
|
|
|
(7,900
|
)
|
|
(58
|
)%
|
|||
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
(108,010
|
)
|
|
$
|
(45,417
|
)
|
|
$
|
(62,593
|
)
|
|
138
|
%
|
•
|
a reversal of an accrual pertaining to subordination agreements entered into by the general partners of two real estate funds with those funds' lead investor and
|
•
|
a credit to occupancy and equipment expense in 2010 related to a reversal of a previously recorded
|
|
Year ended December 31,
|
|
Period to Period
|
|||||||||||
|
2010
|
|
2009
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Investment banking
|
$
|
38,965
|
|
|
$
|
10,557
|
|
|
$
|
28,408
|
|
|
269
|
%
|
Brokerage
|
112,217
|
|
|
17,812
|
|
|
94,405
|
|
|
530
|
%
|
|||
Management fees
|
38,847
|
|
|
41,694
|
|
|
(2,847
|
)
|
|
(7
|
)%
|
|||
Incentive income
|
11,363
|
|
|
1,911
|
|
|
9,452
|
|
|
495
|
%
|
|||
Interest and dividends
|
11,547
|
|
|
477
|
|
|
11,070
|
|
|
NM
|
|
|||
Reimbursement from affiliates
|
6,816
|
|
|
10,326
|
|
|
(3,510
|
)
|
|
(34
|
)%
|
|||
Other revenues
|
1,936
|
|
|
4,732
|
|
|
(2,796
|
)
|
|
(59
|
)%
|
|||
Consolidated Funds revenues
|
12,119
|
|
|
36,392
|
|
|
(24,273
|
)
|
|
(67
|
)%
|
|||
Total revenues
|
233,810
|
|
|
123,901
|
|
|
109,909
|
|
|
89
|
%
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
194,919
|
|
|
96,592
|
|
|
98,327
|
|
|
102
|
%
|
|||
Interest and dividends
|
8,971
|
|
|
1,601
|
|
|
7,370
|
|
|
460
|
%
|
|||
General, administrative and other expenses
|
127,931
|
|
|
68,217
|
|
|
59,714
|
|
|
88
|
%
|
|||
Consolidated Funds expenses
|
8,121
|
|
|
23,581
|
|
|
(15,460
|
)
|
|
(66
|
)%
|
|||
Total expenses
|
339,942
|
|
|
189,991
|
|
|
149,951
|
|
|
79
|
%
|
|||
Other income (loss)
|
|
|
|
|
|
|
|
|||||||
Net gain (loss) on securities, derivatives and other investments
|
21,980
|
|
|
(2,154
|
)
|
|
24,134
|
|
|
NM
|
|
|||
Consolidated Funds net gains (losses)
|
31,062
|
|
|
20,999
|
|
|
10,063
|
|
|
48
|
%
|
|||
Total other income (loss)
|
53,042
|
|
|
18,845
|
|
|
34,197
|
|
|
181
|
%
|
|||
Income (loss) before income taxes
|
(53,090
|
)
|
|
(47,245
|
)
|
|
(5,845
|
)
|
|
12
|
%
|
|||
Income taxes expense (benefit)
|
(21,400
|
)
|
|
(8,206
|
)
|
|
(13,194
|
)
|
|
161
|
%
|
|||
Net income (loss)
|
(31,690
|
)
|
|
(39,039
|
)
|
|
7,349
|
|
|
(19
|
)%
|
|||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
13,727
|
|
|
16,248
|
|
|
(2,521
|
)
|
|
(16
|
)%
|
|||
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
(45,417
|
)
|
|
$
|
(55,287
|
)
|
|
$
|
9,870
|
|
|
(18
|
)%
|
|
Year ended
December 31, |
|
|
|
|
|||||||||||||||||||||||||
|
2011
|
|
2010
|
|
Total
Period-to-Period |
|||||||||||||||||||||||||
|
Alternative
Investment Management |
|
|
|
Total
2011 |
|
Alternative
Investment Management |
|
|
|
Total
2010 |
|
||||||||||||||||||
|
Broker-Dealer
|
|
Broker-Dealer
|
|
$ Change
|
|
% Change
|
|||||||||||||||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||
Economic Income Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Investment banking
|
$
|
—
|
|
|
$
|
50,976
|
|
|
$
|
50,976
|
|
|
$
|
—
|
|
|
$
|
38,965
|
|
|
$
|
38,965
|
|
|
$
|
12,011
|
|
|
31
|
%
|
Brokerage
|
—
|
|
|
99,611
|
|
|
99,611
|
|
|
—
|
|
|
112,217
|
|
|
112,217
|
|
|
(12,606
|
)
|
|
(11
|
)%
|
|||||||
Management fees
|
67,309
|
|
|
—
|
|
|
67,309
|
|
|
51,440
|
|
|
—
|
|
|
51,440
|
|
|
15,869
|
|
|
31
|
%
|
|||||||
Incentive income (loss)
|
10,366
|
|
|
—
|
|
|
10,366
|
|
|
9,615
|
|
|
—
|
|
|
9,615
|
|
|
751
|
|
|
8
|
%
|
|||||||
Investment income (loss)
|
39,149
|
|
|
2,198
|
|
|
41,347
|
|
|
59,638
|
|
|
(221
|
)
|
|
59,417
|
|
|
(18,070
|
)
|
|
(30
|
)%
|
|||||||
Other revenues
|
622
|
|
|
(7
|
)
|
|
615
|
|
|
932
|
|
|
7
|
|
|
939
|
|
|
(324
|
)
|
|
(35
|
)%
|
|||||||
Total economic income revenues
|
117,446
|
|
|
152,778
|
|
|
270,224
|
|
|
121,625
|
|
|
150,968
|
|
|
272,593
|
|
|
(2,369
|
)
|
|
(1
|
)%
|
|||||||
Economic Income Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Compensation and benefits
|
50,838
|
|
|
143,970
|
|
|
194,808
|
|
|
58,831
|
|
|
127,062
|
|
|
185,893
|
|
|
8,915
|
|
|
5
|
%
|
|||||||
Non-compensation expenses—Fixed
|
34,138
|
|
|
69,778
|
|
|
103,916
|
|
|
29,228
|
|
|
64,255
|
|
|
93,483
|
|
|
10,433
|
|
|
11
|
%
|
|||||||
Non-compensation expenses—Variable
|
17,085
|
|
|
24,412
|
|
|
41,497
|
|
|
7,338
|
|
|
27,022
|
|
|
34,360
|
|
|
7,137
|
|
|
21
|
%
|
|||||||
Reimbursement from affiliates
|
(4,602
|
)
|
|
—
|
|
|
(4,602
|
)
|
|
(7,315
|
)
|
|
—
|
|
|
(7,315
|
)
|
|
2,713
|
|
|
(37
|
)%
|
|||||||
Total economic income expenses
|
97,459
|
|
|
238,160
|
|
|
335,619
|
|
|
88,082
|
|
|
218,339
|
|
|
306,421
|
|
|
29,198
|
|
|
10
|
%
|
|||||||
Net economic income (loss) (before non-controlling interest)
|
19,987
|
|
|
(85,382
|
)
|
|
(65,395
|
)
|
|
33,543
|
|
|
(67,371
|
)
|
|
(33,828
|
)
|
|
(31,567
|
)
|
|
93
|
%
|
|||||||
Non-controlling interest
|
(6,042
|
)
|
|
—
|
|
|
(6,042
|
)
|
|
(1,759
|
)
|
|
—
|
|
|
(1,759
|
)
|
|
(4,283
|
)
|
|
243
|
%
|
|||||||
Economic income (loss)
|
$
|
13,945
|
|
|
$
|
(85,382
|
)
|
|
$
|
(71,437
|
)
|
|
$
|
31,784
|
|
|
$
|
(67,371
|
)
|
|
$
|
(35,587
|
)
|
|
$
|
(35,850
|
)
|
|
101
|
%
|
|
Year ended
December 31, |
|
Period-to-Period
|
|||||||||||
|
2011
|
|
2010
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Non-compensation expenses—fixed:
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
$
|
735
|
|
|
$
|
1,026
|
|
|
$
|
(291
|
)
|
|
(28
|
)%
|
Professional, advisory and other fees
|
14,707
|
|
|
13,366
|
|
|
1,341
|
|
|
10
|
%
|
|||
Occupancy and equipment
|
21,660
|
|
|
18,167
|
|
|
3,493
|
|
|
19
|
%
|
|||
Depreciation and amortization
|
8,740
|
|
|
11,432
|
|
|
(2,692
|
)
|
|
(24
|
)%
|
|||
Service fees
|
15,619
|
|
|
15,813
|
|
|
(194
|
)
|
|
(1
|
)%
|
|||
Other
|
42,455
|
|
|
33,679
|
|
|
8,776
|
|
|
26
|
%
|
|||
Total
|
$
|
103,916
|
|
|
$
|
93,483
|
|
|
$
|
10,433
|
|
|
11
|
%
|
|
Year ended
December 31, |
|
Period-to-Period
|
|||||||||||
|
2011
|
|
2010
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Non-compensation expenses—Variable:
|
|
|
|
|
|
|
|
|||||||
Floor brokerage and trade execution
|
$
|
11,818
|
|
|
$
|
15,280
|
|
|
$
|
(3,462
|
)
|
|
(23
|
)%
|
CHRP Syndication Costs
|
5,644
|
|
|
666
|
|
|
4,978
|
|
|
747
|
%
|
|||
Expenses related to Luxembourg reinsurance companies
|
8,789
|
|
|
4,279
|
|
|
4,510
|
|
|
105
|
%
|
|||
Marketing and business development
|
15,246
|
|
|
14,135
|
|
|
1,111
|
|
|
8
|
%
|
|||
Total
|
$
|
41,497
|
|
|
$
|
34,360
|
|
|
$
|
7,137
|
|
|
21
|
%
|
|
Year ended
December 31, |
|
|
|
|
|||||||||||||||||||||||||
|
2010
|
|
2009
|
|
Total
Period-to-Period |
|||||||||||||||||||||||||
|
Alternative
Investment Management |
|
|
|
Total
2010 |
|
Alternative
Investment Management |
|
|
|
Total
2009 |
|
||||||||||||||||||
|
Broker-Dealer
|
|
Broker-Dealer
|
|
$ Change
|
|
% Change
|
|||||||||||||||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||
Economic Income Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Investment banking
|
$
|
—
|
|
|
$
|
38,965
|
|
|
$
|
38,965
|
|
|
$
|
—
|
|
|
$
|
10,557
|
|
|
$
|
10,557
|
|
|
$
|
28,408
|
|
|
269
|
%
|
Brokerage
|
—
|
|
|
112,217
|
|
|
112,217
|
|
|
—
|
|
|
17,812
|
|
|
17,812
|
|
|
94,405
|
|
|
530
|
%
|
|||||||
Management fees
|
51,440
|
|
|
—
|
|
|
51,440
|
|
|
53,940
|
|
|
—
|
|
|
53,940
|
|
|
(2,500
|
)
|
|
(5
|
)%
|
|||||||
Incentive income (loss)
|
9,615
|
|
|
—
|
|
|
9,615
|
|
|
(6,996
|
)
|
|
—
|
|
|
(6,996
|
)
|
|
16,611
|
|
|
(237
|
)%
|
|||||||
Investment income (loss)
|
59,638
|
|
|
(221
|
)
|
|
59,417
|
|
|
21,958
|
|
|
—
|
|
|
21,958
|
|
|
37,459
|
|
|
171
|
%
|
|||||||
Other revenues
|
932
|
|
|
7
|
|
|
939
|
|
|
3,536
|
|
|
—
|
|
|
3,536
|
|
|
(2,597
|
)
|
|
(73
|
)%
|
|||||||
Total economic income revenues
|
121,625
|
|
|
150,968
|
|
|
272,593
|
|
|
72,438
|
|
|
28,369
|
|
|
100,807
|
|
|
171,786
|
|
|
170
|
%
|
|||||||
Economic Income Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Compensation and benefits
|
58,831
|
|
|
127,062
|
|
|
185,893
|
|
|
63,207
|
|
|
30,032
|
|
|
93,239
|
|
|
92,654
|
|
|
99
|
%
|
|||||||
Non-compensation expenses—Fixed
|
29,228
|
|
|
64,255
|
|
|
93,483
|
|
|
41,889
|
|
|
10,946
|
|
|
52,835
|
|
|
40,648
|
|
|
77
|
%
|
|||||||
Non-compensation expenses—Variable
|
7,338
|
|
|
27,022
|
|
|
34,360
|
|
|
3,467
|
|
|
3,674
|
|
|
7,141
|
|
|
27,219
|
|
|
381
|
%
|
|||||||
Reimbursement from affiliates
|
(7,315
|
)
|
|
—
|
|
|
(7,315
|
)
|
|
(11,044
|
)
|
|
—
|
|
|
(11,044
|
)
|
|
3,729
|
|
|
(34
|
)%
|
|||||||
Total economic income expenses
|
88,082
|
|
|
218,339
|
|
|
306,421
|
|
|
97,519
|
|
|
44,652
|
|
|
142,171
|
|
|
164,250
|
|
|
116
|
%
|
|||||||
Net economic income (loss) (before non-controlling interest)
|
33,543
|
|
|
(67,371
|
)
|
|
(33,828
|
)
|
|
(25,081
|
)
|
|
(16,283
|
)
|
|
(41,364
|
)
|
|
7,536
|
|
|
(18
|
)%
|
|||||||
Non-controlling interest
|
(1,759
|
)
|
|
—
|
|
|
(1,759
|
)
|
|
(602
|
)
|
|
—
|
|
|
(602
|
)
|
|
(1,157
|
)
|
|
192
|
%
|
|||||||
Economic income (loss)
|
$
|
31,784
|
|
|
$
|
(67,371
|
)
|
|
$
|
(35,587
|
)
|
|
$
|
(25,683
|
)
|
|
$
|
(16,283
|
)
|
|
$
|
(41,966
|
)
|
|
$
|
6,379
|
|
|
(15
|
)%
|
|
Year ended
December 31, |
|
Period-to-Period
|
|||||||||||
|
2010
|
|
2009
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Non-compensation expenses—fixed:
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
$
|
1,026
|
|
|
$
|
1,549
|
|
|
$
|
(523
|
)
|
|
(34
|
)%
|
Professional, advisory and other fees
|
13,366
|
|
|
12,249
|
|
|
1,117
|
|
|
9
|
%
|
|||
Occupancy and equipment
|
18,167
|
|
|
13,969
|
|
|
4,198
|
|
|
30
|
%
|
|||
Depreciation and amortization
|
11,432
|
|
|
5,751
|
|
|
5,681
|
|
|
99
|
%
|
|||
Service fees
|
15,813
|
|
|
4,453
|
|
|
11,360
|
|
|
255
|
%
|
|||
Other
|
33,679
|
|
|
14,864
|
|
|
18,815
|
|
|
127
|
%
|
|||
Total
|
$
|
93,483
|
|
|
$
|
52,835
|
|
|
$
|
40,648
|
|
|
77
|
%
|
|
Year ended
December 31, |
|
Period-to-Period
|
|||||||||||
|
2010
|
|
2009
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Non-compensation expenses—Variable:
|
|
|
|
|
|
|
|
|||||||
Floor brokerage and trade execution
|
$
|
15,280
|
|
|
$
|
2,451
|
|
|
$
|
12,829
|
|
|
523
|
%
|
CHRP Syndication Costs
|
666
|
|
|
—
|
|
|
666
|
|
|
NM
|
|
|||
Expenses related to Luxembourg reinsurance companies
|
4,279
|
|
|
—
|
|
|
4,279
|
|
|
NM
|
|
|||
Marketing and business development
|
14,135
|
|
|
4,690
|
|
|
9,445
|
|
|
201
|
%
|
|||
Total
|
$
|
34,360
|
|
|
$
|
7,141
|
|
|
$
|
27,219
|
|
|
381
|
%
|
•
|
pay our operating expenses, primarily consisting of compensation and benefits and general and administrative expenses; and
|
•
|
provide capital to facilitate the growth of our existing business.
|
|
As of December 31, 2011
|
||
|
(dollars in thousands)
|
||
Securities purchased under agreements to resell
|
|
||
Agreements with Barclays Capital Inc bearing interest of (0.38%) - 0.25% due on January 3, 2012
|
$
|
166,260
|
|
Securities sold under agreements to repurchase
|
|
||
Agreements with Royal Bank of Canada bearing interest of 1.53% - 1.58% due on January 3, 2012 to June 25, 2012
|
49,450
|
|
|
Agreements with Barclays Capital Inc bearing interest of 0.03% - 0.08% due on January 3, 2012
|
179,333
|
|
|
|
$
|
228,783
|
|
|
As of December 31, 2010
|
||
|
(dollars in thousands)
|
||
Securities purchased under agreements to resell
|
|
||
Agreements with Barclays Capital Inc bearing interest of 0.07% - 0.14% due on January 3, 2011
|
$
|
97,755
|
|
Securities sold under agreements to repurchase
|
|
||
Agreements with Royal Bank of Canada bearing interest of 1.42% due on February 22, 2011 to September 1, 2011
|
48,532
|
|
|
Agreements with Barclays Capital Inc bearing interest of 0.18% - 1.50% due on January 7, 2011 to June 6, 2011
|
143,633
|
|
|
|
$
|
192,165
|
|
|
Total
|
|
1-3 Years
|
|
4-5 Years
|
|
More Than
5 Years |
||||||||
|
(dollars in thousands)
|
||||||||||||||
Equipment Leases, Service Payments and Facility Leases
|
|
|
|
|
|
|
|
||||||||
Real Estate
|
$
|
121,857
|
|
|
$
|
47,005
|
|
|
$
|
22,357
|
|
|
$
|
52,495
|
|
Service Payments
|
32,067
|
|
|
28,842
|
|
|
3,225
|
|
|
—
|
|
||||
Capital leases
|
5,729
|
|
|
4,484
|
|
|
1,245
|
|
|
—
|
|
||||
Aircraft
|
3,666
|
|
|
3,666
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
163,319
|
|
|
$
|
83,997
|
|
|
$
|
26,827
|
|
|
$
|
52,495
|
|
Debt
|
|
|
|
|
|
|
|
||||||||
Notes Payable
|
370
|
|
|
370
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
370
|
|
|
$
|
370
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Future contributions to the Company's defined benefit plan beyond
2011
cannot reasonably be estimated and are excluded from the table above. The Company had funded all 2011 requirements before December 31, 2011.
|
i.
|
Portfolio funds
—
Portfolio funds (“Portfolio Funds”) include interests in funds and investment companies managed by the Company or its affiliates. The Company follows US GAAP regarding fair value measurements and disclosures relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). The guidance permits, as a practical expedient, an entity holding investments in certain entities that either are investment companies as defined by the AICPA Audit and Accounting Guide, Investment Companies, or have attributes similar to an investment company, and calculate net asset value per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment.
|
ii.
|
Real estate investments
—
Real estate investments are valued at estimated fair value. The fair value of real estate investments are estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Real estate investments without a public market are valued based on assumptions and valuation techniques used by the Company. Such valuation techniques may include discounted cash flow analysis, prevailing market capitalization rates or earning multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties, consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence, as well as independent external appraisals. In general, the Company considers several valuation techniques when measuring the fair value of a real estate investment. However, in certain circumstances, a single valuation technique may be appropriate. Real estate investments are reviewed on a quarterly basis by the Company for significant changes at the property level or a significant change in the overall market which would impact the value of the real estate investment resulting in unrealized appreciation or depreciation.
|
•
|
Hedge Funds
.
Management fees for the Company's hedge funds are generally charged at an annual rate of up to 2% of assets under management. Management fees are generally calculated monthly based on assets under management at the end of each month before incentive income.
|
•
|
Alternative Solutions.
Management fees for the Alternative Solutions business are generally charged at an annual rate of up to 2% of assets under management. Management fees are generally calculated monthly based on assets under management at the end of each month before incentive income or based on assets under management at the beginning of the month. Management fees earned from the Alternative Solutions business are based and initially calculated on estimated net asset values and actual fees ultimately earned could be impacted to the extent of any changes in these estimates.
|
•
|
Real Estate Funds.
Management fees from the Company's real estate funds are generally charged by their general partners at an annual rate between 1% to 1.5% of total capital commitments during the investment period and of invested capital or net asset value of the applicable fund after the investment period has ended. Management fees are typically paid to the general partners on a quarterly basis, at the beginning of the quarter in arrears, and are prorated for changes in capital commitments throughout the investment period and invested capital after the investment period. The general partners of the Company's real estate funds are owned jointly by the Company and third parties. Accordingly, the management fees (in addition to incentive income and investment income) generated by these real estate funds are split between the Company and the other general partners. Pursuant to US GAAP, these fees and other income received by the general partners that are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the consolidated statements of operations.
|
•
|
CHRP Funds.
During the investment period (as defined in the management agreement of the CHRP Funds), management fees for the CHRP Funds are generally charged at an annual rate of up to 2% of committed capital. After the investment period, management fees are generally charged at an annual rate of up to 2% of assets under management. Management fees for the CHRP Funds are calculated on a quarterly basis.
|
•
|
Ramius Trading Strategies.
Management fees and platform fees for the Company's private commodity trading advisory business are generally charged at an annual rate of up to 3% and 1.50%, respectively, for the levered vehicle and 1% and 0.50%, respectively, for the unlevered vehicle. In addition, management fees for Ramius Trading
|
•
|
Other.
The Company also provides other investment advisory services. Other management fees are primarily earned from the Company's cash management business and range from annual rates of 0.04% to 0.20% of assets, based on the average daily balances of the assets under management.
|
•
|
Underwriting fees.
The Company earns underwriting revenues in securities offerings in which the Company acts as an underwriter, such as initial public offerings, follow-on equity offerings, debt offerings, and convertible security offerings. Underwriting revenues include management fees, selling concessions and underwriting fees. Fee revenue relating to underwriting commitments is recorded when all significant items relating to the underwriting process have been completed and the amount of the underwriting revenue has been determined. This generally is the point at which all of the following have occurred: (i) the issuer's registration statement has become effective with the SEC, or the other offering documents are finalized; (ii) the Company has made a firm commitment for the purchase of securities from the issuer; and (iii) the Company has been informed of the number of securities that it has been allotted.
|
•
|
Strategic/financial advisory fees.
The Company's strategic advisory revenues include success fees earned in connection with advising companies, principally in mergers and acquisitions and liability management transactions. The Company also earns fees for related advisory work such as providing fairness opinions. The Company records strategic advisory revenues when the services for the transactions are completed under the terms of each assignment or engagement and collection is reasonably assured. Expenses associated with such transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded.
|
•
|
Private placement fees.
The Company earns agency placement fees in non-underwritten transactions such as private placements of debt and equity securities, including, private investment in public equity transactions (“PIPEs”) and registered direct offerings. The Company records private placement revenues when the services for the transactions are completed under the terms of each assignment or engagement and collection is reasonably assured. Expenses associated with such transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded.
|
(a)
|
Documents filed as part of this Annual Report on Form 10-K:
|
Consolidated Financial Statements
|
|
Page
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
126,889
|
|
|
$
|
36,354
|
|
Cash collateral pledged
|
9,785
|
|
|
8,633
|
|
||
Securities owned, at fair value
|
744,914
|
|
|
474,095
|
|
||
Securities purchased under agreement to resell
|
166,260
|
|
|
97,755
|
|
||
Other investments
|
61,929
|
|
|
40,320
|
|
||
Receivable from brokers
|
62,046
|
|
|
95,937
|
|
||
Fees receivable
|
22,297
|
|
|
31,688
|
|
||
Due from related parties
|
16,554
|
|
|
16,370
|
|
||
Fixed assets, net of accumulated depreciation and amortization of $23,852 and $17,764, respectively
|
37,042
|
|
|
36,591
|
|
||
Goodwill
|
20,028
|
|
|
27,179
|
|
||
Intangible assets, net of accumulated amortization of $20,220 and $8,146, respectively
|
5,760
|
|
|
12,754
|
|
||
Other assets
|
26,620
|
|
|
19,456
|
|
||
Consolidated Funds
|
|
|
|
||||
Cash and cash equivalents
|
297
|
|
|
7,210
|
|
||
Securities owned, at fair value
|
6,334
|
|
|
8,722
|
|
||
Other investments, at fair value
|
228,820
|
|
|
333,374
|
|
||
Other assets
|
263
|
|
|
732
|
|
||
Total Assets
|
$
|
1,535,838
|
|
|
$
|
1,247,170
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Securities sold, not yet purchased, at fair value
|
$
|
334,251
|
|
|
$
|
197,916
|
|
Securities sold under agreement to repurchase
|
228,783
|
|
|
192,165
|
|
||
Payable to brokers
|
213,360
|
|
|
85,655
|
|
||
Compensation payable
|
71,223
|
|
|
76,204
|
|
||
Short-term borrowings and other debt
|
5,650
|
|
|
31,733
|
|
||
Fees payable
|
5,503
|
|
|
8,797
|
|
||
Due to related parties
|
1,914
|
|
|
9,187
|
|
||
Accounts payable, accrued expenses and other liabilities
|
61,462
|
|
|
42,267
|
|
||
Consolidated Funds
|
|
|
|
||||
Capital withdrawals payable
|
394
|
|
|
7,817
|
|
||
Accounts payable, accrued expenses and other liabilities
|
246
|
|
|
1,827
|
|
||
Total Liabilities
|
922,786
|
|
|
653,568
|
|
||
Commitments and Contingencies (Note 19)
|
|
|
|
||||
Redeemable non-controlling interests
|
104,587
|
|
|
144,346
|
|
||
Stockholders' equity
|
|
|
|
||||
Preferred stock, par value $0.01 per share; 10,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Class A common stock, par value $0.01 per share: 250,000,000 shares authorized, 119,393,640 shares issued and
114,047,637 outstanding as of December 31, 2011 and 75,490,209 shares issued and outstanding as of
December 31, 2010, respectively (including 576,892 and 1,554,124 restricted shares, respectively)
|
1,135
|
|
|
726
|
|
||
Class B common stock, par value $0.01 per share: 250,000,000 authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
688,427
|
|
|
504,480
|
|
||
(Accumulated deficit) retained earnings
|
(163,980
|
)
|
|
(55,970
|
)
|
||
Accumulated other comprehensive income (loss)
|
(215
|
)
|
|
20
|
|
||
Less: Class A common stock held in treasury, at cost, 5,346,003 shares as of December 31, 2011
|
(16,902
|
)
|
|
—
|
|
||
Total Stockholders' Equity
|
508,465
|
|
|
449,256
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
1,535,838
|
|
|
$
|
1,247,170
|
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Revenues
|
|
|
|
|
|
||||||
Investment banking
|
$
|
50,976
|
|
|
$
|
38,965
|
|
|
$
|
10,557
|
|
Brokerage
|
99,611
|
|
|
112,217
|
|
|
17,812
|
|
|||
Management fees
|
52,466
|
|
|
38,847
|
|
|
41,694
|
|
|||
Incentive income
|
3,265
|
|
|
11,363
|
|
|
1,911
|
|
|||
Interest and dividends
|
22,306
|
|
|
11,547
|
|
|
477
|
|
|||
Reimbursement from affiliates
|
4,322
|
|
|
6,816
|
|
|
10,326
|
|
|||
Other revenues
|
1,583
|
|
|
1,936
|
|
|
4,732
|
|
|||
Consolidated Funds
|
|
|
|
|
|
||||||
Interest and dividends
|
569
|
|
|
11,733
|
|
|
33,697
|
|
|||
Other revenues
|
180
|
|
|
386
|
|
|
2,695
|
|
|||
Total revenues
|
235,278
|
|
|
233,810
|
|
|
123,901
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
203,767
|
|
|
194,919
|
|
|
96,592
|
|
|||
Floor brokerage and trade execution
|
16,475
|
|
|
17,143
|
|
|
2,451
|
|
|||
Interest and dividends
|
8,839
|
|
|
8,971
|
|
|
1,601
|
|
|||
Professional, advisory and other fees
|
33,702
|
|
|
14,547
|
|
|
20,140
|
|
|||
Service fees
|
16,365
|
|
|
15,814
|
|
|
4,452
|
|
|||
Communications
|
16,350
|
|
|
13,972
|
|
|
2,906
|
|
|||
Occupancy and equipment
|
25,673
|
|
|
18,119
|
|
|
11,835
|
|
|||
Depreciation and amortization
|
15,472
|
|
|
11,543
|
|
|
5,761
|
|
|||
Client services and business development
|
16,725
|
|
|
14,470
|
|
|
7,804
|
|
|||
Goodwill impairment
|
7,151
|
|
|
—
|
|
|
—
|
|
|||
Other
|
12,354
|
|
|
22,323
|
|
|
12,868
|
|
|||
Consolidated Funds
|
|
|
|
|
|
||||||
Interest and dividends
|
147
|
|
|
3,078
|
|
|
14,017
|
|
|||
Professional, advisory and other fees
|
2,136
|
|
|
3,094
|
|
|
6,500
|
|
|||
Floor brokerage and trade execution
|
—
|
|
|
995
|
|
|
707
|
|
|||
Other
|
499
|
|
|
954
|
|
|
2,357
|
|
|||
Total expenses
|
375,655
|
|
|
339,942
|
|
|
189,991
|
|
|||
Other income (loss)
|
|
|
|
|
|
||||||
Net gains (losses) on securities, derivatives and other investments
|
15,128
|
|
|
21,980
|
|
|
(2,154
|
)
|
|||
Bargain purchase gain
|
22,244
|
|
|
—
|
|
|
—
|
|
|||
Consolidated Funds:
|
|
|
|
|
|
|
|
||||
Net realized and unrealized gains (losses) on investments and other transactions
|
4,925
|
|
|
33,116
|
|
|
55,908
|
|
|||
Net realized and unrealized gains (losses) on derivatives
|
(583
|
)
|
|
(761
|
)
|
|
(31,750
|
)
|
|||
Net gains (losses) on foreign currency transactions
|
53
|
|
|
(1,293
|
)
|
|
(3,159
|
)
|
|||
Total other income (loss)
|
41,767
|
|
|
53,042
|
|
|
18,845
|
|
|||
Income (loss) before income taxes
|
(98,610
|
)
|
|
(53,090
|
)
|
|
(47,245
|
)
|
|||
Income tax expense (benefit)
|
(20,073
|
)
|
|
(21,400
|
)
|
|
(8,206
|
)
|
|||
Net income (loss) from continuing operations
|
(78,537
|
)
|
|
(31,690
|
)
|
|
(39,039
|
)
|
|||
Net income (loss) from discontinued operations, net of tax
|
(23,646
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss)
|
(102,183
|
)
|
|
(31,690
|
)
|
|
(39,039
|
)
|
|||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
5,827
|
|
|
13,727
|
|
|
16,248
|
|
|||
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
(108,010
|
)
|
|
$
|
(45,417
|
)
|
|
$
|
(55,287
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
95,532
|
|
|
73,149
|
|
|
41,001
|
|
|||
Diluted
|
95,532
|
|
|
73,149
|
|
|
41,001
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
(0.88
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.35
|
)
|
Income (loss) from discontinued operations
|
$
|
(0.25
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Diluted
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
|
$
|
(0.88
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.35
|
)
|
Income (loss) from discontinued operations
|
$
|
(0.25
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common Shares Outstanding
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings/ (Accumulated deficit)
|
|
Total Stockholders' Equity
|
|
Redeemable Non-controlling Interest
|
|
Total Comprehensive Income (Loss)
|
|||||||||||||||||
Balance, December 31, 2008
|
37,536,826
|
|
|
$
|
375
|
|
|
$
|
—
|
|
|
$
|
277,464
|
|
|
$
|
(1,163
|
)
|
|
$
|
54,216
|
|
|
$
|
330,892
|
|
|
$
|
284,936
|
|
|
|
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,287
|
)
|
|
(55,287
|
)
|
|
16,248
|
|
|
$
|
(39,039
|
)
|
|||||||
Defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
636
|
|
|
—
|
|
|
636
|
|
|
—
|
|
|
636
|
|
||||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
643
|
|
|
(55,287
|
)
|
|
(54,644
|
)
|
|
16,248
|
|
|
(38,396
|
)
|
||||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
4,906
|
|
|
—
|
|
|
—
|
|
|
4,906
|
|
|
1,613
|
|
|
|
|
||||||||
Capital distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,482
|
)
|
|
(9,482
|
)
|
|
(60,214
|
)
|
|
|
|
||||||||
Acquisition of non-controlling interest (see Note 2)
|
2,713,882
|
|
|
27
|
|
|
—
|
|
|
3,085
|
|
|
—
|
|
|
—
|
|
|
3,112
|
|
|
(13,482
|
)
|
|
|
|||||||||
Common stock issuance upon close of Transaction (see Note 2)
|
15,055,619
|
|
|
151
|
|
|
—
|
|
|
114,346
|
|
|
—
|
|
|
—
|
|
|
114,497
|
|
|
1,724
|
|
|
|
|
||||||||
Restricted stock awards issued
|
2,144,138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||||
Issuance of common stock on share offering (see Note 21)
|
17,292,698
|
|
|
173
|
|
|
—
|
|
|
80,434
|
|
|
—
|
|
|
—
|
|
|
80,607
|
|
|
—
|
|
|
|
|
||||||||
Amortization of share based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
3,637
|
|
|
—
|
|
|
—
|
|
|
3,637
|
|
|
—
|
|
|
|
|
||||||||
Balance, December 31, 2009
|
74,743,163
|
|
|
726
|
|
|
—
|
|
|
483,872
|
|
|
(520
|
)
|
|
(10,553
|
)
|
|
473,525
|
|
|
230,825
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,417
|
)
|
|
(45,417
|
)
|
|
13,727
|
|
|
(31,690
|
)
|
||||||||
Defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
241
|
|
|
—
|
|
|
241
|
|
|
—
|
|
|
241
|
|
||||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299
|
|
|
—
|
|
|
299
|
|
|
—
|
|
|
299
|
|
||||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540
|
|
|
(45,417
|
)
|
|
(44,877
|
)
|
|
13,727
|
|
|
(31,150
|
)
|
||||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,062
|
|
|
|
|
||||||||
Capital withdrawals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105,869
|
)
|
|
|
|
||||||||
Consolidation of Replication Ltd (see Note 3b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|
|
|||||||||
Deconsolidation of CHRP (see Note 3b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,713
|
)
|
|
|
|
||||||||
Deconsolidation of Replication Ltd (see Note 3b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,095
|
)
|
|
|
|
||||||||
Restricted stock awards issued
|
747,046
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||||
Amortization of share based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
20,608
|
|
|
—
|
|
|
—
|
|
|
20,608
|
|
|
—
|
|
|
|
|
||||||||
Balance, December 31, 2010
|
75,490,209
|
|
|
726
|
|
|
—
|
|
|
504,480
|
|
|
20
|
|
|
(55,970
|
)
|
|
449,256
|
|
|
144,346
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(108,010
|
)
|
|
(108,010
|
)
|
|
5,827
|
|
|
(102,183
|
)
|
||||||||
Defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(260
|
)
|
|
—
|
|
|
(260
|
)
|
|
—
|
|
|
(260
|
)
|
||||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
|
(108,010
|
)
|
|
(108,245
|
)
|
|
5,827
|
|
|
(102,418
|
)
|
||||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,038
|
|
|
|
|
||||||||
Capital withdrawals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,094
|
)
|
|
|
|
||||||||
Consolidation of RCG Linkem II LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,470
|
|
|
|
|
||||||||
Restricted stock awards issued
|
3,053,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||||
Common stock issuance upon acquisition (see Note 2)
|
40,850,133
|
|
|
409
|
|
|
—
|
|
|
155,639
|
|
|
—
|
|
|
—
|
|
|
156,048
|
|
|
—
|
|
|
|
|
||||||||
Purchase of treasury stock, at cost
|
(5,346,003
|
)
|
|
—
|
|
|
(16,902
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,902
|
)
|
|
—
|
|
|
|
|
||||||||
Amortization of share based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
28,308
|
|
|
—
|
|
|
—
|
|
|
28,308
|
|
|
—
|
|
|
|
|
||||||||
Balance, December 31, 2011
|
114,047,637
|
|
|
$
|
1,135
|
|
|
$
|
(16,902
|
)
|
|
$
|
688,427
|
|
|
$
|
(215
|
)
|
|
$
|
(163,980
|
)
|
|
$
|
508,465
|
|
|
$
|
104,587
|
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations
|
$
|
(78,537
|
)
|
|
$
|
(31,690
|
)
|
|
$
|
(39,039
|
)
|
Net income (loss) from discontinued operations, net of tax
|
(23,646
|
)
|
|
—
|
|
|
—
|
|
|||
Adjustments to reconcile net income (loss) to net cash (used in) / provided by operating activities:
|
|
|
|
|
|
||||||
Bargain purchase gain
|
(22,244
|
)
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
26,864
|
|
|
11,543
|
|
|
5,761
|
|
|||
Share-based compensation
|
28,308
|
|
|
20,608
|
|
|
3,637
|
|
|||
Deferred rent obligations
|
(4,061
|
)
|
|
(8,574
|
)
|
|
(543
|
)
|
|||
Net loss on disposal of fixed assets
|
103
|
|
|
299
|
|
|
249
|
|
|||
Goodwill impairment
|
7,151
|
|
|
—
|
|
|
—
|
|
|||
Purchases of securities owned, at fair value
|
(8,953,879
|
)
|
|
(3,415,775
|
)
|
|
(84,350
|
)
|
|||
Proceeds from sales of securities owned, at fair value
|
8,726,114
|
|
|
2,943,376
|
|
|
97,299
|
|
|||
Proceeds from sales of securities sold, not yet purchased, at fair value
|
4,690,844
|
|
|
2,678,922
|
|
|
—
|
|
|||
Payments to cover securities sold, not yet purchased, at fair value
|
(4,553,832
|
)
|
|
(2,556,056
|
)
|
|
—
|
|
|||
Net (gains) losses on securities, derivatives and other investments
|
(3,164
|
)
|
|
(20,339
|
)
|
|
(1,891
|
)
|
|||
Consolidated Funds:
|
|
|
|
|
|
||||||
Purchases of securities owned, at fair value
|
(480,251
|
)
|
|
(445,913
|
)
|
|
—
|
|
|||
Proceeds from sales of securities owned, at fair value
|
482,630
|
|
|
437,147
|
|
|
—
|
|
|||
Purchases of other investments
|
(18,356
|
)
|
|
(30,583
|
)
|
|
(2,181
|
)
|
|||
Proceeds from sales of other investments
|
127,664
|
|
|
285,915
|
|
|
75,743
|
|
|||
Net realized and unrealized (gains) losses on investments and other transactions
|
(4,746
|
)
|
|
(34,316
|
)
|
|
(39,506
|
)
|
|||
(Increase) decrease in operating assets:
|
|
|
|
|
|
||||||
Cash acquired from business acquisition
|
117,496
|
|
|
—
|
|
|
97,903
|
|
|||
Cash collateral pledged
|
(25
|
)
|
|
(8,132
|
)
|
|
203
|
|
|||
Securities owned, at fair value, held at broker dealer
|
152,080
|
|
|
50,895
|
|
|
(34,133
|
)
|
|||
Receivable from brokers
|
127,645
|
|
|
(63,412
|
)
|
|
13,279
|
|
|||
Fees receivable
|
9,391
|
|
|
(9,242
|
)
|
|
1,686
|
|
|||
Due from related parties
|
3,286
|
|
|
(1,510
|
)
|
|
9,021
|
|
|||
Other assets
|
(2,286
|
)
|
|
5,040
|
|
|
(1,682
|
)
|
|||
Consolidated Funds:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
6,913
|
|
|
(4,024
|
)
|
|
(92
|
)
|
|||
Other assets
|
469
|
|
|
215
|
|
|
(645
|
)
|
|||
Increase (decrease) in operating liabilities:
|
|
|
|
|
|
||||||
Securities sold, not yet purchased, at fair value, held at broker dealer
|
(157,134
|
)
|
|
75,075
|
|
|
1,980
|
|
|||
Payable to brokers
|
46,169
|
|
|
81,838
|
|
|
(1,304
|
)
|
|||
Compensation payable
|
(12,107
|
)
|
|
(4,248
|
)
|
|
4,425
|
|
|||
Fees payable
|
(4,263
|
)
|
|
3,410
|
|
|
(2,394
|
)
|
|||
Due to related parties
|
(7,273
|
)
|
|
1,084
|
|
|
(2,446
|
)
|
|||
Accounts payable, accrued expenses and other liabilities
|
7,143
|
|
|
(14,758
|
)
|
|
9,474
|
|
|||
Consolidated Funds:
|
|
|
|
|
|
||||||
Due to related parties
|
—
|
|
|
—
|
|
|
(136
|
)
|
|||
Accounts payable, accrued expenses and other liabilities
|
(1,582
|
)
|
|
1,652
|
|
|
(20
|
)
|
|||
Net cash provided by / (used in) operating activities
|
232,884
|
|
|
(51,553
|
)
|
|
110,298
|
|
|
Year ended December 31,
|
||||||||||
(continued)
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Securities purchased under agreement to resell
|
(68,505
|
)
|
|
(97,755
|
)
|
|
—
|
|
|||
Purchases of other investments
|
(67,914
|
)
|
|
(321,914
|
)
|
|
(233
|
)
|
|||
Proceeds from sales of other investments
|
57,917
|
|
|
316,063
|
|
|
9,477
|
|
|||
Purchase of fixed assets
|
(6,539
|
)
|
|
(5,853
|
)
|
|
(399
|
)
|
|||
Net cash provided by / (used in) investing activities
|
(85,041
|
)
|
|
(109,459
|
)
|
|
8,845
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Securities sold under agreement to repurchase
|
36,618
|
|
|
192,165
|
|
|
(1,425
|
)
|
|||
Borrowings on short-term borrowings and other debt
|
493
|
|
|
8,059
|
|
|
—
|
|
|||
Repayments on short-term borrowings and other debt
|
(26,576
|
)
|
|
(25,663
|
)
|
|
(203
|
)
|
|||
Purchase of treasury stock
|
(11,365
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
—
|
|
|
—
|
|
|
80,607
|
|
|||
Purchase of non-controlling interest (see Note 2)
|
—
|
|
|
—
|
|
|
(10,370
|
)
|
|||
Capital withdrawals to members
|
—
|
|
|
—
|
|
|
(23,943
|
)
|
|||
Capital withdrawals to non-controlling interests in operating entities
|
(5,009
|
)
|
|
—
|
|
|
486
|
|
|||
Consolidated Funds:
|
|
|
|
|
|
||||||
Repayments on the line of credit
|
—
|
|
|
—
|
|
|
(10,207
|
)
|
|||
Capital contributions by non-controlling interests in Consolidated Funds
|
4,038
|
|
|
10,062
|
|
|
1,613
|
|
|||
Capital withdrawals to non-controlling interests in Consolidated Funds
|
(55,507
|
)
|
|
(134,624
|
)
|
|
(55,011
|
)
|
|||
Net cash provided by / (used in) financing activities
|
(57,308
|
)
|
|
49,999
|
|
|
(18,453
|
)
|
|||
Change in cash and cash equivalents
|
90,535
|
|
|
(111,013
|
)
|
|
100,690
|
|
|||
Cash and cash equivalents at beginning of year
|
36,354
|
|
|
147,367
|
|
|
46,677
|
|
|||
Cash and cash equivalents at end of year
|
$
|
126,889
|
|
|
$
|
36,354
|
|
|
$
|
147,367
|
|
Supplemental information
|
|
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
9,007
|
|
|
$
|
6,943
|
|
|
$
|
1,277
|
|
Cash paid during the year for taxes
|
$
|
871
|
|
|
$
|
1,310
|
|
|
$
|
—
|
|
Supplemental non-cash information
|
|
|
|
|
|
||||||
Purchase of treasury stock, at cost, upon close of acquisition (see Note 21)
|
$
|
1,906
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchase of treasury stock, at cost, through net settlement (See Note 21)
|
$
|
3,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net assets acquired upon acquisition (net of cash) (See Note 2)
|
$
|
58,486
|
|
|
$
|
—
|
|
|
$
|
11,167
|
|
Non compete agreements and covenants with limiting conditions acquired (see Note 2)
|
$
|
2,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock issuance upon close of acquisition (see Note 2)
|
$
|
156,048
|
|
|
$
|
—
|
|
|
$
|
114,497
|
|
Net assets of consolidated entities
|
$
|
3,470
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net assets of deconsolidated entities
|
$
|
—
|
|
|
$
|
6,816
|
|
|
$
|
—
|
|
Net settlement of cash collateral pledged with repayments on the line of credit
|
$
|
—
|
|
|
$
|
6,746
|
|
|
$
|
—
|
|
Assets acquired under capital lease obligations
|
$
|
—
|
|
|
$
|
6,337
|
|
|
$
|
—
|
|
Common stock issuance to acquire non-controlling interest (see Note 2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,490
|
|
Capital contributions made through REOP Program (see Note 15)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,906
|
|
|
(dollars in thousands)
|
||
Cash and cash equivalents
|
$
|
117,496
|
|
Cash collateral pledged
|
1,127
|
|
|
Securities owned, at fair value
|
221,855
|
|
|
Other investments
|
2,569
|
|
|
Receivable from brokers
|
93,754
|
|
|
Fixed assets, net
|
8,804
|
|
|
Intangibles
|
2,770
|
|
|
Other assets
|
5,137
|
|
|
Securities sold, not yet purchased, at fair value
|
(175,391
|
)
|
|
Payable to brokers
|
(81,536
|
)
|
|
Compensation payable
|
(3,521
|
)
|
|
Fees payable
|
(969
|
)
|
|
Unfavorable lease
|
(3,388
|
)
|
|
Accounts payable, accrued expenses and other liabilities
|
(12,725
|
)
|
|
Total net assets acquired
|
$
|
175,982
|
|
Non compete agreements and covenants with limiting conditions acquired
|
2,310
|
|
|
Goodwill/(Bargain purchase gain) on transaction
|
(22,244
|
)
|
|
Total purchase price
|
$
|
156,048
|
|
|
(in thousands,
except per share data)
|
|
||
Number of Cowen Holdings common shares outstanding at closing:
|
|
|
||
Common float
|
12,072
|
|
(1)
|
|
Restricted shares
|
2,785
|
|
(2)
|
|
Restricted share units
|
27
|
|
(3)
|
|
Total shares issued to Cowen Holdings stockholders
|
14,884
|
|
|
|
Estimated market price a Cowen Holdings common share
|
$
|
7.55
|
|
(4)
|
Estimated purchase price of Cowen Holdings common shares
|
$
|
112,374
|
|
|
Add: Fair value of unvested restricted shares and options issued
|
2,123
|
|
(5)
|
|
Estimated purchase price
|
$
|
114,497
|
|
|
(1)
|
Based on the trading float of Cowen Holdings's common shares on the acquisition date.
|
(2)
|
Based on Cowen Holdings's unvested restricted shares outstanding on the acquisition date. Excludes restricted shares that were not subject to accelerated vesting as a result of the Transactions.
|
(3)
|
Based on Cowen Holdings's restricted share units outstanding on the acquisition date.
|
(4)
|
The $7.55 share price used in calculating the estimated purchase consideration represents the closing share price of Cowen Holdings common stock on October 30, 2009.
|
(5)
|
In connection with the Transactions, each outstanding Cowen Holdings stock option was exchanged for one stock option of the Company. Each newly issued stock option was fully vested upon issuance, and has a strike price and expiration date equal to that of the original stock option. Cowen Holdings had 892,782 stock options outstanding as of the closing date. The fair value of Cowen Holdings's stock option awards was estimated to be $0.7 million based on a Black‑Scholes valuation model. Also included in the $2.1 million is $1.4 million related to the fair value of pre-combination service on restricted shares that were not subject to accelerated vesting as a result of the Transactions.
|
|
(dollars in thousands)
|
||
Cash and cash equivalents
|
$
|
97,903
|
|
Cash collateral pledged
|
501
|
|
|
Securities owned, at fair value
|
17,555
|
|
|
Receivable from brokers
|
19,893
|
|
|
Fees receivable
|
4,802
|
|
|
Other investments
|
17,121
|
|
|
Due from related parties
|
1,061
|
|
|
Fixed assets, net
|
8,379
|
|
|
Intangible assets, net
|
17,000
|
|
|
Other assets
|
17,535
|
|
|
Securities sold, not yet purchased, at fair value
|
(12,832
|
)
|
|
Payable to brokers
|
(1,304
|
)
|
|
Compensation payable
|
(37,592
|
)
|
|
Accounts payable, accrued expenses and other liabilities
|
(40,952
|
)
|
|
Total identifiable net assets acquired
|
109,070
|
|
|
Non-controlling interest
|
(1,724
|
)
|
|
Goodwill
|
7,151
|
|
|
Total purchase price
|
$
|
114,497
|
|
|
Year ended December 31,
|
||
|
2009
|
||
|
(in thousands, except per share data)
|
||
|
(unaudited)
|
||
Revenues
|
$
|
284,459
|
|
Net income (loss)
|
(100,759
|
)
|
|
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
(116,719
|
)
|
|
|
|
||
Net income (loss) per common share:
|
|
||
Basic
|
$
|
(2.12
|
)
|
Diluted
|
(2.12
|
)
|
a.
|
Basis of presentation
|
b.
|
Principles of consolidation
|
c.
|
Use of estimates
|
d.
|
Cash and cash equivalents
|
e.
|
Valuation of investments and derivative contracts
|
i.
|
Portfolio funds—
Portfolio funds (“Portfolio Funds”) include interests in funds and investment companies managed by the Company or its affiliates. The Company follows US GAAP regarding fair value measurements and disclosures relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). The guidance permits, as a practical expedient, an entity holding investments in certain entities that either are investment companies as defined by the AICPA Audit and Accounting Guide, Investment Companies, or have attributes similar to an investment company, and calculate net asset value per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment.
|
ii.
|
Real estate investments—
Real estate investments are valued at estimated fair value. The fair value of real estate investments are estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Real estate investments without a public market are valued based on assumptions and valuation techniques used by the Company. Such valuation techniques may include discounted cash flow analysis, prevailing market capitalization rates or earning multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties, consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence, as well as independent external appraisals. In general, the Company considers several valuation techniques when measuring the fair value of a real estate investment. However, in certain circumstances, a single valuation technique may be appropriate. Real estate investments are reviewed on a quarterly basis by the Company for
|
f.
|
Due from/due to related parties
|
g.
|
Receivable from and payable to brokers
|
h.
|
Securities purchased under agreements to resell and securities sold under agreements to repurchase
|
i.
|
Fixed assets
|
|
|
|
|
Asset
|
Depreciable Lives
|
|
Principal Method
|
Telephone and computer equipment
|
3-5 years
|
|
Straight-line
|
Computer software
|
3-5 years
|
|
Straight-line
|
Furniture and fixtures
|
3-8 years
|
|
Straight-line
|
Leasehold improvements
|
1-11 years
|
|
Straight-line
|
Capitalized lease asset
|
5 years
|
|
Straight-line
|
j.
|
Goodwill and intangible assets
|
k.
|
Deferred Rent
|
m.
|
Capital withdrawals payable
|
n.
|
Redeemable non-controlling interests in consolidated subsidiaries
|
o.
|
Treasury stock
|
p.
|
Comprehensive Income (Loss)
|
q.
|
Revenue recognition
|
•
|
Hedge Funds
.
Management fees for the Company's hedge funds are generally charged at an annual rate of up to 2% of assets under management. Management fees are generally calculated monthly based on assets under management at the end of each month before incentive income.
|
•
|
Alternative Solutions.
Management fees for the Alternative Solutions business are generally charged at an annual rate of up to 2% of assets under management. Management fees are generally calculated monthly based on assets under management at the end of each month before incentive income or based on assets under management at the beginning of the month. Management fees earned from the Alternative Solutions business are based and initially calculated on estimated net asset values and actual fees ultimately earned could be impacted to the extent of any changes in these estimates.
|
•
|
Real Estate Funds.
Management fees from the Company's real estate funds are generally charged by their general partners at an annual rate between 1% to 1.5% of total capital commitments during the investment period and of invested capital or net asset value of the applicable fund after the investment period has ended. Management fees are typically paid to the general partners on a quarterly basis, at the beginning of the quarter in arrears, and are prorated for changes in capital commitments throughout the investment period and invested capital after the investment period. The general partners of the Company's real estate funds are owned jointly by the Company and third parties. Accordingly, the management fees (in addition to incentive income and investment income) generated by these real estate funds are split between the Company and the other general partners. Pursuant to US GAAP, these fees and other income received by the general partners that are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the consolidated statements of operations.
|
•
|
CHRP Funds.
During the investment period (as defined in the management agreement of the CHRP Funds), management fees for the CHRP Funds are generally charged at an annual rate of up to 2% of committed capital. After the investment period, management fees are generally charged at an annual rate of up to 2% of assets under management. Management fees for the CHRP Funds are calculated on a quarterly basis.
|
•
|
Ramius Trading Strategies.
Management fees and platform fees for the Company's private commodity trading advisory business are generally charged at an annual rate of up to 3% and 1.50%, respectively, for the levered vehicle and 1% and 0.50%, respectively, for the unlevered vehicle. In addition, management fees for Ramius Trading Strategies Managed Futures Fund, a mutual fund launched in September 2011, are 1.60% per annum (subject to an overall expense cap of 1.85%). Management and platform fees are generally calculated monthly based on assets under management at the end of each month.
|
•
|
Other.
The Company also provides other investment advisory services. Other management fees are primarily earned from the Company's cash management business and range from annual rates of 0.04% to 0.20% of assets, based on the average daily balances of the assets under management.
|
•
|
Underwriting fees
.
The Company earns underwriting revenues in securities offerings in which the Company acts as an underwriter, such as initial public offerings, follow-on equity offerings, debt offerings, and convertible security offerings. Underwriting revenues include management fees, selling concessions and underwriting fees. Fee revenue relating to underwriting commitments is recorded when all significant items relating to the underwriting process have been completed and the amount of the underwriting revenue has been determined. This generally is the point at which all of the following have occurred: (i) the issuer's registration statement has become effective with the SEC, or the other offering documents are finalized; (ii) the Company has made a firm commitment for the purchase of securities from the issuer; and (iii) the Company has been informed of the number of securities that it has been allotted.
|
•
|
Strategic/financial advisory fees.
The Company's strategic advisory revenues include success fees earned in connection with advising companies, principally in mergers and acquisitions and liability management transactions. The Company also earns fees for related advisory work such as providing fairness opinions. The Company records strategic advisory revenues when the services for the transactions are completed under the terms of each assignment or engagement and collection is reasonably assured. Expenses associated with such transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded.
|
•
|
Private placement fees
.
The Company earns agency placement fees in non-underwritten transactions such as private placements of debt and equity securities, including, private investment in public equity transactions (“PIPEs”) and registered direct offerings. The Company records private placement revenues when the services for the transactions are completed under the terms of each assignment or engagement and collection is reasonably assured. Expenses associated with such transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded.
|
•
|
Commissions.
Commission revenue includes fees from executing client transactions. These fees are recognized on a trade date basis. The Company permits institutional customers to allocate a portion of their commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. Commissions on soft dollar brokerage are recorded net of the related expenditures on an accrual basis. During the years ended December 31, 2011, 2010 and 2009, the Company earned $66.0 million, $69.3 million and $9.3 million of revenues from commissions, respectively.
|
•
|
Principal transactions, net.
Principal transaction, net revenue includes net trading gains and losses from the Company's market-making activities in fixed income and over-the-counter equity securities, listed options trading, trading of convertible securities, and trading gains and losses on inventory and other firm positions, which include warrants previously received as part of investment banking transactions. Commissions associated with these transactions are also included herein. In certain cases, the Company provides liquidity to clients buying or selling blocks of shares of listed stocks without previously identifying the other side of the trade at execution, which subjects the Company to market risk. These positions are typically held for a very short duration. During the years ended December 31, 2011, 2010 and 2009, the Company earned $27.1 million, $36.1 million and $7.0 million of revenues from principal transactions, net, respectively.
|
•
|
Equity research fees.
Equity research fees are paid to the Company for providing equity research. Revenue is recognized once an arrangement exists, access to research has been provided, the fee amount is fixed or determinable, and collection is reasonably assured. During the years ended December 31, 2011, 2010 and 2009, the Company earned $6.5 million, $6.8 million and $1.5 million of revenues from equity research fees, respectively.
|
r.
|
Investments transactions and related income/expenses
|
s.
|
Share-based compensation
|
t.
|
Employee benefit plans
|
u.
|
Leases
|
v.
|
Income taxes
|
w.
|
Foreign currency transactions
|
x.
|
Recently adopted accounting pronouncements
|
|
For the Period June 28, 2011 through December 31, 2011
|
||
|
(dollars in thousands)
|
||
Total revenues, net of interest expense
|
$
|
2,899
|
|
Loss from discontinued operations
|
(24,075
|
)
|
|
Income tax expense/(benefit)
|
(429
|
)
|
|
Loss from discontinued operations, net of taxes
|
(23,646
|
)
|
a.
|
Operating Entities
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
U.S. Government securities(a)
|
$
|
182,868
|
|
|
$
|
143,247
|
|
Common stocks
|
250,380
|
|
|
116,215
|
|
||
Restricted common stock
|
—
|
|
|
5,000
|
|
||
Convertible bonds (b)
|
18,130
|
|
|
—
|
|
||
Corporate bonds (c)
|
231,864
|
|
|
191,702
|
|
||
Options
|
55,768
|
|
|
14,349
|
|
||
Warrants and rights
|
2,690
|
|
|
2,334
|
|
||
Mutual funds
|
3,214
|
|
|
1,248
|
|
||
|
$
|
744,914
|
|
|
$
|
474,095
|
|
(a)
|
As of
December 31, 2011
, maturities ranged from November 2013 to November 2021 and interest rates ranged between 0.25% and 8%. As of
December 31, 2010
, maturities ranged from November 2019 to February 2026 and interest rates ranged between 3.38% and 8%.
|
(b)
|
As of
December 31, 2011
, the maturity was August 2027 with an interest rate of 2.75%.
|
(c)
|
As of
December 31, 2011
, maturities ranged from January 2012 to February 2041 and interest rates ranged between 3.13% and 13.50%. As of
December 31, 2010
, maturities ranged from May 2011 to August 2039 and interest rates ranged between 1.4% and 13%.
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
(1) Portfolio Funds, at fair value
|
$
|
42,336
|
|
|
$
|
29,391
|
|
(2) Real estate investments, at fair value
|
2,353
|
|
|
1,882
|
|
||
(3) Equity method investments
|
16,687
|
|
|
8,734
|
|
||
(4) Lehman claims, at fair value
|
553
|
|
|
313
|
|
||
|
$
|
61,929
|
|
|
$
|
40,320
|
|
(1)
|
Portfolio Funds, at fair value
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Cowen Healthcare Royalty Partners (a)(*)
|
$
|
6,297
|
|
|
$
|
14,769
|
|
Cowen Healthcare Royalty Partners II (a)(*)
|
1,521
|
|
|
143
|
|
||
Ramius Global Credit Fund LP (b)(*)
|
11,790
|
|
|
11,733
|
|
||
Ramius Alternative Replication Ltd (c)(*)
|
837
|
|
|
866
|
|
||
Tapestry Investment Co PCC Ltd (d)
|
185
|
|
|
565
|
|
||
Ramius Enhanced Replication Fund LLC (e)(*)
|
337
|
|
|
—
|
|
||
Starboard Value and Opportunity Fund LP (f)(*)
|
11,123
|
|
|
—
|
|
||
Other private investment (g)
|
7,415
|
|
|
—
|
|
||
Vreeland Partners II, L.P. (h)
|
1,986
|
|
|
—
|
|
||
Other affiliated funds (i)(*)
|
845
|
|
|
1,315
|
|
||
|
$
|
42,336
|
|
|
$
|
29,391
|
|
*
|
These portfolio funds are affiliates of the Company
|
(a)
|
Cowen Healthcare Royalty Partners and Cowen Healthcare Royalty Partners II are private equity funds and therefore redemptions will be made when the underlying investments are liquidated.
|
(b)
|
Ramius Global Credit Fund LP has a quarterly redemption policy with 60 day notice period and a 4% penalty on redemptions of investments of less than a year in duration.
|
(c)
|
Ramius Alternative Replication Ltd has monthly redemption policy with a seven day notice period.
|
(d)
|
Tapestry Investment Company PCC Ltd is in the process of liquidation and redemptions will be made periodically by the investment managers' decision as the underlying investments are liquidated.
|
(e)
|
Ramius Enhanced Replication Fund LLC has monthly redemption policy with a seven day notice period.
|
(f)
|
Starboard Value and Opportunity Fund LP permits quarterly withdrawals upon ninety days notice.
|
(g)
|
Other private investment represents the Company's closed end investment in an investment company, which was formed to make an investment in a wireless broadband communication provider in Italy.
|
(h)
|
Vreeland Partners II, L.P. is a wholly owned externally managed fund that seeks to provide financing to public companies for short term duration. The Company can redeem from this fund as positions are sold on an average of 30 days or less notice.
|
(i)
|
The majority of these funds are real estate fund affiliates of the Company or are managed by the Company and the investors can redeem from these funds as investments are liquidated.
|
(2)
|
Real estate investments, at fair value
|
(3)
|
Equity method investments
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
RCG Longview Debt Fund IV Management, LLC
|
$
|
1,980
|
|
|
$
|
2,009
|
|
Cowen Healthcare Royalty GP, LLC
|
513
|
|
1,176
|
||||
Cowen Healthcare Royalty GP II, LLC
|
258
|
|
8
|
||||
Chicago Board Options Exchange
|
2,423
|
|
0
|
||||
Starboard Value LP
|
3,693
|
|
0
|
||||
RCG Longview Partners, LLC
|
1,569
|
|
2,203
|
||||
RCG Longview Louisiana Manager, LLC
|
1,140
|
|
186
|
||||
RCG Urban American, LLC
|
1,258
|
|
889
|
||||
RCG Urban American Management, LLC
|
1,096
|
|
359
|
||||
RCG Longview Equity Management, LLC
|
557
|
|
499
|
||||
Urban American Real Estate Fund II, L.P.
|
1,541
|
|
833
|
||||
RCG Kennedy House, LLC
|
323
|
|
259
|
||||
Other
|
336
|
|
313
|
||||
|
$
|
16,687
|
|
|
$
|
8,734
|
|
(4)
|
Lehman Claims, at fair value
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
U.S. Government securities(a)
|
$
|
165,197
|
|
|
$
|
100,559
|
|
Common stocks
|
123,877
|
|
|
88,580
|
|
||
Corporate bonds(b)
|
1,529
|
|
|
2,615
|
|
||
Options
|
43,648
|
|
|
6,162
|
|
||
|
$
|
334,251
|
|
|
$
|
197,916
|
|
(a)
|
As of
December 31, 2011
, maturities ranged from September 2013 to January 2040 and interest rates ranged between 0.13% and 7.41%. As of
December 31, 2010
, maturities ranged from December 2015 to August 2026 and interest rates ranged between 2.13% and 6.75%.
|
(b)
|
As of
December 31, 2011
, maturities ranged from December 2016 to January 2026 and interest rates ranged between 5.55% and 9.50%. As of
December 31, 2010
, maturities ranged from June 2013 to December 2025 and interest rates ranged between 2.25% and 3.75%.
|
|
As of December 31, 2011
|
||
|
(dollars in thousands)
|
||
Securities purchased under agreements to resell
|
|
||
Agreements with Barclays Capital Inc bearing interest of (0.38%) - 0.25% due on January 3, 2012
|
$
|
166,260
|
|
Securities sold under agreements to repurchase
|
|
||
Agreements with Royal Bank of Canada bearing interest of 1.53% - 1.58% due on January 3, 2012 to June 25, 2012
|
49,450
|
|
|
Agreements with Barclays Capital Inc bearing interest of 0.03% - 0.08% due on January 3, 2012
|
179,333
|
|
|
|
$
|
228,783
|
|
|
As of December 31, 2010
|
||
|
(dollars in thousands)
|
||
Securities purchased under agreements to resell
|
|
||
Agreements with Barclays Capital Inc bearing interest of 0.07% - 0.14% due on January 3, 2011
|
$
|
97,755
|
|
Securities sold under agreements to repurchase
|
|
||
Agreements with Royal Bank of Canada bearing interest of 1.42% due on February 22, 2011 to September 1, 2011
|
48,532
|
|
|
Agreements with Barclays Capital Inc bearing interest of 0.18% - 1.50% due on January 7, 2011 to June 6, 2011
|
143,633
|
|
|
|
$
|
192,165
|
|
b.
|
Consolidated Funds
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Government sponsored securities (a)
|
$
|
2,006
|
|
|
$
|
7,682
|
|
Commercial paper (b)
|
3,927
|
|
|
—
|
|
||
Corporate bond (c)
|
401
|
|
|
1,040
|
|
||
|
$
|
6,334
|
|
|
$
|
8,722
|
|
(a)
|
As of
December 31, 2011
, maturities ranged from October 2012 to October 2013 and interest rates ranged between 0.32% and 1.74%. As of
December 31, 2010
, maturities ranged from January 2011 to December 2012 and interest rates ranged between 0.35% and 4.88%.
|
(b)
|
Commercial paper was purchased at a discount and matures on January 3, 2012.
|
(c)
|
As of
December 31, 2011
, the maturity was April 2012 with an interest rate of 0.58%. As of
December 31, 2010
, the maturity was January 2011 with an interest rate of 0.42%.
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
(1) Portfolio Funds
|
$
|
221,480
|
|
|
$
|
327,131
|
|
(2) Lehman claims
|
7,340
|
|
|
6,243
|
|
||
|
$
|
228,820
|
|
|
$
|
333,374
|
|
(1)
|
Investments in Portfolio Funds, at fair value
|
|
As of December 31,
|
||||||
Description
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Investments of Enterprise LP
|
$
|
193,012
|
|
|
$
|
257,246
|
|
Investments of consolidated fund of funds
|
28,468
|
|
|
69,885
|
|
||
|
$
|
221,480
|
|
|
$
|
327,131
|
|
|
|
|
As of December 31, 2011
|
|
||||||||||||||||||
|
|
|
Ramius Levered Multi-Strategy FOF LP
|
|
Ramius Multi-Strategy FOF LP
|
|
Ramius Vintage Multi-Strategy FOF LP
|
|
RTS Global 3X Fund LP
|
|
Total
|
|
||||||||||
Description
|
Strategy
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
||||||||||
|
|
|
|
|
(dollars in thousands)
|
|
|
|
||||||||||||||
Ramius Multi-Strategy Master FOF LP*
|
Multi-Strategy
|
|
$
|
—
|
|
|
$
|
8,269
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,269
|
|
(a)
|
Ramius Vintage Multi-Strategy Master FOF LP*
|
Multi-Strategy
|
|
—
|
|
|
—
|
|
|
8,883
|
|
|
—
|
|
|
8,883
|
|
(a)
|
|||||
Tapestry Pooled Account V LLC*
|
Credit-Based
|
|
438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438
|
|
(b)
|
|||||
Independently Advised Portfolio Funds*
|
Futures & Global Macro
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,078
|
|
|
8,078
|
|
(c)
|
|||||
Externally Managed Portfolio Funds
|
Credit-Based
|
|
260
|
|
|
—
|
|
|
—
|
|
|
|
|
|
260
|
|
(b)
|
|||||
Externally Managed Portfolio Funds
|
Event Driven
|
|
1,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,992
|
|
(d)
|
|||||
Externally Managed Portfolio Funds
|
Hedged Equity
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
(e)
|
|||||
Externally Managed Portfolio Funds
|
Multi-Strategy
|
|
459
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
459
|
|
(f)
|
|||||
Externally Managed Portfolio Funds
|
Fixed Income Arbitrage
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
(g)
|
|||||
|
|
|
$
|
3,238
|
|
|
$
|
8,269
|
|
|
$
|
8,883
|
|
|
$
|
8,078
|
|
|
$
|
28,468
|
|
|
|
|
|
As of December 31, 2010
|
|
||||||||||||||||||
|
|
|
Ramius Levered Multi-Strategy FOF LP
|
|
Ramius Multi-Strategy FOF LP
|
|
Ramius Vintage Multi-Strategy FOF LP
|
|
RTS Global 3X Fund LP
|
|
Total
|
|
||||||||||
Description
|
Strategy
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
||||||||||
|
|
|
|
|
(dollars in thousands)
|
|
|
|
||||||||||||||
Ramius Multi-Strategy Master FOF LP*
|
Multi-Strategy
|
|
$
|
—
|
|
|
$
|
28,633
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,633
|
|
(a)
|
Ramius Vintage Multi-Strategy Master FOF LP*
|
Multi-Strategy
|
|
—
|
|
|
—
|
|
|
20,722
|
|
|
—
|
|
|
20,722
|
|
(a)
|
|||||
Tapestry Pooled Account V LLC*
|
Credit-Based
|
|
687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
687
|
|
(b)
|
|||||
Independently Advised Portfolio Funds*
|
Futures & Global Macro
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,889
|
|
|
15,889
|
|
(c)
|
|||||
Externally Managed Portfolio Funds
|
Credit-Based
|
|
522
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
(b)
|
|||||
Externally Managed Portfolio Funds
|
Event Driven
|
|
2,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,800
|
|
(d)
|
|||||
Externally Managed Portfolio Funds
|
Hedged Equity
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
(e)
|
|||||
Externally Managed Portfolio Funds
|
Multi-Strategy
|
|
535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
535
|
|
(f)
|
|||||
Externally Managed Portfolio Funds
|
Fixed Income Arbitrage
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
(g)
|
|||||
|
|
|
$
|
4,641
|
|
|
$
|
28,633
|
|
|
$
|
20,722
|
|
|
$
|
15,889
|
|
|
$
|
69,885
|
|
|
(a)
|
Investments held in affiliated master funds can be redeemed on a monthly basis with no advance notice.
|
(b)
|
The Credit‑Based strategy aims to generate returns via positions in the credit sensitive sphere of the fixed income
|
(c)
|
The Futures and Global Macro strategy is comprised of several portfolio accounts, each of which will be advised independently by a commodity trading advisor implementing primarily managed futures or global macro‑based investment strategies. The trading advisors (through their respective portfolio accounts) will trade independently of each other and, as a group, will employ a wide variety of systematic, relative value and discretionary trading programs in the global currency, fixed income, commodities and equity futures markets. In implementing their trading programs, the trading advisors will trade primarily in the futures and forward markets (as well as in related options). Although certain trading advisors may be permitted to use total return swaps and trade other financial instruments from time to time on an interim basis, the primary focus will be on the futures and forward markets. Redemption frequency of these portfolio accounts are monthly (and intra‑monthly for a $10,000 fee) and the notification period for redemptions is 5 business days (or 3 business days for intra‑month).
|
(d)
|
The Event Driven strategy is generally implemented through various combinations and permutations of merger arbitrage, restructuring and distressed instruments. Approximately 0.6% (as of
December 31, 2011
) and 3% (as of
December 31, 2010
) of the investments in this category represent investments in a fund that is in the process of liquidating. Distributions from this fund will be received as underlying investments are liquidated. The remaining amount of the investments in this category is in a side pocket or suspended with undetermined payout dates.
|
(e)
|
The Hedged Equity strategy focuses on equity strategies with some directional market exposure. The strategy attempts to profit from market efficiencies and direction. The investee fund manager has side-pocketed investments.
|
(f)
|
The Multi‑Strategy investment objective is to invest discrete pools of its capital among portfolio managers that invest through investment funds, forming multi‑strategy, diversified investment portfolios designed to achieve non-market directional returns with low relative volatility. The investments in this category represent investments in a fund that is in the process of liquidating. Distributions from this fund will be received as underlying investments are liquidated.
|
(g)
|
The Fixed Income Arbitrage strategy seeks to achieve long term capital appreciation by employing a variety of strategies to generate returns without significant exposure to credit spread, interest rate changes or duration. As of
December 31, 2011
, the investment manager has gated investments.
|
(2)
|
Lehman Claims, at fair value
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Consolidated Funds net gains (losses) on investments and other transactions:
|
|
|
|
|
|
||||||
Net realized gains (losses) on investments and other transactions
|
$
|
4,959
|
|
|
$
|
16,696
|
|
|
$
|
(8,561
|
)
|
Net unrealized gains (losses) on investments and other transactions
|
(34
|
)
|
|
16,420
|
|
|
64,469
|
|
|||
Consolidated Funds net gains (losses) on derivatives:
|
|
|
|
|
|
||||||
Net realized gains (losses) on derivatives
|
$
|
(651
|
)
|
|
$
|
(1,892
|
)
|
|
$
|
(26,517
|
)
|
Net unrealized gains (losses) on derivatives
|
68
|
|
|
1,131
|
|
|
(5,233
|
)
|
|
December 31, 2011
|
|
December 31, 2010
|
||||||||||||
Description
|
Securities
owned |
|
Securities
sold, but not yet purchased |
|
Securities
owned |
|
Securities
sold, but not yet purchased |
||||||||
|
(dollars in thousands)
|
||||||||||||||
Common stock
|
$
|
2,173
|
|
|
$
|
—
|
|
|
$
|
10,123
|
|
|
$
|
—
|
|
Corporate bonds
|
—
|
|
|
—
|
|
|
1,997
|
|
|
—
|
|
||||
Over-the-counter foreign currency call option
|
—
|
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
||||
Preferred stock
|
1,027
|
|
|
—
|
|
|
410
|
|
|
—
|
|
||||
Private debt
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
||||
Private equity
|
276
|
|
|
—
|
|
|
173
|
|
|
—
|
|
||||
Restricted stock
|
47
|
|
|
—
|
|
|
3,148
|
|
|
—
|
|
||||
Rights
|
2,173
|
|
|
—
|
|
|
2,115
|
|
|
—
|
|
||||
Trade claims
|
128
|
|
|
—
|
|
|
128
|
|
|
—
|
|
||||
Warrants
|
3
|
|
|
—
|
|
|
55
|
|
|
—
|
|
||||
|
$
|
5,827
|
|
|
$
|
—
|
|
|
$
|
18,208
|
|
|
$
|
(63
|
)
|
|
|
|
As of December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
Description
|
Strategy
|
|
Fair Value
|
||||||
|
|
|
(dollars in thousands)
|
||||||
624 Art Holdings, LLC*
|
Artwork
|
|
$
|
38
|
|
|
$
|
98
|
|
Q Capital Strategies, LLC*
|
Life Settlements
|
|
—
|
|
|
111
|
|
||
RCG Longview Equity Fund, LP*
|
Real Estate
|
|
14,460
|
|
|
10,120
|
|
||
RCG Longview II, LP*
|
Real Estate
|
|
1,592
|
|
|
1,835
|
|
||
RCG Longview Debt Fund IV, LP*
|
Real Estate
|
|
23,594
|
|
|
12,628
|
|
||
RCG Longview, LP*
|
Real Estate
|
|
271
|
|
|
383
|
|
||
RCG Soundview, LLC*
|
Real Estate
|
|
2,748
|
|
|
2,542
|
|
||
RCG Urban American Real Estate Fund, L.P.*
|
Real Estate
|
|
3,142
|
|
|
3,207
|
|
||
RCG International Sarl*
|
Multi-Strategy
|
|
870
|
|
|
9,463
|
|
||
Ramius Navigation Fund Ltd*
|
Multi-Strategy
|
|
1,106
|
|
|
24,972
|
|
||
RCG Special Opportunities Fund, Ltd*
|
Multi-Strategy
|
|
97,144
|
|
|
97,845
|
|
||
Ramius Credit Opportunities Fund Ltd*
|
Distressed
|
|
121
|
|
|
300
|
|
||
RCG Endeavour, LLC*
|
Multi-Strategy
|
|
47
|
|
|
87
|
|
||
RCG Energy, LLC *
|
Energy
|
|
16,560
|
|
|
18,850
|
|
||
RCG Renergys, LLC*
|
Energy
|
|
2
|
|
|
2
|
|
||
Other Private Investments
|
Various
|
|
16,580
|
|
|
15,189
|
|
||
Real Estate Investments
|
Real Estate
|
|
15,795
|
|
|
25,662
|
|
||
|
|
|
$
|
194,070
|
|
|
$
|
223,294
|
|
|
|
|
|
|
|
*
|
These Portfolio Funds are affiliates of the Company.
|
|
|
|
December 31, 2011
|
|
December 31, 2010
|
||||||||||||
Description
|
Strategy
|
|
Ramius
Multi-Strategy Master FOF LP |
|
Ramius Vintage
Multi-Strategy Master FOF LP |
|
Ramius
Multi-Strategy Master FOF LP |
|
Ramius Vintage
Multi-Strategy Master FOF LP |
||||||||
|
|
|
(dollars in thousands)
|
||||||||||||||
Ramius Vintage Multi-Strategy Master FOF LP*
|
Multi Strategy
|
|
$
|
552
|
|
|
$
|
—
|
|
|
$
|
1,354
|
|
|
$
|
—
|
|
Tapestry Pooled Account II, LLC*
|
Hedged Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,544
|
|
||||
Tapestry Pooled Account V, LLC*
|
Credit-Based
|
|
901
|
|
|
962
|
|
|
1,416
|
|
|
1,512
|
|
||||
Externally Managed Funds
|
Credit-Based
|
|
40
|
|
|
399
|
|
|
6,653
|
|
|
803
|
|
||||
Externally Managed Funds
|
Event Driven
|
|
3,015
|
|
|
5,044
|
|
|
6,491
|
|
|
6,802
|
|
||||
Externally Managed Funds
|
Fixed Income Arbitrage
|
|
79
|
|
|
—
|
|
|
83
|
|
|
—
|
|
||||
Externally Managed Funds
|
Hedged Equity
|
|
1,272
|
|
|
1,753
|
|
|
4,386
|
|
|
3,055
|
|
||||
Externally Managed Funds
|
Multi Strategy
|
|
1,319
|
|
|
1,442
|
|
|
7,785
|
|
|
4,292
|
|
||||
Externally Managed Funds
|
Global Macro
|
|
—
|
|
|
—
|
|
|
2,053
|
|
|
679
|
|
||||
Externally Managed Funds
|
Opportunistic Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,677
|
|
||||
Externally Managed Funds
|
Managed Futures
|
|
—
|
|
|
—
|
|
|
2,430
|
|
|
—
|
|
||||
|
|
|
$
|
7,178
|
|
|
$
|
9,600
|
|
|
$
|
32,651
|
|
|
$
|
22,364
|
|
*
|
These Portfolio Funds are affiliates of the Company.
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Bond futures
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Commodity options
|
181
|
|
|
(39
|
)
|
||
Currency options
|
487
|
|
|
347
|
|
||
Commodity forwards
|
51
|
|
|
32
|
|
||
Commodity futures
|
756
|
|
|
970
|
|
||
Currency forwards
|
157
|
|
|
(63
|
)
|
||
Currency futures
|
418
|
|
|
1,073
|
|
||
Energy futures
|
2
|
|
|
(2
|
)
|
||
Foreign currency option
|
358
|
|
|
1
|
|
||
Index options
|
80
|
|
|
86
|
|
||
Index futures
|
80
|
|
|
45
|
|
||
Interest rate futures
|
20
|
|
|
(10
|
)
|
||
Interest rate options
|
(25
|
)
|
|
5
|
|
||
|
$
|
2,563
|
|
|
$
|
2,443
|
|
|
Assets at Fair Value as of December 31, 2011
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
(dollars in thousands)
|
|
|
||||||||||
Securities owned and derivatives
|
|
|
|
|
|
|
|
||||||||
US Government securities
|
$
|
182,868
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
182,868
|
|
Common stocks
|
248,598
|
|
|
713
|
|
|
1,069
|
|
|
250,380
|
|
||||
Convertible bonds
|
—
|
|
|
18,130
|
|
|
—
|
|
|
18,130
|
|
||||
Corporate bonds
|
—
|
|
|
231,864
|
|
|
—
|
|
|
231,864
|
|
||||
Futures
|
172
|
|
|
—
|
|
|
—
|
|
|
172
|
|
||||
Equity swaps
|
—
|
|
|
635
|
|
|
—
|
|
|
635
|
|
||||
Options
|
55,530
|
|
|
169
|
|
|
69
|
|
|
55,768
|
|
||||
Warrants and rights
|
1,225
|
|
|
—
|
|
|
1,465
|
|
|
2,690
|
|
||||
Mutual funds
|
3,214
|
|
|
—
|
|
|
—
|
|
|
3,214
|
|
||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|||||
Portfolio Funds
|
—
|
|
|
23,431
|
|
|
18,905
|
|
|
42,336
|
|
||||
Real estate investments
|
—
|
|
|
—
|
|
|
2,353
|
|
|
2,353
|
|
||||
Lehman claim
|
—
|
|
|
—
|
|
|
553
|
|
|
553
|
|
||||
|
$
|
491,607
|
|
|
$
|
274,942
|
|
|
$
|
24,414
|
|
|
$
|
790,963
|
|
|
Liabilities at Fair Value as of December 31, 2011
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Securities sold, not yet purchased and derivatives
|
|
|
|
|
|
|
|
||||||||
US Government securities
|
$
|
165,197
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
165,197
|
|
Common stocks
|
123,875
|
|
|
2
|
|
|
—
|
|
|
123,877
|
|
||||
Corporate bonds
|
—
|
|
|
1,529
|
|
|
—
|
|
|
1,529
|
|
||||
Futures
|
617
|
|
|
—
|
|
|
—
|
|
|
617
|
|
||||
Equity swaps—short exposure
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
||||
Options
|
43,648
|
|
|
—
|
|
|
—
|
|
|
43,648
|
|
||||
|
$
|
333,337
|
|
|
$
|
1,671
|
|
|
$
|
—
|
|
|
$
|
335,008
|
|
|
Assets at Fair Value as of December 31, 2010
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
(dollars in thousands)
|
|
|
||||||||||
Securities owned and derivatives
|
|
|
|
|
|
|
|
||||||||
US Government securities
|
$
|
143,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
143,247
|
|
Common stocks
|
115,875
|
|
|
6
|
|
|
334
|
|
|
116,215
|
|
||||
Restricted common stock
|
—
|
|
|
—
|
|
|
5,000
|
|
|
5,000
|
|
||||
Corporate bonds
|
—
|
|
|
191,702
|
|
|
—
|
|
|
191,702
|
|
||||
Futures
|
442
|
|
|
—
|
|
|
—
|
|
|
442
|
|
||||
Options
|
14,234
|
|
|
115
|
|
|
—
|
|
|
14,349
|
|
||||
Warrants and rights
|
357
|
|
|
—
|
|
|
1,977
|
|
|
2,334
|
|
||||
Mutual funds
|
1,248
|
|
|
—
|
|
|
—
|
|
|
1,248
|
|
||||
Other investments
|
|
|
|
|
|
|
|
||||||||
Portfolio Funds
|
566
|
|
|
11,744
|
|
|
17,081
|
|
|
29,391
|
|
||||
Real estate investments
|
—
|
|
|
—
|
|
|
1,882
|
|
|
1,882
|
|
||||
Lehman claim
|
—
|
|
|
—
|
|
|
313
|
|
|
313
|
|
||||
|
$
|
275,969
|
|
|
$
|
203,567
|
|
|
$
|
26,587
|
|
|
$
|
506,123
|
|
|
Liabilities at Fair Value as of December 31, 2010
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Securities sold, not yet purchased and derivatives
|
|
|
|
|
|
|
|
||||||||
US Government securities
|
$
|
100,559
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100,559
|
|
Common stocks
|
88,580
|
|
|
—
|
|
|
—
|
|
|
88,580
|
|
||||
Corporate bonds
|
—
|
|
|
2,615
|
|
|
—
|
|
|
2,615
|
|
||||
Equity swaps—short exposure
|
—
|
|
|
245
|
|
|
—
|
|
|
245
|
|
||||
Futures
|
334
|
|
|
—
|
|
|
—
|
|
|
334
|
|
||||
Options
|
6,162
|
|
|
—
|
|
|
—
|
|
|
6,162
|
|
||||
|
$
|
195,635
|
|
|
$
|
2,860
|
|
|
$
|
—
|
|
|
$
|
198,495
|
|
|
Assets at Fair Value as of December 31, 2011
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
(dollars in thousands)
|
|
|
||||||||||
Securities owned
|
|
|
|
|
|
|
|
||||||||
US Government securities
|
$
|
2,006
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,006
|
|
Commercial paper
|
—
|
|
|
3,927
|
|
|
—
|
|
|
3,927
|
|
||||
Corporate bonds
|
—
|
|
|
401
|
|
|
—
|
|
|
401
|
|
||||
Other investments
|
|
|
|
|
|
|
|
||||||||
Portfolio Funds
|
—
|
|
|
8,078
|
|
|
213,402
|
|
|
221,480
|
|
||||
Lehman claims
|
—
|
|
|
—
|
|
|
7,340
|
|
|
7,340
|
|
||||
|
$
|
2,006
|
|
|
$
|
12,406
|
|
|
$
|
220,742
|
|
|
$
|
235,154
|
|
|
Assets at Fair Value as of December 31, 2010
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
(dollars in thousands)
|
|
|
||||||||||
Securities owned
|
|
|
|
|
|
|
|
||||||||
US Government securities
|
$
|
7,682
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,682
|
|
Corporate bonds
|
—
|
|
|
1,040
|
|
|
—
|
|
|
1,040
|
|
||||
Other investments
|
|
|
|
|
|
|
|
||||||||
Portfolio Funds
|
—
|
|
|
15,889
|
|
|
311,242
|
|
|
327,131
|
|
||||
Lehman claims
|
—
|
|
|
—
|
|
|
6,243
|
|
|
6,243
|
|
||||
|
$
|
7,682
|
|
|
$
|
16,929
|
|
|
$
|
317,485
|
|
|
$
|
342,096
|
|
|
Operating Entities
|
|
Consolidated Funds
|
||||||||||||||||||||||||||||||||||||||||||
|
Common
stocks |
|
Common stocks, sold not yet purchased
|
|
Restricted
Common Stock |
|
Corporate
Bonds |
|
Options
|
|
Warrants
and Rights |
|
Portfolio
Funds |
|
|
Real
estate |
|
Lehman
claim |
|
Portfolio
Funds |
|
|
Lehman
claim |
||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2009
|
$
|
334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,370
|
|
|
|
$
|
1,077
|
|
|
$
|
209
|
|
|
$
|
97,366
|
|
|
|
$
|
3,881
|
|
Transfers in
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,356
|
|
(a)
|
855
|
|
(b)
|
|
—
|
|
|
—
|
|
|
382,004
|
|
(a)
|
|
—
|
|
|||||||||||
Transfers out
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(2,866
|
)
|
(c)
|
|
|
|
|
|
(9,139
|
)
|
(a)
|
|
—
|
|
||||||||||||||
Purchases/(covers)
|
—
|
|
|
—
|
|
|
5,000
|
|
|
1,215
|
|
|
10,179
|
|
|
36
|
|
|
310,078
|
|
|
|
800
|
|
|
—
|
|
|
20,685
|
|
|
|
—
|
|
|||||||||||
(Sales)/short buys
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,634
|
)
|
|
(10,343
|
)
|
|
(938
|
)
|
|
(310,562
|
)
|
|
|
(100
|
)
|
|
—
|
|
|
(197,035
|
)
|
|
|
(8,547
|
)
|
|||||||||||
Realized gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
419
|
|
|
164
|
|
|
495
|
|
|
1,108
|
|
|
|
—
|
|
|
—
|
|
|
4,224
|
|
|
|
—
|
|
|||||||||||
Unrealized gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,028
|
|
|
1,098
|
|
|
|
105
|
|
|
104
|
|
|
13,137
|
|
|
|
10,909
|
|
|||||||||||
Balance at December 31, 2010
|
$
|
334
|
|
|
$
|
—
|
|
|
$
|
5,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,977
|
|
|
$
|
17,081
|
|
|
|
$
|
1,882
|
|
|
$
|
313
|
|
|
$
|
311,242
|
|
|
|
$
|
6,243
|
|
Transfers in
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
566
|
|
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||||||||
Transfers out
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||||||||
Purchases/(covers)
|
687
|
|
|
(978
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111
|
|
|
52,475
|
|
|
|
330
|
|
|
—
|
|
|
2
|
|
|
|
—
|
|
|||||||||||
(Sales)/short buys
|
(568
|
)
|
|
833
|
|
|
(4,857
|
)
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
(53,435
|
)
|
|
|
(10
|
)
|
|
—
|
|
|
(104,243
|
)
|
|
|
—
|
|
|||||||||||
Realized gains (losses)
|
159
|
|
|
145
|
|
|
(143
|
)
|
|
—
|
|
|
—
|
|
|
48
|
|
|
157
|
|
|
|
—
|
|
|
—
|
|
|
2,508
|
|
|
|
—
|
|
|||||||||||
Unrealized gains (losses)
|
457
|
|
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
(587
|
)
|
|
2,061
|
|
|
|
151
|
|
|
240
|
|
|
3,893
|
|
|
|
1,097
|
|
||||||||||||
Balance at December 31, 2011
|
$
|
1,069
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
1,465
|
|
|
$
|
18,905
|
|
|
|
$
|
2,353
|
|
|
$
|
553
|
|
|
$
|
213,402
|
|
|
|
$
|
7,340
|
|
(a)
|
Changes in the observability of inputs used in the valuation of such assets
|
(b)
|
Deconsolidation of Ramius Alternative Replication Fund Ltd (See Note 3b)
|
(c)
|
Deconsolidation of CHRP GP (See Note 3b)
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Telephone and computer equipment
|
$
|
12,828
|
|
|
$
|
8,576
|
|
Computer software
|
5,419
|
|
|
4,831
|
|
||
Furniture and fixtures
|
5,997
|
|
|
4,630
|
|
||
Leasehold improvements
|
30,264
|
|
|
25,271
|
|
||
Assets acquired under capital leases—equipment
|
6,337
|
|
|
6,337
|
|
||
Construction in progress
|
—
|
|
|
4,650
|
|
||
Other
|
49
|
|
|
60
|
|
||
|
60,894
|
|
|
54,355
|
|
||
Less: Accumulated depreciation and amortization
|
(23,852
|
)
|
|
(17,764
|
)
|
||
|
$
|
37,042
|
|
|
$
|
36,591
|
|
|
2011
|
|
2010
|
||||||||||||||||||||
|
Alternative
Investment Management |
|
Broker-
Dealer |
|
Total
|
|
Alternative
Investment Management |
|
Broker-
Dealer |
|
Total
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Beginning balance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
30,228
|
|
|
$
|
7,151
|
|
|
$
|
37,379
|
|
|
$
|
30,228
|
|
|
$
|
7,151
|
|
|
$
|
37,379
|
|
Accumulated impairment charges
|
(10,200
|
)
|
|
—
|
|
|
(10,200
|
)
|
|
(10,200
|
)
|
|
—
|
|
|
(10,200
|
)
|
||||||
Net
|
20,028
|
|
|
7,151
|
|
|
27,179
|
|
|
20,028
|
|
|
7,151
|
|
|
27,179
|
|
||||||
Activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill impairment charges
|
—
|
|
|
(7,151
|
)
|
|
(7,151
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
—
|
|
|
(7,151
|
)
|
|
(7,151
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
30,228
|
|
|
7,151
|
|
|
37,379
|
|
|
30,228
|
|
|
7,151
|
|
|
37,379
|
|
||||||
Accumulated impairment charges
|
(10,200
|
)
|
|
(7,151
|
)
|
|
(17,351
|
)
|
|
(10,200
|
)
|
|
—
|
|
|
(10,200
|
)
|
||||||
Net
|
$
|
20,028
|
|
|
$
|
—
|
|
|
$
|
20,028
|
|
|
$
|
20,028
|
|
|
$
|
7,151
|
|
|
$
|
27,179
|
|
|
|
|
December 31, 2011
|
|
December 31, 2010
|
|||||||||||||||||||||
|
Amortization
Period
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization (1)
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||||||||
|
(in years)
|
|
(in thousands)
|
|
(in thousands)
|
|||||||||||||||||||||
Investment contracts
|
5
|
|
|
$
|
3,900
|
|
|
$
|
(3,900
|
)
|
|
$
|
—
|
|
|
$
|
3,900
|
|
|
$
|
(3,900
|
)
|
|
$
|
—
|
|
Trade name
|
7.5
|
|
|
9,400
|
|
|
(6,649
|
)
|
|
2,751
|
|
|
9,400
|
|
|
(1,463
|
)
|
|
7,937
|
|
||||||
Customer relationships
|
4
|
|
|
6,800
|
|
|
(4,916
|
)
|
|
1,884
|
|
|
6,800
|
|
|
(1,983
|
)
|
|
4,817
|
|
||||||
Customer contracts
|
1.2
|
|
|
800
|
|
|
(800
|
)
|
|
—
|
|
|
800
|
|
|
(800
|
)
|
|
—
|
|
||||||
Covenants to not compete
|
1 or 2
|
|
|
1,950
|
|
|
(1,950
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Covenants with limiting conditions
|
10
|
|
|
580
|
|
|
(580
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Intellectual property
|
3
|
|
|
2,550
|
|
|
(1,425
|
)
|
|
1,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
$
|
25,980
|
|
|
$
|
(20,220
|
)
|
|
$
|
5,760
|
|
|
$
|
20,900
|
|
|
$
|
(8,146
|
)
|
|
$
|
12,754
|
|
|
|
||
|
(dollars in thousands)
|
||
2012
|
$
|
1,993
|
|
2013
|
1,822
|
|
|
2014
|
741
|
|
|
2015
|
516
|
|
|
2016
|
516
|
|
|
Thereafter
|
172
|
|
|
|
$
|
5,760
|
|
|
As of December 31,
|
|||||||
|
2011
|
|
|
2010
|
||||
|
(dollars in thousands)
|
|||||||
Deposits
|
$
|
1,273
|
|
|
|
$
|
1,384
|
|
Prepaid expenses
|
8,139
|
|
|
|
7,691
|
|
||
Taxes receivable
|
2,064
|
|
|
|
2,033
|
|
||
Derivative contracts, at fair value
|
807
|
|
|
|
442
|
|
||
Receivable from portfolio companies
|
4,349
|
|
|
|
109
|
|
||
Interest receivable
|
5,800
|
|
|
|
5,237
|
|
||
Other
|
4,188
|
|
(1)
|
|
2,560
|
|
||
|
$
|
26,620
|
|
|
|
$
|
19,456
|
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Deferred rent obligations (see Note 3k)
|
$
|
15,327
|
|
|
$
|
16,000
|
|
Deferred income on sale-leaseback (see Note 3u)
|
1,037
|
|
|
1,536
|
|
||
Equity in RCG Longview Partners II, LLC (see Note 6a(3))
|
5,775
|
|
|
5,576
|
|
||
Legal and regulatory reserve (Note 19)
|
10,100
|
|
|
1,500
|
|
||
Liability for future rent payments (see Note 19)
|
5,912
|
|
|
—
|
|
||
Termination of service contracts
|
1,551
|
|
|
—
|
|
||
Derivative contracts, at fair value
|
757
|
|
|
579
|
|
||
Accrued expenses and accounts payable
|
18,880
|
|
|
15,845
|
|
||
Accrued tax liabilities
|
2,123
|
|
|
1,231
|
|
||
|
$
|
61,462
|
|
|
$
|
42,267
|
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Redeemable non-controlling interests in consolidated subsidiaries
|
|
|
|
||||
Operating Companies(a)
|
$
|
6,472
|
|
|
$
|
1,009
|
|
Consolidated Funds
|
98,115
|
|
|
143,337
|
|
||
|
$
|
104,587
|
|
|
$
|
144,346
|
|
(a)
|
See Note 3b
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
|
|
|
|
|
||||||
Operating Companies
|
$
|
7,002
|
|
|
$
|
1,759
|
|
|
$
|
602
|
|
Consolidated Funds and certain real estate entities
|
(1,175
|
)
|
|
11,968
|
|
|
15,646
|
|
|||
|
$
|
5,827
|
|
|
$
|
13,727
|
|
|
$
|
16,248
|
|
|
Shares Subject
to Option |
|
Weighted Average
Exercise Price/Share |
|
Weighted Average
Remaining Term |
|
Aggregate Intrinsic
Value(1) |
||||||
|
|
|
|
|
(in years)
|
|
(dollars in thousands)
|
||||||
Balance outstanding at December 31, 2009
|
892,782
|
|
|
$
|
15.06
|
|
|
3.81
|
|
|
|
|
|
Options granted
|
150,003
|
|
|
3.96
|
|
(2)
|
|
|
|
|
|
||
Options acquired
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||
Options exercised
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||
Options forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||
Options expired
|
(149,353
|
)
|
|
16.00
|
|
|
|
|
|
|
|
||
Balance outstanding at December 31, 2010
|
893,432
|
|
|
$
|
13.04
|
|
|
3.5
|
|
|
|
|
|
Options granted
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||
Options acquired
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||
Options expired
|
(27,004
|
)
|
|
16
|
|
|
|
|
|
|
|
||
Balance outstanding at December 31, 2011
|
866,428
|
|
|
$
|
12.95
|
|
|
2.53
|
|
|
$
|
—
|
|
Options exercisable at December 31, 2010
|
743,429
|
|
|
$
|
14.87
|
|
|
2.87
|
|
|
$
|
—
|
|
Options exercisable at December 31, 2011
|
716,425
|
|
|
$
|
14.83
|
|
|
1.89
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on the Company's closing stock price of $2.59 on
December 31, 2011
and $4.69 on
December 31, 2010
.
|
(2)
|
The weighted average grant date fair value was $1.84.
|
|
Nonvested
Restricted Shares and Restricted Stock Units |
|
Weighted-Average
Grant Date Fair Value |
|||
Balance outstanding at December 31, 2009
|
2,554,182
|
|
|
$
|
6.90
|
|
Granted
|
6,220,608
|
|
|
4.61
|
|
|
Vested
|
(1,561,317
|
)
|
|
5.48
|
|
|
Cancelled
|
(856,438
|
)
|
|
4.15
|
|
|
Forfeited
|
(569,014
|
)
|
|
5.26
|
|
|
Balance outstanding at December 31, 2010
|
5,788,021
|
|
|
$
|
5.39
|
|
Granted
|
6,153,187
|
|
|
4.27
|
|
|
Vested
|
(3,979,730
|
)
|
|
3.38
|
|
|
Cancelled
|
(7,735
|
)
|
|
4.31
|
|
|
Forfeited
|
(436,061
|
)
|
|
4.82
|
|
|
Balance outstanding at December 31, 2011
|
7,517,682
|
|
|
$
|
5.57
|
|
|
Nonvested
RCG Grants |
|
Weighted-Average
Grant Date Fair Value |
|||
Balance outstanding at December 31, 2009
|
2,859,426
|
|
|
$
|
7.30
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(91,502
|
)
|
|
—
|
|
|
Forfeited
|
(129,846
|
)
|
*
|
—
|
|
|
Balance outstanding at December 31, 2010
|
2,638,078
|
|
|
$
|
7.30
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(1,297,726
|
)
|
|
7.30
|
|
|
Forfeited
|
(42,139
|
)
|
*
|
7.30
|
|
|
Balance outstanding at December 31, 2011
|
1,298,213
|
|
|
$
|
—
|
|
|
|
|
|
|
(dollars in thousands)
|
||
Unvested awards at January 1, 2009
|
$
|
7,334
|
|
Awards granted during 2009
|
—
|
|
|
Awards vested/exercised during 2009
|
(6,987
|
)
|
|
Awards expired during 2009
|
—
|
|
|
Awards forfeited during 2009
|
(347
|
)
|
|
Unvested awards at December 31, 2009
|
$
|
—
|
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Projected benefit obligation
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
6,311
|
|
|
$
|
6,596
|
|
Service cost
|
50
|
|
|
54
|
|
||
Interest cost
|
264
|
|
|
317
|
|
||
Actuarial loss (gain)
|
(55
|
)
|
|
(47
|
)
|
||
Curtailments
|
—
|
|
|
(140
|
)
|
||
Lump sum settlement
|
(991
|
)
|
|
(480
|
)
|
||
Effect of change in currency conversion
|
12
|
|
|
11
|
|
||
Benefit obligation at end of year
|
$
|
5,591
|
|
|
$
|
6,311
|
|
Change in plan assets
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
5,791
|
|
|
$
|
5,846
|
|
Actual return on plan assets
|
206
|
|
|
534
|
|
||
Employer contributions
|
633
|
|
|
—
|
|
||
Benefits paid
|
(991
|
)
|
|
(589
|
)
|
||
Fair value of plan assets at the end of year
|
$
|
5,639
|
|
|
$
|
5,791
|
|
Funded balance at end of year
|
$
|
48
|
|
|
$
|
(520
|
)
|
Amounts recognized in the consolidated statement of financial condition
|
|
|
|
||||
Liabilities
|
$
|
48
|
|
|
$
|
(520
|
)
|
Accumulated benefit obligation
|
$
|
5,533
|
|
|
$
|
6,270
|
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Components of net periodic benefit cost included in employee compensation and benefits
|
|
|
|
|
|
||||||
Service cost
|
$
|
51
|
|
|
$
|
54
|
|
|
$
|
72
|
|
Interest cost
|
264
|
|
|
317
|
|
|
339
|
|
|||
Expected return on plan assets
|
(277
|
)
|
|
(294
|
)
|
|
(328
|
)
|
|||
Amortization of (loss) / gain
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Amortization of prior service cost
|
23
|
|
|
23
|
|
|
24
|
|
|||
Effect of curtailment
|
—
|
|
|
(10
|
)
|
|
62
|
|
|||
Effect of settlement
|
(31
|
)
|
|
(7
|
)
|
|
12
|
|
|||
Net periodic benefit cost
|
$
|
30
|
|
|
$
|
83
|
|
|
$
|
177
|
|
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
|
|
|
|
|
|
||||||
Net loss
|
$
|
17
|
|
|
$
|
(234
|
)
|
|
$
|
(542
|
)
|
Effect of curtailment
|
—
|
|
|
10
|
|
|
(62
|
)
|
|||
Effect of settlement
|
31
|
|
|
6
|
|
|
(12
|
)
|
|||
Amortization of loss / (gain)
|
—
|
|
|
—
|
|
|
4
|
|
|||
Amortization of prior service cost
|
(23
|
)
|
|
(23
|
)
|
|
(24
|
)
|
|||
Total recognized in other comprehensive loss
|
$
|
25
|
|
|
$
|
(241
|
)
|
|
$
|
(636
|
)
|
Total recognized in net periodic benefit cost and other comprehensive loss
|
$
|
55
|
|
|
$
|
(158
|
)
|
|
$
|
(459
|
)
|
Amounts recognized in accumulated other comprehensive loss
|
|
|
|
|
|
||||||
Net gain (loss)
|
$
|
80
|
|
|
$
|
127
|
|
|
$
|
(154
|
)
|
Prior service cost
|
(441
|
)
|
|
(463
|
)
|
|
(449
|
)
|
|||
Effect of change in currency conversion
|
—
|
|
|
—
|
|
|
26
|
|
|||
Total recognized in accumulated other comprehensive loss
|
$
|
(361
|
)
|
|
$
|
(336
|
)
|
|
$
|
(577
|
)
|
Estimated amounts to be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year
|
|
|
|
|
|
||||||
Prior service cost
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
19
|
|
Net gain (loss)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash Balance Plan
|
|
GmbH Plan
|
|
Retirement Allowance Plan
|
|||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2011
|
|
2010
|
|
2009
|
|
2011
|
|
2010
|
|
2009
|
|||||||
Discount Rate
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
—
|
%
|
|
N/A
|
|
N/A
|
|
—
|
%
|
|
2.25
|
%
|
|
2.50
|
%
|
Rate of Compensation Increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
%
|
|
N/A
|
|
N/A
|
|
—
|
%
|
|
2.40
|
%
|
|
2.50
|
%
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Ramius Multi-Strategy Fund Ltd(a)
|
$
|
506
|
|
|
$
|
812
|
|
Ramius Global Credit Fund Ltd(b)
|
1,040
|
|
|
725
|
|
||
External Mutual Funds—Total return(c)
|
1,785
|
|
|
2,699
|
|
||
External Mutual Funds—Real Return(d)
|
1,079
|
|
|
362
|
|
||
External Mutual Funds—Conservative(e)
|
1,229
|
|
|
1,193
|
|
||
|
$
|
5,639
|
|
|
$
|
5,791
|
|
(a)
|
Ramius Multi-Strategy Fund Ltd invests substantially all of its capital through a "master feeder" structure in Ramius Intermediate Fund, L.P. which invests in funds that employ a variety of diversified, non-directional investment strategies that seek to achieve, over the long term, a target return with low volatility.
|
(b)
|
Ramius Global Credit Fund Ltd invests substantially all of its capital through a "master-feeder" structure in Ramius Global Credit Intermediate Fund, LP which invests in a fund whose objective is to seek to achieve superior returns.
|
(c)
|
External Mutual Funds—Total Return's main objective is to achieve maximum total return by investing assets in a diversified portfolio of fixed income instruments of varying maturities which may be represented by derivatives.
|
(d)
|
External Mutual Funds—Real Return's main objective is to seek to achieve maximum total return after inflation consistent with preservation of real capital and prudent investment management.
|
(e)
|
External Mutual Funds—Conservative's main objective is to seek to achieve a high level of current income with some consideration given to the growth of capital by investing in fixed-income securities.
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Continued Operations
|
|
||||||||||
Current tax expense/(benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
121
|
|
|
$
|
(4,227
|
)
|
State and local
|
560
|
|
|
(149
|
)
|
|
(556
|
)
|
|||
Foreign
|
897
|
|
|
963
|
|
|
315
|
|
|||
Total
|
1,457
|
|
|
935
|
|
|
(4,468
|
)
|
|||
Deferred tax expense/(benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
2
|
|
|
$
|
(35
|
)
|
|
$
|
2,256
|
|
State and local
|
(6
|
)
|
|
(13
|
)
|
|
—
|
|
|||
Foreign
|
(21,526
|
)
|
|
(22,287
|
)
|
|
(5,993
|
)
|
|||
Total
|
(21,530
|
)
|
|
(22,335
|
)
|
|
(3,737
|
)
|
|||
Total Tax expense/(benefit)
|
$
|
(20,073
|
)
|
|
$
|
(21,400
|
)
|
|
$
|
(8,205
|
)
|
Discontinued Operations
|
|
||||||||||
Current tax expense/(benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and local
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign
|
(424
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
(429
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred tax expense/(benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and local
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Tax expense/(benefit)
|
$
|
(429
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
||||||||||
Current tax expense/(benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
121
|
|
|
$
|
(4,227
|
)
|
State and local
|
555
|
|
|
(149
|
)
|
|
(556
|
)
|
|||
Foreign
|
473
|
|
|
963
|
|
|
315
|
|
|||
Total
|
1,028
|
|
|
935
|
|
|
(4,468
|
)
|
|||
Deferred tax expense/(benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
2
|
|
|
$
|
(35
|
)
|
|
$
|
2,256
|
|
State and local
|
(6
|
)
|
|
(13
|
)
|
|
—
|
|
|||
Foreign
|
(21,526
|
)
|
|
(22,287
|
)
|
|
(5,993
|
)
|
|||
Total
|
(21,530
|
)
|
|
(22,335
|
)
|
|
(3,737
|
)
|
|||
Total Tax expense/(benefit)
|
$
|
(20,502
|
)
|
|
$
|
(21,400
|
)
|
|
$
|
(8,205
|
)
|
|
2011
|
|
2010
|
|
2009
|
|||
Pre-tax loss at U.S. statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Partnership loss not subject to corporate tax
|
—
|
|
|
—
|
|
|
(17.5
|
)
|
Change in valuation allowance
|
(33.3
|
)
|
|
(29.9
|
)
|
|
(13.0
|
)
|
Deferred asset recognition
|
11.5
|
|
|
27.2
|
|
|
12.5
|
|
Bargain purchase price
|
6.3
|
|
|
—
|
|
|
—
|
|
Minority interest reversal
|
1.7
|
|
|
9.0
|
|
|
—
|
|
Other, net
|
(4.5
|
)
|
|
(1.0
|
)
|
|
0.4
|
|
Total
|
16.7
|
%
|
|
40.3
|
%
|
|
17.4
|
%
|
|
2011
|
|
2010
|
||||
|
(dollars in thousands)
|
||||||
Deferred tax assets, net of valuation allowance
|
|
|
|
||||
Net operating loss
|
$
|
109,893
|
|
|
$
|
22,844
|
|
Deferred compensation
|
38,191
|
|
|
38,396
|
|
||
Unrealized losses on investments
|
13,432
|
|
|
2,987
|
|
||
Goodwill
|
11,760
|
|
|
13,288
|
|
||
Legal reserves
|
3,592
|
|
|
—
|
|
||
Foreign tax credits
|
1,837
|
|
|
1,786
|
|
||
Acquired lease liability
|
1,456
|
|
|
3,355
|
|
||
Other
|
1,416
|
|
|
1,986
|
|
||
Total deferred tax assets
|
181,577
|
|
|
84,642
|
|
||
Valuation allowance
|
(157,007
|
)
|
|
(67,959
|
)
|
||
Deferred tax assets, net of valuation allowance
|
24,570
|
|
|
16,683
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Basis difference on investments
|
(15,351
|
)
|
|
(7,772
|
)
|
||
Fixed assets
|
(5,207
|
)
|
|
(3,482
|
)
|
||
Intangible assets
|
(2,975
|
)
|
|
(5,219
|
)
|
||
Other
|
(1,028
|
)
|
|
(50
|
)
|
||
Total deferred tax liabilities
|
(24,561
|
)
|
|
(16,523
|
)
|
||
Deferred tax assets, net
|
$
|
9
|
|
|
$
|
160
|
|
|
Federal
|
|
New York
|
|
Hong Kong
|
||||||
Jurisdiction:
|
|
|
|
|
|
||||||
Net operating loss (in millions)
|
$
|
262
|
|
|
$
|
362
|
|
|
$
|
9
|
|
Year of expiration
|
2029
|
|
|
2029
|
|
|
Indefinite
|
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands)
|
||||||||||
Beginning Balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
504
|
|
Additions:
|
|
|
|
|
|
||||||
Current year tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Prior year tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reductions:
|
|
|
|
|
|
||||||
Expired statue of limitations
|
—
|
|
|
—
|
|
|
(504
|
)
|
|||
Ending Balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Equipment Leases(a)
|
|
Service Payments (b)
|
|
Facility Leases (c)
|
||||||
|
(dollars in thousands)
|
||||||||||
2012
|
$
|
3,301
|
|
|
$
|
11,582
|
|
|
$
|
16,779
|
|
2013
|
3,301
|
|
|
9,151
|
|
|
16,052
|
|
|||
2014
|
1,548
|
|
|
8,109
|
|
|
14,174
|
|
|||
2015
|
1,051
|
|
|
3,032
|
|
|
11,582
|
|
|||
2016
|
194
|
|
|
193
|
|
|
10,775
|
|
|||
Thereafter
|
—
|
|
|
—
|
|
|
52,495
|
|
|||
|
$
|
9,395
|
|
|
$
|
32,067
|
|
|
$
|
121,857
|
|
(a)
|
Equipment Leases include the Company's commitments relating to operating and capital leases. See Note 20 for further information on capital lease minimum payments.
|
(b)
|
The Company is contractually committed to future cash payments for various service agreements but the Company has accelerated $0.8 million of expense during the fourth quarter of 2011 since these services were discontinued prior to December 31, 2011.
|
(c)
|
The Company has entered into various agreements to sublease certain of its premises on a month-to-month basis. The Company recorded sublease income related to these leases of $0.3 million and $0.8 million for the year ended
December 31, 2011
and
2010
, respectively.
|
|
As of December 31,
|
||||||
|
2011
|
|
2010
|
||||
|
(in thousands)
|
||||||
Line of credit
|
$
|
—
|
|
|
$
|
24,000
|
|
Notes payable
|
370
|
|
|
1,396
|
|
||
Capital lease obligations
|
5,280
|
|
|
6,337
|
|
||
|
$
|
5,650
|
|
|
$
|
31,733
|
|
|
Capital Lease
Obligation |
|
Short
Term Borrowings |
||||
|
(in thousands)
|
||||||
2012
|
$
|
1,541
|
|
|
$
|
171
|
|
2013
|
1,541
|
|
|
164
|
|
||
2014
|
1,402
|
|
|
42
|
|
||
2015
|
1,051
|
|
|
—
|
|
||
2016
|
194
|
|
|
—
|
|
||
Thereafter
|
—
|
|
|
—
|
|
||
Subtotal
|
5,729
|
|
|
377
|
|
||
Less: Amount representing interest(a)
|
(449
|
)
|
|
(7
|
)
|
||
Total
|
$
|
5,280
|
|
|
$
|
370
|
|
(a)
|
Amount necessary to reduce net minimum lease payments to present value calculated at the Company's implicit rate at lease inception.
|
|
Treasury stock
shares |
|
Cost
(in thousands) |
|
Average cost
per share |
|||||
Balance outstanding at December 31, 2010
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Treasury stock purchased in connection with acquisition (see Note 2)
|
499,001
|
|
|
1,906
|
|
|
3.82
|
|
||
Shares purchased for minimum tax withholding under the Equity Plan
|
794,518
|
|
|
2,508
|
|
|
3.16
|
|
||
Shares purchased for minimum tax withholding under the RCG Grants plan
|
408,164
|
|
|
1,123
|
|
|
2.75
|
|
||
Purchase of treasury stock
|
3,644,320
|
|
|
11,365
|
|
|
3.12
|
|
||
Balance outstanding at December 31, 2011
|
5,346,003
|
|
|
$
|
16,902
|
|
|
3.16
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
|
(dollars in thousands, except per share data)
|
||||||||||
Net income (loss) from continuing operations
|
$
|
(78,537
|
)
|
|
$
|
(31,690
|
)
|
|
$
|
(39,039
|
)
|
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
5,827
|
|
|
13,727
|
|
|
16,248
|
|
|||
Net income (loss) from continuing operations less Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
(84,364
|
)
|
|
(45,417
|
)
|
|
(55,287
|
)
|
|||
|
|
|
|
|
|
||||||
Net income (loss) from discontinued operations, net of tax
|
$
|
(23,646
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Shares for basic and diluted calculations:
|
|
|
|
|
|
||||||
Weighted average shares used in basic computation
|
95,532
|
|
|
73,149
|
|
|
41,001
|
|
|||
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|||
Restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares used in diluted computation
|
95,532
|
|
|
73,149
|
|
|
41,001
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
(0.88
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.35
|
)
|
Income (loss) from discontinued operations
|
(0.25
|
)
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
(0.88
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.35
|
)
|
Income (loss) from discontinued operations
|
(0.25
|
)
|
|
—
|
|
|
—
|
|
|
Year Ended December 31, 2011
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
||||||||||||||
|
Alternative
Investment Management |
|
Broker-Dealer
|
|
Total
Economic Income/(Loss) |
|
Funds
Consolidation |
|
Other
Adjustments |
|
|
|
GAAP
|
||||||||||||
|
|
|
|
|
(dollars in thousands)
|
||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment banking
|
$
|
—
|
|
|
$
|
50,976
|
|
|
$
|
50,976
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
50,976
|
|
Brokerage
|
—
|
|
|
99,611
|
|
|
99,611
|
|
|
—
|
|
|
—
|
|
|
|
|
99,611
|
|
||||||
Management fees
|
67,309
|
|
|
—
|
|
|
67,309
|
|
|
(1,809
|
)
|
|
(13,034
|
)
|
|
(a)
|
|
52,466
|
|
||||||
Incentive income
|
10,366
|
|
|
—
|
|
|
10,366
|
|
|
—
|
|
|
(7,101
|
)
|
|
(a)
|
|
3,265
|
|
||||||
Investment Income
|
39,149
|
|
|
2,198
|
|
|
41,347
|
|
|
—
|
|
|
(41,347
|
)
|
|
(c)
|
|
—
|
|
||||||
Interest and dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,306
|
|
|
(c)
|
|
22,306
|
|
||||||
Reimbursement from affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
(280
|
)
|
|
4,602
|
|
|
(b)
|
|
4,322
|
|
||||||
Other revenue
|
622
|
|
|
(7
|
)
|
|
615
|
|
|
—
|
|
|
968
|
|
|
(c)
|
|
1,583
|
|
||||||
Consolidated Funds revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
749
|
|
|
—
|
|
|
|
|
749
|
|
||||||
Total revenues
|
117,446
|
|
|
152,778
|
|
|
270,224
|
|
|
(1,340
|
)
|
|
(33,606
|
)
|
|
|
|
235,278
|
|
||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee compensation and benefits
|
50,838
|
|
|
143,970
|
|
|
194,808
|
|
|
—
|
|
|
8,959
|
|
|
|
|
203,767
|
|
||||||
Interest and dividends
|
184
|
|
|
551
|
|
|
735
|
|
|
—
|
|
|
8,104
|
|
|
(c)
|
|
8,839
|
|
||||||
Non-compensation expenses—Fixed
|
33,954
|
|
|
69,227
|
|
|
103,181
|
|
|
—
|
|
|
(103,181
|
)
|
|
(c)(d)
|
|
—
|
|
||||||
Non-compensation expenses—Variable
|
17,085
|
|
|
24,412
|
|
|
41,497
|
|
|
—
|
|
|
(41,497
|
)
|
|
(c)(d)
|
|
—
|
|
||||||
Non-compensation expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153,116
|
|
|
(c)(d)
|
|
153,116
|
|
||||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,151
|
|
|
(f)
|
|
7,151
|
|
||||||
Reimbursement from affiliates
|
(4,602
|
)
|
|
—
|
|
|
(4,602
|
)
|
|
—
|
|
|
4,602
|
|
|
(b)
|
|
—
|
|
||||||
Consolidated Funds expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
2,782
|
|
|
—
|
|
|
|
|
2,782
|
|
||||||
Total expenses
|
97,459
|
|
|
238,160
|
|
|
335,619
|
|
|
2,782
|
|
|
37,254
|
|
|
|
|
375,655
|
|
||||||
Other income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) on securities, derivatives and other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,128
|
|
|
(c)
|
|
15,128
|
|
||||||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,244
|
|
|
(e)
|
|
22,244
|
|
||||||
Consolidated Funds net gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,947
|
|
|
1,448
|
|
|
|
|
4,395
|
|
||||||
Total other income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,947
|
|
|
38,820
|
|
|
|
|
41,767
|
|
||||||
Income (loss) before income taxes and non-controlling interests
|
19,987
|
|
|
(85,382
|
)
|
|
(65,395
|
)
|
|
(1,175
|
)
|
|
(32,040
|
)
|
|
|
|
(98,610
|
)
|
||||||
Income taxes expense / (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,073
|
)
|
|
(b)
|
|
(20,073
|
)
|
||||||
Economic Income (Loss) / Net income (loss) before non-controlling interests
|
19,987
|
|
|
(85,382
|
)
|
|
(65,395
|
)
|
|
(1,175
|
)
|
|
(11,967
|
)
|
|
|
|
(78,537
|
)
|
||||||
Net income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,646
|
)
|
|
(g)
|
|
(23,646
|
)
|
||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries
|
(6,042
|
)
|
|
—
|
|
|
(6,042
|
)
|
|
1,175
|
|
|
(960
|
)
|
|
|
|
(5,827
|
)
|
||||||
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
13,945
|
|
|
$
|
(85,382
|
)
|
|
$
|
(71,437
|
)
|
|
$
|
—
|
|
|
$
|
(36,573
|
)
|
|
|
|
$
|
(108,010
|
)
|
|
Year Ended December 31, 2010
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
||||||||||||||
|
Alternative
Investment Management |
|
Broker-Dealer
|
|
Total
Economic Income/(Loss) |
|
Funds
Consolidation |
|
Other
Adjustments |
|
|
|
GAAP
|
||||||||||||
|
|
|
|
|
(dollars in thousands)
|
||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment banking
|
$
|
—
|
|
|
$
|
38,965
|
|
|
$
|
38,965
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
38,965
|
|
Brokerage
|
—
|
|
|
112,217
|
|
|
112,217
|
|
|
—
|
|
|
—
|
|
|
|
|
112,217
|
|
||||||
Management fees
|
51,440
|
|
|
—
|
|
|
51,440
|
|
|
(2,877
|
)
|
|
(9,716
|
)
|
|
(a)
|
|
38,847
|
|
||||||
Incentive income
|
9,615
|
|
|
—
|
|
|
9,615
|
|
|
—
|
|
|
1,748
|
|
|
(a)
|
|
11,363
|
|
||||||
Investment Income
|
59,638
|
|
|
(221
|
)
|
|
59,417
|
|
|
—
|
|
|
(59,417
|
)
|
|
(c)
|
|
—
|
|
||||||
Interest and dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,547
|
|
|
(c)
|
|
11,547
|
|
||||||
Reimbursement from affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
|
7,315
|
|
|
(b)
|
|
6,816
|
|
||||||
Other revenue
|
932
|
|
|
7
|
|
|
939
|
|
|
—
|
|
|
997
|
|
|
(c)
|
|
1,936
|
|
||||||
Consolidated Funds revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
12,119
|
|
|
—
|
|
|
|
|
12,119
|
|
||||||
Total revenues
|
121,625
|
|
|
150,968
|
|
|
272,593
|
|
|
8,743
|
|
|
(47,526
|
)
|
|
|
|
233,810
|
|
||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee compensation and benefits
|
58,831
|
|
|
127,062
|
|
|
185,893
|
|
|
—
|
|
|
9,026
|
|
|
|
|
194,919
|
|
||||||
Interest and dividends
|
265
|
|
|
761
|
|
|
1,026
|
|
|
—
|
|
|
7,945
|
|
|
(c)
|
|
8,971
|
|
||||||
Non-compensation expenses—Fixed
|
28,963
|
|
|
63,494
|
|
|
92,457
|
|
|
—
|
|
|
(92,457
|
)
|
|
(c)(d)
|
|
—
|
|
||||||
Non-compensation expenses—Variable
|
7,338
|
|
|
27,022
|
|
|
34,360
|
|
|
—
|
|
|
(34,360
|
)
|
|
(c)(d)
|
|
—
|
|
||||||
Non-compensation expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,931
|
|
|
(c)(d)
|
|
127,931
|
|
||||||
Reimbursement from affiliates
|
(7,315
|
)
|
|
—
|
|
|
(7,315
|
)
|
|
—
|
|
|
7,315
|
|
|
(b)
|
|
—
|
|
||||||
Consolidated Funds expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
8,121
|
|
|
|
|
|
|
|
8,121
|
|
||||||
Total expenses
|
88,082
|
|
|
218,339
|
|
|
306,421
|
|
|
8,121
|
|
|
25,400
|
|
|
|
|
339,942
|
|
||||||
Other income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) on securities, derivatives and other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,980
|
|
|
(c)
|
|
21,980
|
|
||||||
Consolidated Funds net gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
11,346
|
|
|
19,716
|
|
|
|
|
31,062
|
|
||||||
Total other income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
11,346
|
|
|
41,696
|
|
|
|
|
53,042
|
|
||||||
Income (loss) before income taxes and non-controlling interests
|
33,543
|
|
|
(67,371
|
)
|
|
(33,828
|
)
|
|
11,968
|
|
|
(31,230
|
)
|
|
|
|
(53,090
|
)
|
||||||
Income taxes expense / (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(21,400
|
)
|
|
(b)
|
|
(21,400
|
)
|
||||||
Economic Income (Loss) / Net income (loss) before non-controlling interests
|
33,543
|
|
|
(67,371
|
)
|
|
(33,828
|
)
|
|
11,968
|
|
|
(9,830
|
)
|
|
|
|
(31,690
|
)
|
||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries
|
(1,759
|
)
|
|
—
|
|
|
(1,759
|
)
|
|
(11,968
|
)
|
|
—
|
|
|
|
|
(13,727
|
)
|
||||||
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
31,784
|
|
|
$
|
(67,371
|
)
|
|
$
|
(35,587
|
)
|
|
$
|
—
|
|
|
$
|
(9,830
|
)
|
|
|
|
$
|
(45,417
|
)
|
|
Year Ended December 31, 2009
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
||||||||||||||
|
Alternative
Investment Management |
|
Broker-Dealer
|
|
Total
Economic Income/(Loss) |
|
Funds
Consolidation |
|
Other
Adjustments |
|
|
|
GAAP
|
||||||||||||
|
|
|
|
|
(dollars in thousands)
|
||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment banking
|
$
|
—
|
|
|
$
|
10,557
|
|
|
$
|
10,557
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
10,557
|
|
Brokerage
|
—
|
|
|
17,812
|
|
|
17,812
|
|
|
—
|
|
|
—
|
|
|
|
|
17,812
|
|
||||||
Management fees
|
53,940
|
|
|
—
|
|
|
53,940
|
|
|
(4,024
|
)
|
|
(8,222
|
)
|
|
(a)
|
|
41,694
|
|
||||||
Incentive income
|
(6,996
|
)
|
|
—
|
|
|
(6,996
|
)
|
|
—
|
|
|
8,907
|
|
|
(a)
|
|
1,911
|
|
||||||
Investment Income
|
21,958
|
|
|
—
|
|
|
21,958
|
|
|
|
|
|
(21,958
|
)
|
|
(c)
|
|
—
|
|
||||||
Interest and dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
477
|
|
|
(c)
|
|
477
|
|
||||||
Reimbursement from affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
(718
|
)
|
|
11,044
|
|
|
(b)
|
|
10,326
|
|
||||||
Other revenue
|
3,536
|
|
|
—
|
|
|
3,536
|
|
|
—
|
|
|
1,196
|
|
|
(c)
|
|
4,732
|
|
||||||
Consolidated Funds revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
36,392
|
|
|
—
|
|
|
|
|
36,392
|
|
||||||
Total revenues
|
72,438
|
|
|
28,369
|
|
|
100,807
|
|
|
31,650
|
|
|
(8,556
|
)
|
|
|
|
123,901
|
|
||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee compensation and benefits
|
63,207
|
|
|
30,032
|
|
|
93,239
|
|
|
—
|
|
|
3,353
|
|
|
|
|
96,592
|
|
||||||
Interest and dividends
|
1,549
|
|
|
—
|
|
|
1,549
|
|
|
—
|
|
|
52
|
|
|
(c)
|
|
1,601
|
|
||||||
Non-compensation expenses—Fixed
|
40,340
|
|
|
10,946
|
|
|
51,286
|
|
|
—
|
|
|
(51,286
|
)
|
|
(c)(d)
|
|
—
|
|
||||||
Non-compensation expenses—Variable
|
3,467
|
|
|
3,674
|
|
|
7,141
|
|
|
—
|
|
|
(7,141
|
)
|
|
(c)(d)
|
|
—
|
|
||||||
Non-compensation expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,217
|
|
|
(c)(d)
|
|
68,217
|
|
||||||
Reimbursement from affiliates
|
(11,044
|
)
|
|
—
|
|
|
(11,044
|
)
|
|
—
|
|
|
11,044
|
|
|
(b)
|
|
—
|
|
||||||
Consolidated Funds expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
23,581
|
|
|
—
|
|
|
|
|
23,581
|
|
||||||
Total expenses
|
97,519
|
|
|
44,652
|
|
|
142,171
|
|
|
23,581
|
|
|
24,239
|
|
|
|
|
189,991
|
|
||||||
Other income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) on securities, derivatives and other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,154
|
)
|
|
(c)
|
|
(2,154
|
)
|
||||||
Consolidated Funds net gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,588
|
|
|
19,411
|
|
|
|
|
20,999
|
|
||||||
Total other income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,588
|
|
|
17,257
|
|
|
|
|
18,845
|
|
||||||
Income (loss) before income taxes and non-controlling interests
|
(25,081
|
)
|
|
(16,283
|
)
|
|
(41,364
|
)
|
|
9,657
|
|
|
(15,538
|
)
|
|
|
|
(47,245
|
)
|
||||||
Income taxes expense/(benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,989
|
)
|
|
(2,217
|
)
|
|
(b)
|
|
(8,206
|
)
|
||||||
Economic Income (Loss)/Net income (loss) before non-controlling interests
|
(25,081
|
)
|
|
(16,283
|
)
|
|
(41,364
|
)
|
|
15,646
|
|
|
(13,321
|
)
|
|
|
|
(39,039
|
)
|
||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries
|
(602
|
)
|
|
—
|
|
|
(602
|
)
|
|
(15,646
|
)
|
|
—
|
|
|
|
|
(16,248
|
)
|
||||||
Economic Income (Loss)/Net Income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
(25,683
|
)
|
|
$
|
(16,283
|
)
|
|
$
|
(41,966
|
)
|
|
$
|
—
|
|
|
$
|
(13,321
|
)
|
|
|
|
$
|
(55,287
|
)
|
(a)
|
Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share of management and incentive fees of certain real estate operating entities and the activist business.
|
(b)
|
Economic Income (Loss) excludes income taxes as management does not consider this item when evaluating the performance of the segment. Also, reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP.
|
(c)
|
Economic Income (Loss) recognizes Company income from proprietary trading net of related expenses.
|
(d)
|
Economic Income (Loss) recognizes the Company's proportionate share of expenses for certain real estate and other operating entities for which the investments are recorded under the equity method of accounting for investments.
|
(e)
|
Economic Income (Loss) excludes the bargain purchase gain which resulted from the LaBranche acquisition.
|
(f)
|
Economic Income (Loss) excludes goodwill impairment.
|
(g)
|
Economic Income (Loss) excludes discontinued operations.
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
2011 |
|
June 30,
2011 |
|
Sept. 30,
2011 |
|
December 31,
2011 |
||||||||
|
(in thousands)
|
||||||||||||||
Total revenues
|
$
|
64,245
|
|
|
$
|
58,679
|
|
|
$
|
62,828
|
|
|
$
|
49,526
|
|
Net Income (loss) before income taxes
|
1,043
|
|
|
4,541
|
|
|
(48,944
|
)
|
|
(55,250
|
)
|
||||
Income tax expense (benefit)
|
163
|
|
|
(17,954
|
)
|
|
71
|
|
|
(2,353
|
)
|
||||
Net income (loss) from continuing operations
|
880
|
|
|
22,495
|
|
|
(49,015
|
)
|
|
(52,897
|
)
|
||||
Net income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,646
|
)
|
||||
Net Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
798
|
|
|
2,458
|
|
|
(783
|
)
|
|
3,354
|
|
||||
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
82
|
|
|
$
|
20,037
|
|
|
$
|
(48,232
|
)
|
|
$
|
(79,897
|
)
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.00
|
|
|
$
|
0.26
|
|
|
$
|
(0.42
|
)
|
|
$
|
(0.49
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.21
|
)
|
||||
Diluted
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.00
|
|
|
$
|
0.26
|
|
|
$
|
(0.42
|
)
|
|
$
|
(0.49
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.21
|
)
|
||||
Weighted average number of common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
74,160
|
|
|
76,330
|
|
|
115,664
|
|
|
114,686
|
|
||||
Diluted
|
76,083
|
|
|
77,898
|
|
|
115,664
|
|
|
114,686
|
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
2010 |
|
June 30,
2010 |
|
Sept. 30,
2010 |
|
December 31,
2010 |
||||||||
|
(in thousands)
|
||||||||||||||
Total revenues
|
$
|
56,258
|
|
|
$
|
55,000
|
|
|
$
|
52,202
|
|
|
$
|
70,350
|
|
Net Income (loss) before income taxes
|
(5,186
|
)
|
|
(23,150
|
)
|
|
(13,027
|
)
|
|
(11,727
|
)
|
||||
Income tax expense (benefit)
|
(266
|
)
|
|
599
|
|
|
299
|
|
|
(22,032
|
)
|
||||
Net Income (loss)
|
(4,920
|
)
|
|
(23,749
|
)
|
|
(13,326
|
)
|
|
10,305
|
|
||||
Net Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries
|
8,056
|
|
|
(2,552
|
)
|
|
2,029
|
|
|
6,194
|
|
||||
Net income (loss) attributable to Cowen Group, Inc. stockholders
|
$
|
(12,976
|
)
|
|
$
|
(21,197
|
)
|
|
$
|
(15,355
|
)
|
|
4,111
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.18
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.06
|
|
Diluted
|
(0.18
|
)
|
|
(0.29
|
)
|
|
(0.21
|
)
|
|
0.05
|
|
||||
Weighted average number of common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
72,509
|
|
|
72,693
|
|
|
73,385
|
|
|
73,991
|
|
||||
Diluted
|
72,509
|
|
|
72,693
|
|
|
73,385
|
|
|
75,901
|
|
|
|
|
|
COWEN GROUP, INC.
|
|
||
|
|
|
|
|
|
||
|
|
|
|
By:
|
|
/s/ PETER A. COHEN
|
|
|
|
|
|
Name:
|
|
Peter A. Cohen
|
|
|
Date:
|
March 9, 2012
|
|
Title:
|
|
Chairman of the Board, Chief Executive
Officer and President
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ PETER A. COHEN
|
|
Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)
|
|
|
Peter A. Cohen
|
|
|
March 9, 2012
|
|
|
|
|
|
|
/s/ STEPHEN A. LASOTA
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
|
Stephen A. Lasota
|
|
|
March 9, 2012
|
|
|
|
|
|
|
/s/ KATHERINE E. DIETZE
|
|
|
|
|
Katherine E. Dietze
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ STEVEN KOTLER
|
|
|
|
|
Steven Kotler
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ JEROME S. MARKOWITZ
|
|
|
|
|
Jerome S. Markowitz
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ JACK H. NUSBAUM
|
|
|
|
|
Jack H. Nusbaum
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ JEFFREY M. SOLOMON
|
|
|
|
|
Jeffrey M. Solomon
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ THOMAS W. STRAUSS
|
|
|
|
|
Thomas W. Strauss
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ JOHN E. TOFFOLON, JR.
|
|
|
|
|
John E. Toffolon, Jr.
|
|
Director
|
|
March 9, 2012
|
|
|
|
|
|
/s/ JOSEPH R. WRIGHT
|
|
|
|
|
Joseph R. Wright
|
|
Director
|
|
March 9, 2012
|
Exhibit No.
|
|
Description
|
|
2.1
|
|
|
Transaction Agreement and Agreement and Plan of Merger, dated as of June 3, 2009, by and among Cowen Group, Inc., Lexington Park Parent Corp., Lexington Merger Corp., Park Exchange LLC and Ramius LLC (included as Appendix A to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 filed on July 10, 2009).
|
2.2
|
|
|
Agreement and Plan of Merger, dated as of February 16, 2011, by and among the Company, Louisiana Merger Sub, Inc. and LaBranche (previously filed as Exhibit 2.1 to Form 8-K filed on February 17, 2011).
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009).
|
3.2
|
|
|
Amended and Restated By-Laws of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009).
|
3.3
|
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009).
|
4.1
|
|
|
Form of Class A Common Stock Certificate (previously filed as Exhibit 4.1 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
4.2
|
|
|
Voting Agreement, dated as of February 16, 2011, by and among, the Company and the individuals listed on Schedule A thereto (previously filed as Exhibit 4.1 to Form 8-K filed on February 17, 2011).
|
10.1
|
|
|
Employment Agreement of Peter A. Cohen, dated as of June 3, 2009, by and among Peter A. Cohen, Ramius LLC, Cowen Group, Inc. and RCG Holdings LLC (previously filed as Exhibit 10.3 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009).*
|
10.2
|
|
|
Employment Agreement of Thomas Strauss, dated as of June 3, 2009, by and among Thomas Strauss, Ramius LLC, Cowen Group, Inc. and RCG Holdings LLC (previously filed as Exhibit 10.6 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009).*
|
10.3
|
|
|
Employment Agreement of Jeffrey Solomon, dated as of June 3, 2009, by and among Jeffrey Solomon, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.5 to the Form 8-K filed November 5, 2009).*
|
10.4
|
|
|
Lease, dated as of June 22, 2007 by and between 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius Capital Group, LLC)), as amended by the First Amendment to Lease, dated as of June 9, 2008, by and between BP 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius LLC)) (previously filed as Exhibit 10.14 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
10.5
|
|
|
Sublease, dated as of December 19, 2005, by and between Société Générale and SG Cowen & Co., LLC. (previously filed as Exhibit 10.15 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
10.6
|
|
|
Lease, dated as of October 29, 1993 by and between Rock-McGraw, Inc. and Société Générale (previously filed as Exhibit 10.16 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
10.7
|
|
|
Supplemental Indenture, dated as of May 5, 1998, by and between Rock-McGraw, Inc. and Société Générale (previously filed as Exhibit 10.17 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
10.8
|
|
|
Indemnification Agreement, dated as of July 11, 2006, by and among Société Générale, SG Americas Securities Holdings, Cowen and Company, LLC and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.) (previously filed as Exhibit 10.18 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
10.9
|
|
|
Escrow Agreement, dated as of July 12, 2006, by and among SG Americas Securities Holdings, Inc., Cowen and Company, LLC, Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.) and the escrow agent (previously filed as Exhibit 10.19 to Amendment No. 2 to Form S-1 filed on December 14, 2009).
|
10.1
|
|
|
Cowen Group, Inc. 2006 Equity and Incentive Plan (previously filed as Exhibit 10.20 to Amendment No. 2 to Form S-1 filed on December 14, 2009).*
|
10.11
|
|
|
Cowen Group, Inc. 2007 Equity and Incentive plan (previously filed as Exhibit 10.21 to Amendment No. 2 to Form S-1 filed on December 14, 2009).*
|
10.12
|
|
|
Form of RSU Award Agreement. (previously filed as Exhibit 10.23 to the Form 10-K filed on March 25, 2010).*
|
10.13
|
|
|
Cowen Group, Inc. 2010 Equity and Incentive Plan (incorporated by reference to Appendix A to the Definitive Proxy Statement of Cowen Group, Inc., on Schedule 14A for the year ended December 31, 2009, as filed on April 30, 2010).*
|
10.14
|
|
|
Form of Equity Award Agreement (previously filed as Exhibit 10.2 to the Form 8-K filed on June 10, 2010).*
|
10.15
|
|
|
First Amendment to Sublease dated August 20, 2010 between Société Générale and the Company, amending that certain Sublease, dated as of December 19, 2005, between Société Générale and Cowen and Company, LLC (f/k/a SG Cowen & Co, LLC) (previously filed as Exhibit 10.1 to the Form 8-K filed August 24, 2010).
|
Exhibit No.
|
|
Description
|
||
10.16
|
|
|
Second Amendment to Lease dated August 20, 2010 between BP 599 Lexington Avenue and the Company, amending that certain Lease dated as of June 22, 2007 by and between 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius Capital Group, LLC)), as amended by the First Amendment to Lease, dated as of June 9, 2008, by and between BP 599 Lexington Avenue LLC and Ramius LLC (previously filed as Exhibit 10.2 to Form 8-K filed August 24, 2010).
|
|
10.17
|
|
|
Letter Agreement with George M.L. LaBranche, IV dated October 31, 2011 (filed herewith).*
|
|
10.18
|
|
|
Form of Restricted Stock Unit and Deferred Cash Award Agreement (filed herewith).*
|
|
21.1
|
|
|
Subsidiaries of Cowen Group, Inc. (filed herewith).
|
|
23.1
|
|
|
Consent of Independent Registered Public Accounting Firm (filed herewith).
|
|
31.1
|
|
|
Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
31.2
|
|
|
Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
32
|
|
|
Certification of CEO and CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
|
|
*
|
Signifies management contract or compensatory plan or arrangement.
|
Name of Subsidiary
|
|
Jurisdiction
|
Born RCG Re SCA
|
|
Luxembourg
|
Clemency RCG Re SCA
|
|
Luxembourg
|
Cowen Alternative Investments, LLC
|
|
Delaware
|
Cowen and Company, LLC
|
|
Delaware
|
Cowen Capital LLC
|
|
Delaware
|
Cowen Capital Partners II, LLC
|
|
Delaware
|
Cowen Financial Technology LLC
|
|
Delaware
|
Cowen Healthcare Royalty Management, LLC
|
|
Delaware
|
Cowen Holdings, Inc.
|
|
Delaware
|
Cowen International Limited
|
|
England and Wales
|
Cowen International Trading Limited
|
|
England and Wales
|
Cowen and Company (Asia) Limited
|
|
Hong Kong
|
Cowen Asia Limited
|
|
Hong Kong
|
Cowen Latitude Capital Group, LLC
|
|
Delaware
|
Cowen Latitude China Holdings Limited
|
|
Hong Kong
|
Cowen Latitude Investment Consulting Co., Ltd.
|
|
China
|
Cowen Overseas Investment LP
|
|
Cayman Islands
|
Cowen Services Company, LLC
|
|
Delaware
|
Cowen Structured Holdings Inc.
|
|
Delaware
|
Cowen Structured Holdings LLC
|
|
Delaware
|
Cowen Structured Products Holding Hong Kong Limited
|
|
Hong Kong
|
Cowen Structured Products Specialists, LLC
|
|
Delaware
|
Larochette RCG Re SCA
|
|
Luxembourg
|
October LLC
|
|
Delaware
|
Ramius Advisors, LLC
|
|
Delaware
|
Ramius Alternative Solutions LLC
|
|
Delaware
|
Ramius Asia LLC
|
|
Delaware
|
Ramius Enterprise Investments Gibraltar Ltd
|
|
Gibraltar
|
Ramius Enterprise Luxembourg Holdco SARL
|
|
Luxembourg
|
Ramius Enterprise Luxembourg Holdco II SARL
|
|
Luxembourg
|
Ramius Enterprise Master Fund Ltd
|
|
Cayman Islands
|
Ramius Japan Ltd.
|
|
Cayman Islands
|
Ramius LLC
|
|
Delaware
|
Ramius Optimum Investments LLC
|
|
Delaware
|
Ramius Structured Credit Group LLC
|
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K of Cowen Group, Inc:
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 9, 2012
|
|
/s/ PETER A. COHEN
|
|
|
|
|
Name: Peter A. Cohen
Title:
Chief Executive Officer and President
(principal executive officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Cowen Group, Inc:
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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March 9, 2012
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/s/ STEPHEN A. LASOTA
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Name: Stephen A. Lasota
Title: Chief Financial Officer (principal financial officer and principal accounting officer) |
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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March 9, 2012
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/s/ PETER A. COHEN
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Name: Peter A. Cohen
Title: Chief Executive Officer and President (principal executive officer) |
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/s/ STEPHEN A. LASOTA
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|
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Name: Stephen A. Lasota
Title: Chief Financial Officer (principal financial officer and principal accounting officer) |
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