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Investments in Equity Method Affiliates | 12 Months Ended
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Dec. 31, 2012
Investments in Equity Method Affiliates | 15. INVESTMENTS IN EQUITY METHOD AFFILIATES The Company has several investments that are accounted for under the equity method. Equity method accounting requires that the Company record its investment on the consolidated balance sheets and recognize its share of the affiliate’s net income as earnings each year. Investments in equity method affiliates is included as component of other assets on the Company’s consolidated balance sheets. The Company has certain equity method investees for which it has elected the fair value option. See note 3-F. Those investees are excluded from the table below. Those investees are included as a component of other investments, at fair value in the consolidated balance sheet. All gains and losses (unrealized and realized) from securities classified as other investments, at fair value in the consolidated balance sheets are recorded as a component of principal transactions and other income in the consolidated statements of operations. As of December 31, 2011, the Company had the following equity method investees (excluding equity method affiliates for which it had adopted the fair value option): (i) Star Asia Manager; (ii) Deep Value GP; (iii) Deep Value GP II; (iv) Star Asia SPV; (v) Star Asia Opportunity; (vi) Star Asia Capital Management; and (vii) Duart Capital. As of December 31, 2012, the Company had the following investees accounted for under the equity method: (i) Star Asia Manager; (ii) Deep Value GP; (iii) Deep Value GP II; (iv) Star Asia SPV; (v) Star Asia Opportunity; (vi) Star Asia Capital Management; (vii) Star Asia Opportunity II; (vii) SAA Manager; and (viii) SAP GP. During the year ended December 31, 2012, the Company did not make an investment in SAA Manager and SAP GP or recognize any income or loss under the equity method related to SAP GP. See note 3-F for a discussion of these entities. The following table summarizes the activity and the earnings of the Company’s equity method affiliates. INVESTMENT IN EQUITY METHOD AFFILIATES (Dollars in Thousands)
|  | Investment in |  |  | Total |
|  | Star Asia Manager |  |  | Deep Value GP |  |  | Deep Value GP II |  |  | Star Asia SPV |  |  | Star Asia Opportunity |  |  | Star Asia Capital Management |  |  | Star Asia Opportunity II (1) |  |  | SAA Manager |  |  | Duart Capital and Other |  |
Balance at December 31, 2009 |  | $ | 343 |  |  | $ | 97 |  |  | $ | 37 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 477 |
Investments / advances |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,500 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,283 |  |  |  | 5,783 |
Distributions / repayments |  |  | (975 | ) |  |  | (5,904 | ) |  |  | — |  |  |  | (3,104 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (9,983 | )
In kind distribution |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (55 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (55 | )
Earnings / (loss) realized |  |  | 834 |  |  |  | 6,076 |  |  |  | (6 | ) |  |  | 263 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,283 | ) |  |  | 5,884 |
Balance at December 31, 2010 |  |  | 202 |  |  |  | 269 |  |  |  | 31 |  |  |  | 1,604 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,106 |
Investments / advances |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | 4,055 |  |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | 964 |  |  |  | 5,031 |
Distributions / repayments |  |  | (850 | ) |  |  | (4,597 | ) |  |  | — |  |  |  | (1,846 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (7,293 | )
Earnings / (loss) realized |  |  | 1,694 |  |  |  | 4,349 |  |  |  | 2 |  |  |  | 702 |  |  |  | 405 |  |  |  | 44 |  |  |  | — |  |  |  | — |  |  |  | (964 | ) |  |  | 6,232 |
Balance at December 31, 2011 |  |  | 1,046 |  |  |  | 21 |  |  |  | 33 |  |  |  | 466 |  |  |  | 4,460 |  |  |  | 50 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,076 |
Investments / advances |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | — |  |  |  | 6 |  |  |  | 4,700 |  |  |  | — |  |  |  | — |  |  |  | 4,716 |
Distributions / repayments |  |  | (1,600 | ) |  |  | — |  |  |  | (1,720 | ) |  |  | (662 | ) |  |  | (4,982 | ) |  |  | (652 | ) |  |  | (2,477 | ) |  |  | — |  |  |  | — |  |  |  | (12,093 | )
Reorganization |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,841 | ) |  |  | — |  |  |  | — |  |  |  | (1,841 | )
Earnings / (loss) realized |  |  | 1,101 |  |  |  | (14 | ) |  |  | 1,726 |  |  |  | 1,581 |  |  |  | 544 |  |  |  | 504 |  |  |  | (382 | ) |  |  | (8 | ) |  |  | — |  |  |  | 5,052 |
Balance at December 31, 2012 |  | $ | 547 |  |  | $ | 7 |  |  | $ | 39 |  |  | $ | 1,395 |  |  | $ | 22 |  |  | $ | (92 | ) |  | $ | — |  |  | $ | (8 | ) |  | $ | — |  |  | $ | 1,910 |
(1) | On December 20, 2012, Star Asia Opportunity II completed a reorganization whereby its assets were contributed into a subsidiary of the Star Asia Special Situations Fund. The net effect of the reorganization to the Company was that the Company exchanged its ownership interest in Star Asia Opportunity II for cash and an interest in the Star Asia Special Situations Fund. The Star Asia Special Situations Fund is carried at fair value and included as a component of other assets, at fair value.
The cash received by the Company in the reorganization is included as distributions / repayments above. The remaining carrying value of the Company’s equity method investment in Star Asia Opportunity II was $1,841 after taking into account the cash distribution from the reorganization. This amount was reclassified from investments in equity method affiliates to other investments, at fair value. It is shown as reorganization in the table above and is treated as the cost basis of the Company’s investment in the Star Asia Special Situations Fund. Any difference between the cost basis assigned and the fair value of the Company’s investment in the Star Asia Special Situations Fund is included as a component of principal transactions, and other income. See notes 8, 9, 28, and 29. In September 2010, Strategos substantially completed the liquidation of the first Deep Value fund. In conjunction with this liquidation and distribution of funds to investors, the Deep Value GP recognized an incentive fee in the amount of $12,308 during the second half of 2010. Since the Company owns 50% of the Deep Value GP, the Company’s share of this incentive fee was $6,154, which was included as a component of income from equity method affiliates. This incentive fee is included in the earnings / (loss) realized line item, which was $6,076 for the year ended December 31, 2010, in the table above. During the second quarter of 2011, another Strategos Deep Value fund for which Deep Value GP served as the general partner was substantially liquidated. In conjunction with this liquidation and distribution of funds to investors, the Deep Value GP recognized an incentive fee in the amount of $8,719 during the second quarter of 2011. Since the Company owns 50% of the Deep Value GP, the Company’s share of this incentive fee was $4,359 and was included as a component of income from equity method affiliates. This incentive fee is included in the earnings / (loss) realized line item, which was $4,349 for the year ended December 31, 2011, in the table above. During the fourth quarter of 2012, a Strategos Deep Value fund for which Deep Value GP II served as the general partner was substantially liquidated. In conjunction with this liquidation and distribution of funds to investors, the Deep Value GP II recognized an incentive fee in the amount of $4,301 during the fourth quarter of 2012. Since the Company owns 40% of the Deep Value GP II, the Company’s share of this incentive fee was $1,720 and was included as a component of income from equity method affiliates. This incentive fee is included in the earnings / (loss) realized line item, which was $1,726 for the year ended December 31, 2012, in the table above. The following table summarizes the combined financial information for all equity method investees, including equity method investees for which the fair value option was elected. This aggregated summarized financial data does not represent the Company’s proportionate share of equity method investees’ assets or earnings. SUMMARY DATA OF EQUITY METHOD INVESTEES (unaudited) (Dollars in Thousands)
|  | December 31, 2012 |  |  | December 31, 2011 |
Total Assets |  | $ | 279,874 |  |  | $ | 257,735 |
Liabilities |  | $ | 96,981 |  |  | $ | 68,530 |
Equity attributable to the investees |  |  | 182,277 |  |  |  | 188,170 |
Non-controlling interest |  |  | 616 |  |  |  | 1,035 |
Liabilities & Equity |  | $ | 279,874 |  |  | $ | 257,735 |
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Net income / (loss) |  | $ | 2,248 |  |  | $ | 12,786 |  |  | $ | 62,664 |
Net income / (loss) attributable to the investees |  | $ | 2,667 |  |  | $ | 12,818 |  |  | $ | 62,583 |
See note 29 for information regarding transactions with the Company’s equity method investees.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32787-111569 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 18 -Paragraph 20 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32847-111569 + Details
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