11. 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. Investment in equity method affiliates is included as a component of other assets on the Company’s consolidated balance sheets.

The Company has certain equity method affiliates for which it has elected the fair value option. 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 sheets. 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.

Effective in March 2013, the Company acquired 100% control of Star Asia Manager as a result of the Star Asia Manager Repurchase Transaction. See note 4. Prior to March 1, 2013, the Company accounted for its investment in Star Asia Manager under the equity method. Since March 1, 2013, the Company has included Star Asia Manager in its consolidated financial statements.

As of September 30, 2013, the Company had the following equity method investees (excluding equity method affiliates for which it had adopted the fair value option): (i) Deep Value GP II; (ii) Star Asia Opportunity; (iii) Star Asia Capital Management; (iv) SAA Manager; and (v) SAP GP. During the nine months ended September 30, 2013, the Company did not make an investment in SAP GP or recognize any income or loss under the equity method related to SAP GP. During the second quarter of 2013, the Company received its investment return up to an agreed upon maximum from Star Asia SPV and the Company no longer has an ownership interest in Star Asia SPV. During the third quarter of 2013, the Company received its final liquidating distribution from Deep Value GP. The following table summarizes the activity and the earnings of the Company’s equity method affiliates and includes the activity for Star Asia Manager during the period that the Company accounted for its investment in Star Asia Manager under the equity method.



INVESTMENTS IN EQUITY METHOD AFFILIATES
(Dollars in Thousands)

	Star		Deep		Deep		Star		Star		Star Asia
	Asia		Value		Value		Asia		Asia		Capital		SAA
	Manager		GP		GP II		SPV		Opportunity		Management		Manager		Total
January 1, 2013	$	547	$	7	$	39	$	1,395	$	22	$	(92)	$	(8)	$	1,910
Investments / advances		-		-		-		-		-		-		10		10
Distributions / repayments		-		(7)		-		(2,682)		-		(99)		(100)		(2,888)
Acquisition (1)		(705)		-		-		-		-		-		-		(705)
Earnings / (loss) realized		158		-		(6)		1,287		(5)		108		173		1,715
September 30, 2013	$	-	$	-	$	33	$	-	$	17	$	(83)	$	75	$	42

(1)See note 4.

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
(Dollars in Thousands)

		September 30, 2013		December 31, 2012
Total Assets	$	388,316	$	279,874

Liabilities	$	153,899	$	96,981
Equity attributable to the investees		234,317		182,277
Non-controlling interest		100		616
Total Liabilities & Equity	$	388,316	$	279,874



		Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012

Net income / (loss)	$	17,496	$	9,313	$	26,431	$	(419)

Net income / (loss) attributable to the investees	$	17,456	$	9,201	$	26,947	$	(253)

See note 20 for information regarding transactions with the Company’s equity method investees.