Morgan Stanley 2010 Annual Report Download - page 169

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair Value of Investments that Calculate Net Asset Value.
The Company’s Investments measured at fair value were $9,752 million and $9,286 million at December 31,
2010 and 2009, respectively. The following table presents information solely about the Company’s investments
in private equity funds, real estate funds and hedge funds measured at fair value based on net asset value at
December 31, 2010 and December 31, 2009, respectively.
At December 31, 2010 At December 31, 2009
Fair Value
Unfunded
Commitment Fair Value
Unfunded
Commitment
(dollars in millions)
Private equity funds .................................. $1,947 $1,047 $1,292 $1,251
Real estate funds .................................... 1,154 500 823 674
Hedge funds(1):
Long-short equity hedge funds ..................... 1,046 4 1,597 —
Fixed income/credit-related hedge funds ............. 305 — 407 —
Event-driven hedge funds ......................... 143 — 146 —
Multi-strategy hedge funds ........................ 140 — 235 —
Total .............................................. $4,735 $1,551 $4,500 $1,925
(1) Fixed income/credit-related hedge funds, event-driven hedge funds and multi-strategy hedge funds are redeemable at least on a
six-month period basis with a notice period of 90 days or less. At December 31, 2010, approximately 49% of the fair value amount of
long-short equity hedge funds is redeemable at least quarterly, 24% is redeemable every six months and 27% of these funds have a
redemption frequency of greater than six months. At December 31, 2009, approximately 36% of the fair value amount of long-short
equity hedge funds is redeemable at least quarterly, 15% is redeemable every six months and 49% of these funds have a redemption
frequency of greater than six months. The notice period for long-short equity hedge funds is primarily greater than 90 days.
Private Equity Funds. Amount includes several private equity funds that pursue multiple strategies, including
leveraged buyouts, venture capital, infrastructure growth capital, distressed investments and mezzanine capital.
In addition, the funds may be structured with a focus on specific domestic or foreign geographic regions. These
investments are generally not redeemable with the funds. Instead, the nature of the investments in this category is
that distributions are received through the liquidation of the underlying assets of the fund. At December 31, 2010,
it is estimated that 6% of the fair value of the funds will be liquidated in the next five years, another 35% of the
fair value of the funds will be liquidated between five to 10 years and the remaining 59% of the fair value of the
funds have a remaining life of greater than 10 years.
Real Estate Funds. Amount includes several real estate funds that invest in real estate assets such as
commercial office buildings, retail properties, multi-family residential properties, developments or hotels. In
addition, the funds may be structured with a focus on specific geographic domestic or foreign regions. These
investments are generally not redeemable with the funds. Distributions from each fund will be received as the
underlying investments of the funds are liquidated. At December 31, 2010, it is estimated that 20% of the fair
value of the funds will be liquidated within the next five years, another 34% of the fair value of the funds will be
liquidated between five to 10 years and the remaining 46% of the fair value of the funds have a remaining life of
greater than 10 years.
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