Wells Fargo 2014 Annual Report Download - page 233

Alternative Investments assets, available-for-sale securities, and other assets. The table
The following table summarizes our investments in various types excludes those investments that are probable of being sold at an
of funds for which we use net asset values (NAVs) per share as a amount different from the funds’ NAVs.
practical expedient to measure fair value on recurring and
nonrecurring bases. The investments are included in trading
Unfunded Redemption
(in millions) Fair value commitments Redemption frequency notice period
December 31, 2014
Offshore funds $ 125 — Daily - Quarterly 1 - 60 days
Hedge funds 1 — Daily - Quarterly 1-90 days
Private equity funds (1)(2) 1,313 243 N/A N/A
Venture capital funds (2) 68 9 N/A N/A
Total (3) $ 1,507 252
December 31, 2013
Offshore funds $ 308 — Daily-Quarterly 1-180 days
Hedge funds 2 — Monthly-Semi Annually 5-95 days
Private equity funds (1)(2) 1,496 316 N/A N/A
Venture capital funds (2) 63 14 N/A N/A
Total (3) $ 1,869 330
N/A - Not applicable
(1) Excludes a private equity fund investment of $171 million and $505 million at December 31, 2014, and December 31, 2013, respectively for which we recorded a
nonrecurring fair value adjustment during the periods then ended. The investment is probable of being sold for an amount different from the fund’s NAV; therefore, the
investment’s fair value has been estimated using recent transaction information. This investment is subject to the Volcker Rule, which includes provisions that restrict
banking entities from owning interests in certain types of funds.
(2) Includes certain investments subject to the Volcker Rule that we may have to divest.
(3) December 31, 2014, and December 31, 2013, include $1.3 billion and $1.5 billion, respectively, of fair value for nonmarketable equity investments carried at cost for which
we use NAVs as a practical expedient for determining nonrecurring fair value adjustments. The fair values of investments that had nonrecurring fair value adjustments were
$108 million and $88 million at December 31, 2014, and December 31, 2013 respectively.
Offshore funds primarily invest in foreign mutual funds.
Redemption restrictions are in place for these investments with a
fair value of $24 million and $144 million at December 31, 2014
and December 31,2013, respectively, due to lock-up provisions
that will remain in effect until February 2017.
Private equity funds invest in equity and debt securities
issued by private and publicly-held companies in connection
with leveraged buyouts, recapitalizations and expansion
opportunities. These investments do not allow redemptions.
Alternatively, we receive distributions as the underlying assets of
the funds liquidate, which we expect to occur over the next
6 years.
Venture capital funds invest in domestic and foreign
companies in a variety of industries, including information
technology, financial services and healthcare. These investments
can never be redeemed with the funds. Instead, we receive
distributions as the underlying assets of the fund liquidate,
which we expect to occur over the next 5 years.
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