Question-and-Answer Session
Operator
From the line of Michael Kim.
Michael Kim - Sandler O’Neil
Hi, guys, good morning. Just to start out with, I guess I understand the rationale behind hedging your investments. But first, how much of the portfolio is actually hedged; and then more broadly, should we assume your near term outlook for the capital markets isn't all that constructive, since I would expect this limits the upside when the markets do eventually start to rally?
Gary Black
Could you repeat the question? We missed the first part of it.
Michael Kim - Sandler O’Neil
Yeah. Just in terms of kind of hedging your investment portfolio, first part of the question was how much of the portfolio was actually hedged. The second part was how should we think about your near term outlook for the broader markets, just given the fact that I would assume the hedging kind of limits your upside when the markets do eventually rally.
Greg Frost
This is Greg. I certainly wouldn't classify the hedge as a market call. I think it was just something that we did. It causes lots of volatility in earnings. I think it's just something that we wanted to get done. Many of our peers do the same thing. It's certainly not making a market call up or down either way.
Michael Kim - Sandler O’Neil
Okay, and then any color on how much of the investment portfolio is hedged?
Greg Frost
The large part, the bulk of the equity piece of the portfolio is hedged.
Michael Kim - Sandler O’Neil
Okay, great. And then secondly, just focusing on compensation, even if we include the severance charges this quarter, comp was down pretty meaningfully on a sequential basis, and I'm just wondering if part of the decline reflected any kind of year-end bonus accrual true ups and, if so, can you quantify any of that potential amount?
Greg Frost
I think if you look at comp quarter-to-quarter and, as you point out, if you back out the $8 million of severance, comp was down 44% on asset decline or revenue decline of 36%. That differential to me really is the true up of some year-end accruals and some other compensation adjustments we made through the fourth quarter, so that's the way I would think about it.
Michael Kim - Sandler O’Neil
Okay. And then if just finally, in terms of the decision to exit the money market fund business, I'm just wondering what your options are in terms of looking at disposing those assets, and how does the decision box with what seems to be an overall initiative to be a more diversified asset manager?
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