JMP Group Inc. is a full-service investment banking, asset management and corporate credit management firm. The Company provides investment banking, sales and trading, and equity research services to corporate and institutional clients, and alternative asset management products and services to institutional investors and high-net-worth individuals. It operates in four segments: Broker-Dealer, Asset Management, Corporate Credit and Corporate. It manages and invests in corporate credit instruments through collateralized loan obligations and direct investments. It provides institutional investors with capital markets intelligence and objective, informed investment recommendations about individual equities that are not followed. JMP Group Inc. conducts its business activities through three wholly owned or majority owned subsidiaries: JMP Securities LLC (JMP Securities), Harvest Capital Strategies LLC (HCS) and JMP Credit Corporation (JMP Credit). JMP Securities operates as an introducing broker and does not hold funds or securities for, or owe any money or securities to, customers and does not carry accounts for customers. HCS is a registered investment advisor and provides investment management services for investors through investment partnerships and other entities managed by HCS.

Investment Banking
The Company’s investment banking professionals provide capital raising, mergers and acquisitions transaction and other advisory services to corporate clients. It assists its publicly traded and privately held corporate clients with capital raising activities, which include the underwriting of a range of equity and debt securities, including common, preferred and convertible securities. Its public equity underwriting capabilities include initial public offerings and follow-on equity offerings. It also acts as an agent in private placements of equity and debt securities and arranges private investments in public equity (PIPE) transactions, as well as privately negotiated, registered direct stock offerings on behalf of its public company clients.

Sales and Trading
The Company’s sales and trading operation distributes its equity research product and communicates its investment recommendations to its institutional investors. In addition, its sales and trading staff executes equity trades on behalf of its clients and markets the securities of companies, for which it acts as an underwriter. Its equity research features themes and actionable ideas about industries and companies that are not evaluated by many other research providers. Its capital markets group manages the syndication, marketing, execution and distribution of equity and debt offerings. Its capital markets group manages the syndication, marketing, execution and distribution of the security offerings it manage. Its syndicate activities include coordinating the marketing and order-taking process for underwritten transactions and conducting after-market stabilization and initial market-making.

Equity Research
The Company’s research department is charged with developing investment themes, anticipating sector and cyclical changes, and producing action-oriented reports that assists its clients with their investment decisions. It provides clients with an understanding of industry-specific and company-specific issues that can impact their portfolio returns. Its equity research focuses on four target industries: financial services, healthcare, real estate and technology.

Asset Management
Through HCS, the Company managed a family of five hedge funds, one funds of hedge funds and one externally advised real estate investment trust (REIT). As of December 31, 2011, it had a total of $584.7 million in client assets under management (including assets of employees and portfolio managers) and had an additional $30.5 million of its own capital invested in these vehicles. In addition, as of December 31, 2011, it had invested $2.6 million in funds managed by third parties.

Corporate Credit
JMP Credit Advisors serves as the investment manager to Cratos CLO. As of December 31, 2011, the HCC portfolio consisted of three loans with an aggregate par amount of $8 million.