For the full year ended December 31, 2012, we invested a total of $125.2 million in portfolio securities and received proceeds from redemption and repayments of portfolio securities totaling $66.6 million, for a net deployment of cash in new investments during the year of $58.6 million. As a result of the increased investment activity, the total fair value of our investment portfolio increased 47% during the year, from $145.1 million at December 31, 2011 to $213.6 million at December 31, 2012. As a percentage of cost, the fair value of our investment portfolio improved from 84% at December 31, 2011 to 98% at December 31, 2012, primarily as a result of the appreciation in value of a number of investments and the realization of a $21.8 million loss in our investment in a biofuels business, the value of which was reduced to zero in 2011.
Operating Results – Three months ended December 31, 2012
Investment income totaled $6.1 million for the quarter ended December 31, 2012, increasing 23% compared to $5.0 million in the corresponding quarter of 2011. The increase in 2012 was primarily attributable to increased interest and dividend income from a larger investment portfolio in 2012.
Operating expenses for the fourth quarter of 2012 were $3.4 million, increasing $0.6 million, or 21%, compared to the fourth quarter of 2011, primarily as a result of higher interest expenses on increased borrowings to support our larger investment portfolio and higher base management fees on higher total asset balances. General and administrative expenses were flat at $1.3 million in each quarter. The resulting net investment income was $2.8 million, or $0.13 per share, for the quarter ended December 31, 2012, compared to $2.2 million, or $0.10 per share, for the quarter ended December 31, 2011.We recognized net realized capital losses of $19.5 million, or $0.92 per share, during the three months ended December 31, 2012, primarily resulting from the write off of our investments in BioEnergy Holdings, LLC ("BioEnergy") and Bionol Clearfield, LLC ("Bionol") of $21.8 million, partially offset by realized capital gains on the sale of our investments in overriding royalty interests and warrants of Tammany Oil & Gas, LLC ("Tammany") of $2.8 million. For the three months ended December 31, 2011, we recognized net realized capital losses of $0.2 million, or $0.01 per share, related to accrual adjustments regarding costs associated with the sale of our investment in Alden Resources, LLC ("Alden") in July 2011.
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