INVESTMENTS

The amortized cost, gross unrealized gains and losses, and estimated fair value of the Company's available-for-sale investments at March 31, 2020 and December 31, 2019 are summarized in the tables shown below:



(in thousands)	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities:
U.S. government, government agencies and authorities	$	5,503	$	126	$	—	$	5,629
States, municipalities and political subdivisions	600		3		—		603
Mortgage-backed	4,009		48		3		4,054
Corporate	4,953		22		14		4,961
Total fixed maturities	$	15,065	$	199	$	17	$	15,247



(in thousands)	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities:
U.S. government, government agencies and authorities	$	13,246	$	74	$	4	$	13,316
States, municipalities and political subdivisions	601		—		1		600
Mortgage-backed	2,951		2		14		2,939
Corporate	5,338		8		6		5,340
Total fixed maturities	$	22,136	$	84	$	25	$	22,195

The table below summarizes the Company's fixed maturities at March 31, 2020 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of these obligations.



(in thousands)	March 31, 2020
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	4,166	$	4,183
Due after one year through five years	9,530		9,676
Due after five years through ten years	538		549
Due after ten years	831		839
Total	$	15,065	$	15,247

The following tables highlight the aggregate unrealized loss position, by security type, of available-for-sale investments in unrealized loss positions as of March 31, 2020 and December 31, 2019. The tables segregate the holdings based on the period of time the investments have been continuously held in unrealized loss positions.



(in thousands)									March 31, 2020
	Less than 12 Months				Greater than 12 Months				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Fixed maturities:
States, municipalities and political subdivisions	$	100	$	—	$	—	$	—	$	100	$	—
Mortgage-backed	354		3		149		—		503		3
Corporate	1,176		12		199		2		1,375		14
Total fixed maturities	$	1,630	$	15	$	348	$	2	$	1,978	$	17



(in thousands)									December 31, 2019
	Less than 12 Months				Greater than 12 Months				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Fixed maturities:
U.S. government, government agencies and authorities	$	305	$	—	$	1,002	$	4	$	1,307	$	4
States, municipalities and political subdivisions	—		—		453		1		453		1
Mortgage-backed	1,063		1		1,271		13		2,334		14
Corporate	2,495		4		526		2		3,021		6
Total fixed maturities	$	3,863	$	5	$	3,252	$	20	$	7,115	$	25

There are approximately 14 and 48 individual available-for-sale investments that were in unrealized loss positions as of March 31, 2020 and December 31, 2019, respectively.

The establishment of an other-than-temporary impairment on an investment requires a number of judgments and estimates. The Company performs a quarterly analysis of the individual investments to determine if declines in market value are other-than-temporary. The analysis includes some or all of the following procedures as deemed appropriate by the Company:


•	identifying all unrealized loss positions that have existed for at least six months;


•	identifying other circumstances management believes may affect the recoverability of the unrealized loss positions;


•	obtaining a valuation analysis from third-party investment managers regarding the intrinsic value of these investments based on their knowledge and experience together with market-based valuation techniques;


•	reviewing the trading range of certain investments over the preceding calendar period;


•	assessing if declines in market value are other-than-temporary for debt instruments based on the investment grade credit ratings from third-party rating agencies;


•	assessing if declines in market value are other-than-temporary for any debt instrument with a non-investment grade credit rating based on the continuity of its debt service record;


•	determining the necessary provision for declines in market value that are considered other-than-temporary based on the analyses performed; and


•	assessing the Company's ability and intent to hold these investments at least until any potential investment impairment is recovered.

The risks and uncertainties inherent in the assessment methodology used to determine declines in market value that are other-than-temporary include, but may not be limited to, the following:


•	the opinions of professional investment managers could be incorrect;


•	the past trading patterns of individual investments may not reflect future valuation trends;


•	the credit ratings assigned by independent credit rating agencies may be incorrect due to unforeseen or unknown facts related to a company's financial situation; and


•	the debt service pattern of non-investment grade instruments may not reflect future debt service capabilities and may not reflect a company's unknown underlying financial problems.

As a result of the analysis performed by the Company to determine declines in market value that are other-than-temporary, the Company recorded write-downs of $0.1 million and zero for other-than-temporary impairment related to other investments for the three months ended March 31, 2020 and March 31, 2019, respectively, and zero and $0.1 million for other-than-temporary impairment related to limited liability investments for the three months ended March 31, 2020 and March 31, 2019, respectively. There were no write-downs recorded for other-than-temporary impairments related to available-for sale investments for the three months ended March 31, 2020 and March 31, 2019, respectively.

The Company has reviewed currently available information regarding investments with estimated fair values less than their carrying amounts and believes these unrealized losses are not other-than-temporary and are primarily due to temporary market and sector-related factors rather than to issuer-specific factors. The Company does not intend to sell those investments, and it is not likely it will be required to sell those investments before recovery of its amortized cost.

The Company does not have any exposure to subprime mortgage-backed investments.

Limited liability investments include investments in limited liability companies and limited partnerships. The Company's interests in these investments are not deemed minor and, therefore, are accounted for under the equity method of accounting. The most recently available financial statements are used in applying the equity method. The difference between the end of the reporting period of the limited liability entities and that of the Company is no more than three months. As of March 31, 2020 and December 31, 2019, the carrying value of limited liability investments totaled $3.8 million and $3.8 million, respectively. Income or loss from limited liability investments is recognized based on the Company's share of the earnings of the limited liability entities and is included in net investment income in the consolidated statements of operations. At March 31, 2020, the Company has no unfunded commitments related to limited liability investments.

Limited liability investments, at fair value represents the underlying investments of the Company’s consolidated entities Net Lease Investment Grade Portfolio LLC ("Net Lease") and Argo Holdings Fund I, LLC ("Argo Holdings"). Prior to the fourth quarter of 2019, limited liability investments, at fair value included the Company's investment in 1347 Investors LLC ("1347 Investors").

The fair value of the Company's investment in 1347 Investors was calculated based on a model that distributed the net equity of 1347 Investors to all classes of membership interests. The model used quoted market prices and significant market observable inputs. The most significant input to the model was the observed stock price of Limbach Holdings, Inc. ("Limbach") common stock.

During the fourth quarter of 2019, the Company’s investment in 1347 Investors was dissolved, which resulted in the Company holding shares of Limbach common stock directly. Through the first quarter of 2020, the Limbach common stock price has declined, which has resulted in a loss on change in fair value of $0.6 million.

As of March 31, 2020 and December 31, 2019, the carrying value of the Company's limited liability investments, at fair value was $31.0 million and $29.1 million, respectively. The Company recorded no impairments related to limited liability investments, at fair value for the three months ended March 31, 2020 and March 31, 2019. At March 31, 2020, the Company has no unfunded commitments to fund limited liability investments, at fair value.

Investments in private companies consist of convertible preferred stocks and notes in privately owned companies and investments in limited liability companies in which the Company’s interests are deemed minor. The Company's investments in private companies do not have readily determinable fair values. The Company has elected to record investments in private companies at cost, adjusted for observable price changes and impairments. As of March 31, 2020 and December 31, 2019, the carrying value of the Company's investments in private companies totaled $1.4 million and $2.0 million, respectively. For the three months ended March 31, 2020 and March 31, 2019, the Company recorded adjustments of zero and less than $0.1 million, respectively, to adjust the fair value of certain investments in private companies for observable price changes, which are included in net change in unrealized (loss) gain on private company investments in the consolidated statements of operations.

The Company performs a quarterly impairment analysis of its investments in private companies. The analysis includes some or all of the following procedures as deemed appropriate by the Company:


•	the opinions of external investment and portfolio managers;


•	the financial condition and prospects of the investee;


•	recent operating trends and forecasted performance of the investee;


•	current market conditions in the geographic area or industry in which the investee operates;


•	changes in credit ratings; and


•	changes in the regulatory environment.

As a result of the analysis performed, the Company recorded impairments related to investments in private companies of $0.7 million and zero for the three months ended March 31, 2020 and March 31, 2019, respectively, which are included in net change in unrealized (loss) gain on private company investments in the consolidated statements of operations. The impairment recorded for the three months ended March 31, 2020 is a result of the impact of COVID-19 on the investment's underlying business.

Real estate investments are reported at fair value. As of March 31, 2020 and December 31, 2019, the carrying value of the Company's real estate investments totaled $10.7 million.

Other investments include collateral loans and are reported at their unpaid principal balance. As of March 31, 2020 and December 31, 2019, the carrying value of other investments totaled $0.8 million and $1.0 million, respectively.

Net investment income for the three months ended March 31, 2020 and March 31, 2019 is comprised as follows:



(in thousands)	Three months ended March 31,
	2020			2019
Investment income:
Interest from fixed maturities	$	102		$	73
Dividends	45			58
Income (loss) from limited liability investments	23			(18		)
Income from limited liability investments, at fair value	234			235
Income from real estate investments	200			200
Other	127			178
Gross investment income	731			726
Investment expenses	(12		)	(27		)
Net investment income	$	719		$	699

Gross realized gains and losses on available-for-sale investments, limited liability investments, limited liability investments, at fair value and investments in private companies for the three months ended March 31, 2020 and March 31, 2019 are comprised as follows:



(in thousands)	Three months ended March 31,
	2020		2019
Gross realized gains	$	208	$	315
Gross realized losses	—		—
Net realized gains gains	$	208	$	315

(Loss) gain on change in fair value of equity investments for the three months ended March 31, 2020 and March 31, 2019 is comprised as follows:



(in thousands)	Three months ended March 31,
	2020			2019
Net losses recognized on equity investments sold during the period	$	—		$	—
Change in unrealized (losses) gains on equity investments held at end of the period	(597		)	78
(Loss) gain on change in fair value of equity investments	$	(597	)	$	78

Short-term investments and fixed maturities with an estimated fair value of $0.2 million at March 31, 2020 and December 31, 2019, were on deposit with state and provincial regulatory authorities.

The Company also has restricted cash of $17.9 million and $12.2 million at March 31, 2020 and December 31, 2019, respectively. Included in restricted cash are (i) zero and $1.1 million at March 31, 2020 and December 31, 2019, respectively, held in escrow as part of the transaction to sell Mendota; (ii) $15.3 million and $8.6 million at March 31, 2020 and December 31, 2019, respectively, held as deposits by IWS Acquisition Corporation ("IWS"), Professional Warranty Service Corporation ("PWSC"), and Geminus; (iii) $2.0 million and $1.9 million at March 31, 2020 and December 31, 2019, respectively, on deposit with state and provincial regulatory authorities; and (iv) $0.6 million at March 31, 2020 and December 31, 2019, pledged to third-parties as deposits or to collateralize liabilities. Collateral pledging transactions are conducted under terms that are common and customary to standard collateral pledging and are subject to the Company's standard risk management controls.

Impact of COVID-19 on Investments

As discussed in Note 24, "Subsequent Events," in March 2020 the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in the markets in which we operate. The COVID-19 outbreak has had a notable impact on general economic conditions, including but not limited to the temporary closures of many businesses; "shelter in place" and other governmental regulations; and reduced consumer spending due to both job losses and other effects attributable to COVID-19. There remain many unknowns.

The Company continues to assess the impact that the COVID-19 pandemic may have on the value of its various investments, which could result in future material decreases in the underlying investment values. Such decreases may be considered temporary or could be deemed to be other-than-temporary, and management may be required to record write-downs of the related investments in future reporting periods.