Investment Funds

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

The Company evaluates whether it is an investor in a variable interest entity ("VIE"). Such entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support, or the equity investors, as a group, do not have the characteristics of a controlling financial interest (primary beneficiary). The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary beneficiary in any of its investment funds, and accordingly, carries its interests in investment funds under the equity method of accounting.

The Company’s maximum exposure to loss with respect to these investments is limited to the carrying amount reported on the Company’s consolidated balance sheet and its unfunded commitments, which were $615 million as of March 31, 2022.

Investment funds consisted of the following:


	Carrying Value as of				Income (Loss) from Investment Funds
	March 31,		December 31,		For the Three Months Ended March 31,
(In thousands)	2022		2021		2022		2021
Financial services	$	454,701	$	431,818	$	25,932	$	17,142
Transportation	341,022		336,688		11,179		6,228
Real Estate	283,897		273,690		16,364		4,434
Energy	136,401		150,224		(892)		3,320
Other funds	329,627		288,192		(569)		7,811
Total	$	1,545,648	$	1,480,612	$	52,014	$	38,935

The Company's share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.

Financial services investment funds include the Company’s minority investment in Lifson Re, a Bermuda reinsurance company. Effective January 1, 2021, Lifson Re participates on a fully collateralized basis in a majority of the Company’s reinsurance placements for a 22.5% share of placed amounts. This pertains to all traditional reinsurance/retrocessional placements for both property and casualty business where there is more than one open market reinsurer participating. For the three months ended March 31, 2022 and 2021, the Company has ceded approximately $89 million and $53 million, respectively, of written premiums to Lifson Re.

Other funds include deferred compensation trust assets of $32 million and $34 million as of March 31, 2022 and December 31, 2021, respectively. These assets support other liabilities reflected in the balance sheet of an equal amount for employees who have elected to defer a portion of their compensation. The change in the net asset value of the trust is recorded in other funds within net investment income with an offsetting equal amount within corporate expenses.