Unconsolidated Investments

6 Months Ended

Jun. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Kennedy Wilson has a number of joint venture interests including commingled funds and separate accounts, generally ranging from 5% to 50%, that were formed to acquire, manage, develop, service and/or sell real estate. Kennedy Wilson has significant influence over these entities, but not control. Accordingly, these investments are accounted for under the equity method.

Joint Venture and Fund Holdings

The following table details Kennedy Wilson's investments in joint ventures by investment type and geographic location as of June 30, 2021:


(Dollars in millions)	Multifamily		Commercial		Hotel		Funds		Residential and Other		Total
Western U.S.	$	403.8	$	88.0	$	114.8	$	121.8	$	190.9	$	919.3
Ireland	390.4		133.9		—		4.2		—		528.5
United Kingdom	—		112.3		—		17.4		—		129.7
Total	$	794.2	$	334.2	$	114.8	$	143.4	$	190.9	$	1,577.5

The following table details Kennedy Wilson's investments in joint ventures by investment type and geographic location as of December 31, 2020:


(Dollars in millions)	Multifamily		Commercial		Hotel		Funds		Residential and Other		Total
Western U.S.	$	226.2	$	83.0	$	86.3	$	118.1	$	180.8	$	694.4
Ireland	389.7		129.7		—		3.7		—		523.1
United Kingdom	—		56.4		—		15.4		—		71.8
Total	$	615.9	$	269.1	$	86.3	$	137.2	$	180.8	$	1,289.3

During the six months ended June 30, 2021, the change in unconsolidated investments primarily relates to $178.8 million associated with the deconsolidation of the MF seed portfolio as discussed in Note 3, $103.3 million of contributions to new and existing unconsolidated investments, $57.4 million of distributions from unconsolidated investments, $70.8 million of income from unconsolidated investments, and a $7.5 million decrease related to other items which primarily related to foreign exchange movements. Please see below for additional details.

As of June 30, 2021 and December 31, 2020, $1,429.5 million and $1,136.5 million, respectively, of unconsolidated investments were accounted for under fair value. See Note 5 for more detail.

Contributions to Joint Ventures

During the six months ended June 30, 2021, Kennedy Wilson contributed $103.3 million to joint ventures, primarily to fund new acquisitions in the Company's UK industrial separate account and capital calls for development on Kona Village hotel.

Distributions from Joint Ventures

During the six months ended June 30, 2021, Kennedy Wilson received $57.4 million in operating and investing distributions from its joint ventures.

The following table details cash distributions by investment type and geographic location for the six months ended June 30, 2021:


	Multifamily				Commercial				Funds				Residential and Other				Total
(Dollars in millions)	Operating		Investing		Operating		Investing		Operating		Investing		Operating		Investing		Operating		Investing
Western U.S.	$	11.7	$	14.6	$	4.0	$	—	$	7.0	$	5.3	$	—	$	5.6	$	22.7	$	25.5
Ireland	3.0		—		5.0		1.2		—		—		—		—		8.0		1.2
Total	$	14.7	$	14.6	$	9.0	$	1.2	$	7.0	$	5.3	$	—	$	5.6	$	30.7	$	26.7

Investing distributions resulted primarily from the sales of two office properties in Fund VI, refinancing and buyouts from limited partners in the VHH portfolio, and a partial redemption of a non-core hedge fund investment. Operating distributions resulted from operating cash flow generated by the joint venture investments.

Income from Unconsolidated Investments

The following table presents income from unconsolidated investments recognized by Kennedy Wilson during the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2021		2020		2021		2020
Income from unconsolidated investments - operating performance	$	12.5	$	8.7	$	26.0	$	23.0
Income from unconsolidated investments - realized losses	(3.1)		—		(3.1)		(0.6)
Income from unconsolidated investments - fair value	26.8		10.7		32.1		8.8
Income from unconsolidated investments - performance fees	16.2		(0.2)		15.8		(1.1)
	$	52.4	$	19.2	$	70.8	$	30.1

Operating performance is related to underlying performance from unconsolidated investments. Realized losses are related to asset sales. Fair value gains primarily related to growth in the business of the Company's retained unconsolidated investment interest in the Zonda business from Meyers Research after the sale of a significant interest in that business in 2018. The Company's European logistics portfolio had fair value gains associated with tightening of yields on industrial assets in the United Kingdom and resyndications at the Company's VHH partnership and net foreign exchange movements on fair value European unconsolidated investments. Income from performance fees primarily relates to increase in the Company's unrealized performance fee related to one of the Company's commingled funds which was primarily driven by value increase in its multifamily assets.

Vintage Housing Holdings ("VHH")

As of June 30, 2021 and December 31, 2020, the carrying value of the Company's investment in VHH was $136.2 million and $142.9 million, respectively. The decrease in the six months ended June 30, 2021 related to cash distributions associated with development projects in VHH. Distributions in the current period primarily relate to the refund of advances on two development projects in which VHH provides cash for the construction costs in advance, and other partners subsequently pay their share of the costs back to VHH. Fair value gains in the current period primarily relate to resyndications in which VHH dissolves an existing partnership and recapitalizes into a new partnership with tax exempt bonds and tax credits that are sold to a new tax credit partner and, in many cases, yields cash back to VHH. Upon resyndication, VHH retains a GP interest in the partnership and receives various future streams of cash flows including: development fees, asset management fees, other GP management fees and distributions from operations. Prior period fair value gains primarily relate to cap rate compression.

Capital Commitments

As of June 30, 2021, Kennedy Wilson had unfulfilled capital commitments totaling $102.5 million to five of its unconsolidated joint ventures, including $77.9 million relating to three closed-end funds managed by Kennedy Wilson, under the respective operating agreements. The Company may be called upon to contribute additional capital to joint ventures in satisfaction of such capital commitment obligations.