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Investments in Unconsolidated Entities
 6 Months Ended
Jun. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Unconsolidated Entities Investments in Unconsolidated EntitiesThe Company has various equity investments in entities where it has the ability to exert significant influence over such entity, but does not control such entity. In these cases the criteria for consolidation have not been met and the Company is required to account for such investments under ASC 323-10; the Company has elected the FVO for its investments in unconsolidated entities. As of June 30, 2022 and December 31, 2021, the Company's investments in unconsolidated entities had an aggregate fair value of $192.3 million and $195.6 million, respectively, which is included on the Consolidated Balance Sheet in Investments in unconsolidated entities, at fair value. For the three-month periods ended June 30, 2022, and 2021, the Company recognized $(23.3) million and $18.6 million, respectively, in Earnings (losses) from investments in unconsolidated entities, on its Condensed Consolidated Statement of Operations. For the six-month periods ended June 30, 2022, and 2021, the Company recognized $(28.8) million and $25.2 million, respectively, in Earnings (losses) from investments in unconsolidated entities, on its Consolidated Statement of Operations. Certain of the entities that the Company accounts for under ASC 323-10 are deemed to be VIEs, and the maximum amount at risk is generally limited to the Company's investment in the VIE. As of June 30, 2022 and December 31, 2021, the fair value of the Company's investments in unconsolidated entities that have been deemed to be VIEs was $75.0 million and $63.9 million, respectively.
The following table provides details about the Company's investments in unconsolidated entities as of June 30, 2022 and December 31, 2021:
Percentage Ownership
of Unconsolidated Entity
Investment in Unconsolidated EntityForm of InvestmentJune 30, 2022December 31, 2021
Loan Originators:
Longbridge Financial, LLC(1)
Preferred shares49.6%49.6%
LendSure Mortgage Corp.(1)(2)
Common shares49.9%49.9%
Other(1)(3)(4)
Various24.7%–80.0%31.5%–80.0%
Co-investments with Ellington affiliate(s)(1):
Elizon DB 2015-1 LLC(5)(6)
Membership Interest11.7%3.4%
Elizon NM CRE 2020-1 LLC(5)(7)
Membership Interest22.7%20.5%
Elizon CH CRE 2021-1 LLC(5)(8)
Membership Interest31.2%30.5%
Elizon NAT CRE 2021-1 LLC(5)(9)
Membership Interest19.0%—%
Other(5)
Membership Interest26.0%16.8%
Equity investments in securitization-related risk retention vehicles(10)
Membership Interest24.6%–56.3%56.3%
Other:
Jepson Holdings Limited(1)(5)
Membership Interest5.4%19.6%
Other(1)(5)(11)
Various8.2%–79.0%8.0%–79.0%
(1)See Note 13 for additional details on the Company's related party transactions.
(2)Excludes investment in warrants convertible into non-voting common shares; including such warrants the Company's additional non-voting stake in the entity was 13.8% as of both June 30, 2022 and December 31, 2021. See Note 13 Related Party Transactions—Transactions Involving Certain Loan Originators for additional information.
(3)Excludes investment in non-voting common shares equal to 16.4% of a loan originator; including such shares the Company's total stake in such entity was 61.4% as of both June 30, 2022 and December 31, 2021. See Note 13 Related Party Transactions—Transactions Involving Certain Loan Originators for additional information.
(4)Excludes investment in non-voting preferred shares equal to 17.1% of a mortgage loan originator; including such shares the Company's total stake in such entity was 52.8% as of June 30, 2022. As of December 31, 2021, the Company total stake in this entity was 31.5%; the Company acquired its non-voting preferred shares during the six-month period ended June 30, 2022. See Note 13 Related Party Transactions—Transactions Involving Certain Loan Originators for additional information.
(5)The Company has evaluated this entity and determined that it meets the definition of a VIE. The Company evaluated its interest in the VIE and determined that the Company does not have the power to direct the activities of the VIE and does not have control of the underlying assets, where applicable. As a result, the Company determined that it is not the primary beneficiary of this VIE and therefore has not consolidated the VIE.
(6)As discussed in Note 13 Related Party Transactions—Participation in Multi-Borrower Financing Facilities, the Company and the Affiliated Entities (as defined in Note 13) each consolidate their segregated silos of the Joint Entity (as defined in Note 13). The Company's effective percentage ownership before the effects of consolidation of both its and the Affiliated Entities' respective segregated silos of the Joint Entity, was 66.2% and 47.5% as of June 30, 2022 and December 31, 2021, respectively.
(7)As discussed in Note 13 Related Party Transactions—Participation in Multi-Borrower Financing Facilities, the Company and the Affiliated Entities (as defined in Note 13) each consolidate their segregated silos of the Joint Entity (as defined in Note 13). The Company's effective percentage ownership before the effects of consolidation of both its and the Affiliated Entities' respective segregated silos of the Joint Entity, was 38.6% and 31.0% as of June 30, 2022 and December 31, 2021, respectively.
(8)As discussed in Note 13 Related Party Transactions—Participation in Multi-Borrower Financing Facilities, the Company and the Affiliated Entities (as defined in Note 13) each consolidate their segregated silos of the Joint Entity (as defined in Note 13). The Company's effective percentage ownership before the effects of consolidation of both its and the Affiliated Entities' respective segregated silos of the Joint Entity, was 56.2% and 44.8% as of June 30, 2022 and December 31, 2021, respectively.
(9)As discussed in Note 13 Related Party Transactions—Participation in Multi-Borrower Financing Facilities, the Company and the Affiliated Entities (as defined in Note 13) each consolidate their segregated silos of the Joint Entity (as defined in Note 13). The Company's effective percentage ownership before the effects of consolidation of both its and the Affiliated Entities' respective segregated silos of the Joint Entity, was 81.4% as of June 30, 2022; the Company did not have an interest in this entity as of December 31, 2021.
(10)Includes interests in Consumer Risk Retention Vehicles, as defined in Note 10—Participation in Multi-Seller Consumer Loan Securitizations. The Company has evaluated these entities and determined that they do not meet the definition of a VIE. The Company evaluated its interest in the entity under the voting interest model outlined in ASC 810, and has determined that the Company does not control these entities. As a result, the Company has not consolidated the entity. See Note 10 for additional details on the Company's securitization transactions.
(11)Includes interest in warehouse facilities; see Note 13—Participation in CLO Transactions, for additional details.
As of June 30, 2022 and December 31, 2021, the Company had non-controlling equity interests in various loan originators with an aggregate fair value of $111.4 million and $137.8 million, respectively. As of June 30, 2022, the Company's two largest investments in unconsolidated entities were in mortgage loan originators, LendSure Mortgage Corp., or "LendSure" and Longbridge Financial, LLC, or "Longbridge."
The Company's investment in LendSure was considered significant pursuant to Regulation S-X for the six-month period ended June 30, 2022. For the three-month periods ended June 30, 2022 and 2021, the Company recognized $(7.7) million and $3.2 million, respectively of unrealized gains (losses) from its investment in Lendsure, which is included in Earnings (losses) from investments in unconsolidated entities on the Condensed Consolidated Statement of Operations. For the six-month periods ended June 30, 2022 and 2021, the Company recognized $(12.1) million and $5.6 million, respectively of unrealized gains (losses) from its investment in Lendsure, which is included in Earnings (losses) from investments in unconsolidated entities on the Condensed Consolidated Statement of Operations. As of June 30, 2022 and December 31, 2021, the fair value of the Company's investment in LendSure was $33.4 million and $45.5 million, respectively, which is included on the Condensed Consolidated Balance Sheet in Investments in unconsolidated entities, at fair value. The following table provides a summary of the results of operations of LendSure for the three- and six-month periods ended June 30, 2022 and 2021.
Three-Month Period EndedSix-Month Period Ended
(In thousands)June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Revenue$14,457 $19,048 $30,019 $31,412 
Net income (loss)$756 $6,747 $1,154 $10,377 
The Company's investment in Longbridge was considered significant pursuant to Regulation S-X for the six-month period ended June 30, 2022. For the three-month periods ended June 30, 2022 and 2021, the Company recognized $(13.7) million and $10.8 million, respectively of unrealized gains (losses) from its investment in Longbridge, which is included in Earnings (losses) from investments in unconsolidated entities on the Condensed Consolidated Statement of Operations. For the six-month periods ended June 30, 2022 and 2021, the Company recognized $(16.9) million and $11.3 million, respectively of unrealized gains (losses) from its investment in Longbridge, which is included in Earnings (losses) from investments in unconsolidated entities on the Condensed Consolidated Statement of Operations. As of June 30, 2022 and December 31, 2021, the fair value of the Company's investment in Longbridge was $59.1 million and $74.5 million, respectively, which is included on the Condensed Consolidated Balance Sheet in Investments in unconsolidated entities, at fair value. The following table provides a summary of the results of operations of Longbridge for the three- and six-month periods ended June 30, 2022 and 2021.
Three-Month Period EndedSix-Month Period Ended
(In thousands)June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Revenue(1)(2)
$(73,766)$61,700 $(131,507)$100,236 
Net income (loss)$(24,014)$19,186 $(34,665)$31,712 
(1)Longbridge includes in Revenue mark-to-market gains and losses on certain reverse mortgage loans held for investment.
(2)Longbridge has conformed prior period to current period presentation.