Net investment income (Tables)

6 Months Ended

Jun. 30, 2019

Net investment income for the three and six months ended June 30, 2019 and 2018 consisted of the following:



	Three months ended						Six months ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net investment income by type
Net realized gains on investments and investment derivatives	$	44		$	64,731		$	44		$	130,500
Net change in unrealized gains (losses) on investments and investment derivatives	1,026			(32,532		)	2,728			(95,520		)
Net gains (losses) on foreign currencies	(1,192		)	(1,830		)	2,573			(2,617		)
Dividend and interest income	3,149			24,493			5,834			37,717
Dividends paid on securities sold, not yet purchased	—			(2,329		)	—			(4,221		)
Other expenses	(253		)	(6,865		)	(443		)	(12,352		)
Management and performance fees to related parties	—			(14,493		)	—			(24,540		)
Net investment income from investment in related party investment fund (1)	66,357			—			213,348			—
Net investment income	$	69,131		$	31,175		$	224,084		$	28,967


(1)	Effective August 31, 2018, Third Point Re, Third Point Re BDA and Third Point Re USA entered into the 2018 LPA to invest in TP Fund. As a result, the management and performance fees are presented within net investment income from investment in related party investment fund from the effective date of the transition. See Note 7 for additional information regarding management and performance fees.

The following table provides an additional breakdown of our net investment income by asset and liability type for the three and six months ended June 30, 2019 and 2018:



	Three months ended						Six months ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net investment income (loss) by asset type
Equity securities	$	—		$	58,881		$	—		$	40,556
Private common equity securities	—			(11		)	—			(453		)
Private preferred equity securities	—			166			—			(1,874		)
Total equities	—			59,036			—			38,229
Asset-backed securities	—			7,033			—			19,482
Bank debt	—			800			—			3,321
Corporate bonds	—			(737		)	—			(3,413		)
Municipal bonds	—			2,470			—			6,248
U.S. Treasury securities	3,224			478			5,022			(159		)
Sovereign debt	(934		)	(8,533		)	32			(4,402		)
Other debt securities	—			31			—			469
Total debt securities	2,290			1,542			5,054			21,546
Options	—			(5,562		)	—			(6,619		)
Rights and warrants	—			63			—			47
Real estate	—			414			—			501
Trade claims	—			(284		)	—			(287		)
Total other investments	—			(5,369		)	—			(6,358		)
Net investment income (loss) in funds valued at NAV, excluding TP Fund	—			282			3			(625		)
Total net investment income from invested assets	2,290			55,491			5,057			52,792
Net investment income (loss) by liability type
Equity securities	—			(23,844		)	—			(10,926		)
Corporate bonds	—			(1,934		)	—			(1,969		)
Options	—			9,174			—			12,907
Total net investment income (loss) from securities sold, not yet purchased	—			(16,604		)	—			12
Other investment income (losses) and other expenses not presented above
Other investment expenses	(254		)	(673		)	(444		)	(1,026		)
Net investment income on derivative contracts	—			8,680			—			6,059
Net investment income (loss) on cash, including foreign exchange gain (loss)	738			(5,485		)	6,123			(9,345		)
Net investment losses on securities purchased under an agreement to sell and securities sold under an agreement to repurchase	—			(32		)	—			(241		)
Withholding taxes reclassified to income tax expense	—			4,291			—			5,256
Total other investment income and other expenses	484			6,781			5,679			703
Management and performance fees to related parties	—			(14,493		)	—			(24,540		)
Net investment income from investment in related party investment fund (1)	66,357			—			213,348			—
Net investment income	$	69,131		$	31,175		$	224,084		$	28,967

(1)

Effective August 31, 2018, Third Point Re, Third Point Re BDA and Third Point Re USA entered into the 2018 LPA to invest in TP Fund. As a result, the management and performance fees are presented within net investment income from investment in related party investment fund from the effective date of the transition. See Note 7 for additional information regarding management and performance fees.

Equity Method Investment, Summarized Financial Information, Related Party Investment Fund

As a result of the Company’s holding in TP Fund and its contribution to the Company’s overall financial results, the Company includes the following summarized income statement of the TP Fund for the three and six months ended June 30, 2019 and summarized balance sheet as of June 30, 2019 and December 31, 2018.

This summarized income statement of TP Fund reflects the main components of total investment income and expenses of TP Fund. This summarized income statement is not a breakdown of the Company’s proportional investment income in TP Fund as presented in the Company’s condensed consolidated statement of income.



	Three months ended			Six months ended
TP Fund summarized income statement ⁽¹⁾	June 30, 2019			June 30, 2019
Investment income
Net realized gain (loss) from securities, derivative contracts and foreign currency translations	$	19,663		$	(3,438	)
Net change in unrealized gain on securities, derivative contracts and foreign currency translations	59,728			249,766
Net loss from currencies	(2,110		)	(2,592		)
Dividend and interest income	17,756			30,080
Other income	2,306			4,414
Total investment income	97,343			278,230
Expenses
Management fees	5,143			9,986
Interest	5,201			8,824
Dividends on securities sold, not yet purchased	2,389			4,744
Administrative and professional fees	613			1,015
Other expenses	1,607			3,204
Total expenses	14,953			27,773
Net income	$	82,390		$	250,457

(1) TP Fund commenced operations on September 3, 2018, as result, there are no comparative results for the prior year periods.

The following table is a summarized balance sheet of TP Fund as of June 30, 2019 and December 31, 2018 and reflects the underlying assets and liabilities of TP Fund. This summarized balance sheet is not a breakdown of the Company’s proportional interests in the underlying assets and liabilities of TP Fund.



TP Fund summarized balance sheet	June 30, 2019		December 31, 2018
Assets
Total investments in securities	$	1,826,645	$	1,561,636
Cash and cash equivalents	906		6
Due from brokers	478,592		375,469
Derivative assets, at fair value	26,725		20,533
Interest and dividends receivable	6,258		3,693
Participation agreement with related party	—		2,296
Other assets	107		422
Total assets	$	2,339,233	$	1,964,055
Liabilities
Accounts payable and accrued expenses	$	2,369	$	1,754
Securities sold, not yet purchased, at fair value	406,124		355,233
Securities sold under agreement to repurchase	1,290		—
Due to brokers	453,935		107,116
Derivative liabilities, at fair value	24,858		27,483
Redemptions payable to Third Point Re	400,000		—
Interest and dividends payable	2,327		1,881
Management fee payable	467		182
Total liabilities	1,291,370		493,649
Total partners' capital	$	1,047,863	$	1,470,406