INVESTMENTS IN UNCONSOLIDATED ENTITIES AND LOAN MANAGER

As a specialized asset manager, the Company develops various types of investment vehicles, which it manages under long-term management agreements or similar arrangements. The following table details the Company’s investments in these vehicles, including the range of ownership interests owned (in thousands, except percentages):



	Range of Combined Ownership Interests	December 31,
	Range of Combined Ownership Interests	2013		2012
Real estate investment entities	1% – 12%	$	8,271	$	8,397
Financial fund management partnerships	3% − 50%	5,294		3,847
Trapeza entities	33% − 50%	777		912
Investments in unconsolidated entities		$	14,342	$	13,156

In January 2013, the Company sold its 10% interest in a real estate joint venture to its partner for $3.0 million and recognized a gain of $1.6 million. The Company will continue to manage the remaining property held by the joint venture and will receive property management fees.

Two of the structured finance entities that hold investments in trust preferred assets ("Trapeza entities") that have incentive distributions, also known as carried interests, were subject to a potential clawback to the extent that such distributions exceed the cumulative net profits of the entities, as defined in the respective partnership agreements (see Note 19). The clawback liability was $1.2 million at December 31, 2012. The general partner of those entities is equally owned by the Company and its co-managing partner. In 2013, the general partner began the process of dissolving the two partnerships, and settled the clawback commitments. The Company's proportionate share of these payments was $1.1 million and recognized an $83,000 equity gain on the resolution.

Included in investments in unconsolidated entities is the Company's $2.5 million investment in RRE Opportunity REIT I, which completed its offering stage in December 2013. The Company accounts for this investment on the cost method since the Company owns less than 1% of RRE Opportunity REIT I's shares outstanding.

The Company evaluates all of these investments for impairment on a quarterly basis. There were no identified events that had a significant adverse effect on these investments and, as such, no impairment has been recorded.

Investment in Unconsolidated Loan Manager. Until the Company sold its Apidos Capital Management, LLC ("Apidos") CLO business to CVC Capital Partners SICAV-FIS, S.A., a private equity firm ("CVC") on April 17, 2012, the operations of Apidos were included in the Company's consolidated results. Thereafter, the Company has recorded its 33% equity share of the results of the joint venture, CVC Credit Partners, LLC ("CVC Credit Partners"), which includes the Apidos operations, in Financial Fund Management Revenues on the consolidated statements of operations and comprehensive loss. Included in costs and expenses for CVC Credit Partners for 2013 are $2.4 million of offering costs associated with a new European investment fund that will hold sub-investment grade European debt. Summarized operating data for CVC Credit Partners is presented below (in thousands):



	For the Year Ended December 31, 2013			For the Period from April 17 to December 31, 2012
Management fee revenues ⁽¹⁾	$	51,662		$	20,606
Costs and expenses⁽¹⁾	(48,106		)	(16,264		)
Net income	$	3,556		$	4,342
Portion of net income attributable to the Company	$	1,174		$	1,433

(1) Revenues and expenses both include $8.8 million of an offsetting item in 2013.

In conjunction with the CVC Credit Partners joint venture, the Company retained a preferred interest in Apidos (which became a subsidiary of CVC Credit Partners) relating to incentive management fees on legacy CLOs that had been managed by Apidos. The Company accounts for this interest, with a book value of $6.8 million at December 31, 2013, on the cost method. As these incentive fees are received, in accordance with its preferred interest, the Company receives a distribution of 75% of those amounts which will initially be recorded as income, net of any contractual amounts due to third-parties. The Company continually evaluates the investment for impairment by estimating the fair value of the expected future cash flows from the incentive management fees. If the estimated fair value is less than the cost basis of the interest, the preferred interest will be deemed to be impaired. If the Company determines that the shortfall is other-than-temporary, the impairment will be recorded as a reduction of the preferred interest by reducing the revenues previously recorded on these preferred shares. At such time that the investment has been reduced to zero, all subsequent distributions will be recorded as income.