NOTE 8 - 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	June 30, 2015		December 31, 2014
Real estate investment entities	1% – 12%	$	11,461	$	8,313
Financial fund management partnerships	0.01% − 50%	4,802		4,162
Trapeza entities	33% − 50%	621		614
Investments in unconsolidated entities		$	16,884	$	13,089

Included in real estate investment entities is the Company's $2.5 million investment in Opportunity REIT I, which completed its initial public offering in December 2013 as well as a $1.3 million investment in Opportunity REIT II, which is still in its offering stage and a $200,000 investment in Innovation Office REIT, Inc. ("Innovation Office REIT"), was declared effective by the Securities and Exchange Commission on June 10, 2015. The Company accounts for its investments in Opportunity REITs I and II and the Innovation Office REIT on the cost method. In June 2015, the Company invested $3.0 million into a 50/50 joint venture with the principals of Pearlmark Real Estate Partners, L.L.C. The joint venture, Pearlmark Real Estate, LLC ("Pearlmark") will focus on managing institutional real estate investments (see Note 17). The Company accounts for its investment in Pearlmark on the equity method of accounting. In July 2015, Pearlmark commenced fundraising for two initial funds.

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. The Company records its 33% equity share of the operating results of CVC Credit Partners in Financial Fund Management Revenues on the consolidated statements of operations and comprehensive income. In accordance with the CVC Credit Partners shareholders' agreement, in July 2015, CVC exercised its option to buy down the Company's interests in the joint venture by 9%, which will reduce the Company's interest to 24% commencing in the third quarter. In conjunction with the buy down, the Company recorded an impairment charge of $4.3 million on its investment in CVC Credit Partners during the three and six months ended June 30, 2015. The purchase price, an agreed upon formulaic option price based on finalized 2014 results of the joint venture, was not indicative of its fair value. The remaining interests held by the Company were valued by a third-party valuation firm, which concluded that the fair value exceeded the book value and, as such, there was no further impairment.

Summarized operating data for CVC Credit Partners is presented below (in thousands):



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Management fee revenues	$	15,891		$	14,399		$	32,629		$	26,787
Costs and expenses	(14,118		)	(13,551		)	(28,927		)	(24,847		)
Net income	$	1,773		$	848		$	3,702		$	1,940
Portion of net income attributable to the Company	$	580		$	280		$	1,222		$	641

The Company has a preferred interest in Apidos relating to incentive management fees on legacy CLOs that had been sponsored and managed by Apidos. The Company accounts for this interest, with a book value of $6.8 million at June 30, 2015, 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. Each quarter the Company 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.