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	September 30, 2015		December 31, 2014
Real estate investment entities	1% – 12%	$	11,496	$	8,313
Financial fund management partnerships	0.01% − 50%	6,175		4,162
Trapeza entities	33% − 50%	678		614
Investments in unconsolidated entities		$	18,349	$	13,089

Included in real estate investment entities is the Company's $2.5 million investment in Opportunity REIT I, as well as a $1.3 million investment in Opportunity REIT II, a $200,000 investment in Innovation Office REIT as well as a $200,000 investment in Resource Apartment REIT III, Inc. ("Apartment REIT III"), which filed a registration statement with the SEC on November 2, 2015. The Company accounts for its investments in Opportunity REITs I and II, Innovation Office REIT and Apartment REIT III on the cost method. As of September 30, 2015, the Company had invested $4.0 million in Pearlmark. In October 2015, the Company invested an additional $1.0 million in Pearlmark. The Company accounts for its investment in Pearlmark on the equity method of accounting. The Company has commitments with respect to some of these investments (see Note 17).

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 equity share of the operating results of CVC Credit Partners in Financial Fund Management Revenues. 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 reduced the Company's interest to 24%. In conjunction with the buydown, the Company recorded an impairment charge of $4.3 million on its investment in CVC Credit Partners during the three 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						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Management fee revenues	$	18,023		$	19,103		$	50,652		$	45,890
Costs and expenses	(15,919		)	(17,326		)	(44,846		)	(42,172		)
Net income	$	2,104		$	1,777		$	5,806		$	3,718
Portion of net income attributable to the Company	$	505		$	586		$	1,727		$	1,227

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 September 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 book value of the investment by estimating the fair value of the expected future cash flows from the incentive management fees. To the extent that the estimated fair value of future cash flows is less than the cost basis of the investment, such shortfall will be recorded as a reduction of the preferred interest. At such time that the investment has been reduced to zero, all subsequent distributions will be recorded as income.