NOTE 7 - 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	2015		2014
Real estate investment entities	1% – 12%	$	10,169	$	8,313
Financial fund management entities	0.01% - 50%	6,754		7,097
Trapeza entities	33% − 50%	630		614
Investments in unconsolidated entities		$	17,553	$	16,024

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, a $1.3 million investment in Opportunity REIT II, which completed its offering in February 2016, a $200,000 investment in Innovation Office REIT (the Company invested an additional $2.0 million in the first quarter of 2016) and 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 the Opportunity REITs, Innovation Office REIT and Apartment REIT III on the cost method.

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 continues to manage the one remaining property held by the joint venture for which it receives a property management fee. As of December 31, 2015, the Company had invested $6.0 million in Pearlmark and in February 2016, the Company increased its investment by an additional $1.0 million. 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 20).

Included in financial fund management investment entities is the Company's $3.2 million of investments in several managed credit funds, $2.6 million of investments in the RFIG partnerships which hold investments in financial institutions and a $919,000 investment in RCM Global.

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 - CVC Credit Partners. In April 2012, the Company sold its equity interests in Apidos Capital Management, LLC ("Apidos") to CVC Capital Partners SICAV-FIS, S.A., a private equity firm (“CVC”), in exchange for (i) $25.0 million in cash, (ii) a 33% limited partner interest in CVC Credit Partners, a Cayman Islands limited partnership jointly owned by the Company and CVC, and (iii) a 33% interest in CVC Credit Partners' general partner, a Jersey corporation. The Company also retained a preferred equity interest in Apidos-CVC, which entitles it to receive distributions from CVC Credit Partners equal to 75% of the incentive management fees from the legacy Apidos portfolios. These investments are reflected as Investments in unconsolidated loan manager on the consolidated balance sheets and 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 interest in the joint venture by 9%, which reduced the Company's LP interest to 24% or $25.8 million at December 31, 2015 from $32.9 million at December 31, 2014. In connection with the CVC 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):



	Years Ended December 31,
	2015			2014			2013
Management fee revenues	$	70,566		$	67,512		$	51,662
Costs and expenses	(62,565		)	(61,953		)	(48,106		)
Net income (loss)	$	8,001		$	5,559		$	3,556
Portion of net income (loss) attributable to the Company	$	2,253		$	1,834		$	1,775

The Company accounts for its preferred interest in Apidos, with a book value of $6.8 million at December 31, 2015 and 2014, 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.