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	March 31, 2016		December 31, 2015
Real estate investment entities	1% – 8%	$	13,717	$	10,169
Financial fund management partnerships	0.01% − 50%	6,700		6,754
Trapeza entities	33% − 50%	751		630
Investments in unconsolidated entities		$	21,168	$	17,553

During the three months ended March 31, 2016, the Company invested $2.0 million in the Innovation Office REIT and $1.5 million in Pearlmark. The investment balances reflected in the above table include the Company's equity in the earnings (losses) of the entities, as reduced by any distributions received. 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 $2.2 million investment in Innovation Office REIT and a $200,000 investment in Resource Apartment REIT III, Inc. ("Apartment REIT III"). The Company accounts for its investments in the Opportunity REITs, Innovation Office REIT and Apartment REIT III on the cost method. As of March 31, 2016, the Company had an investment in Pearlmark of $6.2 million, inclusive of an initial $378,000 general partner contribution to a newly-formed Pearlmark-sponsored fund (see Note 19). 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 19).

Included in financial fund management partnerships is the Company's $3.4 million of investments in several managed credit funds, $2.5 million of investments in the RFIG partnerships which hold investments in financial institutions and an $816,000 investment in RCM Global, LLC ("RCM Global"), a venture between the Company, RSO and certain related parties that holds a portfolio of available-for-sale securities.

The Company evaluates all of these investments for impairment on a quarterly basis. There were no identified events that had significant adverse effect on these investments and, as such, no impairment was 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, 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 purchase a portion of the Company's interest in the joint venture by 9%, which reduced the Company's LP 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
	March 31,
	2016			2015
Management fee revenues	$	19,961		$	16,738
Costs and expenses	(16,146		)	(14,809		)
Net income	$	3,815		$	1,929
Portion of net income (loss) attributable to the Company	$	916		$	637

The Company accounts for its preferred interest in Apidos on the cost method. As 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. During the quarter ended March 31, 2016, as a result of cash payouts from three of the legacy Apidos deals that were called during the quarter, the Company's preferred interest was reduced by $2.0 million to $4.8 million. At such time that the investment has been reduced to zero, all subsequent distributions will be recorded as income.

The Company evaluates all of these investments for impairment on a quarterly basis.