Equity Method Investments

6 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Note 6 – Equity Method Investments

In November 2018, CPFH LLC, of which the Company holds a 25% share, was formed to purchase certain real estate assets among partners in a joint venture. In March 2020, HGC Origination I LLC and HGC Funding I LLC were formed as joint ventures with a partner for purposes of conducting business relating to the sourcing, origination and funding of loans to debt purchasing clients. In April 2022, KNFH LLC, of which the Company holds a 25% share, was formed to purchase certain real estate assets and machinery and equipment among partners in a joint venture. In December 2022, DHC8 LLC, of which the Company holds a 13.33% share, was formed to provide funding and receive principal and interest payments as a result of the initial investment. In May 2023, HGC MPG Funding LLC, of which the company holds a 25% share, was formed as a joint venture with a partner for purposes of conducting business relating to the sourcing, origination and funding of loans to debt purchasing clients. CPFH LLC, KNFH LLC and DHC8 LLC are joint ventures formed in connection with the Company’s Industrial Assets Division, whereas HGC Origination I LLC and HGC Funding I LLC, and HGC MPG Funding LLC were formed in connection with the Financial Assets Division. The Company has significant influence over the operations and financial policies of each of its equity method investments.

The table below details the Company’s joint venture revenues and earnings during the six months ended June 30, 2023 and 2022 (in thousands):

	Six Months Ended June 30,
	2023			2022
Revenues:
CPFH LLC	$	—		$	31,021
KNFH LLC		303			4,578
DHC8 LLC		821			—
HGC Origination I LLC and HGC Funding I LLC		2,541			860
HGC MPG Funding LLC		118			—
Total revenues	$	3,783		$	36,459
Operating income (loss):
CPFH LLC	$	—		$	15,318
KNFH LLC		(141	)		873
DHC8 LLC		701			—
HGC Origination I LLC and HGC Funding I LLC		2,562			838
HGC MPG Funding LLC		118			—
Total operating income	$	3,240		$	17,029

The table below details the summarized components of assets and liabilities of the Company’s joint ventures, as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30,		December 31,
	2023		2022
Assets:
KNFH LLC	$	297	$	—
DHC8 LLC		7,922		8,561
HGC Origination I LLC and HGC Funding I LLC		46,340		53,385
HGC MPG Funding LLC		13,386		—
Total assets	$	67,945	$	61,946
Liabilities:
KNFH LLC	$	285	$	47
DHC8 LLC		1,144		1,028
HGC Origination I LLC and HGC Funding I LLC		—		1,504
HGC MPG Funding LLC		—		—
Total liabilities	$	1,429	$	2,579