NOTE 4—INVESTMENTS IN PARTNERSHIPS

The following table provides information about the carrying value of the Company’s investments in partnerships.



	At		At
	September 30,		December 31,
(in thousands)	2015		2014
Investments in U.S. real estate partnerships	$	22,454	$	22,529
Investments in IHS-managed funds		3,053		5,689
Investment in a solar joint venture		25,078		─
Investments in Lower Tier Property Partnerships (“LTPPs”) related to CFVs (1)		189,295		231,204
Total investments in partnerships	$	239,880	$	259,422

⁽¹⁾

See Note 15, “Consolidated Funds and Ventures,” for more information.

Investments in U.S. Real Estate Partnerships

At September 30, 2015, $16.3 million of the reported carrying value of investments in U.S. real estate partnerships pertains to an equity investment made by the Company in a real estate venture that was formed during the fourth quarter of 2014. The Company accounts for this investment using the equity method of accounting. The Company made an initial contribution of $8.8 million, which represented 80% of the real estate venture’s initial capital. The Company has rights to a preferred return on its capital contribution, as well as rights to share in excess cash flows of the real estate venture.

At September 30, 2015, the majority of the remaining balance ($6.1 million) of investments in U.S. real estate partnerships pertains to an equity investment that represents a 33% ownership interest in a partnership that was formed to take a deed-in-lieu of foreclosure on land that was collateral for a loan held by the Company. The Company accounts for this investment using the equity method of accounting.

The following table provides information about the total assets and liabilities of the U.S. real estate partnerships in which the Company held an equity investment:



	At		At
	September 30,		December 31,
	2015		2014
(in thousands)
Total assets	$	86,018	$	83,021
Total liabilities		39,222		34,856

The following table provides information about the net loss recognized by the Company in connection with its equity investment in U.S. real estate partnerships:



	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2015		2014		2015		2014
Net loss	$	(655)	$	(437)	$	(1,503)	$	(933)

Investments in IHS-managed Funds

At September 30, 2015, the Company held equity co-investments in three IHS-managed funds (SAWHF, IHS Residential Partners I and IHS Fund II) that range from a 1.8% to a 4.25% ownership interest in such funds. IHS provides asset management services to each of these investment vehicles in return for asset management fees. For each investment vehicle, IHS also has rights to investment returns on its equity co-investment as well as has rights to an allocation of profits from such funds (the latter of which is often referred to as “carried interest”), which is contingent upon the investment returns generated by each investment vehicle.

The Company accounts for its interest in SAWHF, IHS Residential Partners I and IHS Fund II as equity investments using the equity method of accounting. At September 30, 2015, the carrying basis of the Company’s equity investment in SAWHF, IHS Residential Partners I and IHS Fund II was $1.5 million, $1.5 million and $39,118, respectively.

The Company recognizes an impairment loss for equity method investments when evidence demonstrates that the loss is other-than-temporary. During the third quarter of 2015, the Company assessed that its co-investment in SAWHF was other-than-temporarily impaired and recognized a loss of $1.6 million in its Consolidated Statements of Operations as a component of “Other expenses” as a result of adjusting the carrying value of such investment to its fair value.

The following table provides information about the carrying value of total assets (primarily real estate) and liabilities of the three IHS-managed funds in which the Company held an equity investment:



	At		At
	September 30,		December 31,
	2015		2014
(in thousands)
Total assets	$	251,790	$	276,007
Total liabilities		103,449		104,863

The table that follows below provides information about the net (loss) income recognized by the Company in connection with its equity investments in the three IHS-managed funds. However, the net loss that was recognized for the three months and nine months ended September 30, 2014 was related only to IHS Residential Partners I since, during such reporting periods, no capital had been called for IHS Fund II and SAWHF was consolidated by the Company for reporting purposes (such that its equity investment in SAWHF was eliminated for reporting purposes in consolidation).



	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2015		2014		2015		2014
Net (loss) income	$	(1,291)	$	(1,835)	$	2,042	$	(2,831)

Investment in a Solar Joint Venture

On July 15, 2015, the Company entered into a joint venture with a third party to provide capital for the development and construction of solar power projects throughout the U.S. (hereinafter, the “Solar Joint Venture”). The Company is primarily responsible for the day-to-day management and operation of the Solar Joint Venture and day-to-day oversight of its investments. In return for providing this service, the Company receives an administrative member cost reimbursement fee that is recognized in the Consolidated Statements of Operations as a component of “Asset management fees and reimbursements.” The Company’s initial capital commitment was $25.0 million, which represented a 50% ownership interest in the Solar Joint Venture. As of September 30, 2015, the Company had contributed $25.0 million in capital to the Solar Joint Venture. The Company accounts for its investment in the Solar Joint Venture using the equity method of accounting.

On October 28, 2015, the Operating Agreement of the Solar Joint Venture was amended to increase the capital commitment for each member to $50.0 million.

The following table provides information about the carrying amount of total assets (primarily cash and solar construction and development loans) and liabilities of the Solar Joint Venture in which the Company held an equity investment at September 30, 2015:



	At		At
	September 30,		December 31,
	2015		2014
(in thousands)
Total assets	$	50,812	$	─
Total liabilities		984		─

The following table displays the net income recognized by the Company in connection with its equity investment in the Solar Joint Venture:



	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2015		2014		2015		2014
Net income	$	516	$	─	$	516	$	─