Note 3—Investments in Partnerships

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


	At		At
	March 31,		December 31,
(in thousands)	2019		2018
Investment in Solar Ventures	$	130,444	$	126,339
Investments in U.S. real estate partnerships (includes $883 and $898 related to variable interest entities ("VIEs")) (1)		19,973		19,961
Investment in South Africa Workforce Housing Fund ("SAWHF")		8,728		8,779
Total investments in partnerships	$	159,145	$	155,079

⁽¹⁾

We do not consolidate any of the investees that were assessed to meet the definition of a VIE because the Company was deemed not to be the primary beneficiary.

Investment in Solar Ventures

At March 31, 2019, the carrying value of the Company’s equity investments in Solar Construction Lending, LLC (“SCL”), Solar Permanent Lending, LLC (“SPL”) and Solar Development Lending, LLC (“SDL”) was $68.0 million, $2.9 million and $59.5 million, respectively. The Company held ownership interests of 50.0% in SCL and SPL, and 42.0% in SDL as of March 31, 2019. None of these investees were assessed to constitute VIEs and the Company accounts for all of these investments using the equity method of accounting.

As of March 31, 2018, the Company had accounted for its equity investment in Renewable Energy Lending, LLC (“REL”) pursuant to the equity method of accounting. However, effective June 1, 2018, with the Company’s buyout of our prior investment partner’s ownership interest in REL, the Company became the sole owner of REL and consolidated this entity for reporting purposes in all subsequent reporting periods. As a result, the Company’s equity investment in REL was eliminated for reporting purposes at each subsequent reporting period and REL’s equity investments in SCL and SPL are reported as direct investments of the Company at such reporting date. The $5.1 million purchase price paid by the Company to our prior investment partner on June 1, 2018, was allocated to the net assets acquired based upon their relative fair values. Such allocation resulted in a cumulative basis adjustment of $4.5 million being allocated to the Company’s investments in SCL and SPL, an adjustment of which represented the difference between the Company’s acquisition cost basis of its investments and the historical cost basis of the investments at the partnership level. This basis difference is amortized over the remaining investment period of each respective partnership. For the three months ended March 31, 2019, the amortization expense related to such basis difference was $0.2 million. As of March 31, 2019, the unamortized balance of the Company’s basis difference was $3.8 million.

On November 28, 2018, the Company, our investment partner and Hunt entered into an agreement whereby Hunt was admitted as a member of SDL solely for the purpose of an investment in a specific loan. The maximum principal amount of the loan was $58.8 million with Hunt and the Company obligated to contribute 30% and 20%, respectively, and our investment partner was obligated to contribute the remaining 50% of the funding commitment of such loan. On April 1, 2019, the Company purchased Hunt’s 30% ownership interest in SDL for $11.3 million, which increased our ownership interest in SDL to 50.0% as of such date. Refer to Note 13, “Related Party Transactions and Transactions with Affiliates,” for additional information.

The following table provides information about the carrying amount of total assets and liabilities of all investees for which the Company had an equity method investment:


	At		At
	March 31,		December 31,
	2019		2018
(in thousands)
Total assets	$	299,606	$	279,960
Other liabilities		23,518		12,833

The following table provides information about the gross revenue, operating expenses and net income of all investees for which the Company had an equity method investment:


	For the three months ended
	March 31,
(in thousands)	2019		2018
Gross revenue	$	10,334	$	6,799
Operating expenses		1,894		1,386
Net income		8,492		5,245
Net income attributable to the entity		8,492		4,133

Investments in U.S. Real Estate Partnerships

At March 31, 2019, $19.1 million of the reported carrying value of investments in U.S. real estate partnerships represented the Company’s 80% ownership interest in a joint venture that owns and operates a mixed-use town center and undeveloped land parcels. The Company has the right to a preferred return on its unreturned capital contributions, as well as the right to share in excess cash flows of the real estate venture. As of March 31, 2019, the Company held a 75.01% economic interest based upon the partnership’s distribution waterfall. This entity was determined not to be a VIE because decision-making rights are shared equally among its members. As such, the Company accounts for this investment using the equity method of accounting.

At March 31, 2019, $0.9 million of the reported carrying value of investments in U.S. real estate partnerships related to three limited partner interests in three affordable housing partnerships that the Company acquired for $3.3 million in which our ownership interest ranged from 74.25% to 74.92%. While these entities were deemed to be VIEs, the Company was not deemed to be their primary beneficiary. Therefore, the Company did not consolidate these entities and accounts for these investments using the equity method of accounting.

At March 31, 2019 and December 31, 2018, four of the U.S. real estate partnerships in which we have investments were determined to be VIEs. The carrying value of the equity investments in these partnerships was $0.9 million at March 31, 2019 and December 31, 2018. For one of the Company’s VIEs, because the underlying real estate was sold during the fourth quarter of 2017, the Company does not expect to make additional contributions to that investment. Because we are unable to quantify the maximum amount of additional capital contributions that we may be required to fund in the future associated with our proportionate share of these investments, we measure our maximum exposure to loss based upon the carrying value of these investments. At March 31, 2019 and December 31, 2018, our maximum exposure to loss due to our involvement with these VIEs was $0.9 million.

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


	At		At
	March 31,		December 31,
	2019		2018
(in thousands)
Total assets	$	55,077	$	56,238
Debt		6,061		6,530
Other liabilities		32,310		32,165

The following table provides information about the gross revenue, operating expenses and net loss of U.S. real estate partnerships in which the Company had an equity investment:


	For the three months ended
	March 31,
(in thousands)	2019		2018
Gross revenue	$	664	$	801
Operating expenses		470		537
Net loss and net loss attributable to the entity		(879)		(309)

Investment in SAWHF

At March 31, 2019, the carrying value of the Company’s 11.85% equity investment in SAWHF was $8.7 million. As SAWHF was determined not to be a VIE, the Company accounts for this investment using the equity method of accounting.

The following table provides information about the carrying value of total assets, debt and other liabilities of SAWHF:


	At		At
	March 31,		December 31,
	2019		2018
(in thousands)
Total assets	$	74,033	$	74,803
Other liabilities		154		496

The following table provides information about the gross revenue, operating expenses and net income of SAWHF:


	For the three months ended
	March 31,
(in thousands)	2019		2018
Gross revenue	$	199	$	4,319
Operating expenses		331		1,840
Net income and net income attributable to the entity		2,034		2,479