Investments

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Investments Carried Under the Measurement Alternative


(in thousands)	Percent Ownership1		December 31, 2021		December 31, 2020
Advanced Markets Holdings	25% / 43%		$	5,110	$	8,867
China Credit BGC Money Broking Company Limited	33	%	16,784		15,119
Freedom International Brokerage	45	%	9,794		9,800
Other			1,159		3,873
Equity method investments			$	32,847	$	37,659
Investments carried under measurement alternative			192		349
Total equity method and investments carried under measurement alternative			$	33,039	$	38,008

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1Represents the Company’s voting interest in the equity method investment as of December 31, 2021 and 2020.

The carrying value of the Company’s equity method investments was $32.8 million and $37.7 million as of December 31, 2021 and 2020, respectively, and is included in “Investments” in the Company’s consolidated statements of financial condition.

The Company recognized gains of $6.7 million, $5.0 million and $4.1 million related to its equity method investments for the years ended December 31, 2021, 2020 and 2019, respectively. The Company’s share of the net gains or losses is reflected in “Gains (losses) on equity method investments” in the Company’s consolidated statements of operations.

For the year ended December 31, 2021, the Company did not recognize any impairment charges relating to existing equity method investments. For the year ended December 31, 2020, the Company recorded impairment charges of $3.9 million relating to existing equity method investments. The impairment was recorded in “Other income (loss)” in the Company’s consolidated statements of operations. For the year ended December 31, 2019, the Company did not recognize any impairment charges relating to existing equity method investments. The Company sold part of an equity method investment with a fair value of $3.8 million during the year ended December 31, 2021. During the years ended December 31, 2020 and 2019, the Company did not sell any equity method investments.

Summarized financial information for the Company’s equity method investments is as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Statements of operations:
Total revenues	$	108,458	$	94,744	$	77,211
Total expenses	82,581		71,241		61,680
Net income	$	25,877	$	23,503	$	15,531


	December 31,
	2021		2020
Statements of financial condition:
Cash and cash equivalents	$	104,855	$	89,627
Fixed assets, net	2,603		2,806
Other assets	42,640		29,065
Total assets	$	150,098	$	121,498
Payables to related parties	2,000		2,000
Other liabilities	92,114		70,020
Total partners’ capital	55,984		49,478
Total liabilities and partners’ capital	$	150,098	$	121,498

See Note 14—“Related Party Transactions” for information regarding related party transactions with unconsolidated entities included in the Company’s consolidated financial statements.

Investments Carried Under Measurement Alternative

The Company has acquired equity investments for which it did not have the ability to exert significant influence over operating and financial policies of the investees. These investments are accounted for using the measurement alternative in accordance with the guidance on recognition and measurement. The carrying value of these investments was $0.2 million and $0.4 million as of December 31, 2021 and 2020, respectively, and they are included in “Investments” in the Company’s consolidated statements of financial condition. The Company did not recognize any gains, losses, or impairments relating to investments carried under the measurement alternative for the years ended December 31, 2021, 2020 and 2019.

In addition, the Company owns membership shares, which are included in “Other assets” in the Company’s consolidated statements of financial condition as of December 31, 2021 and 2020. These equity investments are accounted for using the measurement alternative in accordance with the guidance on recognition and measurement. The Company recognized $0.1 million of unrealized losses, $0.4 million of unrealized losses, and $18.2 million of unrealized gains to reflect observable transactions for these shares during the years ended December 31, 2021, 2020, and 2019, respectively. The unrealized gains (losses) are reflected in “Other income (loss)” in the Company’s consolidated statements of operations.

Investments in VIEs

Certain of the Company’s equity method investments included in the tables above are considered VIEs, as defined under the accounting guidance for consolidation. The Company is not considered the primary beneficiary of and therefore does not consolidate these VIEs. The Company’s involvement with such entities is in the form of direct equity interests and related agreements. The Company’s maximum exposure to loss with respect to the VIEs is its investment in such entities as well as a credit facility and a subordinated loan.

The following table sets forth the Company’s investment in its unconsolidated VIEs and the maximum exposure to loss with respect to such entities (in thousands).


	December 31, 2021				December 31, 2020
	Investment		Maximum Exposure to Loss		Investment		Maximum Exposure to Loss
Variable interest entities1	$	1,159	$	2,139	$	1,258	$	2,238

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1The Company has entered into a subordinated loan agreement with Aqua, whereby the Company agreed to lend the principal sum of $980 thousand. As of December 31, 2021 and 2020, the Company’s maximum exposure to loss with respect to its unconsolidated VIEs includes the sum of its equity investments in its unconsolidated VIEs and the $980 thousand subordinated loan to Aqua.

Consolidated VIE

The Company is invested in a limited liability company that is focused on developing a proprietary trading technology. The limited liability company is a VIE, and it was determined that the Company is the primary beneficiary of this VIE because the Company was the provider of the majority of this VIE’s start-up capital and has the power to direct the activities of this VIE that most significantly impact its economic performance, primarily through its voting percentage and consent rights on the activities that would most significantly influence the entity. The consolidated VIE had total assets of $6.8 million and $7.2 million as of December 31, 2021 and 2020, respectively, which primarily consisted of clearing margin. There were no material restrictions on the consolidated VIE’s assets. The consolidated VIE had total liabilities of $1.3 million and $1.0 million as of December 31, 2021 and 2020, respectively. The Company’s exposure to economic loss on this VIE was $4.5 million and $4.8 million as of December 31, 2021 and 2020, respectively.