Investments

12 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Investments Carried Under the Measurement Alternative


(in thousands)	Percent Ownership1	December 31, 2023		December 31, 2022
Advanced Markets Holdings	25%	$	4,481	$	5,090
China Credit BGC Money Broking Company Limited	33%	21,277		21,104
Freedom International Brokerage	45%	9,507		9,659
Other		2,857		2,530
Equity method investments		$	38,122	$	38,383
Investments carried under measurement alternative		192		192
Total equity method and investments carried under measurement alternative		$	38,314	$	38,575

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1Represents the Company’s voting interest in the equity method investment as of December 31, 2023 and 2022.

The carrying value of the Company’s equity method investments was $38.1 million and $38.4 million as of December 31, 2023 and 2022, respectively, and is included in “Investments” in the Company’s Consolidated Statements of Financial Condition.

The Company recognized gains of $9.2 million, $10.9 million and $6.7 million related to its equity method investments for the years ended December 31, 2023, 2022 and 2021, 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 years ended December 31, 2023, 2022 and 2021, the Company did not recognize impairment charges of existing equity method investments, however, it wrote off a portion of a subordinated loan to an equity method investee in the year of 2022 (see “Investments in VIEs” within this note for more information). During the years ended December 31, 2023 and 2022, the Company did not sell any 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.

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


	Year Ended December 31,
	2023		2022		2021
Statements of operations:
Total revenues	$	111,242	$	125,405	$	108,458
Total expenses	84,216		88,050		82,581
Income before income taxes	$	27,026	$	37,355	$	25,877


	December 31,
	2023		2022
Statements of financial condition:
Cash and cash equivalents	$	79,440	$	82,725
Fixed assets, net	1,900		1,848
Other assets	51,336		54,744
Total assets	$	132,676	$	139,317
Payables to related parties	—		—
Other liabilities	81,898		78,740
Total partners’ capital	50,779		60,577
Total liabilities and partners’ capital	$	132,677	$	139,317

See Note 13—“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 as of both December 31, 2023 and 2022 was $0.2 million, 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, 2023, 2022 and 2021.

In addition, as of December 31, 2023 and 2022, the Company owns membership shares, which are included in “Other assets” in the Company’s Consolidated Statements of Financial Condition. These equity investments are accounted for using the measurement alternative in accordance with the guidance on recognition and measurement. The Company recognized $1.9 million of unrealized gains, $1.8 million of unrealized gains, and $0.1 million of unrealized losses to reflect observable transactions for these shares during the years ended December 31, 2023, 2022, and 2021, respectively.

Investments in VIEs

Certain of the Company’s equity method investments 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, 2023				December 31, 2022
	Investment		Maximum Exposure to Loss		Investment		Maximum Exposure to Loss
Variable interest entities1	$	2,857	$	2,857	$	2,530	$	2,959

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1The Company’s maximum exposure to loss with respect to its unconsolidated VIEs includes the sum of its equity investments. The Company has entered into a subordinated loan agreement with Aqua, whereby the Company agreed to lend the principal sum of $1.0 million. The Company did not recognize any interest income on the subordinated loan subsequent to being designated as a non-accrual loan in November 2022. As of December 31, 2022, the Company had written off $0.6 million of the subordinated loan, which was recorded as part of “Other expenses” on the Company’s Consolidated Statements of Operations. As of December 31, 2023, the Company had received cash payment fully satisfying the remaining subordinated loan receivable of $0.4 million.

Consolidated VIE

The Company 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 $9.5 million and $9.2 million as of December 31, 2023 and 2022, 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 $1.2 million and $1.4 million as of December 31, 2023 and 2022, respectively. The Company’s exposure to economic loss on this VIE was $5.7 million and $5.5 million as of December 31, 2023 and 2022, respectively.