Investments

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Investments Carried Under the Measurement Alternative


(in thousands)	Percent Ownership1	December 31, 2024		December 31, 2023
Advanced Markets Holdings	25%	$	3,772	$	4,481
China Credit BGC Money Broking Company Limited	33%	23,242		21,277
Freedom International Brokerage	45%	9,637		9,507
Other		2,424		2,857
Equity method investments		$	39,075	$	38,122
Investments carried under measurement alternative		192		192
Total equity method and investments carried under measurement alternative		$	39,267	$	38,314

_______________________________________

1Represents the Company’s voting interest in the equity method investment as of December 31, 2024 and 2023.

The carrying value of the Company’s equity method investments was $39.1 million and $38.1 million as of December 31, 2024 and 2023, respectively, and is included in “Investments” in the Company’s Consolidated Statements of Financial Condition.

The Company recognized gains of $8.4 million, $9.2 million and $10.9 million related to its equity method investments for the years ended December 31, 2024, 2023 and 2022, 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, 2024, 2023 and 2022, 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 ended December 31, 2022 (see “Investments in VIEs” within this note for more information). During the years ended December 31, 2024, 2023 and 2022, 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,
	2024		2023		2022
Statements of operations:
Total revenues	$	134,232	$	111,242	$	125,405
Total expenses	89,127		84,216		88,050
Income before income taxes	$	45,105	$	27,026	$	37,355


	December 31,
	2024		2023
Statements of financial condition:
Cash and cash equivalents	$	73,519	$	79,440
Fixed assets, net	2,168		1,900
Other assets	59,068		51,336
Total assets	$	134,755	$	132,676


Other liabilities	71,222		81,898
Total partners’ capital	63,533		50,779
Total liabilities and partners’ capital	$	134,755	$	132,677

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, 2024 and 2023 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, 2024, 2023 and 2022.

In addition, as of December 31, 2024 and 2023, 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. These investments, which do not have a readily determinable fair value, are initially recognized at cost and remeasured through earnings when there is an observable transaction involving the same or similar investment of the same issuer, or due to an impairment. The Company recorded $37.2 million of unrealized gains, $1.9 million of unrealized gains, and $1.8 million of unrealized gains to reflect observable transactions for these shares during the years ended December 31, 2024, 2023, and 2022, respectively. The unrealized gains (losses) are reflected in “Other income (loss)” in the Company’s Consolidated Statements of Operations.

Investments in VIEs

Unconsolidated VIE

One of the Company’s equity method investments is considered a VIE, as defined under the accounting guidance for consolidation. The Company is not considered the primary beneficiary of and therefore does not consolidate the VIE. The Company’s involvement with the VIE is in the form of direct equity interest. The Company’s maximum exposure to loss with respect to the VIE is its investment.

The following table sets forth the Company’s investment in its unconsolidated VIE and the maximum exposure to loss (in thousands).


	December 31, 2024				December 31, 2023
	Investment		Maximum Exposure to Loss		Investment		Maximum Exposure to Loss
Variable interest entity1	$	674	$	674	$	2,857	$	2,857

__________________

1The Company’s maximum exposure to loss with respect to its unconsolidated VIE 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 also 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 $5.3 million and $9.5 million as of December 31, 2024 and 2023, 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 $1.2 million as of December 31, 2024 and 2023, respectively. The Company’s exposure to economic loss on this VIE was $1.3 million and $5.7 million as of December 31, 2024 and 2023, respectively.