Investments in Equity Affiliates

9 Months Ended

Sep. 30, 2022

Investments in Equity Affiliates

Investments in Equity Affiliates

Note 8 — Investments in Equity Affiliates

We account for all investments in equity affiliates under the equity method. A summary of these investments is as follows (in thousands):

					UPB of Loans to
	Investments in Equity Affiliates at				Equity Affiliates at
Equity Affiliates	September 30, 2022		December 31, 2021		September 30, 2022
Arbor Residential Investor LLC	$	49,937	$	65,756	$	—
AMAC Holdings III LLC		16,389		13,772		—
Fifth Wall Ventures		12,505		5,409		—
North Vermont Avenue		2,446		2,419		—
Lightstone Value Plus REIT L.P.		1,895		1,895		—
Docsumo Pte. Ltd.		450		—		—
JT Prime		425		425		—
West Shore Café		—		—		1,688
Lexford Portfolio		—		—		—
East River Portfolio		—		—		—
Total	$	84,047	$	89,676	$	1,688

Arbor Residential Investor LLC (“ARI”). During the three and nine months ended September 30, 2022, we recorded income of $0.3 million and $6.4 million, respectively, and during the three and nine months ended September 30, 2021, we recorded income of $5.4 million and $32.7 million, respectively, to income from equity affiliates in our consolidated statements of income. During the three and nine months ended September 30, 2022, we also received cash distributions totaling $7.3 million and $22.3 million, respectively, and during the three and nine months ended September 30, 2021, we received cash distributions totaling $4.7 million and $23.4 million from this investment, respectively, which were classified as returns of capital. In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3%. The allocation of income is based on the underlying agreements, which may be different than our indirect interest, and was 9.2% at September 30, 2022.

AMAC Holdings III LLC (“AMAC III”). We funded an additional $4.9 million during 2022. During the three and nine months ended September 30, 2022, we recorded a loss associated with this investment of $0.7 million and $1.8 million, respectively, and during the three and nine months ended September 30, 2021, we recorded a loss of $0.4 million and $0.9 million, respectively. During the three and nine months ended September 30, 2022, we received cash distributions totaling $0.2 million and $0.4 million, respectively, and during the three months ended September 30, 2021, we received cash distributions totaling $1.7 million, which were classified as returns of capital.

Fifth Wall Ventures (“Fifth Wall”). We funded an additional $8.7 million during 2022. In addition, during the three and nine months ended September 30, 2022, we received distributions from this investment of $0.7 million and $1.6 million, respectively, which were classified as a return of capital.

Docsumo Pte. Ltd. (“Docsumo”). During 2022, we invested $0.5 million for a noncontrolling interest in Docsumo, a startup company that converts unstructured documents, such as bank statements and pay stubs, to accurate structured data and checks documents for fraud, such as photoshopped layers and font changes, using artificial intelligence.

Lexford Portfolio. During the three and nine months ended September 30, 2022, we received distributions of $5.0 million and $11.0 million, respectively, from this equity investment, which were recognized as income from equity affiliates.

Equity Participation Interest. During the first quarter of 2022, we received $2.6 million from an equity participation interest on a property that was sold and which we had a preferred equity loan that previously paid-off.

See Note 17 for details of certain investments described above.