Investment in Unconsolidated Entities

3 Months Ended

Mar. 31, 2020

Investment in Unconsolidated Entities

7. Investment in Unconsolidated Entities

The table below summarizes our investments in unconsolidated entities as of March 31, 2020 and December 31, 2019 (dollars in thousands):


	Participation /	Carrying value as of
	Ownership % (1)	March 31, 2020		December 31, 2019
Equity method:
Retail Fund	33%	$	—	$	—
Equity interest in a natural gas power plant	10%		25,862		25,862
Investor entity which owns equity in an online real estate company	50%		9,504		9,473
Equity interests in commercial real estate	50%		1,787		1,907
Equity interest in and advances to a residential mortgage originator (2)	N/A		11,807		12,002
Various	25% - 50%		8,529		8,339
			57,489		57,583
Other:
Equity interest in a servicing and advisory business (3)	4%		—		—
Investment funds which own equity in a loan servicer and other real estate assets	4% - 6%		9,225		9,225
Various	0% - 2%		20,620		17,521
			29,845		26,746
		$	87,334	$	84,329

(1)	None of these investments are publicly traded and therefore quoted market prices are not available.

(2)	Includes a $4.5 million subordinated loan as of both March 31, 2020 and December 31, 2019.

(3)	During the year ended December 31, 2019, we received a capital distribution of $8.4 million and our equity interest was reduced to 4% and the carrying value was reduced to zero.

We own a 33% equity interest in a fund that owns four regional shopping malls (the “Retail Fund”). The fund is an investment company which measures its assets at fair value on a recurring basis. We report our interest in the Retail Fund on a three-month lag basis at its liquidation value. As of December 31, 2019, we impaired the remainder of our investment based on our estimate of unrealized decreases in the fair value of the underlying real estate properties. Such decreases were recognized by the Retail Fund during the period included in our three months ended March 31, 2020.

As of March 31, 2020, the carrying value of our equity investment in a residential mortgage originator exceeded the underlying equity in net assets of such investee by $1.6 million. This difference is the result of the Company recording its investment in the investee at its acquisition date fair value, which included certain non-amortizing intangible assets not recognized by the investee. Should the Company determine these intangible assets held by the investee are impaired, the Company will recognize such impairment loss through earnings from unconsolidated entities in our consolidated statement of operations, otherwise, such difference between the carrying value of our equity investment in the residential mortgage originator and the underlying equity in the net assets of the residential mortgage originator will continue to exist.

Other than our equity interest in the residential mortgage originator, there were no differences between the carrying value of our equity method investments and the underlying equity in the net assets of the investees as of March 31, 2020.

During the three months ended March 31, 2020, we did not become aware of any observable price changes in our other investments accounted for under the fair value practicability exception or any indicators of impairment.