Affiliates

3 Months Ended

Mar. 31, 2020

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Unconsolidated Affiliates

On November 22, 2019, Gaea completed a private capital raise transaction in which it raised $66.3 million from the issuance of 4,419,641 shares of its common stock to third parties to allow it to continue to advance its investment strategy. Upon completion of the capital raise, the Company retained ownership of approximately 23.2% of Gaea with third party investors owning the remaining approximately 76.8%. The Company recognized no gain or loss on the transaction as Gaea's fair value at the date of the deconsolidation did not represent a material change from the fair values of its recently acquired assets and liabilities due to the limited lapse of time since their acquisitions. The Company accounts for its investment in Gaea using the equity method.

During the year ended December 31, 2019, the Company acquired a cumulative 40.4% average ownership interest in three legacy entity LLCs managed by the Servicer for $1.0 million which hold investments in RPLs and NPLs. The Company accounts for its investment using the equity method.

During 2018, the Company acquired an 8.0% ownership interest in GAFS. The acquisition was completed in two transactions. January 26, 2018 was the initial closing date wherein the Company acquired a 4.9% interest in GAFS and three warrants, each exercisable for a 2.45% interest in GAFS upon payment of additional consideration, in exchange for consideration of $1.1 million of cash and 45,938 shares of the Company’s common stock with a value of approximately $0.6 million. On May 29, 2018 the additional closing was completed wherein the Company acquired an additional 3.1% interest in GAFS and three warrants, each exercisable for a 1.55% interest in GAFS, in exchange for consideration of $0.7 million of cash and 29,063 shares of the Company's common stock with a value of approximately $0.4 million. The Company accounts for its investment in GAFS using the equity method.

On March 14, 2016, the Company formed AS Ajax E LLC to hold an equity interest in a Delaware trust formed to own residential mortgage loans and residential real estate assets. AS Ajax E LLC owns a 5% equity interest in Ajax E Master Trust which holds a portfolio of RPLs. At the time of the original investment, the Company held a 24.2% interest in AS Ajax E LLC. In October 2016, additional capital contributions were made by third parties, and the Company’s ownership interest in AS Ajax E was reduced to a lower percentage of the total. As of March 31, 2020 and December 31, 2019, the Company’s interest in AS Ajax E LLC was approximately 16.5%. The Company accounts for its investment using the equity method.

Upon the closing of the Company’s original private placement in July 2014, the Company received a 19.8% equity interest in the Manager, a privately held company for which there is no public market for its securities. The Company accounts for its investment in the Manager using the equity method.

The table below shows the net income, assets and liabilities for the Company’s unconsolidated affiliates at 100%, and at the Company’s share ($ in thousands):

Net income/(loss), assets and liabilities of unconsolidated affiliates at 100%


	Three months ended March 31,
Net income/(loss) at 100%	2020		2019
Legacy Entities	$	198	$	—
AS Ajax E LLC	$	62	$	76
Gaea Real Estate Corp.	$	15	$	—
Great Ajax FS LLC⁽¹⁾	$	(3,450)	$	1,600
Thetis Asset Management LLC	$	(4,877)	$	1,408


	March 31, 2020						December 31, 2019
Assets and Liabilities at 100%	Assets		Liabilities		Assets		Liabilities
Gaea Real Estate Corp.	$	83,173	$	772	$	83,068	$	768
Great Ajax FS LLC	$	56,538	$	35,656	$	61,432	$	37,142
Thetis Asset Management LLC	$	7,229	$	2,379	$	12,277	$	2,265
AS Ajax E LLC	$	5,522	$	2	$	5,747	$	2
Legacy entities	$	1,350	$	3,125	$	1,592	$	3,095

Net income/(loss), assets and liabilities of unconsolidated affiliates at the Company's share


	Three months ended March 31,
Net income/(loss) at the Company's share	2020		2019
Legacy Entities	$	79	$	—
AS Ajax E LLC	$	10	$	13
Gaea Real Estate Corp.	$	4	$	—
Great Ajax FS LLC⁽¹⁾	$	(276)	$	128
Thetis Asset Management LLC	$	(966)	$	279


	March 31, 2020						December 31, 2019
Assets and Liabilities at the Company's share	Assets		Liabilities		Assets		Liabilities
Gaea Real Estate Corp.	$	19,277	$	179	$	19,252	$	178
Great Ajax FS LLC	$	4,523	$	2,852	$	4,915	$	2,971
Thetis Asset Management LLC	$	1,431	$	471	$	2,431	$	448
AS Ajax E LLC	$	911	$	—	$	948	$	—
Legacy Entities	$	540	$	1,259	$	637	$	1,247

(1)Net income at the Company's share is not directly proportionate to Net income at 100% due to the timing of the Company's acquisition during the three months ended March 31, 2019

Consolidated affiliates

The Company consolidates the results and balances of securitization trusts which are established to provide debt financing to the Company by securitizing pools of mortgage loans. These trusts are considered to be VIEs, and the Company has determined that it is the primary beneficiary of the VIEs. See Note 9 — Debt.

The Company also consolidates the activities and balances of its controlled affiliates, which include AS Ajax E II, which was established to hold an equity interest in a Delaware trust formed to own residential mortgage loans and residential real estate assets. As of March 31, 2020, AS Ajax E II LLC was 53.1% owned by the Company, with the remainder held by third parties. 2017-D and 2018-C are securitization trusts formed to hold mortgage loans, REO property and secured debt. As of March 31, 2020, 2017-D was 50.0% owned by a third-party institutional accredited investor. As of March 31, 2020, 2018-C was 63.0% owned by the Company, with the remainder held by third-party institutional accredited investors. Great Ajax II REIT which holds an interest in Great Ajax II Depositor LLC which was formed to act as the depositor of mortgage loans into securitization trusts and to hold the subordinated securities issued by such trusts and any additional trusts the Company may form for additional secured borrowings is 99.8% owned by the Company as of March 31, 2020.