Beneficial Interests

6 Months Ended

Jun. 30, 2023

In connection with certain committed capital agreements, the Company has risk sharing arrangements in which it is obligated to make payments to the loan buyer or is entitled to receive payments from the loan buyer if credit losses on the underlying loans subject to the arrangements deviate from initial expectations, subject to a dollar cap. The Company has beneficial interests in these arrangements which either meet the definition of a derivative or that meet the criteria of a debt security. As of June 30, 2023 the Company’s capital at risk, which represents the maximum exposure to losses, under these arrangements was $40.2 million.

The following table presents the aggregate unpaid principal balance of the underlying portfolio as well as the fair value of beneficial interests, which are presented as a separate asset line item on the condensed consolidated balance sheets. As of June 30, 2023, beneficial interest liabilities were immaterial. There were no beneficial interests held by the Company as of December 31, 2022.


	June 30, 2023
	Unpaid Principal Balance		Fair Value

Beneficial interests	$	742,988	$	28,664

The Company recognizes these beneficial interests at fair value with changes reported as part of the fair value and other adjustments on the condensed consolidated statements of operations and comprehensive income (loss). The table below presents losses recognized on beneficial interests during the following periods:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2023		2022		2023

Fair value losses on beneficial interests	$	—	$	(1,956)	$	—	$	(1,956)

Refer to “Note 6. Fair Value Measurement” for additional information.