NOTE 8 - INVESTMENTS IN UNCONSOLIDATED ENTITIES AND LOAN MANAGER

As a specialized asset manager, the Company develops various types of investment vehicles, which it manages under long-term management agreements or similar arrangements. The following table details the Company’s investments in these vehicles, including the range of ownership interests owned (in thousands, except percentages):



	Range of Combined Ownership Interests	December 31,
	Range of Combined Ownership Interests	2014		2013
Real estate investment entities	1% – 12%	$	8,313	$	8,271
Financial fund management partnerships	0.01% - 50%	4,162		5,294
Trapeza entities	33% − 50%	614		777
Investments in unconsolidated entities		$	13,089	$	14,342

Included in real estate investment entities is the Company's $2.5 million investment in Opportunity REIT I, which completed its initial public offering in December 2013 as well as a $1.3 million investment in Opportunity REIT II, which is in its offering stage. The Company accounts for its investments in Opportunity REIT I and Opportunity REIT II on the cost method. In January 2013, the Company sold its 10% interest in a real estate joint venture to its partner for $3.0 million and recognized a gain of $1.6 million. The Company continues to manage the one remaining property held by the joint venture and receives property management fees. As of December 31, 2014, the Company has a $200,000 investment in a new fund it is sponsoring, Innovation Office REIT, Inc., which is expected to be effective by the second quarter of 2015.

The Company evaluates all of its investments for impairment on a quarterly basis. There were no identified events that had a significant adverse effect on any of the investments and, as such, no impairment has been recorded.

Investment in Unconsolidated Loan Manager. The Company has a $39.7 million investment in CVC Credit Partners for which it records its 33% equity share, including the operations of Apidos, in Financial Fund Management Revenues on the consolidated statements of operations and comprehensive loss. Included in costs and expenses for CVC Credit Partners for 2014 and 2013 were $129,000 and $2.4 million, respectively, of offering costs associated with a European investment fund that holds sub-investment grade European debt.

Per the terms of the CVC Credit Partners shareholders agreement, CVC has an irrevocable option to buy 9% of the Company’s interests in the joint venture. This option may be exercised during a sixty-day period commencing with the completion of the CVC Credit Partners audit for the year ended December 31, 2014.

Summarized operating data for CVC Credit Partners is presented below (in thousands):



	Years Ended December 31,
	2014			2013
Management fee revenues	$	67,512		$	51,662
Costs and expenses	(61,953		)	(48,106		)
Net income	$	5,559		$	3,556
Portion of net income attributable to the Company	$	1,803		$	1,775

In conjunction with the formation of CVC Credit Partners, the Company retained a preferred interest in Apidos-CVC relating to incentive management fees on legacy CLOs that had been sponsored and managed by Apidos. The Company accounts for this interest, with a book value of $6.8 million at December 31, 2014, on the cost method. As these incentive fees are received, in accordance with its preferred interest, the Company receives a distribution of 75% of those amounts which will initially be recorded as income, net of any contractual amounts due to third-parties. The Company continually evaluates the investment for impairment by estimating the fair value of the expected future cash flows from the incentive management fees. If the estimated fair value is less than the cost basis of the interest, the preferred interest will be deemed to be impaired. If the Company determines that the shortfall is other-than-temporary, the impairment will be recorded as a reduction of the preferred interest by reducing the revenues previously recorded on these preferred shares. At such time that the investment has been reduced to zero, all subsequent distributions will be recorded as income.