VARIABLE INTEREST ENTITIES |
9 Months Ended |
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Sep. 30, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES A VIE is an entity that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties, or whose equity holders lack the characteristics of a controlling financial interest. The Company sponsors private funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and performance-based fees. These private funds are established as limited partnerships or equivalent structures. Limited partners of the private funds do not have either substantive liquidation rights, or substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of limited partners or by a single limited partner. Accordingly, the absence of such rights, which represent voting rights in a limited partnership, results in the private funds being considered VIEs. The nature of the Company’s involvement with its sponsored funds comprises fee arrangements and equity interests. The fee arrangements are commensurate with the level of management services provided by the Company and contain terms and conditions that are customary to similar at-market fee arrangements.
The Company does not consolidate its sponsored private funds where it has insignificant direct equity interests or capital commitments to these funds as general partner. As the Company’s direct equity interests in its sponsored private funds as general partner absorb insignificant variability, the Company is considered to be acting in the capacity of an agent of these funds and is therefore not the primary beneficiary of these funds. The Company accounts for its equity interests in unconsolidated sponsored private funds under the equity method. Additionally, the Company has investments in funds sponsored by third parties that we do not consolidate as we are not the primary beneficiary. The Company’s maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated private funds, totaling $171.2 million and $191.6 million as of September 30, 2024 and December 31, 2023, respectively, which is included in other investments on the condensed consolidated balance sheets for the periods then ended.
The Operating Company consolidates certain VIEs for which it is the primary beneficiary. Pre-IPO VIEs consisted of certain operating entities not wholly owned by the Company and included BSHM, Bridge Debt Strategies Fund Manager LLC, BOFM, Bridge Agency MBS Fund Manager LLC, Bridge Net Lease Fund Manager LLC, Bridge Logistics Properties Fund Manager LLC, and certain Bridge GPs. As part of the Transactions and IPO, the Operating Company acquired the non-controlling interest of its consolidated subsidiaries BSHM and BOFM, which was accounted for as an equity transaction with no gain or loss recognized in combined net income for the period then ended. The carrying amounts of the non-controlling interest in BSHM and BOFM were adjusted to zero.
In 2023, the Company made a direct investment in Bridge Solar Energy Development Fund LP. Due to the timing of capital raising, the Company’s equity interests in the fund was considered significant to the fund as of September 30, 2024, and as a result the fund was consolidated in the Company’s financial statements for the period then ended. Subsequent to September 30, 2024, additional limited partner capital commitments were funded to Bridge Solar Energy Development Fund LP, which resulted in the Company no longer being considered the primary beneficiary of the VIE. Therefore, the Company’s direct investment in Bridge Solar Energy Development Fund LP was deconsolidated as of such date, and will be reported as an equity method investment on a prospective basis.
The assets of the Operating Company’s consolidated VIEs totaled $1,166.3 million and $1,221.1 million as of September 30, 2024 and December 31, 2023, respectively, while the liabilities of the consolidated VIEs totaled $658.8 million and $681.7 million as of the same dates, respectively. The assets of the consolidated VIEs may only be used to settle obligations of the same VIE. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities. Additionally, the Operating Company is a VIE that is consolidated by the Company.
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