UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JuneSeptember 30, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission File Number:
BRIDGE INVESTMENT GROUP HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware | 82-2769085 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
111 East Sego Lily Drive, Suite 400 Salt Lake City, Utah | 84070 | |
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A common stock, $0.01 par value per share | BRDG | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation(§ (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Indicate by check mark whether the registrant is a shell company (as defined in Rule
As of August13 2021, the registrant had 25,175,24025,162,561shares ofof Class A common stock ($0.01 par value per share) outstanding
TABLE OF CONTENTS
Page | ||||||
1 | ||||||
5 | ||||||
Item 1. | 5 | |||||
5 | ||||||
5 | ||||||
6 | ||||||
7 | ||||||
8 | ||||||
10 | ||||||
11 | ||||||
Item 2. | 38 | |||||
Item 3. | 62 | |||||
Item 4. | 63 | |||||
64 | ||||||
Item 1. | 64 | |||||
Item 1A. | 64 | |||||
Item 2. | 64 | |||||
Item 3. | 64 | |||||
Item 4. | 64 | |||||
Item 5. | 65 | |||||
Item 6. | 65 | |||||
66 |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “seek,” “anticipates,” “plan,” “forecasts,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate.
These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factorsthose described under the sections in Part II, Item 1A, “Risk Factors” of this report and Part II, Item 1A, “Risk Factors” in our Quarterly Report titled “Risk Factors.”
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Certain Definitions
As used in this Quarterly Report, unless the context otherwise requires, references to:
1
2
June 30, 2021 | April 2, 2021 | |||||||
(unaudited) | ||||||||
Assets : | ||||||||
Cash and cash equivalents | $ | 100 | $ | 100 | ||||
Total assets | $ | 100 | $ | 100 | ||||
Stockholder’s equity : | ||||||||
Common stock, par value $0.01 per share, 100 shares issued and outstanding | $ | 1 | $ | 1 | ||||
Additional paid-in capital | 99 | 99 | ||||||
Total stockholders’ equity | $ | 100 | $ | 100 | ||||
3
4
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements (unaudited)
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Combined and Consolidated Balance Sheets (Unaudited)
|
| September 30, |
|
| December 31, |
| ||
(in thousands, except shares and per share amounts) |
| 2021 |
|
| 2020 |
| ||
Assets |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 188,338 |
|
| $ | 101,830 |
|
Restricted cash |
|
| 5,450 |
|
|
| 5,524 |
|
Marketable securities |
|
| 9,108 |
|
|
| 5,053 |
|
Receivables from affiliates |
|
| 33,668 |
|
|
| 25,481 |
|
Notes receivable from affiliates |
|
| 19,475 |
|
|
| 40,795 |
|
Notes receivable from employees |
|
| — |
|
|
| 7,431 |
|
Prepaid and other current assets |
|
| 5,805 |
|
|
| 5,184 |
|
Total current assets |
|
| 261,844 |
|
|
| 191,298 |
|
Accrued performance allocations |
|
| 301,910 |
|
|
| 199,410 |
|
Other investments |
|
| 38,485 |
|
|
| 16,017 |
|
Long-term notes receivable from employees |
|
| 4,364 |
|
|
| — |
|
Tenant improvements, furniture and equipment, net |
|
| 4,200 |
|
|
| 4,158 |
|
Intangible assets, net |
|
| 3,791 |
|
|
| 4,910 |
|
Goodwill |
|
| 9,830 |
|
|
| 9,830 |
|
Deferred tax assets |
|
| 62,537 |
|
|
| 161 |
|
Other assets |
|
| 21 |
|
|
| 228 |
|
Total assets |
| $ | 686,982 |
|
| $ | 426,012 |
|
|
|
|
|
|
|
| ||
Liabilities and shareholdersʼ/membersʼ equity |
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
|
| ||
Accrued performance allocations compensation |
| $ | 19,997 |
|
| $ | 22,167 |
|
Accounts payable and accrued expenses |
|
| 9,774 |
|
|
| 11,137 |
|
Accrued payroll and benefits |
|
| 13,987 |
|
|
| 11,614 |
|
General Partner Notes Payable at fair value |
|
| 12,007 |
|
|
| 16,458 |
|
Insurance loss reserves |
|
| 5,418 |
|
|
| 4,436 |
|
Self-insurance reserves and unearned premiums |
|
| 4,349 |
|
|
| 3,700 |
|
Other current liabilities |
|
| 8,644 |
|
|
| 4,830 |
|
Total current liabilities |
|
| 74,176 |
|
|
| 74,342 |
|
|
|
|
|
|
|
| ||
Notes payable, net |
|
| 148,035 |
|
|
| 147,713 |
|
Other long-term liabilities |
|
| 2,285 |
|
|
| 2,486 |
|
Due to affiliates |
|
| 44,411 |
|
|
| — |
|
Total liabilities |
|
| 268,907 |
|
|
| 224,541 |
|
|
|
|
|
|
|
| ||
Shareholdersʼ/membersʼ equity: |
|
|
|
|
|
| ||
Net investment in common control group |
|
| — |
|
|
| 186,091 |
|
Preferred stock, $0.01 par value, 20,000,000 authorized, 0 issued and |
|
|
|
|
|
| ||
Class A common stock, $0.01 par value, 500,000,000 authorized; 25,162,561 |
|
| 230 |
|
|
| — |
|
Class B common stock, $0.01 par value, 239,208,722 authorized; 86,672,703 |
|
| 867 |
|
|
| — |
|
Additional paid-in capital |
|
| 52,779 |
|
|
| — |
|
Retained earnings |
|
| 10,303 |
|
|
| — |
|
Accumulated other comprehensive income (loss) |
|
| (2 | ) |
|
| 4 |
|
Bridge Investment Group Holdings Inc. equity |
|
| 64,177 |
|
|
| 186,095 |
|
Non-controlling interests in Bridge Investment Group |
|
| 194,771 |
|
|
| 15,376 |
|
Non-controlling interests in Bridge Investment Group Holdings Inc. |
|
| 159,127 |
|
|
| — |
|
Total shareholdersʼ/membersʼ equity |
|
| 418,075 |
|
|
| 201,471 |
|
Total liabilities and shareholdersʼ/membersʼ equity |
| $ | 686,982 |
|
| $ | 426,012 |
|
See notes to condensed combined and consolidated financial statements.
5
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Combined and Consolidated Statements of Operations (Unaudited)
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands, except shares and per share amounts) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| |||||||
Fund management fees |
| $ | 40,576 |
|
| $ | 26,624 |
|
| $ | 105,963 |
|
| $ | 78,066 |
|
Property management and leasing fees |
|
| 22,510 |
|
|
| 13,747 |
|
|
| 53,592 |
|
|
| 45,114 |
|
Construction management fees |
|
| 2,097 |
|
|
| 1,792 |
|
|
| 5,988 |
|
|
| 5,569 |
|
Development fees |
|
| 1,018 |
|
|
| 738 |
|
|
| 2,567 |
|
|
| 1,315 |
|
Transaction fees |
|
| 21,907 |
|
|
| 5,085 |
|
|
| 43,475 |
|
|
| 20,724 |
|
Insurance premiums |
|
| 2,530 |
|
|
| 2,220 |
|
|
| 6,446 |
|
|
| 4,725 |
|
Other asset management and property income |
|
| 1,533 |
|
|
| 1,146 |
|
|
| 4,664 |
|
|
| 4,690 |
|
Total revenues |
|
| 92,171 |
|
|
| 51,352 |
|
|
| 222,695 |
|
|
| 160,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Incentive fees |
|
| 0 |
|
|
| 0 |
|
|
| 910 |
|
|
| 0 |
|
Performance allocations: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Realized gains |
|
| 30,999 |
|
|
| 4,437 |
|
|
| 72,184 |
|
|
| 13,872 |
|
Unrealized gains |
|
| 53,042 |
|
|
| 14,663 |
|
|
| 111,009 |
|
|
| 12,045 |
|
Earnings (losses) from investments in real estate |
|
| 823 |
|
|
| 183 |
|
|
| 1,799 |
|
|
| (407 | ) |
Total investment income |
|
| 84,864 |
|
|
| 19,283 |
|
|
| 185,902 |
|
|
| 25,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Employee compensation and benefits |
|
| 31,763 |
|
|
| 22,826 |
|
|
| 101,220 |
|
|
| 67,358 |
|
Incentive fee compensation |
|
| 0 |
|
|
| 0 |
|
|
| 82 |
|
|
| 0 |
|
Performance allocations compensation: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Realized gain |
|
| 1,855 |
|
|
| 438 |
|
|
| 6,096 |
|
|
| 1,343 |
|
Unrealized gain |
|
| 2,682 |
|
|
| 1,542 |
|
|
| 10,159 |
|
|
| 1,398 |
|
Loss and loss adjustment expenses |
|
| 1,429 |
|
|
| 1,535 |
|
|
| 4,346 |
|
|
| 3,213 |
|
Third-party operating expenses |
|
| 11,581 |
|
|
| 6,033 |
|
|
| 26,325 |
|
|
| 21,676 |
|
General and administrative expenses |
|
| 6,703 |
|
|
| 4,448 |
|
|
| 16,196 |
|
|
| 13,209 |
|
Depreciation and amortization |
|
| 699 |
|
|
| 672 |
|
|
| 2,179 |
|
|
| 2,016 |
|
Total expenses |
|
| 56,712 |
|
|
| 37,494 |
|
|
| 166,603 |
|
|
| 110,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment income (loss) |
|
| 2,565 |
|
|
| (143 | ) |
|
| 8,663 |
|
|
| 663 |
|
Interest income |
|
| 1,008 |
|
|
| 358 |
|
|
| 2,172 |
|
|
| 961 |
|
Interest expense |
|
| (2,407 | ) |
|
| (1,701 | ) |
|
| (6,547 | ) |
|
| (2,626 | ) |
Total other income (expense) |
|
| 1,166 |
|
|
| (1,486 | ) |
|
| 4,288 |
|
|
| (1,002 | ) |
Income before provision for income taxes |
|
| 121,489 |
|
|
| 31,655 |
|
|
| 246,282 |
|
|
| 74,498 |
|
Income tax provision |
|
| (2,607 | ) |
|
| (397 | ) |
|
| (3,441 | ) |
|
| (579 | ) |
Net income |
|
| 118,882 |
|
|
| 31,258 |
|
|
| 242,841 |
|
|
| 73,919 |
|
Net income attributable to non-controlling interests in Bridge |
|
| 60,900 |
|
|
| 4,089 |
|
|
| 70,663 |
|
|
| 10,574 |
|
Net income attributable to Bridge Investment Group Holdings LLC |
|
| 57,982 |
|
|
| 27,169 |
|
|
| 172,178 |
|
|
| 63,345 |
|
Net income attributable to Common Control Group prior to Transactions and IPO |
|
| 3,775 |
|
|
| 27,169 |
|
|
| 117,971 |
|
|
| 63,345 |
|
Net income attributable to non-controlling interests in Bridge Investment |
|
| 43,904 |
|
|
| 0 |
|
|
| 43,904 |
|
|
| 0 |
|
Net income attributable to Bridge Investment Group Holdings Inc. |
| $ | 10,303 |
|
| $ | 0 |
|
| $ | 10,303 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings per share of Class A common stock - Basic and Diluted(1) |
| $ | 0.41 |
|
|
|
|
| $ | 0.41 |
|
|
|
| ||
Weighted-average shares of Class A common stock outstanding - Basic and Diluted(1) |
|
| 22,284,351 |
|
|
|
|
|
| 22,284,351 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
(1) Represents the period following the Transactions and the IPO, from July 16, 2021 through September 30, 2021, as described in note 23. |
|
See notes to condensed combined and consolidated financial statements.
6
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Combined and Consolidated Statements of Comprehensive Income (Unaudited)
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Net income |
| $ | 118,882 |
|
| $ | 31,258 |
|
| $ | 242,841 |
|
| $ | 73,919 |
|
Other comprehensive income (loss) - foreign currency |
|
| (13 | ) |
|
| 1 |
|
|
| (6 | ) |
|
| 1 |
|
Total comprehensive income |
|
| 118,869 |
|
|
| 31,259 |
|
|
| 242,835 |
|
|
| 73,920 |
|
Less: comprehensive income attributable to non-controlling |
|
| 60,900 |
|
|
| 4,089 |
|
|
| 70,663 |
|
|
| 10,574 |
|
Comprehensive income attributable to Bridge Investment |
|
| 57,969 |
|
|
| 27,170 |
|
|
| 172,172 |
|
|
| 63,346 |
|
Less: comprehensive income attributable to Common Control |
|
| 3,775 |
|
|
| 27,170 |
|
|
| 117,971 |
|
|
| 63,346 |
|
Less: comprehensive income attributable to non-controlling |
|
| 43,904 |
|
|
| — |
|
|
| 43,904 |
|
|
| — |
|
Comprehensive income attributable to Bridge Investment |
| $ | 10,290 |
|
| $ | — |
|
| $ | 10,297 |
|
| $ | — |
|
See notes to condensed combined and consolidated financial statements.
7
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Combined and Consolidated Statements of Changes in Shareholders’/Members’ Equity (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NCI in |
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
| Bridge |
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| other |
|
| NCI in |
|
| Investment |
|
| Total |
| |||||||||||
|
| Net |
|
|
|
|
|
|
|
| Additional |
|
|
|
| comprehensive |
|
| Operating |
|
| Group |
|
| Shareholdersʼ/ |
| ||||||||||
|
| investment |
|
| Class A |
|
| Class B |
|
| paid-in |
|
| Retained |
|
| income |
|
| Company |
|
| Holdings |
|
| membersʼ |
| |||||||||
(in thousands) |
| CCG(1) |
|
| common stock |
|
| common stock |
|
| capital |
|
| earnings |
|
| (loss) |
|
| or CCG(2) |
|
| Inc.(3) |
|
| equity |
| |||||||||
Balance at June 30, 2021 |
| $ | 157,253 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 11 |
|
| $ | 12,377 |
|
| $ | — |
|
| $ | 169,641 |
|
Net income prior to Transactions and IPO |
|
| 3,775 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,799 |
|
|
| — |
|
|
| 5,574 |
|
Foreign currency translation adjustment prior to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (11 | ) |
|
| — |
|
|
| — |
|
|
| (11 | ) |
Share-based compensation prior to Transactions and IPO |
|
| 196 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 19 |
|
|
| — |
|
|
| 215 |
|
Distributions prior to Transactions and IPO |
|
| (18,377 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,186 | ) |
|
| — |
|
|
| (21,563 | ) |
Settlement of accrued performance allocations compensation liability with equity |
|
| 14,247 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
| 14,247 |
| ||
Recognition of non-controlling interests in certain subsidiaries concurrent |
|
| (142,986 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 142,986 |
|
|
| — |
|
|
| — |
|
Derecognition of Bridge Debt Strategies Fund GP LLC |
|
| 2,337 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,337 |
|
Effects of Transactions and purchase of Operating Company Class A Units |
|
| (16,445 | ) |
|
| 28 |
|
|
| 975 |
|
|
| 15,442 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Issuance of Class A common stock sold in IPO, net of underwriting discount |
|
| — |
|
|
| 187 |
|
|
| — |
|
|
| 277,006 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (139,875 | ) |
|
| 137,318 |
|
Purchase of membership interests in the Operating Company |
|
| — |
|
|
| — |
|
|
| (108 | ) |
|
| (157,955 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 158,063 |
|
|
| — |
|
Issuance of Class A common stock from Underwritersʼ exercise of |
|
| — |
|
|
| 14 |
|
|
| — |
|
|
| 18,174 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (18,188 | ) |
|
| — |
|
Deferred tax effect resulting from purchase of Class A Units, net of amounts |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 18,730 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 18,730 |
|
Equity reallocation between controlling and non-controlling interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (119,149 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 119,149 |
|
|
| — |
|
Capital contributions subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 186 |
|
|
| — |
|
|
| 186 |
|
Net income subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,303 |
|
|
| — |
|
|
| 59,101 |
|
|
| 43,904 |
|
|
| 113,308 |
|
Foreign currency translation subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| — |
|
|
| (2 | ) |
Share-based compensation subsequent to Transactions and IPO |
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 531 |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
|
| 1,702 |
|
|
| 2,238 |
|
Distributions subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (18,515 | ) |
|
| (5,628 | ) |
|
| (24,143 | ) |
Balance at September 30, 2021 |
| $ | — |
|
| $ | 230 |
|
| $ | 867 |
|
| $ | 52,779 |
|
| $ | 10,303 |
|
| $ | (2 | ) |
| $ | 194,771 |
|
| $ | 159,127 |
|
| $ | 418,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance at June 30, 2020 |
| $ | 164,721 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 8,697 |
|
| $ | — |
|
| $ | 173,418 |
|
Net income for the period |
|
| 27,169 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,089 |
|
|
| — |
|
|
| 31,258 |
|
Foreign currency translation adjustment |
|
| 0 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 0 |
|
|
| — |
|
|
| 1 |
|
Distributions to members |
|
| (54,127 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| (5,435 | ) |
|
| — |
|
|
| (59,562 | ) |
Repurchase of membership interests |
|
| (59 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (40 | ) |
|
| — |
|
|
| (99 | ) |
Share-based compensation |
|
| 351 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 36 |
|
|
| — |
|
|
| 387 |
|
Balance at September 30, 2020 |
| $ | 138,055 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 1 |
|
| $ | 7,347 |
|
| $ | — |
|
| $ | 145,403 |
|
(1) Net investment in Common Control Group ("CCG")
(2.)Non-controlling interests ("NCI") in Bridge Investment Group Holdings LLC or Common Control Group
(3) Non-controlling interests ("NCI") in Bridge Investment Group Holdings Inc.
See notes to condensed combined and consolidated financial statements.
8
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Combined and Consolidated Statements of Changes in Shareholders’/Members’ Equity (Unaudited) (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NCI in |
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
| Bridge |
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| other |
|
| NCI in |
|
| Investment |
|
| Total |
| |||||||||
|
| Net |
|
|
|
|
|
|
|
| Additional |
|
|
|
|
| comprehensive |
|
| Operating |
|
| Group |
|
| Shareholdersʼ/ |
| |||||||||
|
| investment |
|
| Class A |
|
| Class B |
|
| paid-in |
|
| Retained |
|
| income |
|
| Company |
|
| Holdings |
|
| membersʼ |
| |||||||||
(in thousands) |
| CCG(1) |
|
| common stock |
|
| common stock |
|
| capital |
|
| earnings |
|
| (loss) |
|
| or CCG(2) |
|
| Inc.(3) |
|
| equity |
| |||||||||
Balance at December 31, 2020 |
| $ | 186,091 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 4 |
|
| $ | 15,376 |
|
| $ | — |
|
| $ | 201,471 |
|
Net income prior to Transactions and IPO |
|
| 117,971 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,562 |
|
|
| — |
|
|
| 129,533 |
|
Foreign currency translation adjustment prior to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (4 | ) |
|
| — |
|
|
| — |
|
|
| (4 | ) |
Share-based compensation prior to Transactions and IPO |
|
| 14,704 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 975 |
|
|
| — |
|
|
| 15,679 |
|
Capital contributions prior to Transactions and IPO |
|
| 422 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 323 |
|
|
| — |
|
|
| 745 |
|
Distributions prior to Transactions and IPO |
|
| (176,273 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (17,186 | ) |
|
| — |
|
|
| (193,459 | ) |
Repurchase of membership interests prior to Transactions and IPO |
|
| (68 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (42 | ) |
|
| — |
|
|
| (110 | ) |
Settlement of accrued performance allocations compensation liability with equity |
|
| 14,247 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 14,247 |
|
Recognition of non-controlling interests in certain subsidiaries concurrent |
|
| (142,986 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 142,986 |
|
|
| — |
|
|
| — |
|
Derecognition of Bridge Debt Strategies Fund GP LLC |
|
| 2,337 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,337 |
|
Effects of Transactions and purchase of Operating Company Class A Units |
|
| (16,445 | ) |
|
| 28 |
|
|
| 975 |
|
|
| 15,442 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Issuance of Class A common stock sold in IPO, net of underwriting discount |
|
| — |
|
|
| 187 |
|
|
| — |
|
|
| 277,006 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (139,875 | ) |
|
| 137,318 |
|
Purchase of membership interests in the Operating Company |
|
| — |
|
|
| — |
|
|
| (108 | ) |
|
| (157,955 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 158,063 |
|
|
| — |
|
Issuance of Class A common stock from Underwritersʼ exercise of |
|
| — |
|
|
| 14 |
|
|
| — |
|
|
| 18,174 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (18,188 | ) |
|
| — |
|
Deferred tax effect resulting from purchase of Class A Units, net of |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 18,730 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 18,730 |
|
Equity reallocation between controlling and non-controlling interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (119,149 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 119,149 |
|
|
| — |
|
Capital contributions subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 186 |
|
|
| — |
|
|
| 186 |
|
Net income subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,303 |
|
|
| — |
|
|
| 59,101 |
|
|
| 43,904 |
|
|
| 113,308 |
|
Foreign currency translation subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| — |
|
|
| (2 | ) |
Share-based compensation subsequent to Transactions and IPO |
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 531 |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
|
| 1,702 |
|
|
| 2,238 |
|
Distributions subsequent to Transactions and IPO |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (18,514 | ) |
|
| (5,628 | ) |
|
| (24,142 | ) |
Balance at September 30, 2021 |
| $ | — |
|
| $ | 230 |
|
| $ | 867 |
|
| $ | 52,779 |
|
| $ | 10,303 |
|
| $ | (2 | ) |
| $ | 194,771 |
|
| $ | 159,127 |
|
| $ | 418,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance at December 31, 2019 |
| $ | 174,465 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 0 |
|
| $ | 15,860 |
|
| $ | — |
|
| $ | 190,325 |
|
Net income for the period |
|
| 63,345 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,574 |
|
|
| — |
|
|
| 73,919 |
|
Foreign currency translation adjustment |
|
| 0 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 0 |
|
|
| — |
|
|
| 1 |
|
Capital contributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 273 |
|
|
| — |
|
|
| 273 |
|
Distributions to members |
|
| (94,248 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (19,430 | ) |
|
| — |
|
|
| (113,678 | ) |
Repurchase of membership interests |
|
| (6,559 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (39 | ) |
|
| — |
|
|
| (6,598 | ) |
Share-based compensation |
|
| 1,052 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 109 |
|
|
| — |
|
|
| 1,161 |
|
Balance at September 30, 2020 |
| $ | 138,055 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 1 |
|
| $ | 7,347 |
|
| $ | — |
|
| $ | 145,403 |
|
(1) Net investment in Common Control Group ("CCG")
(2.)Non-controlling interests ("NCI") in Bridge Investment Group Holdings LLC or Common Control Group
(3) Non-controlling interests ("NCI") in Bridge Investment Group Holdings Inc.
See notes to condensed combined and consolidated financial statements.
9
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Combined and Consolidated Statements of Cash Flows (Unaudited)
|
| Nine Months Ended September 30, |
| |||||
(in thousands) |
| 2021 |
|
| 2020 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
Net income |
| $ | 242,841 |
|
| $ | 73,919 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| ||
Depreciation and amortization |
|
| 2,179 |
|
|
| 2,016 |
|
Amortization of financing costs and debt discount and premium |
|
| 392 |
|
|
| 140 |
|
Share-based compensation |
|
| 17,917 |
|
|
| 1,161 |
|
Equity in income of investments |
|
| (7,828 | ) |
|
| (353 | ) |
Changes in unrealized gain on General Partner Notes Payable |
|
| (830 | ) |
|
| (657 | ) |
Amortization of lease liabilities |
|
| (203 | ) |
|
| (209 | ) |
Changes in unrealized performance allocations |
|
| (111,009 | ) |
|
| (12,045 | ) |
Changes in unrealized accrued performance allocations compensation |
|
| 10,159 |
|
|
| 1,398 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
| ||
Receivable from affiliates |
|
| (8,136 | ) |
|
| 15,409 |
|
Prepaid and other current assets |
|
| (1,929 | ) |
|
| (1,230 | ) |
Accounts payable and accrued expenses |
|
| (430 | ) |
|
| (1,481 | ) |
Accrued payroll and benefits |
|
| 2,374 |
|
|
| (1,675 | ) |
Other liabilities |
|
| 3,816 |
|
|
| 1,893 |
|
Insurance loss and self-insurance reserves |
|
| 1,630 |
|
|
| 856 |
|
Accrued performance allocations compensation |
|
| 1,918 |
|
|
| 198 |
|
Net cash provided by operating activities |
|
| 152,861 |
|
|
| 79,340 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
| ||
Purchase of investments |
|
| (10,667 | ) |
|
| (15,553 | ) |
Proceeds from sale of investments |
|
| 1,274 |
|
|
| 5,313 |
|
Issuance of notes receivable |
|
| (385,165 | ) |
|
| (108,240 | ) |
Proceeds from collections on notes receivable |
|
| 409,552 |
|
|
| 94,932 |
|
Purchase of tenant improvements, furniture and equipment |
|
| (893 | ) |
|
| (34 | ) |
Net cash provided by (used in) investing activities |
|
| 14,101 |
|
|
| (23,582 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
| ||
Capital contributions |
|
| 931 |
|
|
| 273 |
|
Distributions to members |
|
| (176,273 | ) |
|
| (94,248 | ) |
Distributions to non-controlling interests |
|
| (41,327 | ) |
|
| (19,430 | ) |
Repurchase of membership interests |
|
| (110 | ) |
|
| (6,598 | ) |
Proceeds from issuance of common stock - IPO, net of underwriting |
|
| 277,193 |
|
|
| — |
|
Purchase of membership interests in Operating Company |
|
| (158,063 | ) |
|
| — |
|
Proceeds from issuance of common stock - Underwritersʼ exercise of |
|
| 18,188 |
|
|
| — |
|
Payments of deferred financing costs |
|
| — |
|
|
| (2,489 | ) |
Borrowings from notes payable |
|
| — |
|
|
| 150,000 |
|
Repayment of notes payable |
|
| — |
|
|
| (2,762 | ) |
Repayments of General Partner Notes Payable |
|
| (1,067 | ) |
|
| (500 | ) |
Proceeds from line of credit |
|
| 85,800 |
|
|
| 91,306 |
|
Payments of line of credit |
|
| (85,800 | ) |
|
| (102,542 | ) |
Net cash provided by (used in) financing activities |
|
| (80,528 | ) |
|
| 13,010 |
|
Net increase in cash, cash equivalents, and restricted cash |
|
| 86,434 |
|
|
| 68,768 |
|
Cash, cash equivalents and restricted cash - beginning of period |
|
| 107,354 |
|
|
| 60,110 |
|
Cash, cash equivalents and restricted cash - end of period |
| $ | 193,788 |
|
| $ | 128,878 |
|
|
|
|
|
|
|
| ||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
| ||
Net cash paid for income taxes |
| $ | 3,492 |
|
| $ | 752 |
|
Cash paid for interest |
|
| 8,066 |
|
|
| 1,438 |
|
Settlement of accrued performance allocations compensation liability with equity |
|
| 14,247 |
|
|
| — |
|
Derecognition of Bridge Debt Strategies Fund GP LLC |
|
| 2,337 |
|
|
| — |
|
|
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 188,338 |
|
| $ | 125,755 |
|
Restricted cash |
|
| 5,450 |
|
|
| 3,123 |
|
Cash, cash equivalents, and restricted cash |
| $ | 193,788 |
|
| $ | 128,878 |
|
See notes to condensed combined and consolidated financial statements.
10
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Notes to Condensed Combined and Consolidated Financial Statements
Bridge Investment Group Holdings Inc. (the “Company”) was incorporated in the state of Delaware on March 18, 2021. In connection with its incorporation, the Company issued 100 shares of common stock for $100 to Bridge Investment Group Holdings LLC (the “Operating Company”). The Company was formed for the purpose of completing a public offering and related Transactions in order to conduct the business of Bridge Investment Group Holdings Inc. as a publicly traded entity. On July 20, 2021, the Company completed its initial public offering of 18,750,000 shares of its Class A common stock at a public offering price of $16.00 per share (the “IPO”) receiving approximately $277.2 million in net proceeds, after deducting the underwriting discounts and commissions and estimated offering expenses. The Operating Company used net proceeds from the public offering to pay approximately $137.1 million in cash to redeem certain of the Class A Units held directly or indirectly by certain of the Original Equity Owners. The net proceeds from the IPO were used to purchase 18,750,000 newly issued Class A Units from the Operating Company at a price per unit equal to the initial public offering price per share of Class A common stock in the IPO, less the underwriting discounts and commissions and estimated offering expenses. See Note 18, “Shareholders’ Equity,” for additional details.
In connection with the IPO, owners of the Company becameContributed Bridge GPs contributed their interests in the sole managing member ofrespective Contributed Bridge GPs in exchange for LLC Interests in the Operating Company. Prior to the IPO, the Operating Company and will controldid not have any direct interest in the business and affairsContributed Bridge GPs. These combined financial statements prior to the IPO include 100% of operations of the OperatingContributed Bridge GPs for the periods presented on the basis of common control.
Subsequently, on August 12, 2021, the underwriters exercised their over-allotment option to purchase an additional 1,416,278 shares of our Class A common stock. The Company and its direct and indirect subsidiaries.
June 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
Assets : | ||||||||
Current assets : | ||||||||
Cash and cash equivalents | $ | 61,548 | $ | 101,830 | ||||
Restricted cash | 5,609 | 5,524 | ||||||
Marketable securities | 5,133 | 5,053 | ||||||
Receivables from affiliates | 22,309 | 25,481 | ||||||
Notes receivable from affiliates | 10,335 | 40,795 | ||||||
Notes receivable from employees | — | 7,431 | ||||||
Prepaid and other current assets | 5,504 | 5,184 | ||||||
Total current assets | 110,438 | 191,298 | ||||||
Investments (including accrued performance allocation of $246,620 and $199,410 at June 30, 2021 and December 31, 2020 , respectively) | 281,671 | 215,427 | ||||||
Long-term notes receivable from employees | 1,739 | — | ||||||
Tenant improvements, furniture and equipment – Less accumulated depreciation of $3,222 and $2,686 at June 30, 2021 and December 31, 2020, respectively | 3,943 | 4,158 | ||||||
Intangible assets – Less accumulated amortization of $11,744 and $10,988 | 4,154 | 4,910 | ||||||
Goodwill | 9,830 | 9,830 | ||||||
Other assets | 195 | 389 | ||||||
Total assets | $ | 411,970 | $ | 426,012 | ||||
Liabilities and members’ equity : | ||||||||
Current liabilities: | ||||||||
Accrued performance allocations compensation | $ | 31,136 | $ | 22,167 | ||||
Accounts payable and accrued expenses | 12,438 | 11,137 | ||||||
Accrued payroll and benefits | 20,006 | 11,614 | ||||||
General partner notes payable at fair value | 15,435 | 16,458 | ||||||
Insurance loss reserves | 4,883 | 4,436 | ||||||
Self-insurance reserves and unearned premiums | 3,457 | 3,700 | ||||||
Other current liabilities | 4,699 | 4,830 | ||||||
Total current liabilities | 92,054 | 74,342 | ||||||
Long-term notes payable, net | 147,927 | 147,713 | ||||||
Other long-term liabilities | 2,348 | 2,486 | ||||||
Total liabilities | 242,329 | 224,541 | ||||||
Equity: | ||||||||
Net investment in common control group | 157,253 | 186,091 | ||||||
Non-controlling interest | 12,377 | 15,376 | ||||||
Accumulated other comprehensive income | 11 | 4 | ||||||
Total equity | 169,641 | 201,471 | ||||||
Total liabilities and members’ equity | $ | 411,970 | $ | 426,012 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues: | ||||||||||||||||
Fund management fees | $ | 34,536 | $ | 25,723 | $ | 65,387 | $ | 51,442 | ||||||||
Property management and leasing fees | 14,335 | 14,845 | 31,081 | 31,367 | ||||||||||||
Construction management fees | 2,065 | 2,215 | 3,891 | 3,777 | ||||||||||||
Development fees | 1,163 | 373 | 1,549 | 577 | ||||||||||||
Transaction fees | 16,242 | 8,294 | 21,568 | 15,639 | ||||||||||||
Insurance premiums | 2,022 | 1,349 | 3,916 | 2,505 | ||||||||||||
Other asset management and property income | 1,611 | 2,343 | 3,131 | 3,543 | ||||||||||||
Total revenues | 71,974 | 55,142 | 130,523 | 108,850 | ||||||||||||
Investment income: | ||||||||||||||||
Incentive fees | — | — | 910 | — | ||||||||||||
Performance allocations | ||||||||||||||||
Realized gains | 35,629 | 5,324 | 41,185 | 9,435 | ||||||||||||
Unrealized gains (losses) | 43,248 | (21,435 | ) | 57,967 | (2,618 | ) | ||||||||||
Earnings (losses) from investments in real estate | 980 | (178 | ) | 976 | (590 | ) | ||||||||||
Total investment income | 79,857 | (16,289 | ) | 101,038 | 6,227 | |||||||||||
Expenses: | ||||||||||||||||
Employee compensation and benefits | 42,306 | 19,839 | 69,457 | 44,532 | ||||||||||||
Incentive fee compensation | — | — | 82 | — | ||||||||||||
Performance allocations compensation | ||||||||||||||||
Realized gains | 3,747 | 517 | 4,241 | 905 | ||||||||||||
Unrealized gains (losses ) | 6,048 | (2,424 | ) | 7,477 | (144 | ) | ||||||||||
Loss and loss adjustment expenses | 2,132 | 1,096 | 2,917 | 1,678 | ||||||||||||
Third-party operating expenses | 6,117 | 7,083 | 14,743 | 15,643 | ||||||||||||
General and administrative expenses | 5,392 | 4,070 | 9,492 | 8,761 | ||||||||||||
Depreciation and amortization | 727 | 672 | 1,480 | 1,344 | ||||||||||||
Total expenses | 66,469 | 30,853 | 109,889 | 72,719 | ||||||||||||
Other income (expense) | ||||||||||||||||
Net realized and unrealized gains | 300 | 152 | 6,097 | 807 | ||||||||||||
Interest income | 557 | 231 | 1,165 | 603 | ||||||||||||
Interest expense | (2,554 | ) | (444 | ) | (4,140 | ) | (925 | ) | ||||||||
Total other income (expense) | (1,697 | ) | (61 | ) | 3,122 | 485 | ||||||||||
Income before provision for income taxes | 83,665 | 7,939 | 124,794 | 42,843 | ||||||||||||
Income tax provision | (424 | ) | (170 | ) | (834 | ) | (182 | ) | ||||||||
Net i ncome | 83,241 | 7,769 | 123,960 | 42,661 | ||||||||||||
Net income attributable to non-controlling interests | 5,815 | 4,450 | 9,764 | 6,484 | ||||||||||||
Net income attributable to the Company | $ | 77,426 | $ | 3,319 | $ | 114,196 | $ | 36,177 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income | $ | 83,241 | $ | 7,769 | $ | 123,960 | $ | 42,661 | ||||||||
Other comprehensive income - foreign currency translation adjustments | 6 | — | 7 | — | ||||||||||||
Comprehensive income | 83,247 | 7,769 | 123,967 | 42,661 | ||||||||||||
Less: comprehensive income attributable to non-controlling interests | 5,815 | 4,450 | 9,764 | 6,484 | ||||||||||||
Comprehensive income attributable to the Company | $ | 77,432 | $ | 3,319 | $ | 114,203 | $ | 36,177 | ||||||||
Net investment in common control group | Noncontrolling interests | Accumulated other comprehensive income | Total | |||||||||||||
Balance at March 31, 2021 | $ | 202,167 | $ | 13,192 | $ | 5 | $ | 215,364 | ||||||||
Net income for the period | 77,426 | 5,815 | — | 83,241 | ||||||||||||
Foreign currency translation adjustment | — | — | 6 | 6 | ||||||||||||
Capital contributions | — | 323 | — | 323 | ||||||||||||
Return of capital | (7 | ) | — | — | (7 | ) | ||||||||||
Share-based compensation | 13,767 | 857 | — | 14,624 | ||||||||||||
Distributions to members | (136,100 | ) | (7,810 | ) | — | (143,910 | ) | |||||||||
Balance at June 30, 2021 | $ | 157,253 | $ | 12,377 | $ | 11 | $ | 169,641 | ||||||||
Balance at March 31, 2020 | $ | 168,489 | $ | 12,990 | $ | — | $ | 181,479 | ||||||||
Net income for the period | 3,319 | 4,450 | — | 7,769 | ||||||||||||
Share-based compensation | 351 | 37 | — | 388 | ||||||||||||
Distributions to members | (7,438 | ) | (8,780 | ) | — | (16,218 | ) | |||||||||
Balance at June 30, 2020 | $ | 164,721 | $ | 8,697 | $ | — | $ | 173,418 | ||||||||
Balance at December 31, 2020 | $ | 186,091 | $ | 15,376 | $ | 4 | $ | 201,471 | ||||||||
Net income for the period | 114,196 | 9,764 | — | 123,960 | ||||||||||||
Foreign currency translation adjustment | — | — | 7 | 7 | ||||||||||||
Capital contributions | 422 | 323 | — | 745 | ||||||||||||
Share-based compensation | 14,508 | 957 | — | 15,465 | ||||||||||||
Repurchase of membership interests | (68 | ) | (43 | ) | — | (111 | ) | |||||||||
Distributions to members | (157,896 | ) | (14,000 | ) | — | (171,896 | ) | |||||||||
Balance at June 30, 2021 | $ | 157,253 | $ | 12,377 | $ | 11 | $ | 169,641 | ||||||||
Balance at December 31, 2019 | $ | 174,465 | $ | 15,860 | $ | — | $ | 190,325 | ||||||||
Net income for the period | 36,177 | 6,484 | — | 42,661 | ||||||||||||
Capital contributions | — | 273 | — | 273 | ||||||||||||
Share-based compensation | 702 | 73 | — | 775 | ||||||||||||
Repurchase of membership interests | (6,500 | ) | — | — | (6,500 | ) | ||||||||||
Distributions to members | (40,123 | ) | (13,993 | ) | — | (54,116 | ) | |||||||||
Balance at June 30, 2020 | $ | 164,721 | $ | 8,697 | $ | — | $ | 173,418 | ||||||||
Six Months Ended June 30 , | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 123,960 | $ | 42,661 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,480 | 1,344 | ||||||
Amortization of deferred financing costs and debt discount and premium | 278 | 56 | ||||||
Share-based compensation | 15,465 | 775 | ||||||
Equity in income of investments | (5,725 | ) | (285 | ) | ||||
Changes in unrealized gain on General Partner Notes Payable | (415 | ) | (1,011 | ) | ||||
Amortization of lease incentives | (135 | ) | (166 | ) | ||||
Changes in unrealized performance allocations | (57,967 | ) | 2,618 | |||||
Changes in operating assets and liabilities: | ||||||||
Receivables from affiliates | 3,173 | 14,024 | ||||||
Prepaid and other current assets | (384 | ) | (4,201 | ) | ||||
Other assets | 15 | (191 | ) | |||||
Account payable and accrued expenses | 1,301 | (2,837 | ) | |||||
Accrued payroll and benefits | 8,392 | 3,135 | ||||||
Other current liabilities | (131 | ) | 2,011 | |||||
Insurance loss reserves | 447 | 721 | ||||||
Self-insurance reserves and unearned premiums | (243 | ) | (767 | ) | ||||
Accrued performance allocations compensation | 8,969 | (144 | ) | |||||
Deferred Rent | (3 | ) | 42 | |||||
Net cash provided by operating activities | 98,477 | 57,785 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of investments | (2,717 | ) | (2,408 | ) | ||||
Proceeds from sale of investments | 81 | 918 | ||||||
Issuance of notes receivable | (146,040 | ) | (135,051 | ) | ||||
Proceeds from epayment of notes receivabler | 182,192 | 115,150 | ||||||
Purchase of tenant improvements and office equipment | (321 | ) | — | |||||
Net cash provided by (used in) investing activities | 33,195 | (21,391 | ) | |||||
Cash flows from financing activities: | ||||||||
Capital contributions | 745 | 273 | ||||||
Distributions to members | (157,896 | ) | (40,123 | ) | ||||
Distributions to non-controlling interest | (14,000 | ) | (13,993 | ) | ||||
Repurchase of membership interests | (111 | ) | (6,500 | ) | ||||
Payments of deferred financing costs | — | (121 | ) | |||||
Repayment of notes payable | — | (323 | ) | |||||
Repayments of General Partner N otesP | (607 | ) | — | |||||
Proceeds from line of credit | 64,800 | 46,151 | ||||||
Payments of line of credit | (64,800 | ) | (33,085 | ) | ||||
Net cash used in financing activities | (171,869 | ) | (47,721 | ) | ||||
Net decrease in cash, cash equivalents, and restricted cash | (40,197 | ) | (11,327 | ) | ||||
Cash, cash equivalents and restricted cash – beginning of period | 107,354 | 60,110 | ||||||
Cash, cash equivalents and restricted cash – end of period | $ | 67,157 | $ | 48,783 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income taxes | $ | 834 | $ | 182 | ||||
Cash paid for interest | 3,019 | 54 | ||||||
Cash and cash equivalents | $ | 61,548 | $ | 44,721 | ||||
Restricted cash | 5,609 | 4,062 | ||||||
Cash, cash equivalents, and restricted cash | $ | 67,157 | $ | 48,783 | ||||
Bridge Investment Group Holdings LLC (formerly Bridge Investment Group LLC) (the “Operating Company”), a Delaware limited liability
The Operating Company and the Bridge GPs, collectively defined as “Bridge” or the “Company,” arewere under common control by the direct owners of Bridge. The owners havehad the ability to control the Operating Company and each of Bridge GPs and manage and operate these entities through the Fund Managers, a common board of directors, common ownership, and shared resources and facilities. Bridge representsrepresented the predecessor history for the consolidated operations. As a result, the financial statements for the periods prior to the IPO are the combined operations.
As part of the Transactions, 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 the IPO, less the underwriting discounts and commissions and estimated offering expenses.
11
Following the IPO, the Operating Company did not have any direct interest in the Bridge GPs. These condensed combined financial statements include 100% of operations of the Bridge GPs for the periods presented on the basis of common control.
These financial statements should be read in conjunction with our annual financial statements filed with the Registration Statement and include all adjustments necessary for a fair presentation.
Basis of Combination and Presentation
Principles of Consolidation
Variable Interest Entities
Voting Interest Entities
At each reporting period, the Company reassesses whether changes in facts and circumstances cause a change in the status of an entity as a VIE or voting interest entity, and/or a change in the Company’s consolidation assessment. Changes in consolidation status are applied prospectively. An entity may be consolidated as a result of this reassessment, in which case, the assets, liabilities and
Non-controlling
12
contributions, distributions and their share of the net earnings or losses of each respective consolidated entity. Net income is allocated tocombinedconsolidated statements of operations and comprehensive income and net investment in the common control group.shareholders’ equity.
Use of Estimates
The outbreak of the novel coronavirus(“COVID-19”)
Cash and Cash Equivalents
Restricted Cash
Marketable Securities
Fair Value
Financial assets and liabilities measured and reported at fair value are classified as follows:
In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level 3 being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period. (See Note 8 “Fair Value Measurements” for further detail.
Fair Value Option
13
the financial instrument, as well as upon a business combination or consolidation of a subsidiary. The election is irrevocable unless a new election event occurs. The Company elected the fair value option for the General Partner Notes Payable.
Investments
Changes in fair value of equity method investments are recorded in realized and unrealized gains (losses).
Equity Method Investments
The Company accounts for investments under the equity method of accounting if it has the ability to exercise significant influence over the operating and financial policies of an entity but does not have a controlling financial interest. The equity method investment is initially recorded at cost and adjusted each period for capital contributions, distributions and the Company’s share of the entity’s net income or loss as well as other comprehensive income or loss. The Company’s share of net income or loss may differ from the stated ownership percentage interest in an entity if the governing documents prescribe a substantive
For certain equity method investments, the Company records its proportionate share of income on a one to three-month lag. Distributions of operating profits from equity method investments are reported as operating activities, while distributions in excess of operating profits are reported as investing activities in the condensed combined and consolidated statements of cash flows under the cumulative earnings approach.
Impairment
Evaluation of impairment applies to equity method investments and equity investments under the measurement alternative. If indicators of impairment exist, the Company will estimate the fair value of its investment. In assessing fair value, the Company generally considers, among others, the estimated enterprise value of the investee or fair value of the investee’s underlying net assets, including net cash flows to be generated by the investee as applicable, and for equity method investees with publicly traded equity, the traded price of the equity securities in an active market.
For investments under the measurement alternative, if the carrying value of the investment exceeds its fair value, an impairment is deemed to have occurred.
For equity method investments, further consideration is made if a decrease in value of the investment is other-than-temporary to determine if impairment loss should be recognized. Assessment of other-than-temporary impairment (“OTTI”) involves management judgment, including, but not limited to, consideration of the investee’s financial condition, operating results, business prospects and creditworthiness, the Company’s ability and intent to hold the investment until recovery of its carrying value, or a significant and prolonged decline in traded price of the investee’s equity security. If management is unable to reasonably assert that an impairment is temporary or believes that the Company may not fully recover the carrying value of its investment, then the impairment is considered to be other-than-temporary.
14
Receivables from Affiliates
The Company facilitates the payments of these fees, which are recorded as receivables-principally from affiliated parties on the condensed combined and consolidated balance sheets, until such amounts are repaid. The Company assesses the collectability of such receivables considering the offering period, historical and forecasted capital raising, and establishes an allowance for any balances considered not collectible. None of the receivables were considered not collectible at the respective balance sheet dates.
Notes Receivable from Affiliates and Employees
Prepaid and Other Current Assets
Tenant Improvements, Furniture and Equipment
Intangible Assets
Goodwill
The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that is more likely than not to reduce the fair value of the reporting unit below its carrying amount. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates. As of JuneSeptember 30, 2021, there were 0indicators0 indicators of goodwill impairment.
15
Other Assets
Accounts Payable and Accrued Expenses
Other Current Liabilities
Other Long-term Liabilities
Business Combinations
Definition of a Business
Asset Acquisitions
Acquisitions of Businesses
Revenue Recognition
Fund Management Fees
Fund management fees are generally based on a defined percentage of total commitments, invested capital or NAV of the investment portfolios managed by the Fund Managers. Following the expiration or termination of the investment period, the basis on which management fees are earned for certain
16
Property Management and Leasing Fees
Property management fees are earned as the related services are provided under the terms of the respective property management agreements. Included in management fees are certain expense reimbursements where the Company is considered the principal under the agreements and is required to record the expense and related reimbursement revenue on a gross basis. The Company also earns revenue associated with the leasing of commercial assets. The revenue is recognized upon the execution of the lease agreement.
Construction Management Fees
Construction management fees are earned as the services are provided under the terms of the property management agreement with each property.
Development Fees
Development fees are earned as the services are provided under the terms of the development agreement with each asset.
Transaction Fees
The Company earns transaction fees associated with the due diligence related to the acquisition of assets and financing of assets. The fees are recognized upon the acquisition of the asset or origination of the mortgage or other debt, as applicable.
Insurance Premiums
BIGRM insures multifamily and commercial properties owned by the funds. BIGRM insures direct risks including lease security deposit fulfillment, lessor legal liability, workers compensation deductible, property deductible and general liability deductible reimbursements. Tenant liability premiums are earned monthly. Deposit eliminator premiums are earned in the month that they are written. Workers’ compensation and property deductible premiums are earned over the terms of the policy period.
Other Asset Management and Property Income
Other Asset Management and Property Income is comprised of, among other things interest on
Investment Income (inclusive of incentive fees and performance allocation)
Performance income is based on certain specific hurdle rates as defined in the applicable investment management agreements or fund or joint venture governing documents. Substantially all performance income is earned from funds and joint ventures managed by affiliates of the Company.
Incentive Fees
Incentive fees comprise fees earned from certain fund investor investment mandates for which the Company does not have a general partner interest in a fund. The Company recognizes incentive fee revenue only when these amounts are realized and no longer subject to significant reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period.
Performance Allocation
Carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s partnership agreement or other governing documents. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund’s net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner based on a fund’s cumulative investment returns. Accordingly,
17
the amount recognized as performance allocation revenue reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period.
As the fair value of underlying assets varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (i) positive performance resulting in an increase in the carried interest allocated to the Company or (ii) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a reversal of previously recognized carried interest allocated to the Company. Accrued but unpaid carried interest as of the reporting date is recorded within accrued performance allocations compensation in the condensed combined and consolidated balance sheet.
Carried interest is realized when an underlying investment is profitably disposed of, and the fund’s cumulative returns are in excess of the specific hurdle rates as defined in the applicable investment management agreements or fund or joint venture governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally do not become realized until the end of a fund’s life.
The Company accounts for carried interest, which represents a performance-based capital allocation from a fund General Partner to the Company, as earnings from financial assets within the scope of ASC 323,
Employee Compensation and Benefits
Performance Allocations Compensation
Liability-classified carry awards granted to employees and other participants are accounted for as a component of compensation and benefits expense contemporaneously with our recognition of the related realized and unrealized performance allocation revenue. Upon a reversal of performance allocation revenue, the related compensation expense, if any, is also reversed. Liabilities recognized for carried interest amounts due to affiliates are not paid until the related performance allocation revenue is realized. The Company records incentive fee compensation when it is probable that a liability has been incurred and the amount is reasonably estimable. The incentive fee compensation accrual is based on a number of factors, including the cumulative activity for the period and the expected timing of the distribution of the net proceeds in accordance with the applicable governing agreement. There was $14.2 million of accrued performance allocations accrued prior to the IPO related to the Contributed Bridge GPs that were previously treated as liabilities that were exchanged for interests in the Operating Company at fair value and as such were treated as an extinguishment of a liability with equity. No gain or loss was recorded in the statement of operations related to this transaction.
Third-party Operating Expenses
Realized and Unrealized Gains (Losses)
18
The realized and unrealized change in gain (loss) associated with the financial instruments that we elect the fair value option is also included in realized and unrealized gains (losses).
Interest Income
Foreign Currency
In addition, the condensed combined and consolidated results include certain foreign subsidiaries that use functional currencies other than the U.S. dollar. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rates as of the reporting date. Income and expense and gain and loss transactions denominated in foreign currencies are generally translated into U.S. dollars monthly using the average exchange rates during the respective transaction period. Translation adjustments resulting from this process are recorded to currency translation adjustment in accumulated other comprehensive income.
Income Tax Provision
Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporaryof differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measuredbases, using enacted tax rates expected to apply to taxable income in effect for the periodsyear in which those temporarythe differences are expected to be recovered or settled.reverse. The effect of a change in tax rates on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of units in which the enactment date occurs. Under ASC 740,Income Taxes(“ASC 740”),Operating Company.
Deferred tax assets are reduced by a valuation allowance is established when management believes it is more likely than not that asome portion or all of the deferred tax assetassets will not be realized.
The Company is subject to uncertainthe provisions of ASC Subtopic 740-10, Accounting for Uncertainty in Income Taxes. This standard establishes consistent thresholds as it relates to accounting for income taxes. It defines the threshold for recognizing the benefits of tax return positions in the financial statements as more likely than not to be sustained by the relevant taxing authority and requires measurement of a tax position meeting the more likely than not criterion, based on the largest benefit that is more than 50% likely to be realized. If upon performance of an assessment pursuant to this subtopic, management determines that uncertainties in tax positions in incomeexist that do not meet the minimum threshold for recognition of the related tax expensebenefit, a liability is recorded in the condensed combined and consolidated financial statements. At June 30, 2021 and December 31, 2020, theThe Company did not have a liability recorded for payment ofrecognizes interest and penalties, associated with uncertainif any, related to unrecognized tax positions.
Other than BIGRM and Bridge PM, Inc., Bridgethe Operating Company and its subsidiaries are limited liability companies and partnerships, as such, are not subject to income taxes; the individual Membersmembers of Bridgethe Operating Company are required to report their distributive share of the Operating Company’s realized income, gains, losses, deductions, or credits on their individual income tax returns.
Tax Receivable Agreement — In connection with the IPO, the Company entered into a Tax Receivable Agreement with the Operating Company and each of the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that the Company actually realizes (or in some circumstances is deemed to realize) as a result of (1) increases in the Company’s allocable share of the tax basis of the Operating Company’s assets resulting
19
from (a) the Company’s purchase of Class A Units directly from the Operating Company and the partial redemption of Class A Units by the Operating Company in connection with the IPO, (b) future redemptions or exchanges (or deemed exchanges in certain circumstances) of Class A Units for Class A common stock or cash and (c) certain distributions (or deemed distributions) by the Operating Company; (2) the Company’s allocable share of the existing tax basis of the Operating Company’s assets at the time of any redemption or exchange of Class A Units (including in connection with the IPO), which tax basis is allocated to the Class A Units being redeemed or exchanged and acquired by the Company and (3) certain additional tax benefits arising from payments made under the Tax Receivable Agreement. The Company will retain the benefit of the remaining 15% of these net cash tax savings under the Tax Receivable Agreement.
Comprehensive Income
Segments
Recently Adopted Accounting Standards
Consolidation —
Fair Value
Income Taxes —In December 2019, the FASB issued ASU
Recent Accounting Pronouncements (Not Yet Adopted)
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet for all leases and to disclose certain information about leasing arrangements. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public business entities, ASU 2016-02 was effective for annual reporting periods beginning after December 15, 2018. On June 3, 2020, the FASB extended the
20
adoption date for all other entities, including emerging growth companies (“EGCs”), as defined by the SEC, that have elected to defer adoption until the standard is effective for non-public business entities, to annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, with early adoption permitted. The Company qualifies as an EGC and has elected to take advantage of the extended transition period afforded to EGCs as it applies to the adoption of new accounting standards. Upon adoption of this guidance, the Company expects to record right-of-use assets and lease liabilities on its consolidated balance sheets, relating to its operating leases. However, the Company does not expect the adoption to materially impact its consolidated statements of operations because substantially all of its leases are classified as operating leases, which will continue to be recognized as expense on a straight-line basis under the new guidance.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, which changes the accounting for recognizing impairments of financial assets. Under this guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The guidance also modifies the impairment models for available-for-sale debt securities and purchased financial assets with credit deterioration since their origination. This guidance is effective for annual and interim periods beginning after December 15, 2022 for EGCs that have elected to defer adoption until the guidance becomes effective for non-public entities, with early adoption permitted. The Company does not expect the adoption to have a material impact to our consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. An entity may elect to adopt the amendments in ASU 2020-04 and ASU 2021-01 at any time after March 12, 2020 but no later than December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of this guidance on the condensed combinedits consolidated financial statements.
The Company earns base management fees forpresentstables present revenues disaggregated by product offering, which aligns with the Company’s performance obligations and the basis for calculating each amount (in thousands):amount:
FUND MANAGEMENT FEES |
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Funds |
| $ | 38,827 |
|
| $ | 25,152 |
|
| $ | 101,808 |
|
| $ | 73,791 |
|
Joint ventures and separately managed accounts |
|
| 1,749 |
|
|
| 1,472 |
|
|
| 4,155 |
|
|
| 4,275 |
|
Total fund management fees |
| $ | 40,576 |
|
| $ | 26,624 |
|
| $ | 105,963 |
|
| $ | 78,066 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Funds | $ | 33,510 | $ | 23,982 | $ | 62,980 | $ | 48,639 | ||||||||
Joint Ventures and Separately Managed Accounts | 1,026 | 1,741 | 2,407 | 2,803 | ||||||||||||
Total Fund Management Fees | $ | 34,536 | $ | 25,723 | $ | 65,387 | $ | 51,442 | ||||||||
PROPERTY MANAGEMENT AND LEASING FEES |
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Seniors Housing |
| $ | 6,433 |
|
| $ | 6,490 |
|
| $ | 19,589 |
|
| $ | 20,641 |
|
Multifamily |
|
| 4,536 |
|
|
| 3,839 |
|
|
| 12,951 |
|
|
| 11,227 |
|
Office |
|
| 11,541 |
|
|
| 3,418 |
|
|
| 21,052 |
|
|
| 13,246 |
|
Total property management and leasing fees |
| $ | 22,510 |
|
| $ | 13,747 |
|
| $ | 53,592 |
|
| $ | 45,114 |
|
CONSTRUCTION MANAGEMENT FEES |
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Multifamily |
| $ | 1,295 |
|
| $ | 911 |
|
| $ | 3,353 |
|
| $ | 2,906 |
|
Office |
|
| 730 |
|
|
| 796 |
|
|
| 2,308 |
|
|
| 2,297 |
|
Seniors Housing |
|
| 72 |
|
|
| 85 |
|
|
| 327 |
|
|
| 366 |
|
Total construction management fees |
| $ | 2,097 |
|
| $ | 1,792 |
|
| $ | 5,988 |
|
| $ | 5,569 |
|
21
TRANSACTION FEES |
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Acquisition fees |
| $ | 19,838 |
|
| $ | 3,793 |
|
| $ | 37,627 |
|
| $ | 15,877 |
|
Brokerage fees |
|
| 2,069 |
|
|
| 1,292 |
|
|
| 5,848 |
|
|
| 4,847 |
|
Total transaction fees |
| $ | 21,907 |
|
| $ | 5,085 |
|
| $ | 43,475 |
|
| $ | 20,724 |
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Seniors Housing | $ | 6,597 | $ | 6,867 | $ | 13,153 | $ | 14,151 | ||||||||
Multifamily | 4,322 | 3,659 | 8,416 | 7,388 | ||||||||||||
Office | 3,416 | 4,319 | 9,512 | 9,828 | ||||||||||||
Total Property Management and Leasing Fees | $ | 14,335 | $ | 14,845 | $ | 31,081 | $ | 31,367 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Multifamily | $ | 1,133 | $ | 996 | $ | 2,058 | $ | 1,995 | ||||||||
Office | 829 | 1,007 | 1,578 | 1,501 | ||||||||||||
Seniors Housing | 103 | 212 | 255 | 281 | ||||||||||||
Total Construction Management Fees | $ | 2,065 | $ | 2,215 | $ | 3,891 | $ | 3,777 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Acquisition Fees | $ | 13,137 | $ | 6,647 | $ | 17,789 | $ | 12,084 | ||||||||
Brokerage Fees | 3,105 | 1,647 | 3,779 | 3,555 | ||||||||||||
Total Transactional Fees | $ | 16,242 | $ | 8,294 | $ | 21,568 | $ | 15,639 | ||||||||
For the three and sixnine months ended JuneSeptember 30, 2021 and 2020, no individual client represented 10%10% or more of the Company’s total reported revenues and substantially all of revenue was derived from operations in the United States.
As of JuneSeptember 30, 2021 and December 31, 2020, the Company had $3.0$5.9 million and $2.9 sixnine months ended JuneSeptember 30, 2021, the Company recognized2.0 $0.7$2.3 million, respectively, as revenue from amounts included in the deferred revenue balance as of December 31, 2020. The Company expects to recognize the majority of the deferred revenues within a year of the balance sheet date.
The Company invests a portion of the premiums received at BIGRM in exchange traded funds and mutual funds. As of JuneSeptember 30, 2021 and December 31, 2020, the Company’s investment securities are summarized as follows (in thousands):follows:
|
|
|
|
| Unrealized |
|
| Unrealized |
|
| Fair |
| ||||
(in thousands) |
| Cost |
|
| Gains |
|
| Losses |
|
| Value |
| ||||
September 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exchange traded funds |
| $ | 1,306 |
|
| $ | 21 |
|
| $ | — |
|
| $ | 1,327 |
|
Mutual funds |
|
| 7,743 |
|
|
| 39 |
|
|
| (1 | ) |
|
| 7,781 |
|
Total marketable securities |
| $ | 9,049 |
|
| $ | 60 |
|
| $ | (1 | ) |
| $ | 9,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2020: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exchange traded funds |
| $ | 713 |
|
| $ | 23 |
|
| $ | — |
|
| $ | 736 |
|
Mutual funds |
|
| 4,301 |
|
|
| 16 |
|
|
| — |
|
|
| 4,317 |
|
Total marketable securities |
| $ | 5,014 |
|
| $ | 39 |
|
| $ | — |
|
| $ | 5,053 |
|
Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
June 30, 2021 | ||||||||||||||||
Exchange Traded Funds | $ | 715 | $ | 21 | $ | — | $ | 736 | ||||||||
Mutual Funds | 4,353 | 60 | (16 | ) | 4,397 | |||||||||||
Total | $ | 5,068 | $ | 81 | $ | (16 | ) | $ | 5,133 | |||||||
June 30, 2020 | ||||||||||||||||
Exchange Traded Funds | $ | 713 | $ | 23 | $ | — | $ | 736 | ||||||||
Mutual Funds | 4,301 | 16 | — | 4,317 | ||||||||||||
Total | $ | 5,014 | $ | 39 | $ | — | $ | 5,053 | ||||||||
The Company has interests in 142144 partnership or joint venture entities. The limited liability companies and limited partnerships in which the Company is the general partner are generally engaged directly or indirectly in the acquisition, development, operation and ownership of real estate. The accounting principles of these entities are substantially the same as those of the Company. Additionally, the Company has direct investments in several funds, including certain Bridge-sponsored funds. The Company’s investments are summarized below (in thousands):below:
|
|
|
| Carrying Value at |
| |||||
(in thousands) |
|
|
| September 30, |
|
| December 31, |
| ||
Investments |
|
|
| 2021 |
|
| 2020 |
| ||
Accrued performance allocations |
| (1) |
| $ | 301,910 |
|
| $ | 199,410 |
|
Partnership interest in Company sponsored funds |
| (2) |
|
| 27,871 |
|
|
| 12,975 |
|
Investments in third-party partnership |
| (3) |
|
| 6,393 |
|
|
| 2,697 |
|
Other investments |
| (4) |
|
| 4,221 |
|
|
| 345 |
|
|
|
|
| $ | 340,395 |
|
| $ | 215,427 |
|
Carrying Value at | ||||||||
Investments | June 30, 2021 | December 31, 2020 | ||||||
Partnership interest in carried interest (1) | $ | 246,620 | $ | 199,410 | ||||
Partnership interest in the funds (2) | 29,629 | 12,975 | ||||||
Investments in third party partnership (3) | 5,081 | 2,697 | ||||||
Other investments (4) | 341 | 345 | ||||||
Total | $ | 281,671 | $ | 215,427 | ||||
22
Fair value of the investments is reported on a three-month lag from the fund financial statements due to timing of the information provided by the funds and third-party entities unless information is available on a more-timely basis.
The Company’s equity method investments include investments that are not consolidated, but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the Securities Exchange Commission. SummarizedAt September 30, 2021, the Company’s investment in Bridge Multifamily Fund III and Bridge Multifamily Fund IV represented 12% and 16% of total assets, respectively. NaN other investment represented greater than 10% of total assets.
The following table presents financial information of our significant equity method investment in Bridge Multifamily Fund III, asIII:
(in thousands) |
| Three Months Ended |
| |||||
Investment income |
| September 30, 2021 |
|
| September 30, 2020 |
| ||
Net earnings from investments in real estate |
| $ | 5,154 |
|
| $ | 543 |
|
Interest and other income |
|
| 15 |
|
|
| 0 |
|
Total investment income |
|
| 5,169 |
|
|
| 543 |
|
Expenses |
|
|
|
|
|
| ||
Management fees |
|
| 1,496 |
|
|
| 60 |
|
Partnership expense |
|
| 570 |
|
|
| 42 |
|
Total expenses |
|
| 2,066 |
|
|
| 102 |
|
Net investment income |
|
| 3,103 |
|
|
| 441 |
|
|
|
|
|
|
|
| ||
Net realized gain on investments in real estate |
|
| 90,752 |
|
|
| 50 |
|
Changes in unrealized gain on investments in real estate |
|
| 41,445 |
|
|
| 873 |
|
Unrealized gain on interest rate swap |
|
| 1,023 |
|
|
| — |
|
Net gain on investments |
|
| 133,220 |
|
|
| 923 |
|
Net increase in partnersʼ capital resulting from operations |
| $ | 136,323 |
|
| $ | 1,364 |
|
(in thousands) |
| Nine Months Ended |
| |||||
Investment income |
| September 30, 2021 |
|
| September 30, 2020 |
| ||
Net earnings from investments in real estate |
| $ | 18,716 |
|
| $ | 722 |
|
Interest and other income |
|
| 26 |
|
|
| 12 |
|
Total investment income |
|
| 18,742 |
|
|
| 734 |
|
Expenses |
|
|
|
|
|
| ||
Management fees |
|
| 4,796 |
|
|
| 187 |
|
Partnership expense |
|
| 1,198 |
|
|
| 326 |
|
Interest expense |
|
| 25 |
|
|
| 1 |
|
Total expenses |
|
| 6,019 |
|
|
| 514 |
|
Net investment income |
|
| 12,723 |
|
|
| 220 |
|
|
|
|
|
|
|
| ||
Net realized gain on investments in real estate |
|
| 209,867 |
|
|
| 4,192 |
|
Changes in unrealized gain on investments in real estate |
|
| 63,187 |
|
|
| (1,489 | ) |
Unrealized gain on interest rate swap |
|
| 3,952 |
|
|
| — |
|
Net gain on investments |
|
| 277,006 |
|
|
| 2,703 |
|
Net increase in partnersʼ capital resulting from operations |
| $ | 289,729 |
|
| $ | 2,923 |
|
23
The following table presents financial information of June 30, 2021, is as follows (in thousands):our significant equity investment in Bridge Multifamily Fund IV:
(in thousands) |
| Three Months Ended |
| |||||
Investment income |
| September 30, 2021 |
|
| September 30, 2020 |
| ||
Net earnings from investments in real estate |
| $ | 18,189 |
|
| $ | 15,169 |
|
Interest and other income |
|
| 136 |
|
|
| 1 |
|
Total investment income |
|
| 18,325 |
|
|
| 15,170 |
|
Expenses |
|
|
|
|
|
| ||
Management fees |
|
| 3,822 |
|
|
| 4,767 |
|
Partnership expense |
|
| 1,617 |
|
|
| 494 |
|
Interest expense |
|
| 57 |
|
|
| 110 |
|
Total expenses |
|
| 5,496 |
|
|
| 5,371 |
|
Net investment income |
|
| 12,829 |
|
|
| 9,799 |
|
|
|
|
|
|
|
| ||
Changes in unrealized gain on investments in real estate |
|
| 366,490 |
|
|
| 45,681 |
|
Net gain on investments |
|
| 366,490 |
|
|
| 45,681 |
|
Net increase in partnersʼ capital resulting from operations |
| $ | 379,319 |
|
| $ | 55,480 |
|
|
|
|
|
|
|
| ||
(in thousands) |
| Nine Months Ended |
| |||||
Investment income |
| September 30, 2021 |
|
| September 30, 2020 |
| ||
Net earnings from investments in real estate |
| $ | 51,268 |
|
| $ | 27,185 |
|
Interest and other income |
|
| 241 |
|
|
| 2 |
|
Total investment income |
|
| 51,509 |
|
|
| 27,187 |
|
Expenses |
|
|
|
|
|
| ||
Management fees |
|
| 12,576 |
|
|
| 14,414 |
|
Partnership expense |
|
| 2,585 |
|
|
| 1,474 |
|
Interest expense |
|
| 912 |
|
|
| 920 |
|
Total expenses |
|
| 16,073 |
|
|
| 16,808 |
|
Net investment income |
|
| 35,436 |
|
|
| 10,379 |
|
|
|
|
|
|
|
| ||
Changes in unrealized gain on investments in real estate |
|
| 693,496 |
|
|
| 120,013 |
|
Net gain on investments |
|
| 693,496 |
|
|
| 120,013 |
|
Net increase in partnersʼ capital resulting from operations |
| $ | 728,932 |
|
| $ | 130,392 |
|
Three Months Ended | ||||||||
June 30, 2021 | June 30, 2020 | |||||||
Investment income | ||||||||
Net earnings from investments in real estate | $ | 6,851 | $ | 686 | ||||
Interest and other income | 8 | 28 | ||||||
Total investment income | 6,859 | 714 | ||||||
Expenses | ||||||||
Management fees | 1,563 | 2,222 | ||||||
Partnership expense | 284 | 463 | ||||||
Interest expense | 6 | 18 | ||||||
Total expenses | 1,853 | 2,703 | ||||||
Net investment income (loss) | 5,006 | (1,989 | ) | |||||
Net realized gain (loss) on investments in real estate | 105,682 | 3,198 | ||||||
Changes in unrealized gain on investments in real estate | (45,923 | ) | 29,397 | |||||
Unrealized gain on interest rate swap | 1,319 | 1,228 | ||||||
Net gain on investments | 61,078 | 33,823 | ||||||
Net increase in partners’ capital resulting from operations | $ | 66,084 | $ | 31,834 | ||||
Six Months Ended | ||||||||
June 30, 2021 | June 30, 2020 | |||||||
Investment income | ||||||||
Net earnings from investments in real estate | $ | 13,562 | $ | 7,020 | ||||
Interest and other income | 12 | 115 | ||||||
Total investment income | 13,574 | 7,135 | ||||||
Expenses | ||||||||
Management fees | 3,300 | 4,515 | ||||||
Partnership expense | 628 | 996 | ||||||
Interest expense | 25 | 57 | ||||||
Total expenses | 3,953 | 5,568 | ||||||
Net investment income | 9,621 | 1,567 | ||||||
Net realized gain on investments in real estate | 119,115 | 35,238 | ||||||
Changes in unrealized gain on investments in real estate | 21,742 | 20,829 | ||||||
Unrealized gain (loss) on interest rate swap | 2,929 | (3,556 | ) | |||||
Net gain on investments | 143,786 | 52,511 | ||||||
Net increase in partners’ capital resulting from operations | $ | 153,407 | $ | 54,078 | ||||
As of JuneSeptember 30, 2021 and December 31, 2020, the Company had the following short-term notes receivable from affiliates outstanding (in thousands):outstanding:
|
| September 30, |
|
| December 31, |
| ||
(in thousands) |
| 2021 |
|
| 2020 |
| ||
Bridge Office Fund II |
| $ | 14,140 |
|
| $ | 25,770 |
|
Bridge Debt Strategies Fund I |
|
| 5,335 |
|
|
| 4,500 |
|
Bridge Seniors Housing Fund I |
|
| 0 |
|
|
| 5,000 |
|
Bridge Seniors Housing Fund II |
|
| 0 |
|
|
| 5,000 |
|
Bridge Seniors Housing Fund III |
|
| 0 |
|
|
| 525 |
|
Total |
| $ | 19,475 |
|
| $ | 40,795 |
|
June 30, 2021 | December 31, 2020 | |||||||
Bridge Office Fund II | $ | 0 | $ | 25,770 | ||||
Bridge Debt Strategies Fund I | 5,335 | 4,500 | ||||||
Bridge Seniors Housing Fund I | 0 | 5,000 | ||||||
Bridge Seniors Housing Fund II | 0 | 5,000 | ||||||
Bridge Seniors Housing Fund III | 0 | 525 | ||||||
Bridge Multifamily Fund V | 4,000 | 0 | ||||||
Bridge Logistics Net Leasing Fund I | 1,000 | 0 | ||||||
Total | $ | 10,335 | $ | 40,795 | ||||
As of JuneSeptember 30, 2021, interest on these loans accrued at a fixed rate of 4.025%4.025%.
The Company had interest receivable on these notes as of JuneSeptember 30, 2021 and December 31, 2020 totaling $0.2$0.2 million and $0.3$0.3 million, respectively, which are included in receivables from affiliatesprepaid and other current assets in the accompanying condensed combined and consolidated balance sheets.
During the six months ended June 30, 2021, the Company entered into long-term loansexecuted multiple notes with employees, none of whom are officers, to allow employeesinvest in the opportunity to investment inCompany or the Operating Company. As of JuneSeptember 30, 2021, the Company had multiple notes with employees with an aggregate outstanding principal amount ofoutstanding was $
24
notes mature in 2029 and are long-term in nature andinterest only for the first two years after origination, after which they accrue interest at 4.025%4.025%.immaterial interest receivable from balances on these notes as ofJune September 30, 2021 totaling approximately $10,000, which is included in notes receivable from employeesprepaid and other current assets in the accompanying condensed combined and consolidated balance sheets.
As of December 31, 2020, the Company had multiple notes with employees with an aggregate outstanding principal amount of
Exchange traded funds:
Mutual funds:
Accrued performance allocations and partnership interests:
Other Investments:
General Partner Notes Payable: Valued using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
25
The following scheduletable presents assets that are measured at fair value on a recurring basis at JuneSeptember 30, 2021 and December 31, 2020 (in thousands): 2020:
|
|
|
|
|
|
|
|
|
|
| Measured at |
|
|
|
| |||||
(in thousands) |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| NAV |
|
| Total |
| |||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Exchange traded funds |
| $ | 1,327 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 1,327 |
|
Mutual funds |
|
| 7,781 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 7,781 |
|
Accrued performance allocations |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 301,910 |
|
|
| 301,910 |
|
Partnership interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 34,264 |
|
|
| 34,264 |
|
Other |
|
| — |
|
|
| — |
|
|
| 4,221 |
|
|
| — |
|
|
| 4,221 |
|
Total assets |
| $ | 9,108 |
|
| $ | — |
|
| $ | 4,221 |
|
| $ | 336,174 |
|
| $ | 349,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
General Partner Notes Payable |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 12,007 |
|
| $ | 12,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Exchange traded funds |
| $ | 736 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 736 |
|
Mutual funds |
|
| 4,317 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,317 |
|
Accrued performance allocations |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 199,410 |
|
|
| 199,410 |
|
Partnership interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 15,672 |
|
|
| 15,672 |
|
Other |
|
| — |
|
|
| — |
|
|
| 345 |
|
|
| — |
|
|
| 345 |
|
Total assets |
| $ | 5,053 |
|
| $ | — |
|
| $ | 345 |
|
| $ | 215,082 |
|
| $ | 220,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
General Partner Notes Payable |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 16,458 |
|
| $ | 16,458 |
|
Level 1 | Level 2 | Level 3 | Measured at NAV | Total | ||||||||||||||||
June 30, 2021 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Exchange Traded Funds | $ | 736 | $ | — | $ | — | $ | — | $ | 736 | ||||||||||
Mutual Funds | 4,397 | — | — | — | 4,397 | |||||||||||||||
Carried Interest | — | — | — | 246,620 | 246,620 | |||||||||||||||
Partnership Interests | — | — | — | 34,710 | 34,710 | |||||||||||||||
Other Investments | — | — | 341 | — | 341 | |||||||||||||||
Total Assets | $ | 5,133 | $ | — | $ | 341 | $ | 281,330 | $ | 286,804 | ||||||||||
Liabilities: | ||||||||||||||||||||
Fair value option: | ||||||||||||||||||||
General partner notes payable | $ | — | $ | — | $ | — | $ | 15,435 | $ | 15,435 | ||||||||||
December 31, 2020 |
Level 1 | Level 2 | Level 3 | Measured at NAV | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Exchange Traded Funds | $ | 736 | $ | — | $ | — | $ | — | $ | 736 | ||||||||||
Mutual Funds | 4,317 | — | — | — | 4,317 | |||||||||||||||
Carried Interest | — | — | — | 199,410 | 199,410 | |||||||||||||||
Partnership Interests | — | — | — | 15,672 | 15,672 | |||||||||||||||
Other Investments | — | — | 345 | — | 345 | |||||||||||||||
Total Assets | $ | 5,053 | $ | — | $ | 345 | $ | 215,082 | $ | 220,480 | ||||||||||
Liabilities: | ||||||||||||||||||||
Fair value option: | ||||||||||||||||||||
General partner notes payable | $ | — | $ | — | $ | — | $ | 16,458 | $ | 16,458 |
Accrued carried interest allocations, investments in funds, and investments in limited partnership Unfunded (in thousands) Fair Value Commitments September 30, 2021: Accrued performance allocations $ 301,910 $ 0 Company-sponsored open-end fund 15,525 0 Company-sponsored closed-end funds 12,346 58 Third-party closed-end funds 6,393 3,352 Total $ 336,174 $ 3,410 #REF! December 31, 2020: Accrued performance allocations $ 199,410 $ 0 Company-sponsored open-end fund 12,643 0 Company-sponsored closed-end funds 332 58 Third-party closed-end funds 2,697 4,802 Total $ 215,082 $ 4,860 interestinterests in third partythird-party private funds are valued using NAV of the respective vehicle.scheduletable presents investments carried at fair value using net asset value (in thousands): NAV:
Fair Value | Unfunded Commitments | |||||||
June 30, 2021: | ||||||||
Carried Interest | $ | 246,620 | $ | 0 | ||||
Company-sponsored open-end fund | 13,861 | 0 | ||||||
Company-sponsored closed-end funds | 15,768 | 58 | ||||||
Third party closed-end funds | 5,081 | 3,629 | ||||||
Total | $ | 281,330 | $ | 3,687 | ||||
December 31, 2020: | ||||||||
Carried Interest | $ | 199,410 | $ | 0 | ||||
Company-sponsored open-end fund | 12,643 | 0 | ||||||
Company-sponsored closed-end funds | 332 | 58 | ||||||
Third party closed-end funds | 2,697 | 4,802 | ||||||
Total | $ | 215,082 | $ | 4,860 | ||||
The Company can redeem its investment in the Company-sponsored open-end fund with a sixty-day notice. The Company’s interests in its closed-end funds are not subject to redemption,
26
Fair Value Information of Financial Instruments Reported at Cost
The carrying values of cash, accounts receivable, due from and to affiliates, interest payable and accounts payable approximate fair value due to their short-term nature and negligible credit risk. Carrying (in thousands) Level 1 Level 2 Level 3 Total Value September 30, 2021: Notes Payable, Net (private notes) $ — $ — $ 146,211 $ 146,211 $ 150,000 December 31, 2020: Notes Payable, Net (private notes) $ — $ — $ 149,225 $ 149,225 $ 150,000 scheduletable presents the carrying amounts and estimated fair values of financial instruments (in thousands):reported at amortized cost.
Level 1 | Level 2 | Level 3 | Total | Carrying Value | ||||||||||||||||
June 30, 2021: | ||||||||||||||||||||
Line of credit | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
Private Notes | 0 | 0 | 146,270 | 146,270 | 150,000 | |||||||||||||||
$ | 0 | $ | 0 | $ | 146,270 | $ | 146,270 | $ | 150,000 | |||||||||||
December 31, 2020: | ||||||||||||||||||||
Line of credit | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Private Notes | — | — | 149,225 | 149,225 | 150,000 | |||||||||||||||
$ | — | $ | — | $ | 149,225 | $ | 149,225 | $ | 150,000 | |||||||||||
Fair values of the Letter of Credit and Private Notes were estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments.
The following scheduletable presents the balances per asset class as of JuneSeptember 30, 2021 and December 31, 2020 (in thousands):2020:
|
| September 30, |
|
| December 31, |
| ||
(in thousands) |
| 2021 |
|
| 2020 |
| ||
Tenant improvements |
| $ | 4,642 |
|
| $ | 3,893 |
|
Office furniture |
|
| 1,674 |
|
|
| 1,602 |
|
Office equipment |
|
| 211 |
|
|
| 211 |
|
Computer equipment |
|
| 1,210 |
|
|
| 1,138 |
|
Total tenant improvements, furniture and equipment |
|
| 7,737 |
|
|
| 6,844 |
|
Accumulated depreciation |
|
| (3,537 | ) |
|
| (2,686 | ) |
Net tenant improvements, furniture and equipment |
| $ | 4,200 |
|
| $ | 4,158 |
|
June 30, 2021 | December 31, 2020 | |||||||
Tenant improvements | $ | 4,217 | $ | 3,893 | ||||
Office furniture | 1,602 | 1,602 | ||||||
Office equipment | 211 | 211 | ||||||
Computer equipment | 1,135 | 1,138 | ||||||
Total tenant improvements, furniture and equipment | 7,165 | 6,844 | ||||||
Accumulated depreciation | (3,222 | ) | (2,686 | ) | ||||
Net tenant improvements, furniture and equipment | $ | 3,943 | $ | 4,158 | ||||
Depreciation expense for the Company was $0.2$0.3 million for both the three months ended JuneSeptember 30, 2021 and 2020, and $0.5$0.9 million for both the sixnine months ended JuneSeptember 30, 2021 andcompared to $0.8 million for the nine months ended September 30, 2020.
The Company amortizes its intangible assets from its business combinations over 6 to 10 years. Amortization is based on the pattern in which the estimated economic benefits of the intangible asset will be consumed. The Company evaluates the recoverability of its intangible assets periodically if there is a triggering event. TheThe amortization expense for these intangible assets was $0.4$0.4 million for both the three months ended JuneSeptember 30, 2021 and 2020 and $0.8$1.1 million and $1.2 million for both the sixnine months ended JuneSeptember 30, 2021 and 2020.
Summarized below are the carrying values for the major classes of intangible assets as of JuneSeptember 30, 2021 and 2020 (in thousands):2020:
|
| Weighted |
| Gross |
|
|
|
|
| Net |
| |||
|
| Average |
| Carrying |
|
| Accumulated |
|
| Carrying |
| |||
(in thousands) |
| Life |
| Amount |
|
| Amortization |
|
| Amount |
| |||
September 30, 2021: |
|
|
|
|
|
|
|
|
|
|
| |||
Customer Lists |
| 10 yrs |
| $ | 6,835 |
|
| $ | (6,835 | ) |
| $ | 0 |
|
Management Contracts |
| 6 yrs |
|
| 9,063 |
|
|
| (5,272 | ) |
|
| 3,791 |
|
Total |
|
|
| $ | 15,898 |
|
| $ | (12,107 | ) |
| $ | 3,791 |
|
December 31, 2020: |
|
|
|
|
|
|
|
|
|
|
| |||
Customer Lists |
| 10 yrs |
| $ | 6,835 |
|
| $ | (6,781 | ) |
| $ | 54 |
|
Management Contracts |
| 6 yrs |
|
| 9,063 |
|
|
| (4,207 | ) |
|
| 4,856 |
|
Total |
|
|
| $ | 15,898 |
|
| $ | (10,988 | ) |
| $ | 4,910 |
|
27
Weighted Average Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||
June 30, 2021: | ||||||||||||||||
Customer Lists | 10 yrs | $ | 6,835 | $ | (6,835 | ) | $ | 0 | ||||||||
Management Contracts | 6 yrs | 9,063 | (4,909 | ) | 4,154 | |||||||||||
Total | $ | 4,154 | ||||||||||||||
December 31, 2020: | ||||||||||||||||
Customer Lists | 10 yrs | 6,835 | (6,781 | ) | $ | 54 | ||||||||||
Management Contracts | 6 yrs | 9,063 | (4,207 | ) | 4,856 | |||||||||||
Total | $ | 4,910 | ||||||||||||||
BIGRM is a wholly owned subsidiary of Bridge and is licensed under the Utah Captive Insurance Companies Act. During the six months ended June 30, 2021 and 2020, BIGRM providedprovides the following insurance policies:
For BIGRM’s insured risks, claim expenses and the related insurance loss reserve liabilities are based on the estimated cost necessary to settle all reported and unreported claims occurring prior to the balance sheet dates. LossesAdditionally, claims are expensed when insured events occur or the estimated settlement costs are updated based on the current facts and the reporting date. Additionally, insurance claim expenses and insurance loss reserves include provisions for claims that have occurred but have yet to be reported. ExpensesInsurance expenses and the reserve liabilityinsurance loss reserves for both reported and unreported claims are based on the Company’s previous experience and the analysis of a licensed actuary. Management believes such amounts are adequate to cover the ultimate net cost of insured events incurred through the balance sheet date, JuneSeptember 30, 2021. The insurance loss provisions are estimates and the actual amounts may ultimately be settled for a significantly greater or lesser amount. Any subsequent differences arising will be recorded in the period in which they are determined. As of JuneSeptember 30, 2021 and December 31, 2020, the Company had reserved $4.9$5.4 million and $4.4$4.4 million, respectively.
Medical Self-Insurance Reserves
Property and Casualty Reserves
The Risk Management Program for property risks includes a Self-Insured Retention (“SIR”) component in order to more efficiently manage the risks. BPM’sThe Company’s SIR is comprised of a layer of losses that BPMthe Company is responsible for satisfying after the properties have met their $25,000$25,000 deductible for each claim. That layer covers losses between $25,000$25,000 and $100,000$100,000 and has no aggregate limit for that layer of risk. All multifamily losses above $100,000$100,000 are fully insured. For commercial office, all losses are fully insured after the $50,000 deductible has been met. BIGRM, the captive risk management company wholly100%100% of the $2.0$2.0 million layer above the multifamily deductible and 15% of the $3.0 million in losses/exposure above the $2.0 million layer or $450,000.SIR. All losses above $5.0$2.0 million are fully insured by multiple outside insurance carriers. There is also a $750,000$750,000 per occurrence limit for any single loss. All losses above the SIR thresholds are fully insured with the exception of catastrophic loss deductibles in excess of the deductibles outlined above. Catastrophic losses, in zones deemed catastrophic (CAT Zones), such as earthquake, named storm and flood zones, have deductibles that equal up to 5%5% of the insurable value of the property affected for a particular loss. Any catastrophic losses in deductible/$50,000 deductibles and SIR of $75,000 for multifamily properties as outlined above. The policy remained the same from 2019 to 2020.
On June 20, 2020, BPMthe Company added a general liability self-insured retention aggregate limit of $10.0$10.0 million with a per occurrence limit of $2.0$2.0 million and per location limit of $4.0$4.0 million. Any insurance claims above these limits are fully insured by multiple insurance carriers. BPM insured this retention with the BIGRM captive. As of JuneSeptember 30, 2021 and December 31, 2020, the Company had reserved $0.7 reserved $0.9million and $0.4$0.4 million, respectively.
28
As of JuneSeptember 30, 2021 and December 31, 2020, the total self-insurance reserve liability was $3.5$4.3 million and $3.7$3.7 million, respectively.
The Bridge GPs traditionally have a General Partner commitment to the respective fund, which is usually satisfied by affiliates direct investment into the funds. For the General Partner commitments for BSH I GP, BMF III GP and BDS I GP, this commitment was satisfied by a notes payable (“General Partner Notes Payable”) between the General Partner and certain related parties or outside investors (“GP Lenders”) for reduced management fees. Under the terms of the General Partner Notes Payable, the GP Lender enters into a notes payable with the respective General Partner, which then subscribes to the respective fund for the same amount as the amount of the General Partner Note Payable. The General Partner Notes Payable mature based upon the terms of the limited partnership agreement of the respective fund. The carrying value of the General Partner Notes Payable represents
|
|
|
|
| Fair Value as of |
|
| Fair Value as of |
| |||
(in thousands) |
| Commitment |
|
| September 30, 2021 |
|
| December 31, 2020 |
| |||
Bridge Seniors Housing Fund I |
| $ | 4,775 |
|
|
| 5,274 |
|
| $ | 5,243 |
|
Bridge Multifamily Fund III |
|
| 9,300 |
|
|
| 6,733 |
|
|
| 8,643 |
|
Bridge Debt Strategies Fund I |
|
| — |
|
|
| — |
|
|
| 2,572 |
|
Total |
| $ | 14,075 |
|
|
| 12,007 |
|
| $ | 16,458 |
|
Commitment | Fair Value as of June 30, 2021 | Fair Value as of December 31, 2020 | ||||||||||
Bridge Seniors Housing Fund I | $ | 4,775 | $ | 5,269 | $ | 5,243 | ||||||
Bridge Multifamily Fund III | 9,300 | 7,612 | 8,643 | |||||||||
Bridge Debt Strategies Fund I | 7,260 | 2,554 | 2,572 | |||||||||
Total | $ | 21,335 | $ | 15,435 | $ | 16,458 | ||||||
The Company has no repayment obligation other than the return of capital and profit distributions, net of management fees and carried interest allocation of the respective fund.
On July 22, 2020, the Company entered in a secured revolving line of credit to borrow up to $75.0$75.0 million (“Line of Credit”). Debt issuance costs related to the Line of Credit are included in other assets in the condensed combined and consolidated balance sheets. The Company 0t0t have anJuneSeptember 30, 2021 and December 31, 2020. Borrowings under this arrangement accrue interest at2.25%2.25%. The revolving Line of Credit contains various financial covenants applicable to the Company. The covenants require the Company to maintain (1) a Consolidated Total Debt to Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) ratio of no more than 3.0, (2) minimum liquidity of $2.5$2.5 million, $20.0(3) $20.0 million of affiliate deposits in a specific financial institution and maintain a(4) minimum quarterly EBITDA of $10.0$10.0 million. As of JuneSeptember 30, 2021, the Company was in full compliance with all debt covenants. The Line of Credit matures on July 22, 2022.
On July 22, 2020, Bridge entered into a $150.0$150.0 million Note Purchase Agreement, pursuant to which it issued two tranches of notes (the “Private Notes”). As of JuneSeptember 30, 2021, unamortized deferred financing costs were $2.1$2.0 million$2.3$2.3 million, respectively,, and the net carrying value of the Private Notes was $147.9$148.0 million$147.7$147.7 million, respectively.respectively. The Private Notes has two tranches, a5-year3.9%5-year 3.9% fixed rate tranche that matures on July 22, 2025 and a7-year4.15%7-year 4.15% fixed rate tranche that matures on July 22, 2027.2027. The Private Notes contain various financial covenants applicable to the Company. The covenants require the Company to maintain (1) a Consolidated Total Debt to Consolidated EBITDA ratio no more than 3.0, (2) minimum liquidity of $2.5$2.5 million, and maintain a(3) minimum quarterly EBITDA of $10.0 million.$10.0 million. As of JuneSeptember 30, 2021, the Company was in full compliance with all debt covenants. The Private Notes are collateralized by the assets held by the Company.
The following scheduletable presents scheduled principal payments of the Company’s debt as of JuneSeptember 30, 2021 (in thousands):2021:
(in thousands) |
|
|
| |
2021 |
| $ | 0 |
|
2022 |
|
| 0 |
|
2023 |
|
| 0 |
|
2024 |
|
| 0 |
|
2025 |
|
| 75,000 |
|
Thereafter |
|
| 75,000 |
|
Total |
| $ | 150,000 |
|
2021 | $ | 0 | ||
2022 | 0 | |||
2023 | 0 | |||
2024 | 0 | |||
2025 | 75,000 | |||
Thereafter | 75,000 | |||
Total | $ | 150,000 |
29
The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the Company’s Private Notes are recorded as a reduction of the corresponding debt obligation, and debt issuance costs related to the Line of Credit are included in other assets in the combined balance sheets.obligation. All debt issuance costs are amortized over the remaining term of the related obligation.
The following scheduletable presents the activity of the Company’s debt issuance costs (in thousands):costs:
|
|
|
|
| Line of |
| ||
|
| Private |
|
| credit and |
| ||
(in thousands) |
| Notes |
|
| term loan |
| ||
Unamortized debt issuance costs as of December 31, 2020 |
| $ | 2,257 |
|
| $ | 170 |
|
Amortization of debt issuance costs |
|
| (322 | ) |
|
| (70 | ) |
Unamortized debt issuance costs as of September 30, 2021 |
| $ | 1,935 |
|
| $ | 100 |
|
Private Notes | Line of credit and term loan | |||||||
Unamortized debt issuance costs as of December 31, 2020 | $ | 2,257 | $ | 170 | ||||
Amortization of debt issuance costs | (214 | ) | (47 | ) | ||||
Unamortized debt issuance costs as of June 30, 2021 | $ | 2,043 | $ | 123 | ||||
Investment income (loss) in the condensed combined and consolidated statements of operations consist primarily of the realized and unrealized gains and losses on investments (including foreign exchange gains and losses attributable to foreign denominated investments and related activities) and other financial instruments, including those for which the fair value option has been elected. Unrealized gains or losses result from changes in the fair value of these investments and other financial instruments during a period. Upon disposition of an investment or financial instrument, previously recognized unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period.
The following scheduletable summarizes total net realizedinvestment income (loss) on investments and unrealized gains (losses)other financial instruments for the three and sixnine months ended JuneSeptember 30, 2021 and 2020, respectively (in thousands).respectively.
|
| For the three months ended September 30, 2021 |
| |||||||||
(in thousands) |
| Net Realized |
|
| Net Unrealized |
|
| Total |
| |||
Investment in Company-sponsored funds |
| $ | (1 | ) |
| $ | (1,269 | ) |
| $ | (1,270 | ) |
Investment in third-party partnerships |
|
| (98 | ) |
|
| 683 |
|
|
| 585 |
|
Other investments |
|
| 4 |
|
|
| 2,832 |
|
|
| 2,836 |
|
General Partner Notes Payable |
|
| 0 |
|
|
| 414 |
|
|
| 414 |
|
Total investment income (loss) |
| $ | (95 | ) |
| $ | 2,660 |
|
| $ | 2,565 |
|
|
| For the three months ended September 30, 2020 |
| |||||||||
(in thousands) |
| Net Realized |
|
| Net Unrealized |
|
| Total |
| |||
Investment in Company-sponsored funds |
| $ | (34 | ) |
| $ | (27 | ) |
| $ | (61 | ) |
Investment in third-party partnerships |
|
| 38 |
|
|
| (12 | ) |
|
| 26 |
|
Other investments |
|
| 64 |
|
|
| (1 | ) |
|
| 63 |
|
General Partner Notes Payable |
|
| 0 |
|
|
| (171 | ) |
|
| (171 | ) |
Total investment income (loss) |
| $ | 68 |
|
| $ | (211 | ) |
| $ | (143 | ) |
|
| For the nine months ended September 30, 2021 |
| |||||||||
(in thousands) |
| Net Realized |
|
| Net Unrealized |
|
| Total |
| |||
Investment in Company-sponsored funds |
| $ | (5 | ) |
| $ | 3,184 |
|
| $ | 3,179 |
|
Investment in third-party partnerships |
|
| (410 | ) |
|
| 2,206 |
|
|
| 1,796 |
|
Other investments |
|
| 4 |
|
|
| 2,854 |
|
|
| 2,858 |
|
General Partner Notes Payable |
|
| 0 |
|
|
| 830 |
|
|
| 830 |
|
Total investment income (loss) |
| $ | (411 | ) |
| $ | 9,074 |
|
| $ | 8,663 |
|
30
|
| For the nine months ended September 30, 2020 |
| |||||||||
(in thousands) |
| Net Realized |
|
| Net Unrealized |
|
| Total |
| |||
Investment in Company-sponsored funds |
| $ | (35 | ) |
| $ | (26 | ) |
| $ | (61 | ) |
Investment in third-party partnerships |
|
| 2 |
|
|
| 154 |
|
|
| 156 |
|
Other investments |
|
| (88 | ) |
|
| (1 | ) |
|
| (89 | ) |
General Partner Notes Payable |
|
| 0 |
|
|
| 657 |
|
|
| 657 |
|
Total investment income (loss) |
| $ | (121 | ) |
| $ | 784 |
|
| $ | 663 |
|
For the Three Months Ended June 30, 2021 | For the Three Months Ended June 30, 2020 | |||||||||||||||||||||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||||||||||||||||||
Investment in Company-sponsored funds | $ | (5 | ) | $ | 411 | $ | 406 | $ | — | $ | — | $ | — | |||||||||||
Investment in third party partnerships | (270 | ) | 1,279 | 1,009 | — | — | — | |||||||||||||||||
Other investments | (17 | ) | 26 | 9 | 224 | — | 224 | |||||||||||||||||
General Partner Notes Payable | — | (1,124 | ) | (1,124 | ) | — | (72 | ) | (72 | ) | ||||||||||||||
Total | $ | (292 | ) | $ | 592 | $ | 300 | $ | 224 | $ | (72 | ) | $ | 152 | ||||||||||
For the Six Months Ended June 30, 2021 | For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||||||||||||||||||
Investment in Company-sponsored funds | $ | (4 | ) | $ | 4,452 | $ | 4,448 | $ | — | $ | $ | — | ||||||||||||
Investment in third party partnerships | (312 | ) | 1,523 | 1,211 | (36 | ) | 167 | 131 | ||||||||||||||||
Other investments | — | 22 | 22 | (152 | ) | (152 | ) | |||||||||||||||||
General Partner Notes Payable | — | 416 | 416 | — | 828 | 828 | ||||||||||||||||||
Total | $ | (316 | ) | $ | 6,413 | $ | 6,097 | $ | (188 | ) | $ | 995 | $ | 807 | ||||||||||
Following our IPO, we became a public company on July 16, 2021 and are taxed as a corporation for U.S. federal and state income tax purposes. We are subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of any taxable income generated by the Operating Company that flows through to the Company.
Prior to our becoming a public company, other than BIGRM and Bridge PM, Inc., the Company and its subsidiaries arewere limited liability companies or limited partnerships and, as such, arewere not subject to income taxes; the individual owners of Bridge are required to report their distributive share of the Company’s realized income, gains, losses, deductions, or credits on their individual income tax returns.
In connection with the exchanges of Operating Company interests for Class A common stock by the Original Equity Owners in July and August 2021, the Company’s ownership in the Operating Company increased, which resulted in an increase to deferred tax assets in the amount of $62.2 million. Additionally, in connection with the exchange transactions the Company recorded a corresponding Tax Receivable Agreement liability of $44.4 million, representing 85% of the incremental net cash tax savings for the Company due to the exchanging Original Equity Owners.
The Company’s effective tax rate was 2% for the three months ended September 30, 2021. The Company’s effective tax rate is dependent on many factors, including the estimated amount of income subject to tax. Consequently, the effective tax rate for the Company can vary from period to period. The Company’s overall effective tax rate in each of the periods described above is less than the statutory rate primarily because (a) the Company was 1%not subject to U.S. federal taxes prior to the Transactions and 2% for the second quarterIPO and (b) a portion of 2021income is allocated to non-controlling interests, and 2020, respectively,the tax liability on such income is borne by the holders of such non-controlling interests.
The Company evaluates the realizability of its deferred tax asset on a quarterly basis and 1% and 0% foradjusts the first six monthsvaluation allowance when it is more likely than not that all or a portion of 2021 and 2020, respectively.
As of JuneSeptember 30, 2021, the Company had 0 not not expect any
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed combined and consolidated financial statements.
Bridge Investment Group Holdings Inc.
The Company has two classes of common stock outstanding, Class A common stock and Class B common stock. Class A common stock is traded on the New York Stock Exchange. The Company is authorized to issue 500,000,000 shares of Class A common stock with a par value of $0.01 per share, 239,208,722 shares of Class B common stock with a par value of $0.01 per share, and 20,000,000 shares of preferred stock, with a par value of $0.01 per share. Each share of Class A common stock is entitled to one vote and each share of Class B common stock is entitled to ten votes. See Note 1 “Organization” for more information about our common stock. As of September 30, 2021,25,162,561 shares of Class A common stock (including restricted stock) were outstanding, 86,672,703 shares of Class B common stock were outstanding, and there were 0 shares of our preferred stock outstanding. See “Initial Public Offering” for equity transactions resulting from the Company’s IPO.
31
The following table presents a reconciliation of Bridge Investment Group Holdings Inc. common stock for the nine months ended September 30, 2021.
| Bridge Investment |
| |||||||||
| Group Holdings Inc. |
| |||||||||
|
|
|
| Class A |
|
|
|
| |||
| Class A |
|
| restricted |
|
| Class B |
| |||
| common |
|
| common |
|
| common |
| |||
| stock |
|
| stock |
|
| stock |
| |||
Balance at January 1, 2021 |
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Effect of Transactions and purchase of |
| 2,614,690 |
|
|
| 245,959 |
|
|
| 97,463,981 |
|
Class A common stock issued - sold in IPO |
| 20,166,278 |
|
|
| — |
|
|
| (10,791,278 | ) |
Restricted stock issued |
| — |
|
|
| 2,153,204 |
|
|
| — |
|
Restricted stock forfeited |
| — |
|
|
| (17,570 | ) |
|
| — |
|
Balance at September 30, 2021 |
| 22,780,968 |
|
|
| 2,381,593 |
|
|
| 86,672,703 |
|
Bridge Investment Group Holdings LLC
Prior to the IPO, the Operating Company hashad three classes of shares:membership interests: (i) Class A;represent represented the voting equity holders andrepresents represented profits interests awarded to employees of the Operating Company. Class BB-1 and B-2 interests were issued as “profits interests,” pursuant to agreements entered into with certain employees during 2021, 2020 and 2019. At the time of issuance, the Class BB-1 and B-2 interests had a capital account interest of zero percent. The holders of Class BB-1 and B-2 interests arewere entitled to distributions in excess of the defined threshold per the respective award. The holders ofdodid not have voting rights.
Net profits and any other items of income shall beare allocated to the members’ capital accounts in a manner that is consistent with their respective ownership percentages. Distributions to members willare generally bemade in a manner consistent with their respective ownership percentages at the time the profits were generated and are subject to approval of the Company’s board of managers.
The Operating Company’s Members’ capital interests are transferable; however, transfers are subject to obtaining the prior written consent of the Company’s board of managers,Company, with certain exceptions for transfers to affiliated parties. In the event of an approved transfer, the Company has a right of first refusal to purchase any interests to be transferred. Members’ liability is limited to the capital account balance. Distributions are reflected in the condensed combined and consolidated statements of changes in shareholders and members’ equity when declared by the board of managersdirectors and consist of distributions to members and non-controlling interest holders.
Subsequent to the IPO, the Company is the sole managing member of the Operating Company, and owns 109.7 million Class A Units and 97.5 million Class B Units (voting only), respectively, of the Operating Company, which is 23% and 100% of the total outstanding Class A Units and Class B Units, respectively. The Company controls the business and affairs of the Operating Company and its direct and indirect subsidiaries.
The following table presents a reconciliation of Bridge Investment Group Holdings LLC Interests for the nine months ended September 30, 2021.
| Bridge Investment |
| |||||||||
| Group Holdings LLC |
| |||||||||
|
|
|
|
|
|
| Class B-1/2 |
| |||
| Class A |
|
| Class B |
|
| common |
| |||
| Units |
|
| Units |
|
| units |
| |||
Balance at December 31, 2020 |
| 75,718,797 |
|
|
| 0 |
|
|
| 5,064,378 |
|
Equity reallocation prior to Transactions |
| 5,064,378 |
|
|
| 97,463,981 |
|
|
| (5,064,378 | ) |
Effect of Transactions and purchase of |
| 19,541,455 |
|
|
| — |
|
|
| — |
|
Purchase of partnership interests with |
| 9,375,000 |
|
|
| — |
|
|
| — |
|
Exchange of Class A shares issued in IPO |
| — |
|
|
| — |
|
|
| — |
|
Balance at September 30, 2021 |
| 109,699,630 |
|
|
| 97,463,981 |
|
|
| 0 |
|
32
Initial Public Offering
Bridge GPs
On closing of the IPO, owners of the Contributed Bridge GPs contributed their interests in the respective Contributed Bridge GPs in exchange for LLC Interests in the Operating Company. Prior to the IPO, the Operating Company did not have any direct interest in the Contributed Bridge GPs. These condensed combined and consolidated financial statements include 100% of operations of the Contributed Bridge GPs for the periods presented on the basis of common control prior to the Transactions. Subsequent to the Transactions, the Operating Company consolidated the Contributed Bridge GPs. The net income that is not attributable to the Operating Company is reflected in net income attributable to non-controlling interests in the subsidiaries in the condensed combined and consolidated statements of operations and comprehensive income.
Prior to the Transactions, the Contributed Bridge GPs had three classes of shares: (i) Class A; (ii) Class C; and (iii) Class D. Class A represents the voting interest and Classes C and D represent allocations of carried interest to employees of the Operating Company, which are included in performance allocations compensation. As part of the Transactions, all of the Class C shares of the Contributed Bridge GPs were exchanged for interests in the Operating Company. Generally, if at the termination of a fund, the fund has not achieved investment returns that exceed the preferred return threshold or the funds have received net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Bridge GPs will be obligated to repay an amount equal to the excess of amounts previously distributed to the general partner over the amounts to which the general partner was ultimately entitled (generally net of income tax liabilities associated with related allocations of taxable income).
Dividends and distributions are reflected in the condensed combined and consolidated statements of stockholders’ equity when declared by the Company’s board of directors. Dividends are made to Class A common stockholders and distributions are made to members of the Operating Company and holders of non-controlling interests in subsidiaries.
All of the distributable earnings of the Operating Company prior to the IPO are payable to the Original Equity Owners. As of September 30, 2021, there was $2.3 million that was declared that had not yet been distributed to Original Equity Owners.
Long-Term Leases
The scheduletable below provides the future minimum rental payments required as of the combined and consolidated balance sheet date, JuneSeptember 30, 2021, in the aggregate and for each of the five succeeding fiscal years for leases greater than a year in length, and withouttaking into consideration cancellation options. The Company’s leases noted above that mature withinoptions during the year or are cancellable are not included inlife of the schedule below.
|
| For the Years Ended |
| |
(in thousands) |
| December 31, |
| |
Remainder of 2021 |
| $ | 1,033 |
|
2022 |
|
| 3,825 |
|
2023 |
|
| 3,621 |
|
2024 |
|
| 3,345 |
|
2025 |
|
| 3,163 |
|
Thereafter |
|
| 5,485 |
|
Total |
| $ | 20,472 |
|
For the Years Ended December 31, | ||||
Remainder of 2021 | $ | 2,085 | ||
2022 | 3,825 | |||
2023 | 3,621 | |||
2024 | 3,345 | |||
2025 | 3,163 | |||
Thereafter | 5,485 | |||
Total | $ | 21,524 | ||
Certain leases contain renewal options, rent escalations based on increases in certain costs incurred by the lessor or increases in the fair market value of the leased property, and terms to pay a proportionate share of the operating expenses. Rent expense is recorded on a straight-line basis over the lease term for leases with determinable rent escalation and lease incentives. These items resulted in long term deferred rent of $0.7$0.8 million and $0.7 million as of both JuneSeptember 30, 2021 and December 31, 2020, respectively, and short-term deferred rent of $0.1$0.1 million as of both JuneSeptember 30, 20202021 and December 31, 2020. Total rent expense for all of the Company’s office leases for both the three months ended JuneSeptember 30, 2021 and 2020 was $1.0$1.0 million (net of lease incentive
33
amortization of $0.1$0.1 million). Total rent expense for all of the Company’s office leases for both the sixnine months ended JuneSeptember 30, 2021 and 2020 was $2.0$3.0 million and $3.1 million, respectively, (net of lease incentive amortization of $0.2 million)$0.2 million for both periods).
The Company has other operating leases related to computers, copiers and other office equipment that were determined to be immaterial and are not included in the scheduletable above.
Allocated Performance Income
At JuneSeptember 30, 2021 and December 31, 2020, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment by the Bridge GPs, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $88.8approximately $117.5million and $62.7 Regarding BDS I GP funds, as of both June 30, 2021 and 2020, ifIf the funds were liquidated at their fair values theas of September 30, 2021, there is 0 contingent repayment obligation or liability of BDS I GP would be $2.3million, which is reimbursable to BDS I GP by certain professionals who are recipients of such performance income.
Guarantees and Other Commitments
Legal Matters
Letters of Credit
Indemnification Arrangements — In the normal course of business and consistent with standard business practices, the Company has provided general indemnifications to certain officers and directors when they act in good faith in the performance of their duties for the Company. The Company’s maximum exposure under these arrangements cannot be determined as these indemnities relate to future claims that may be made against the Company or related parties, but which have not yet occurred. No liability related to these indemnities has been recorded in the condensed combined and consolidated balance sheets as of September 30, 2021. Based on past experience, management believes that the risk of loss related to these indemnities is remote.
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
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
34
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
The Company combines certain VIEs for which it is the primary beneficiary. Pre-IPO VIEs consist of certain operating entities not wholly owned by the Company and include Bridge Seniors Housing Fund Manager LLC, Bridge Debt Strategies Fund Manager LLC, Bridge Office Fund Manager LLC, Bridge Agency MBS Fund Manager LLC, Bridge Logistics Net Lease Fund Manager LLC, Bridge Logistics Properties Fund Manager LLC, and the 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. The carrying amounts of the non-controlling interest in BSHM and BOFM were adjusted to zero. The assets of the consolidated VIEs totaled $291.3$327.2 million and $244.3$244.3 million as of JuneSeptember 30, 2021 and December 31, 2020, respectively, while the liabilities of the combinedconsolidated VIEs totaled $63.5$44.3 million and $51.3$51.3 million as of same dates. The assets of the combinedconsolidated VIEs may only be used to settle obligations of the same VIE. In addition, there is no recourse to the Company for the combinedconsolidated VIEs’ liabilities.
Substantially all of the Company’s revenue is earned from its affiliates, including fund management fees, property management and leasing fees, construction management fees, development fees, transaction fees, insurance premiums, and real estate mortgage brokerage and administrative expense reimbursements. The related accounts receivable is included within Receivables from Affiliates within the condensed combined and consolidated balance sheets.
The Company has investment management agreements with the funds that it manages. In accordance with these agreements, the funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the funds.
The Company also has entered into agreements to be reimbursed for its expenses incurred for providing administrative services to certain related parties, including Bridge Founders Group, LLC. Employees and other related parties may be permitted to invest in Bridge funds alongside fund investors. Participation is limited to individuals who qualify under applicable securities laws. These funds generally do not require these individuals to pay management or performance fees.
|
| September 30, |
|
| December 31, |
| ||
(in thousands) |
| 2021 |
|
| 2020 |
| ||
Fees receivable from non-consolidated funds |
| $ | 16,777 |
|
| $ | 15,350 |
|
Payments made on behalf of and amounts due from non-consolidated entities |
|
| 16,891 |
|
|
| 10,131 |
|
Total receivables from affiliates |
| $ | 33,668 |
|
| $ | 25,481 |
|
|
|
|
|
|
|
|
Related party transactions also include a long-term debt due to affiliates of $44.4 million incurred in connection with the Tax Receivable Agreement (see Note 2 “Significant Accounting Policies” for more details).
June 30, 2021 | December 31, 2020 | |||||||
Fees receivable from non-consolidated funds | $ | 16,714 | $ | 15,350 | ||||
Payments made on behalf of and amounts due from non-consolidated funds | 5,595 | 10,131 | ||||||
Total receivables from affiliates | $ | 22,309 | $ | 25,481 |
Restricted Stock and RSUs
On July 6, 2021, the Company adopted the 2021 Incentive Award Plan, which became effective on July 20, 2021, under which 6,600,000 shares of the Company’s Class A common stock were reserved for issuance. As of September 30, 2021, 4,436,674 were still available for future grants. In connection with the IPO, the Company granted 2,146,826 shares of Class A restricted stock and 16,500 restricted stock units (“RSUs”) associated with Class A common stock. Approximately one-third of such restricted stock and RSUs granted vest on the third, fourth and fifth anniversaries of the grant date.
The fair value of the restricted stock and RSUs is based upon our stock price at grant date and is expensed over the vesting period. We classify both restricted stock and RSUs as equity instruments. Compensation expense is included in salaries and employee benefits in the statement of income, with the corresponding increase included in additional paid-in capital. If the recipient leaves prior
35
to vesting of the restricted stock or RSUs, the awards are forfeited. During both the three and nine months ended September 30, 2021, the Company hasreversed $0.3 million of share-based compensation related to restricted stock and RSU forfeitures.
Restricted stock is Class A common stock with certain restrictions that relate to trading and carry the possibility of forfeiture. Holders of restricted stock have full voting rights and receive dividend equivalents during the vesting period. In addition, holders of restricted stock can make an election to be subject to income tax on the grant date rather than the vesting date. RSUs represent rights to one share of common stock for each unit. Holders of RSUs receive dividend equivalents during the vesting period but do not have voting rights.
At September 30, 2021, the aggregate unrecognized compensation cost for all unvested restricted stock and RSU awards was $32.9 million, which is expected to be recognized over a weighted-average period of 3.2 years.
Profits Interests
The Operating Company issued profits interests in Bridgethe Operating Company and certain Fund Managers in 2019, 2020, and 2021 to certain members of management to participate in the growth of Bridgethe Operating Company and the respective Fund Managers. A holding company was formed for each of the Fund Managers to hold these profits interests. The holding company’s ownership equates to 5%5% to 40%40% of the related Fund Managers above a certain income and valuation threshold. The Operating Company issued two types of profits interests: (i) award shares and (ii)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Antidilutive a wards | $ | 13,609 | $ | — | $ | 13,609 | $ | — | ||||||||
Awards shares | 1,015 | 388 | 1,856 | 775 | ||||||||||||
Total | $ | 14,624 | $ | 388 | $ | 15,465 | $ | 775 | ||||||||
If the recipient leaves after the awards vest, the Company has the option to repurchase the shares at fair value. If the recipient leaves prior to vesting, the awards are forfeited. DuringThe Company reversed share-based compensation expense related to forfeitures of $0.3 million for both the sixthree and nine months ended JuneSeptember 30, 2021 and 2020, the Company did not reverse any share-based compensation related to forfeitures.
At JuneSeptember 30, 2021, the aggregate unrecognized compensation cost for all unvested equityprofits interests awards was $13.0$11.3 million, which is expected to be recognized over a weighted averageweighted-average period of 2.73.0 years.
The following table summarizes our share-based compensation expense associated with our profits interests awards, restricted stock, and RSUs, which is recorded in employee compensation and benefits on the condensed combined and consolidated statement of operations and comprehensive income:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Antidilutive profits interests awards |
| $ | 0 |
|
| $ | 0 |
|
| $ | 13,609 |
|
| $ | 0 |
|
Profits interests award shares |
|
| 956 |
|
|
| 387 |
|
|
| 2,811 |
|
|
| 1,161 |
|
Restricted stock |
|
| 1,486 |
|
|
| 0 |
|
|
| 1,486 |
|
|
| 0 |
|
RSUs |
|
| 11 |
|
|
| 0 |
|
|
| 11 |
|
|
| 0 |
|
Total share-based compensation |
| $ | 2,453 |
|
| $ | 387 |
|
| $ | 17,917 |
|
| $ | 1,161 |
|
As of JuneSeptember 30, 2021, unrecognized share-based compensation on restricted stock, RSUs and profits interests awards is expected to be recognized as follows:
|
| Years Ended December 31, |
| |||||||||
|
|
|
|
|
|
|
| Profits |
| |||
|
|
|
|
| Restricted stock |
|
| interests |
| |||
(in thousands) |
| Total |
|
| and RSUs |
|
| awards |
| |||
Remainder of 2021 |
| $ | 3,173 |
|
| $ | 2,248 |
|
| $ | 925 |
|
2022 |
|
| 12,694 |
|
|
| 8,993 |
|
|
| 3,701 |
|
2023 |
|
| 12,088 |
|
|
| 8,993 |
|
|
| 3,095 |
|
2024 |
|
| 9,607 |
|
|
| 7,399 |
|
|
| 2,208 |
|
2025 |
|
| 4,964 |
|
|
| 3,971 |
|
|
| 993 |
|
Thereafter |
|
| 1,671 |
|
|
| 1,340 |
|
|
| 331 |
|
Total |
| $ | 44,197 |
|
| $ | 32,944 |
|
| $ | 11,253 |
|
36
We compute earnings per share (“EPS”) only for the period our Class A common stock was outstanding during 2021, specifically the post-IPO period. Basic and diluted net earnings per share of Class A common stock is presented for the period from July 16, 2021 through September 30, 2021, the unrecognized compensation cost willperiod following the Transactions and IPO. There were no shares of Class A common stock outstanding prior to the Transactions and the IPO, therefore, no net earnings per share information has been presented for any period prior to the date of the IPO. The following table presents our EPS for July 16, 2021 through September 30, 2021:
(in thousands, except share and per share amounts) |
|
|
| |
Numerator |
|
|
| |
Net income |
| $ | 118,882 |
|
Less: income attributable to non-controlling interests in |
|
| (60,900 | ) |
Less: net income attributable to Common Control Group |
|
| (3,775 | ) |
Less: income attributable to non-controlling interests in |
|
| (44,153 | ) |
Net income attributable to Bridge Investment Group |
|
| 10,054 |
|
Less: income allocated to restricted stock |
|
| (979 | ) |
Net income available to common shareholders - basic and diluted |
| $ | 9,075 |
|
|
|
|
| |
Denominator |
|
|
| |
Weighted-average shares of Class A common stock outstanding - basic and diluted |
|
| 22,284,351 |
|
|
|
|
| |
Earnings per share of Class A common stock - basic and diluted |
| $ | 0.41 |
|
Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Bridge Investment Group Holdings Inc, giving consideration to the reallocation of net income between holders of Class A common stock and non-controlling interest, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities, if any.
Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to the Company and therefore are not participating securities. As a result, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included.
The calculation of diluted earnings per share excludes 97,463,981 Class B Units of the Operating Company, as the inclusion of such shares would be recognized as follows (in thousands):
For the Years Ended December 31, | ||||
Remainder of 2021 | $ | 2,526 | ||
2022 | 3,783 | |||
2023 | 3,147 | |||
2024 | 2,232 | |||
2025 | 996 | |||
Thereafter | 331 | |||
Total | $ | 13,015 | ||
The Company participates in a defined contribution plan covering all eligible employees whereby employees may elect to contribute a percentage of their compensation to the plan. Employees that are age 21 or older, and have completed 60 days of service, are eligible to participate. During both the three months ended JuneSeptember 30, 2021 and 2020 the Company made contributions of $0.8 and $0.6$0.5 million respectively, to the plan as an employer match to the employee’s contributions. During the sixnine months ended JuneSeptember 30, 2021 and 2020, the Company made similar contributions of $1.5$2.0 million and $1.1 million, respectively, to the plan as an employer match to the employee’s contributions.
Dividends to Class A common stock atstockholders
In November 2021, the Company’s board of directors declared a public offering price of
Entity (in thousands) | Controlling Interest | Non- ControllingInterest | Total Distributions | |||||||||
Bridge Investment Group LLC | $ | 11,390 | $ | — | $ | 11,390 | ||||||
Bridge Debt Strategies Fund Manager LLC | 332 | 222 | 554 | |||||||||
Bridge Senior Housing Fund Manager LLC | 1,103 | 736 | 1,839 | |||||||||
Bridge Office Fund Manager LLC | 1,027 | 328 | 1,355 | |||||||||
Total | $ | 13,852 | $ | 1,286 | $ | 15,138 |
37
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This section presents management’s perspective on our financial condition and results of operations. The following discussion and analysis is intended to highlight and supplement data and information presented elsewhere in this Quarterly Report onstatementstatements in our final prospectus for our initial public offering, or IPO, filed with the Securities and Exchange Commission, or the SEC on July 19, 2021 pursuant to Rule 424(b) under the Securities Act, or the Prospectus. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” We assume no obligation to update any of these forward-looking statements.
Overview
We are a leading, vertically integrated real estate investment manager, diversified across specialized asset classes, with approximately $28.7$31.8 billion of AUM as of JuneSeptember 30, 2021. Our ability to scale our specialized and operationally driven investment approach across multiple attractive sectors within real estate equity and debt, in a way that creates sustainable and thriving communities, is the ethos of who we are and the growth engine of our success. We have enjoyed significant growth since our establishment as an institutional fund manager in 2009, driven by strong investment returns, and our successful efforts to develop an array of investment platforms focused on sectors of the U.S. real estate market that we believe are the most attractive. We have extensive multi-channel distribution capabilities and currently manage capital on behalf of more than aone hundred global institutions and more than 6,500 individual investors across more than 25our investment vehicles at June 30, 2021.
Business Segments
We operate our business in a single segment, real estate investment management, which is how our chief operating decision maker (who is our chairman) reviews financial performance and allocates resources.
Trends Affecting Our Business
Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of our holdings and the ability to source attractive investments and completely deploy the capital that we have raised. However, we believe our disciplined investment philosophy across our diversified investment strategies has historically contributed to the stability of our performance throughout market cycles.
In addition to these macroeconomic trends and market factors, our future performance is heavily dependent on our ability to attract new capital, generate strong, stable returns, source investments with attractive risk-adjusted returns and provide attractive investment products to a growing investor base. We believe our future performance will be influenced by the following factors:
38
Impact of
In March 2020, the World Health Organization declared the outbreak of
We continue to closely monitor developments related to
As the global response tocapital.capital, as well as our tenants and residents at properties we own and/or manage. Some of our employees continue to work remotely. OurOur technology infrastructure has proven to be robust and capable of supporting this model. We have implemented rigorous protocols for remote work across the firm, including increased cadence of group calls and updates, and frequent communication across leadership and working levels. We are leveraging technology to ensure our teams stay connected and productive, and that our culture remains strong even in these unusual circumstances. WhileIn cases where we are generally not meetingyet able to meet with our fund investors in person, we continue to actively communicate with our fund investors and all of our
39
stakeholders through videoconference, teleconference and email. Investment committees continue to convene on their normal schedule, and the firm continues to operate across investment, asset management and corporate support functions.
Key Financial Measures
Our key financial and operating measures are discussed below. Additional information regarding our significant accounting policies can be found in Note 2, “Significant Accounting Policies,” to our condensed combined and consolidated financial statements, which appear elsewhere in this Quarterly Report on Form 10-Q.
Revenues
Fund Management Fees
Property Management and Leasing Fees
Construction Management Fees and Development Fees
Transaction Fees
Insurance Premiums
40
Other Asset Management and Property Income
Performance Fees
Incentive fees are generally calculated as a percentage of the profits earned with respect to certain accounts for which we are the investment manager, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are a form of variable consideration and represent contractual fee arrangements in our contracts with our customers. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax. We recognize incentive fee revenue only when these amounts are realized and no longer subject to significant reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization). However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax basis portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt. Incentive fees received in advance of crystallization that remain subject to clawback are recorded as deferred incentive fee revenue and included in accrued performance allocations compensation in the condensed combined and consolidated balance sheets.
Performance allocations include the allocation of performance-based fees to us from limited partners in the funds in which we hold an equity interest. We are entitled to a performance allocation (typically 15% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to the achievement of minimum return levels (typically 6% to 8%), in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the funds, including performance allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member. Accordingly, performance allocations are not deemed to be within the scope of Accounting Standards Codification Topic 606, or ASC 606,
Expenses
Employee Compensation and Benefits
Share-Based Compensation
41
Performance Allocations Compensation
Loss and Loss Adjustment Expenses
Third-party Operating Expenses
General and Administrative Expenses
Depreciation and Amortization
Other Income Expenses
Investment Income (Loss). Realized gaininvestment income (loss) occurs when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized appreciation (depreciation)investment income (loss) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation)income (loss) at the time an investment is realized. The Company’s share of the investee’s income and expenses for the Company’s equity method investments (exclusive of carried interest) is also included within realized and unrealized gains (losses)other investment income (loss). Realized and unrealized gains (losses) areInvestment income (loss) is presented together as realized and unrealized gainsincome (losses) in the condensed combined and consolidated statements of operations. Finally, the realized and unrealized change in gainincome (loss) associated with the financial instruments that we elect the fair value option is also included in realized and unrealized gains (losses)investment income (loss).
Interest Income
Interest Expense
Income Tax Provision
Net Income Attributable to
42
Inc. are allocated a share of income or loss in the Operating Company in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC represent the economic interests held by management and third parties hold in the consolidated subsidiaries of the Operating Company, fund manager entities, and employees in those entities. These non-controlling interests are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that are consolidated into our financial statements.
For additional discussion of components of our condensed combined and consolidated financial statements, see Note 2, “Significant Accounting Policies,” to our condensed combined and consolidated financial statements, which are included elsewhere in this Quarterly Report on Form 10-Q.
Operating Metrics
We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business.
Assets Under Management
Assets under management (“AUM”) refers to the assets we manage. Our AUM represents the sum of (a) the fair value of the assets of the funds and vehicles we manage, plus (b) the contractual amount of any uncalled capital commitments to those funds and vehicles (including our commitments to the funds and vehicles and those of Bridge affiliates). Our AUM does not deduct any outstanding indebtedness or other accrued but unpaid liabilities of the assets we manage. We view AUM as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital. Our calculations of AUM and (but notfee-earningAUM) includes uncalled commitments to (and the fair value of the assets in) the funds and vehicles we manage from Bridge and Bridge affiliates, regardless of whether such commitments or investments are subject to fees. Our definition of AUM is not based on any definition contained in the agreements governing the funds and vehicles we manage or advise.
The scheduletable below presents rollforwards of our AUM for the three and sixnine months ended JuneSeptember 30, 2021:
|
| Three Months |
|
| Nine Months |
| ||
|
| Ended |
|
| Ended |
| ||
(in millions) |
| September 30, 2021 |
|
| September 30, 2021 |
| ||
Balance as of beginning of period |
| $ | 28,749 |
|
| $ | 25,214 |
|
New capital / commitments raised(1) |
|
| 1,496 |
|
|
| 2,891 |
|
Distributions / return of capital(2) |
|
| (345 | ) |
|
| (661 | ) |
Change in fair value and acquisitions(3) |
|
| 1,882 |
|
|
| 4,338 |
|
AUM as of end of period |
| $ | 31,782 |
|
| $ | 31,782 |
|
Increase |
|
| 3,033 |
|
|
| 6,568 |
|
Increase % |
|
| 10 | % |
|
| 21 | % |
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||
($ in millions) | June 30, 2021 | June 30, 2021 | ||||||
Balance as of beginning of period | $ | 25,927 | $ | 25,214 | ||||
New capital / commitments raised (1) | 1,057 | 1,235 | ||||||
Liquidations / distributions (2) | (320 | ) | (582 | ) | ||||
Market activity and other (3) | 2,085 | 2,882 | ||||||
Balance as of end of period | $ | 28,749 | $ | 28,749 | ||||
Fee-Earning AUM
Fee-earning
Management fees are only marginally affected by market appreciation or depreciation because substantially all of the funds pay management fees based on commitments or invested capital.
43
Our calculation ofIn addition, our calculation of AUM (but notfee-earningAUM) includes uncalled commitments to (and the fair value of the assets in) the funds and vehicles we manage from Bridge and Bridge affiliates, regardless of whether such commitments or investments are subject to fees. The scheduletable below presents rollforwards of our totalsixnine months ended JuneSeptember 30, 2021:
|
| Three Months |
|
| Nine Months |
| ||
|
| Ended |
|
| Ended |
| ||
($ in millions) |
| September 30, 2021 |
|
| September 30, 2021 |
| ||
Balance as of beginning of period |
| $ | 10,819 |
|
| $ | 10,214 |
|
Increases (capital raised/deployment)(1) |
|
| 1,422 |
|
|
| 2,838 |
|
Changes in fair market value |
|
| 5 |
|
|
| (21 | ) |
Decreases (liquidations/other)(2) |
|
| (106 | ) |
|
| (891 | ) |
Fee-earning AUM as of end of period |
| $ | 12,140 |
|
| $ | 12,140 |
|
Increase |
|
| 1,321 |
|
|
| 1,926 |
|
Increase % |
|
| 12 | % |
|
| 19 | % |
Three Months Ended | Six Months Ended | |||||||
($ in millions) | June 30, 2021 | June 30, 2021 | ||||||
Balance as of beginning of period | $ | 10,314 | $ | 10,214 | ||||
Increases (1) | 1,052 | 1,432 | ||||||
Changes in fair market value | (10 | ) | (11 | ) | ||||
Decreases (2) | (536 | ) | (816 | ) | ||||
Balance as of end of period | $ | 10,819 | $ | 10,819 | ||||
Increase | 505 | 605 | ||||||
Increase % | 4.9 | % | 5.9 | % |
The launch of new funds resulted in an increasedsixnine months of 2021 and in 2020.$10.8$12.1 billion as of JuneSeptember 30, 2021 due to our capital raising activities and deployment. The following scheduletable summarizes our balances of2019 by fund (in millions):
June 30, | December 31, | |||||||||||||||
2021 | 2020 | 2020 | 2019 | |||||||||||||
Fee-Earning AUM by Fund | ||||||||||||||||
Bridge Multifamily Fund III | $ | 335 | $ | 494 | $ | 401 | $ | 527 | ||||||||
Bridge Multifamily III JV Partners | 10 | 10 | 10 | 13 | ||||||||||||
Bridge Multifamily Fund IV | 1,259 | 1,574 | 1,574 | 1,579 | ||||||||||||
Bridge Workforce Fund I | 523 | 424 | 499 | 608 | ||||||||||||
Bridge Workforce Fund II | 616 | 72 | 166 | — | ||||||||||||
Bridge Opportunity Zone Fund I | 482 | 482 | 482 | 466 | ||||||||||||
Bridge Opportunity Zone Fund II | 408 | 408 | 408 | 414 | ||||||||||||
Bridge Opportunity Zone Fund III | 1,019 | 331 | 1,028 | — | ||||||||||||
Bridge Opportunity Zone Fund IV | 544 | — | — | — |
Bridge Office Fund I | 500 | 503 | 500 | 548 | ||||||||||||
Bridge Office I JV Partners | 148 | 154 | 154 | 154 | ||||||||||||
Bridge Office Fund II | 130 | 89 | 89 | 81 | ||||||||||||
Bridge Office II JV Partners | 6 | 21 | 21 | 7 | ||||||||||||
Bridge Seniors Housing Fund I | 626 | 626 | 626 | 626 | ||||||||||||
Bridge Seniors Housing Fund II | 814 | 789 | 769 | 937 | ||||||||||||
Bridge Seniors Housing Fund III | 33 | — | 33 | — | ||||||||||||
Bridge Debt Strategies Fund I | 40 | 48 | 41 | 48 | ||||||||||||
Bridge Debt Strategies I JV Partners | 18 | 18 | 18 | 18 | ||||||||||||
Bridge Debt Strategies Fund II | 545 | 849 | 678 | 933 | ||||||||||||
Bridge Debt Strategies II JV Partners | 225 | 389 | 343 | 408 | ||||||||||||
Bridge Debt Strategies Fund III | 1,485 | 1,511 | 1,549 | 1,279 | ||||||||||||
Bridge Debt Strategies III JV Partners | 329 | 465 | 416 | 81 | ||||||||||||
Bridge Debt Strategies Fund IV | 606 | — | 305 | — | ||||||||||||
Bridge Agency MBS Fund | 118 | 64 | 104 | — | ||||||||||||
Total Fee-Earning AUM by Fund | $ | 10,819 | $ | 9,321 | $ | 10,214 | $ | 8,727 | ||||||||
|
| September 30, |
|
| December 31, |
| ||||||||||
(in millions) |
| 2021 |
|
| 2020 |
|
| 2020 |
|
| 2019 |
| ||||
Fee-Earning AUM by Fund |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Bridge Multifamily Fund III |
| $ | 294 |
|
| $ | 468 |
|
| $ | 401 |
|
| $ | 527 |
|
Bridge Multifamily III JV Partners |
|
| 5 |
|
|
| 10 |
|
|
| 10 |
|
|
| 13 |
|
Bridge Multifamily Fund IV |
|
| 1,284 |
|
|
| 1,574 |
|
|
| 1,574 |
|
|
| 1,579 |
|
Bridge Multifamily Fund V |
|
| 305 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Bridge Workforce Fund I |
|
| 523 |
|
|
| 419 |
|
|
| 499 |
|
|
| 608 |
|
Bridge Workforce Fund II |
|
| 616 |
|
|
| 72 |
|
|
| 166 |
|
|
| — |
|
Bridge Opportunity Zone Fund I |
|
| 482 |
|
|
| 482 |
|
|
| 482 |
|
|
| 466 |
|
Bridge Opportunity Zone Fund II |
|
| 408 |
|
|
| 408 |
|
|
| 408 |
|
|
| 414 |
|
Bridge Opportunity Zone Fund III |
|
| 1,019 |
|
|
| 330 |
|
|
| 1,028 |
|
|
| — |
|
Bridge Opportunity Zone Fund IV |
|
| 1,002 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Bridge Office Fund I |
|
| 500 |
|
|
| 500 |
|
|
| 500 |
|
|
| 548 |
|
Bridge Office I JV Partners |
|
| 129 |
|
|
| 154 |
|
|
| 154 |
|
|
| 154 |
|
Bridge Office Fund II |
|
| 130 |
|
|
| 89 |
|
|
| 89 |
|
|
| 81 |
|
Bridge Office II JV Partners |
|
| 6 |
|
|
| 21 |
|
|
| 21 |
|
|
| 7 |
|
Bridge Seniors Housing Fund I |
|
| 626 |
|
|
| 626 |
|
|
| 626 |
|
|
| 626 |
|
Bridge Seniors Housing Fund II |
|
| 809 |
|
|
| 789 |
|
|
| 769 |
|
|
| 937 |
|
Bridge Seniors Housing Fund III |
|
| 33 |
|
|
| — |
|
|
| 33 |
|
|
| — |
|
Bridge Debt Strategies Fund I |
|
| 40 |
|
|
| 48 |
|
|
| 41 |
|
|
| 48 |
|
Bridge Debt Strategies I JV Partners |
|
| 18 |
|
|
| 18 |
|
|
| 18 |
|
|
| 18 |
|
Bridge Debt Strategies Fund II |
|
| 516 |
|
|
| 819 |
|
|
| 678 |
|
|
| 933 |
|
Bridge Debt Strategies II JV Partners |
|
| 221 |
|
|
| 361 |
|
|
| 343 |
|
|
| 408 |
|
Bridge Debt Strategies Fund III |
|
| 1,485 |
|
|
| 1,549 |
|
|
| 1,549 |
|
|
| 1,279 |
|
Bridge Debt Strategies III JV Partners |
|
| 334 |
|
|
| 403 |
|
|
| 416 |
|
|
| 81 |
|
Bridge Debt Strategies Fund IV |
|
| 1,118 |
|
|
| — |
|
|
| 305 |
|
|
| — |
|
Bridge Debt Strategies Fund IV JV Partners |
|
| 79 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Bridge Logistics Net Lease Fund |
|
| 31 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Bridge Agency MBS Fund |
|
| 127 |
|
|
| 70 |
|
|
| 104 |
|
|
| — |
|
Total Fee-Earning AUM by Fund |
| $ | 12,140 |
|
| $ | 9,210 |
|
| $ | 10,214 |
|
| $ | 8,727 |
|
Our average remaining fund life for our7.47.5 years as of JuneSeptember 30, 2021 compared to 8.3 years as of December 31, 2020.
44
Undeployed Capital
As of JuneSeptember 30, 2021, we had $1.7$2.1 billion of undeployed capital available to be deployed for future investment or reinvestment. Of this amount $1.1$0.8 billion is currently fee earning based on commitments and $0.6$1.3 billion will be fee earning if and when it is deployed.
Our Performance
We have a demonstrated record of producing attractive returns for our fund investors across our platforms. Our historical investment returns have been recognized by third parties such as Preqin Ltd., which ranked each of our last three multifamily funds and our workforce and affordable housing funds in the top quartile for their vintage. Our historical investment returns for
Performance Summary as of September 30, 2021 |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
| Unreturned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
| Drawn |
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
| Fund |
|
|
|
| ||||||||
|
| Fund |
|
| Capital + |
|
| Cumulative |
|
| Realized |
|
| Remaining |
|
|
|
| Fair |
|
| TFV |
| Gross |
|
| Net |
| ||||||||
|
| Committed |
|
| Accrued |
|
| Invested |
|
| Proceeds |
|
| Fair Value |
|
| Unrealized |
| Value |
|
| MOIC |
| IRR |
|
| IRR |
| ||||||||
(in millions) |
| Capital (2) |
|
| Pref (3) |
|
| Capital (4) |
|
| (5) |
|
| (RFV) (6) |
|
| MOIC (7) |
| TFV (8) |
|
| (9) |
| (10) |
|
| (11) |
| ||||||||
Closed-End Funds(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
(Investment Period Beginning, Ending Date) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Equity Strategies Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Multifamily |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bridge Multifamily I |
| $ | 124 |
|
| $ | — |
|
| $ | 150 |
|
| $ | 280 |
|
| $ | — |
|
| NA |
| $ | 280 |
|
| 1.87x |
|
| 21.0 | % |
|
| 15.3 | % |
Bridge Multifamily II |
|
| 596 |
|
|
| — |
|
|
| 605 |
|
|
| 1,264 |
|
|
| — |
|
| NA |
|
| 1,264 |
|
| 2.09x |
|
| 30.2 | % |
|
| 23.4 | % |
Bridge Multifamily III |
|
| 912 |
|
|
| — |
|
|
| 873 |
|
|
| 1,341 |
|
|
| 710 |
|
| 2.77x |
|
| 2,051 |
|
| 2.35x |
|
| 28.0 | % |
|
| 21.4 | % |
Bridge Multifamily IV |
|
| 1,590 |
|
|
| 1,444 |
|
|
| 1,312 |
|
|
| 144 |
|
|
| 2,222 |
|
| 1.80x |
|
| 2,366 |
|
| 1.80x |
|
| 44.8 | % |
|
| 33.9 | % |
Total Multifamily Funds |
|
| 3,221 |
|
|
| 1,444 |
|
|
| 2,941 |
|
|
| 3,030 |
|
|
| 2,932 |
|
| 1.98x |
|
| 5,962 |
|
| 2.03x |
| 29.3% |
|
|
| 22.8 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bridge Workforce Housing I |
|
| 619 |
|
|
| 598 |
|
|
| 531 |
|
|
| 72 |
|
|
| 1,037 |
|
| 2.09x |
|
| 1,109 |
|
| 2.09x |
|
| 41.8 | % |
|
| 33.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Seniors Housing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bridge Seniors I |
|
| 578 |
|
|
| 754 |
|
|
| 629 |
|
|
| 295 |
|
|
| 590 |
|
| 1.41x |
|
| 885 |
|
| 1.41x |
|
| 7.8 | % |
|
| 5.3 | % |
Bridge Seniors II |
|
| 820 |
|
|
| 812 |
|
|
| 709 |
|
|
| 148 |
|
|
| 768 |
|
| 1.28x |
|
| 915 |
|
| 1.29x |
|
| 40.4 | % |
|
| 6.9 | % |
Total Senior Housing Funds |
|
| 1,399 |
|
|
| 1,566 |
|
|
| 1,338 |
|
|
| 442 |
|
|
| 1,358 |
|
| 1.34x |
|
| 1,801 |
|
| 1.35x |
|
| 8.7 | % |
|
| 5.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bridge Office I |
|
| 573 |
|
|
| 609 |
|
|
| 537 |
|
|
| 115 |
|
|
| 582 |
|
| 1.29x |
|
| 697 |
|
| 1.30x |
|
| 10.1 | % |
|
| 7.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total Equity Strategies Funds |
|
| 5,812 |
|
|
| 4,216 |
|
|
| 5,347 |
|
|
| 3,659 |
|
|
| 5,910 |
|
| 1.70x |
|
| 9,569 |
|
| 1.79x |
|
| 24.0 | % |
|
| 17.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Debt Strategies Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bridge Debt I |
|
| 132 |
|
|
| 51 |
|
|
| 219 |
|
|
| 215 |
|
|
| 48 |
|
| 1.02x |
|
| 263 |
|
| 1.20x |
|
| 8.5 | % |
|
| 6.5 | % |
Bridge Debt II |
|
| 1,002 |
|
|
| 538 |
|
|
| 2,299 |
|
|
| 2,217 |
|
|
| 530 |
|
| 1.29x |
|
| 2,746 |
|
| 1.19x |
|
| 11.7 | % |
|
| 9.3 | % |
Bridge Debt III |
|
| 1,624 |
|
|
| 1,507 |
|
|
| 5,207 |
|
|
| 4,173 |
|
|
| 1,572 |
|
| 1.21x |
|
| 5,745 |
|
| 1.10x |
|
| 15.1 | % |
|
| 11.8 | % |
Total Debt Strategies Funds |
|
| 2,757 |
|
|
| 2,095 |
|
|
| 7,725 |
|
|
| 6,605 |
|
|
| 2,149 |
|
| 1.23x |
|
| 8,754 |
|
| 1.13x |
|
| 12.9 | % |
|
| 10.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes:
Performance Summary as of June 30, 2021 | ||||||||||||||||||||
(in millions) | Fund Committed Capital (2) | Unreturned Drawn Capital + Accrued Pref (3) | Cumulative Invested Capital (4) | Realized Proceeds (5) | Remaining Fair Value (RFV) (6) | |||||||||||||||
Closed-End Funds by Platform(1) | ||||||||||||||||||||
(Investment Period Beginning/Ending Date) | ||||||||||||||||||||
Bridge Multifamily Fund I (Mar 2009, Mar 2012) | $ | 124 | $ | — | $ | 150 | $ | 280 | $ | — | ||||||||||
Bridge Multifamily Fund II (Apr 2012, Mar 2015) | 596 | — | 605 | 1,264 | — | |||||||||||||||
Bridge Multifamily Fund III (Jan 2015, Jan 2018) | 912 | 2 | 870 | 1,205 | 706 | |||||||||||||||
Bridge Multifamily Fund IV (Jun 2018, Jun 2021) | 1,590 | 1,402 | 1,101 | 126 | 1,645 | |||||||||||||||
Bridge Workforce & Affordable Housing Fund I (Aug 2017, Aug 2020) | 619 | 594 | 525 | 63 | 841 | |||||||||||||||
Bridge Office Fund I (Jul 2017, Jul 2020) | 573 | 600 | 521 | 94 | 599 | |||||||||||||||
Bridge Seniors Housing Fund I (Jan 2014, Jan 2018) | 578 | 739 | 619 | 245 | 624 | |||||||||||||||
Bridge Seniors Housing Fund II (Mar 2017, Mar 2020) | 820 | 804 | 702 | 136 | 748 | |||||||||||||||
Total Equity Strategies Closed-End Funds | 5,812 | 4,142 | 5,095 | 3,412 | 5,163 | |||||||||||||||
Bridge Debt Strategies Fund I (Sep 2014, Sep 2017) | 132 | 50 | 219 | 215 | 49 | |||||||||||||||
Bridge Debt Strategies Fund II (July 2016, July 2019) | 1,002 | 604 | 2,137 | 1,962 | 590 | |||||||||||||||
Bridge Debt Strategies Fund III (May 2018, May 2021) | 1,624 | 1,520 | 1,835 | 891 | 1,389 | |||||||||||||||
Total Debt Strategies Closed-End Funds | 2,757 | 2,174 | 4,191 | 3,068 | 2,029 | |||||||||||||||
Total Closed-End Funds | $ | 8,569 | $ | 6,316 | $ | 9,287 | $ | 6,480 | $ | 7,191 | ||||||||||
Performance Summary as of June 30, 2021 continued | ||||||||||||||||||||
(in millions) | Unrealized MOIC (7) | Total Fair Value (TFV) (8) | TFV MOIC (9) | Fund Gross IRR (10) | Fund Net IRR (11) | |||||||||||||||
Closed-End Funds by Platform(1) | ||||||||||||||||||||
(Investment Period Beginning/Ending Date) | ||||||||||||||||||||
Bridge Multifamily Fund I (Mar 2009, Mar 2012) | NA | $ | 280 | 1.87x | 21.0 | % | 15.3 | % | ||||||||||||
Bridge Multifamily Fund II (Apr 2012, Mar 2015) | NA | 1,264 | 2.09x | 30.2 | % | 23.4 | % | |||||||||||||
Bridge Multifamily Fund III (Jan 2015, Jan 2018) | 2.47x | 1,911 | 2.20x | 26.6 | % | 20.0 | % | |||||||||||||
Bridge Multifamily Fund IV (Jun 2018, Jun 2021) | 1.61x | 1,771 | 1.61x | 36.5 | % | 26.3 | % | |||||||||||||
Bridge Workforce & Affordable Housing Fund I (Aug 2017, Aug 2020) | 1.72x | 904 | 1.72x | 33.8 | % | 25.8 | % | |||||||||||||
Bridge Office Fund I (Jul 2017, Jul 2020) | 1.33x | 693 | 1.33x | 11.9 | % | 8.4 | % | |||||||||||||
Bridge Seniors Housing Fund I (Jan 2014, Jan 2018) | 1.41x | 868 | 1.40x | 8.0 | % | 5.3 | % | |||||||||||||
Bridge Seniors Housing Fund II (Mar 2017, Mar 2020) | 1.25x | 884 | 1.26x | 10.1 | % | 6.4 | % | |||||||||||||
Total Equity Strategies Closed-End Funds | 1.57x | 8,575 | 1.68x | 22.5 | % | 16.3 | % | |||||||||||||
Bridge Debt Strategies Fund I (Sep 2014, Sep 2017) | 1.03x | 264 | 1.21x | 8.8 | % | 6.7 | % | |||||||||||||
Bridge Debt Strategies Fund II (July 2016, July 2019) | 1.27x | 2,552 | 1.19x | 11.4 | % | 9.1 | % | |||||||||||||
Bridge Debt Strategies Fund III (May 2018, May 2021) | 1.27x | 2,280 | 1.24x | 14.2 | % | 10.9 | % | |||||||||||||
Total Debt Strategies Closed-End Funds | 1.26x | 5,096 | 1.22x | 12.3 | % | 9.6 | % | |||||||||||||
Total Closed-End Funds | 1.45x | $ | 13,671 | 1.47x | 19.8 | % | 14.4 | % | ||||||||||||
(4) Cumulative Invested Capital represents the total cost of investments since inception (including any recycling or refinancing of investments). |
45
The returns presented above are those of the primary funds in each platform and not those of the Company. An investment in our Class A common stock is not an investment in any of our funds. The historical returns attributable to our platforms are presented for illustrative purposes only and should not be considered as indicative of the future returns of our Class A common stock or any of our current or future funds. These returns are presented by platform and include multiple funds of varied vintage, including funds that are fully realized, and performance of a specific fund within a platform can vary materially from the return of the platform as a whole. The returns represent aggregate returns for the U.S. domiciled partnerships, and such aggregate returns may differ materially from the fund level returns for each individual partnership
There is no guarantee that any fund or other vehicle within a platform will achieve its investment objectives or achieve comparable investment returns.
Results of Operations
Three Months Ended JuneSeptember 30, 2021 compared to Three Months Ended JuneSeptember 30, 2020
Revenues
Three Months Ended June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Revenues ($ in thousands): | ||||||||||||||||
Fund management fees | $ | 34,536 | $ | 25,723 | $ | 8,813 | 34 | % | ||||||||
Property management and leasing fees | 14,335 | 14,845 | (510 | ) | -3 | % | ||||||||||
Construction management fees | 2,065 | 2,215 | (150 | ) | -7 | % | ||||||||||
Development fees | 1,163 | 373 | 790 | 212 | % | |||||||||||
Transaction fees | 16,242 | 8,294 | 7,948 | 96 | % | |||||||||||
Insurance premiums | 2,022 | 1,349 | 673 | 50 | % | |||||||||||
Other asset management and property income | 1,611 | 2,343 | (732 | ) | -31 | % | ||||||||||
Total revenues | $ | 71,974 | $ | 55,142 | $ | 16,832 | 31 | % | ||||||||
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fund management fees |
| $ | 40,576 |
|
| $ | 26,624 |
|
| $ | 13,952 |
|
|
| 52 | % |
Property management and leasing fees |
|
| 22,510 |
|
|
| 13,747 |
|
|
| 8,763 |
|
|
| 64 | % |
Construction management fees |
|
| 2,097 |
|
|
| 1,792 |
|
|
| 305 |
|
|
| 17 | % |
Development fees |
|
| 1,018 |
|
|
| 738 |
|
|
| 280 |
|
|
| 38 | % |
Transaction fees |
|
| 21,907 |
|
|
| 5,085 |
|
|
| 16,822 |
|
|
| 331 | % |
Insurance premiums |
|
| 2,530 |
|
|
| 2,220 |
|
|
| 310 |
|
|
| 14 | % |
Other asset management and property income |
|
| 1,533 |
|
|
| 1,146 |
|
|
| 387 |
|
|
| 34 | % |
Total revenues |
| $ | 92,171 |
|
| $ | 51,352 |
|
| $ | 40,819 |
|
|
| 79 | % |
Fund Management Fees
Our$9.3$9.2 billion as of JuneSeptember 30, 2020 to $10.8$12.1 billion as of JuneSeptember 30, 2021. Our weighted averageweighted-average management fee increased fromfrom 1.43% for the three months ended JuneSeptember 30, 2020 to 1.51%1.49% for the three months ended JuneSeptember 30, 2021. Our weighted averageweighted-average management fee varies largely due to the size of investor commitments. Our funds generally offer lower management fee percentages for commitments over certain thresholds, which is the main driver in the change in the weighted averageweighted-average management fee. In addition, we launched our first open endedopen-ended fund in ourBridge Agency MBS platformFund in June 2020 and Bridge Logistics Net Lease Fund in July 2021, each of which charges management fees at a lower rate and is based on each investor’s quarterly NAV.
Property Management and Leasing Fees
Construction Management Fees
46
Development Fees
Transaction Fees
Insurance Premiums
Other Asset Management and Property Income
Investment income
Three Months Ended | ||||||||||||||||
June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Investment income ($ in thousands): | ||||||||||||||||
Performance allocations | ||||||||||||||||
Realized | $ | 35,629 | $ | 5,324 | $ | 30,305 | 569 | % | ||||||||
Unrealized | 43,248 | (21,435 | ) | 64,683 | 302 | % | ||||||||||
Total performance allocations | 78,877 | (16,111 | ) | 94,988 | ||||||||||||
Earnings from investments in real estate | 980 | (178 | ) | 1,158 | 651 | % | ||||||||||
Total investment income | $ | 79,857 | $ | (16,289 | ) | $ | 96,146 | 590 | % | |||||||
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Performance allocations |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Realized |
| $ | 30,999 |
|
| $ | 4,437 |
|
| $ | 26,562 |
|
|
| 599 | % |
Unrealized |
|
| 53,042 |
|
|
| 14,663 |
|
|
| 38,379 |
|
|
| 262 | % |
Earnings from investments in real estate |
|
| 823 |
|
|
| 183 |
|
|
| 640 |
|
|
| 350 | % |
Total investment income |
| $ | 84,864 |
|
| $ | 19,283 |
|
| $ | 65,581 |
|
|
| 340 | % |
Total investment income. Total investment income increased by $96.1$65.6 million largely driven by our performance allocations.
Performance allocations.
Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | |||||||||||||||
Realized | Unrealized | Realized | Unrealized | |||||||||||||
BMF III | $ | 21,617 | $ | (4,643 | ) | $ | 3,380 | $ | 955 | |||||||
BMF IV | — | 22,640 | — | 5,975 | ||||||||||||
BWH I | — | 7,525 | — | 1,878 | ||||||||||||
BDS I | — | 44 | (12 | ) | (184 | ) | ||||||||||
BDS II | — | 4,903 | 1,956 | (27,268 | ) | |||||||||||
BDS III | 14,012 | 6,913 | — | (3,340 | ) | |||||||||||
BDS IV | — | 948 | — | — | ||||||||||||
BOF I | — | 3,915 | — | 549 | ||||||||||||
BOF II | — | 1,157 | — | — | ||||||||||||
BAMBS | — | (154 | ) | — | — | |||||||||||
Total | $ | 35,629 | $ | 43,248 | $ | 5,324 | $ | (21,435 | ) | |||||||
|
| Three Months Ended |
|
| Three Months Ended |
| ||||||||||
|
| September 30, 2021 |
|
| September 30, 2020 |
| ||||||||||
(in thousands) |
| Realized |
|
| Unrealized |
|
| Realized |
|
| Unrealized |
| ||||
BMF III |
| $ | 28,389 |
|
| $ | (15,956 | ) |
| $ | 4,437 |
|
| $ | — |
|
BMF IV |
|
| — |
|
|
| 41,108 |
|
|
| — |
|
|
| — |
|
BWH I |
|
| — |
|
|
| 19,740 |
|
|
| — |
|
|
| 3,694 |
|
BWH II |
|
| — |
|
|
| 943 |
|
|
| — |
|
|
| — |
|
BDS I |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 37 |
|
BDS II |
|
| — |
|
|
| 7,209 |
|
|
| — |
|
|
| 2,168 |
|
BDS III |
|
| 2,610 |
|
|
| 3,502 |
|
|
| — |
|
|
| 12,749 |
|
BDS IV |
|
| — |
|
|
| 2,474 |
|
|
| — |
|
|
| 7,277 |
|
BOF I |
|
| — |
|
|
| (6,268 | ) |
|
| — |
|
|
| (11,262 | ) |
BOF II |
|
| — |
|
|
| 1,259 |
|
|
| — |
|
|
| — |
|
AMBS |
|
| — |
|
|
| (969 | ) |
|
| — |
|
|
| — |
|
Total |
| $ | 30,999 |
|
| $ | 53,042 |
|
| $ | 4,437 |
|
| $ | 14,663 |
|
For the three months ended JuneSeptember 30, 2021, the increase in unrealized performance allocation was largely due to an increase in performance income allocation related to the market appreciation from properties within our multifamily and workforce and affordable housing real estate equity funds and favorable market conditions in our debt funds. Performance income allocation is recorded one quarter in arrears, and as such the performance allocation income reflects asset valuations as of March 31,June 30, 2021. The three months ended June 30, 2020 reflectschange in the valuation from the onset of the pandemic, which in particular adversely impacted the valuation of Bridge Debt StrategiesMultifamily Fund II and III dueunrealized performance allocations is attributable to the sell-off in the credit marketsmonetization of mortgage-backed securities in the last week of March 2020 as redemptions and margin calls created a wave of forced selling in the market, which caused a significant decrease in the fair value of the accrued performance allocations. This was partially offset by the market appreciation from properties within our multifamily real estate equity funds.
Earnings from investments in real estate.
47
Expenses
Three Months Ended | ||||||||||||||||
June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Expenses ($ in thousands): | ||||||||||||||||
Employee compensation and benefits | $ | 42,306 | $ | 19,839 | $ | 22,467 | 113 | % | ||||||||
Performance allocations compensation | ||||||||||||||||
Realized | 3,747 | 517 | 3,230 | 625 | % | |||||||||||
Unrealized | 6,048 | (2,424 | ) | 8,472 | 350 | % | ||||||||||
Loss and loss adjustment expenses | 2,132 | 1,096 | 1,036 | 95 | % | |||||||||||
Third-party operating expenses | 6,117 | 7,083 | (966 | ) | -14 | % | ||||||||||
General and administrative expenses | 5,392 | 4,070 | 1,322 | 32 | % | |||||||||||
Depreciation and amortization | 727 | 672 | 55 | 8 | % | |||||||||||
Total expenses | $ | 66,469 | $ | 30,853 | $ | 35,616 | 115 | % | ||||||||
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Employee compensation and benefits |
| $ | 31,763 |
|
| $ | 22,826 |
|
| $ | 8,937 |
|
|
| 39 | % |
Performance allocations compensation |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Realized |
|
| 1,855 |
|
|
| 438 |
|
|
| 1,417 |
|
|
| 324 | % |
Unrealized |
|
| 2,682 |
|
|
| 1,542 |
|
|
| 1,140 |
|
|
| 74 | % |
Loss and loss adjustment expenses |
|
| 1,429 |
|
|
| 1,535 |
|
|
| (106 | ) |
|
| -7 | % |
Third-party operating expenses |
|
| 11,581 |
|
|
| 6,033 |
|
|
| 5,548 |
|
|
| 92 | % |
General and administrative expenses |
|
| 6,703 |
|
|
| 4,448 |
|
|
| 2,255 |
|
|
| 51 | % |
Depreciation and amortization |
|
| 699 |
|
|
| 672 |
|
|
| 27 |
|
|
| 4 | % |
Total expenses |
| $ | 56,712 |
|
| $ | 37,494 |
|
| $ | 19,218 |
|
|
| 51 | % |
Employee Compensation and Benefits
Performance Allocation Compensation.
Loss and Loss Adjustment Expenses
Third-party Operating Expenses.
General and Administrative Expenses
Depreciation and Amortization
Other income (expense)
Three Months Ended | ||||||||||||||||
June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Other income (expense) ($ in thousands) | ||||||||||||||||
Net realized and unrealized gains (losses) | $ | 300 | $ | 152 | $ | 148 | 97 | % | ||||||||
Interest income | 557 | 231 | 326 | 141 | % | |||||||||||
Interest expense | (2,554 | ) | (444 | ) | (2,110 | ) | 475 | % | ||||||||
Total other income (expense) | $ | (1,697 | ) | $ | (61 | ) | $ | (1,636 | ) | 2682 | % | |||||
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net realized and unrealized gains (losses) |
| $ | 2,565 |
|
| $ | (143 | ) |
| $ | 2,708 |
|
|
| 1894 | % |
Interest income |
|
| 1,008 |
|
|
| 358 |
|
|
| 650 |
|
|
| 182 | % |
Interest expense |
|
| (2,407 | ) |
|
| (1,701 | ) |
|
| (706 | ) |
|
| 42 | % |
Total other income (expense) |
| $ | 1,166 |
|
| $ | (1,486 | ) |
| $ | 2,652 |
|
|
| 178 | % |
Realized and Unrealized Gain
Interest Income
Interest Expense
Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net income attributable to non-controlling
48
Company’s subsidiaries and to our profits interests programs. The following scheduletable summarizes the allocation of the(in thousands):
Three Months Ended | ||||||||
June 30, | ||||||||
2021 | 2020 | |||||||
Non-controlling interest related to consolidated fund managers and subsidiaries | $ | 1,205 | $ | 2,598 | ||||
Non-controlling interest related to 2019 profits interests awards | 4,502 | 1,852 | ||||||
Non-controlling interest related to 2020 profits interests awards | 108 | — | ||||||
Total | $ | 5,815 | $ | 4,450 | ||||
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
(in thousands) |
| 2021 |
|
| 2020 |
| ||
Non-controlling interests related to General Partners - realized |
| $ | 17,142 |
|
| $ | — |
|
Non-controlling interests related to General Partners - unrealized |
|
| 31,604 |
|
|
| — |
|
Non-controlling interests related to Fund Managers |
|
| 2,155 |
|
|
| 2,107 |
|
Non-controlling interests related to 2019 profits interests awards |
|
| 8,517 |
|
|
| 1,982 |
|
Non-controlling interests related to 2020 profits interests awards |
|
| 895 |
|
|
| — |
|
Non-controlling interests related to 2021 profits interests awards |
|
| 587 |
|
|
| — |
|
Total |
| $ | 60,900 |
|
| $ | 4,089 |
|
Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net income attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $43.9 million during the three months ended September 30, 2021.
We expect that the 2019 profits interests awards will be collapsed into Class A Units in the Operating Company (or shares of our Class A common stock) on December 31, 2021, the 2020 profits interests awards will be collapsed into Class A Units in the Operating Company (or shares of our Class A common stock) on December 31, 2022, and that all remaining profits interests (relating to 2021 issuances) will be collapsed into Class A Units in the Operating Company (or shares of our Class A common stock) on June 30, 2023. The profits interests will be collapsed based on their then-current fair values and the relative value of the Company, based on Distributable Earnings (as defined below) attributable to the Operating Company, Distributable Earnings of the applicable subsidiary where such profits interests are currently held, and the market price of our Class A common stock, in each case as of the date of the collapse. This will result in a decrease in net income attributable to Based on the final initial public offering price of $16.00 per share remaining constant into the future and based on our current estimates of Distributable Earnings for 2021, we estimate that we will issue approximately seven million Class A Units (or shares of our Class A common stock) on December 31, 2021 to the owners of the 2019 profits interests awards.
Nine Months Ended JuneSeptember 30, 2021 compared to SixNine Months Ended JuneSeptember 30, 2020
Revenues
Six Months Ended | ||||||||||||||||
June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Revenues ($ in thousands): | ||||||||||||||||
Fund management fees | $ | 65,387 | $ | 51,442 | $ | 13,945 | 27 | % | ||||||||
Transaction fees | 21,568 | 15,639 | 5,929 | 38 | % | |||||||||||
Property management and leasing fees | 31,081 | 31,367 | (286 | ) | -1 | % | ||||||||||
Construction management fees | 3,891 | 3,777 | 114 | 3 | % | |||||||||||
Development fees | 1,549 | 577 | 972 | 168 | % | |||||||||||
Insurance premiums | 3,916 | 2,505 | 1,411 | 56 | % | |||||||||||
Other asset management and property income | 3,131 | 3,543 | (412 | ) | -12 | % | ||||||||||
Total revenues | $ | 130,523 | $ | 108,850 | $ | 21,673 | 20 | % | ||||||||
|
| Nine Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fund management fees |
| $ | 105,963 |
|
| $ | 78,066 |
|
| $ | 27,897 |
|
|
| 36 | % |
Property management and leasing fees |
|
| 53,592 |
|
|
| 45,114 |
|
|
| 8,478 |
|
|
| 19 | % |
Construction management fees |
|
| 5,988 |
|
|
| 5,569 |
|
|
| 419 |
|
|
| 8 | % |
Development fees |
|
| 2,567 |
|
|
| 1,315 |
|
|
| 1,252 |
|
|
| 95 | % |
Transaction fees |
|
| 43,475 |
|
|
| 20,724 |
|
|
| 22,751 |
|
|
| 110 | % |
Insurance premiums |
|
| 6,446 |
|
|
| 4,725 |
|
|
| 1,721 |
|
|
| 36 | % |
Other asset management and property income |
|
| 4,664 |
|
|
| 4,690 |
|
|
| (26 | ) |
|
| -1 | % |
Total revenues |
| $ | 222,695 |
|
| $ | 160,203 |
|
| $ | 62,492 |
|
|
| 39 | % |
Fund Management Fees
Property Management and Leasing Fees
Construction Management Fees
49
Development Fees
Transaction Fees
Insurance Premiums
Other Asset Management and Property Income
Investment income
Six Months Ended | ||||||||||||||||
June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Investment income ($ in thousands): | ||||||||||||||||
Incentive fees | $ | 910 | $ | — | $ | 910 | NA | |||||||||
Performance allocations | ||||||||||||||||
Realized | 41,185 | 9,435 | 31,750 | 337 | % | |||||||||||
Unrealized | 57,967 | (2,618 | ) | 60,585 | 2314 | % | ||||||||||
Total performance allocations | 100,062 | 6,817 | 93,245 | 1368 | % | |||||||||||
Earnings from investments in real estate | 976 | (590 | ) | 1,566 | 265 | % | ||||||||||
Total investment income | $ | 101,038 | $ | 6,227 | $ | 94,811 | 1523 | % | ||||||||
|
| Nine Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Incentive fees |
| $ | 910 |
|
| $ | — |
|
| $ | 910 |
|
| NA |
| |
Performance allocations |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Realized |
|
| 72,184 |
|
|
| 13,872 |
|
|
| 58,312 |
|
|
| 420 | % |
Unrealized |
|
| 111,009 |
|
|
| 12,045 |
|
|
| 98,964 |
|
|
| 822 | % |
Earnings from investments in real estate |
|
| 1,799 |
|
|
| (407 | ) |
|
| 2,206 |
|
|
| 542 | % |
Total investment income |
| $ | 185,902 |
|
| $ | 25,510 |
|
| $ | 160,392 |
|
|
| 629 | % |
Total investment income. Total investment income increased by $94.8$160.4 million, largely driven by our performance allocations.
Performance allocations.
Six Months Ended | Six Months Ended | |||||||||||||||
June 30, 2021 | June 30, 2020 | |||||||||||||||
Realized | Unrealized | Realized | Unrealized | |||||||||||||
BMF III | $ | 25,593 | $ | (3,604 | ) | $ | 7,491 | $ | 6,800 | |||||||
BMF IV | — | 28,989 | — | 8,766 | ||||||||||||
BWH I | — | �� | 9,967 | — | 4,967 | |||||||||||
BDS I | — | 35 | (12 | ) | (160 | ) | ||||||||||
BDS II | — | 8,228 | 1,956 | (26,234 | ) | |||||||||||
BDS III | 15,592 | 15,326 | — | — | ||||||||||||
BDS IV | — | 948 | — | — | ||||||||||||
BOF I | — | (3,470 | ) | — | 3,336 | |||||||||||
BOF II | — | 858 | — | — | ||||||||||||
BAMBS | — | 690 | — | — | ||||||||||||
BSH I | — | — | — | (93 | ) | |||||||||||
Total | $ | 41,185 | $ | 57,967 | $ | 9,435 | $ | (2,618 | ) | |||||||
|
| Nine Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, 2021 |
|
| September 30, 2020 |
| ||||||||||
(in thousands) |
| Realized |
|
| Unrealized |
|
| Realized |
|
| Unrealized |
| ||||
BMF III |
| $ | 53,981 |
|
| $ | (19,561 | ) |
| $ | — |
|
| $ | — |
|
BMF IV |
|
| — |
|
|
| 70,097 |
|
|
| — |
|
|
| — |
|
BWH I |
|
| — |
|
|
| 29,707 |
|
|
| — |
|
|
| 8,661 |
|
BWH II |
|
| — |
|
|
| 943 |
|
|
| — |
|
|
| — |
|
BDS I |
|
| — |
|
|
| 35 |
|
|
| (12 | ) |
|
| (124 | ) |
BDS II |
|
| — |
|
|
| 15,437 |
|
|
| 1,956 |
|
|
| (24,066 | ) |
BDS III |
|
| 18,203 |
|
|
| 18,829 |
|
|
| 11,928 |
|
|
| 19,550 |
|
BDS IV |
|
| — |
|
|
| 3,423 |
|
|
| — |
|
|
| 16,043 |
|
BOF I |
|
| — |
|
|
| (9,738 | ) |
|
| — |
|
|
| (7,926 | ) |
BOF II |
|
| — |
|
|
| 2,117 |
|
|
| — |
|
|
| — |
|
AMBS |
|
| — |
|
|
| (280 | ) |
|
| — |
|
|
| — |
|
BSHI |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (93 | ) |
Total |
| $ | 72,184 |
|
| $ | 111,009 |
|
| $ | 13,872 |
|
| $ | 12,045 |
|
The increase in unrealized performance allocationallocations was largely due to an increase in performance income allocation related to the market appreciation from properties within our multifamily and workforce and affordability housing real estate equity funds and favorable market conditions in our debt funds. Performance income allocation is recorded one quarter in arrears, and as such the performance allocation income reflects asset valuations as of March 31,June 30, 2021. The sixnine months ended JuneSeptember 30, 2020 reflects the impact on valuations from the disruption due to the pandemic, which in particular adversely impacted the valuation of Bridge Debt Strategies FundsFund II, and III, due to the selloff in the credit markets of mortgage-backed securities in the last week of March 2020 as redemptions and margin calls created a wave of forced selling in the market, which caused a significant decrease in the fair value of the accrued performance allocations asfor the nine months ended September 30, 2020. The change in the Bridge Multifamily Fund III unrealized performance allocations is attributable to the monetization of March 31, 2020. This was partially offset by the market appreciation from properties within our multifamily real estate equity funds.
50
Additionally, we earned incentive fees of $0.9 million related to the disposition of certain managed investments during the first sixnine months of 2021. No such dispositions occurred during the first sixnine months of 2020.
Earnings from investments in real estate.
Expenses
Six Months Ended | ||||||||||||||||
June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Expenses ($ in thousands): | ||||||||||||||||
Employee compensation and benefits | $ | 69,457 | $ | 44,532 | $ | 24,925 | 56 | % | ||||||||
Incentive fee compensation | 82 | — | 82 | NA | ||||||||||||
Performance allocations compensation | ||||||||||||||||
Realized | 4,241 | 905 | 3,336 | 369 | % | |||||||||||
Unrealized | 7,477 | (144 | ) | 7,621 | 5292 | % | ||||||||||
Loss and loss adjustment expenses | 2,917 | 1,678 | 1,239 | 74 | % | |||||||||||
Third-party operating expenses | 14,743 | 15,643 | (900 | ) | -6 | % | ||||||||||
General and administrative expenses | 9,492 | 8,761 | 731 | 8 | % | |||||||||||
Depreciation and amortization | 1,480 | 1,344 | 136 | 10 | % | |||||||||||
Total expenses | $ | 109,889 | $ | 72,719 | $ | 37,170 | 51 | % | ||||||||
|
| Nine Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Employee compensation and benefits |
| $ | 101,220 |
|
| $ | 67,358 |
|
| $ | 33,862 |
|
|
| 50 | % |
Incentive fee compensation |
|
| 82 |
|
|
| — |
|
|
| 82 |
|
| NA |
| |
Performance allocations compensation |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Realized |
|
| 6,096 |
|
|
| 1,343 |
|
|
| 4,753 |
|
|
| 354 | % |
Unrealized |
|
| 10,159 |
|
|
| 1,398 |
|
|
| 8,761 |
|
|
| 627 | % |
Loss and loss adjustment expenses |
|
| 4,346 |
|
|
| 3,213 |
|
|
| 1,133 |
|
|
| 35 | % |
Third-party operating expenses |
|
| 26,325 |
|
|
| 21,676 |
|
|
| 4,649 |
|
|
| 21 | % |
General and administrative expenses |
|
| 16,196 |
|
|
| 13,209 |
|
|
| 2,987 |
|
|
| 23 | % |
Depreciation and amortization |
|
| 2,179 |
|
|
| 2,016 |
|
|
| 163 |
|
|
| 8 | % |
Total expenses |
| $ | 166,603 |
|
| $ | 110,213 |
|
| $ | 56,390 |
|
|
| 51 | % |
Employee Compensation and Benefits
Performance AllocationAllocations Compensation.
Loss and Loss Adjustment Expenses
Third-party Operating Expenses.
General and Administrative Expenses.
Depreciation and Amortization
Other Income (expense)
Six Months Ended June 30, | Amount | % | ||||||||||||||
2021 | 2020 | Change | Change | |||||||||||||
Other income (expense) ($ in thousands) | ||||||||||||||||
Net realized and unrealized gains | $ | 6,097 | $ | 807 | $ | 5,290 | 656 | % | ||||||||
Interest income | 1,165 | 603 | 562 | 93 | % | |||||||||||
Interest expense | (4,140 | ) | (925 | ) | (3,215 | ) | 348 | % | ||||||||
Total other income (expense) | $ | 3,122 | $ | 485 | $ | 2,637 | 544 | % | ||||||||
51
|
| Nine Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
| Amount |
|
| % |
| |||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| Change |
|
| Change |
| ||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net realized and unrealized gains |
| $ | 8,663 |
|
| $ | 663 |
|
| $ | 8,000 |
|
|
| 1207 | % |
Interest income |
|
| 2,172 |
|
|
| 961 |
|
|
| 1,211 |
|
|
| 126 | % |
Interest expense |
|
| (6,547 | ) |
|
| (2,626 | ) |
|
| (3,921 | ) |
|
| 149 | % |
Total other income (expense) |
| $ | 4,288 |
|
| $ | (1,002 | ) |
| $ | 5,290 |
|
|
| 528 | % |
Realized and Unrealized Gain.
Interest Income
Interest Expense
Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC is comprised ofour fund managersthe Operating Company’s subsidiaries and to our profits interests programs. The following scheduletable summarizes the allocation of the
|
| Nine Months Ended |
| |||||
|
| September 30, |
| |||||
(in thousands) |
| 2021 |
|
| 2020 |
| ||
Non-controlling interests related to General Partners - realized |
| $ | 17,142 |
|
| $ | — |
|
Non-controlling interests related to General Partners - unrealized |
|
| 31,605 |
|
|
| — |
|
Non-controlling interests related to Fund Managers |
|
| 5,652 |
|
|
| 6,740 |
|
Non-controlling interests related to 2019 profits interests awards |
|
| 14,676 |
|
|
| 3,834 |
|
Non-controlling interests related to 2020 profits interests awards |
|
| 1,002 |
|
|
| — |
|
Non-controlling interests related to 2021 profits interests awards |
|
| 586 |
|
|
| — |
|
Total |
| $ | 70,663 |
|
| $ | 10,574 |
|
Net Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net income attributable to non-controlling interests (in thousands):
Six Months Ended | ||||||||
June 30, | ||||||||
2021 | 2020 | |||||||
Non-controlling interest related to consolidated fund managers and subsidiaries | $ | 3,497 | $ | 4,632 | ||||
Non-controlling interest related to 2019 profits interests awards | 6,159 | 1,852 | ||||||
Non-controlling interest related to 2020 profits interests awards | 108 | — | ||||||
Total | $ | 9,764 | $ | 6,484 | ||||
Non-GAAP
Distributable Earnings
Distributable Earnings differs from net income before provision for income taxes, computed in accordance with GAAP in that it does not include depreciation and amortization, unrealized performance allocations and related compensation expense, unrealized gains (losses), share-based compensation, net income attributable toifwhere applicable, charges (credits) related to corporate actions andnon-recurringitems include: charges associated with acquisitions or strategic investments, changes in the tax receivable agreementTax Receivable Agreement liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions, impairment charges associated with leaseThis measure supplementsThese measures supplement and should be considered in addition to and not in lieu of the results of operations discussed further under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Components of our Results of Operations—CombinedOperations – Results of Operations” prepared in accordance with GAAP. Our calculations of Distributable Earnings may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers.
52
Fee Related Earnings
Fee Related Revenues
Fee Related Expenses
Fee Related Revenues and Fee Related Expenses are presented separately in our calculation of
53
Net income before provision for income taxes is the GAAP financial measure most comparable to Distributable Earnings and Fee Related Earnings. The following scheduletable sets forth a reconciliation of net income to Distributable Earnings and to Fee Related Earnings for the three- andsix-monthsJuneSeptember 30, 2021 and 2020.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income | $ | 83,241 | $ | 7,769 | $ | 123,960 | $ | 42,661 | ||||||||
Income tax provision | 424 | 170 | 834 | 182 | ||||||||||||
Income before provision for income taxes | 83,665 | 7,939 | 124,794 | 42,843 | ||||||||||||
Depreciation and amortization | 727 | 672 | 1,480 | 1,344 | ||||||||||||
Less: Unrealized performance allocations | (43,248 | ) | 21,435 | (57,967 | ) | 2,618 | ||||||||||
Plus: Unrealized performance allocations compensation | 6,048 | (2,424 | ) | 7,477 | (144 | ) | ||||||||||
Less: Unrealized (gains) losses | (317 | ) | 71 | (6,098 | ) | (959 | ) | |||||||||
Plus: Share-based compensation | 14,624 | 388 | 15,465 | 775 | ||||||||||||
Less: Net income attributable to non-controlling interests in subsidiaries | (5,815 | ) | (4,450 | ) | (9,764 | ) | (6,484 | ) | ||||||||
Distributable Earnings attributable to the Operating Company | 55,684 | 23,631 | 75,387 | 39,993 | ||||||||||||
Realized performance allocations and incentive fees | (35,629 | ) | (5,324 | ) | (42,095 | ) | (9,435 | ) | ||||||||
Realized performance allocations and incentive fees compensation | 3,747 | 517 | 4,323 | 905 | ||||||||||||
Net insurance (income) loss | 110 | (253 | ) | (999 | ) | (827 | ) |
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Net income |
| $ | 118,882 |
|
| $ | 31,258 |
|
| $ | 242,841 |
|
| $ | 73,919 |
|
Income tax provision |
|
| 2,607 |
|
|
| 397 |
|
|
| 3,441 |
|
|
| 579 |
|
Income before provision for income taxes |
|
| 121,489 |
|
|
| 31,655 |
|
|
| 246,282 |
|
|
| 74,498 |
|
Depreciation and amortization |
|
| 699 |
|
|
| 672 |
|
|
| 2,179 |
|
|
| 2,016 |
|
Less: Unrealized performance allocations |
|
| (53,042 | ) |
|
| (14,663 | ) |
|
| (111,009 | ) |
|
| (12,045 | ) |
Plus: Unrealized performance allocations compensation |
|
| 2,682 |
|
|
| 1,542 |
|
|
| 10,159 |
|
|
| 1,398 |
|
Less: Unrealized (gains) losses |
|
| (2,566 | ) |
|
| 176 |
|
|
| (8,662 | ) |
|
| (782 | ) |
Plus: Share-based compensation |
|
| 2,453 |
|
|
| 387 |
|
|
| 17,917 |
|
|
| 1,161 |
|
Less: Net income attributable to non-controlling interests |
|
| (12,154 | ) |
|
| (4,089 | ) |
|
| (21,916 | ) |
|
| (10,574 | ) |
Less: Realized performance allocations to General Partners |
|
| (17,142 | ) |
|
| — |
|
|
| (17,142 | ) |
|
| — |
|
Distributable earnings attributable to the Operating |
|
| 42,419 |
|
|
| 15,680 |
|
|
| 117,808 |
|
|
| 55,672 |
|
Realized performance allocations and incentive fees |
|
| (30,999 | ) |
|
| (4,437 | ) |
|
| (73,094 | ) |
|
| (13,872 | ) |
Realized performance allocations and incentive fees |
|
| 1,855 |
|
|
| 438 |
|
|
| 6,178 |
|
|
| 1,343 |
|
Realized performance allocations to General Partners |
|
| 17,142 |
|
|
| — |
|
|
| 17,142 |
|
|
| — |
|
Net insurance income |
|
| (1,101 | ) |
|
| (685 | ) |
|
| (2,100 | ) |
|
| (1,512 | ) |
(Earnings) losses from investments in real estate |
|
| (823 | ) |
|
| (183 | ) |
|
| (1,799 | ) |
|
| 407 |
|
Net interest (income) expense and realized (gain) loss |
|
| 1,381 |
|
|
| 1,258 |
|
|
| 4,316 |
|
|
| 1,680 |
|
Net income attributable to non-controlling interests in |
|
| 12,154 |
|
|
| 4,089 |
|
|
| 21,916 |
|
|
| 10,574 |
|
Total Fee Related Earnings |
|
| 42,028 |
|
|
| 16,160 |
|
|
| 90,367 |
|
|
| 54,292 |
|
Less: Net income attributable to non-controlling |
|
| (12,154 | ) |
|
| (4,089 | ) |
|
| (21,916 | ) |
|
| (10,574 | ) |
Total fee related earnings to the Operating Company |
| $ | 29,874 |
|
| $ | 12,071 |
|
| $ | 68,451 |
|
| $ | 43,718 |
|
54
(Earnings) losses from investments in real estate | (980 | ) | 178 | (976 | ) | 590 | ||||||||||
Net interest (income)/expense and realized (gain)/loss | 1,995 | (32 | ) | 2,935 | 423 | |||||||||||
Net income attributable to non-controlling interests | 5,815 | 4,450 | 9,764 | 6,484 | ||||||||||||
Total Fee Related Earnings | 30,742 | 23,167 | 48,339 | 38,133 | ||||||||||||
Less: Total Fee Related Earnings attributable to non-controlling interests | (5,815 | ) | (4,450 | ) | (9,764 | ) | (6,484 | ) | ||||||||
Total Fee Related Earnings to the Operating Company | $ | 24,927 | $ | 18,717 | $ | 38,575 | $ | 31,649 | ||||||||
The following scheduletable sets forth our total Fee Related Earnings and Distributable Earnings for the three- andsix-monthsJuneSeptember 30, 2021 and 2020.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Fund-level fee revenues | ||||||||||||||||
Fund management fees | $ | 34,536 | $ | 25,723 | $ | 65,387 | $ | 51,442 | ||||||||
Transaction fees, net | 16,242 | 8,294 | 21,568 | 15,639 | ||||||||||||
Total net fund-level fee revenues | 50,778 | 34,017 | 86,955 | 67,081 | ||||||||||||
Net earnings from Bridge property operators | 1,988 | 3,308 | 4,081 | 4,804 | ||||||||||||
Development fees | 1,163 | 373 | 1,549 | 577 | ||||||||||||
Other asset management and property income | 1,611 | 2,343 | 3,131 | 3,543 | ||||||||||||
Fee Related Revenues | 55,540 | 40,041 | 95,716 | 76,005 | ||||||||||||
Cash-based employee compensation and benefits | (21,403 | ) | (14,280 | ) | (41,712 | ) | (32,547 | ) | ||||||||
Net administrative expenses | (3,395 | ) | (2,594 | ) | (5,665 | ) | (5,325 | ) | ||||||||
Fee Related Expenses | (24,798 | ) | (16,874 | ) | (47,377 | ) | (37,872 | ) | ||||||||
Total Fee Related Earnings | 30,742 | 23,167 | 48,339 | 38,133 | ||||||||||||
Fee Related Earnings margin | 55 | % | 58 | % | 51 | % | 50 | % | ||||||||
Total Fee Related Earnings attributable to non-controlling interests | (5,815 | ) | (4,450 | ) | (9,764 | ) | (6,484 | ) | ||||||||
Total Fee Related Earnings to the Operating Company | 24,927 | 18,717 | 38,575 | 31,649 | ||||||||||||
Realized performance allocations and incentive fees | 35,629 | 5,324 | 42,095 | 9,435 | ||||||||||||
Realized performance allocations and incentive fees compensation | (3,747 | ) | (517 | ) | (4,323 | ) | (905 | ) | ||||||||
Net insurance income | (110 | ) | 253 | 999 | 827 | |||||||||||
Earnings from investments in real estate | 980 | (178 | ) | 976 | (590 | ) | ||||||||||
Net interest income (expense) and realized gain (loss) | (1,995 | ) | 32 | (2,935 | ) | (423 | ) | |||||||||
Distributable Earnings attributable to the Operating Company | $ | 55,684 | $ | 23,631 | $ | 75,387 | $ | 39,993 | ||||||||
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
($ in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Fund-level fee revenues |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fund management fees |
| $ | 40,576 |
|
| $ | 26,624 |
|
| $ | 105,963 |
|
| $ | 78,066 |
|
Transaction fees |
|
| 21,907 |
|
|
| 5,085 |
|
|
| 43,475 |
|
|
| 20,724 |
|
Total net fund-level fee revenues |
|
| 62,483 |
|
|
| 31,709 |
|
|
| 149,438 |
|
|
| 98,790 |
|
Net earnings from Bridge property operators |
|
| 4,969 |
|
|
| 2,388 |
|
|
| 9,049 |
|
|
| 7,192 |
|
Development fees |
|
| 1,018 |
|
|
| 738 |
|
|
| 2,567 |
|
|
| 1,315 |
|
Other asset management and property income |
|
| 1,533 |
|
|
| 1,146 |
|
|
| 4,664 |
|
|
| 4,690 |
|
Fee Related Revenues |
|
| 70,003 |
|
|
| 35,981 |
|
|
| 165,718 |
|
|
| 111,987 |
|
Cash-based employee compensation and benefits |
|
| (23,173 | ) |
|
| (16,754 | ) |
|
| (64,885 | ) |
|
| (49,302 | ) |
Net administrative expenses |
|
| (4,802 | ) |
|
| (3,067 | ) |
|
| (10,466 | ) |
|
| (8,393 | ) |
Fee Related Expenses |
|
| (27,975 | ) |
|
| (19,821 | ) |
|
| (75,351 | ) |
|
| (57,695 | ) |
Total Fee Related Earnings |
|
| 42,028 |
|
|
| 16,160 |
|
|
| 90,367 |
|
|
| 54,292 |
|
Fee Related Earnings margin |
|
| 60 | % |
|
| 45 | % |
|
| 55 | % |
|
| 48 | % |
Net income attributable to non-controlling interests in |
|
| (12,154 | ) |
|
| (4,089 | ) |
|
| (21,916 | ) |
|
| (10,574 | ) |
Total fee related earnings to the Operating Company |
|
| 29,874 |
|
|
| 12,071 |
|
|
| 68,451 |
|
|
| 43,718 |
|
Realized performance allocations and incentive fees |
|
| 30,999 |
|
|
| 4,437 |
|
|
| 73,094 |
|
|
| 13,872 |
|
Realized performance allocations and incentive fees |
|
| (1,855 | ) |
|
| (438 | ) |
|
| (6,178 | ) |
|
| (1,343 | ) |
Realized performance allocations to General Partners |
|
| (17,142 | ) |
|
| — |
|
|
| (17,142 | ) |
|
| — |
|
Net insurance income |
|
| 1,101 |
|
|
| 685 |
|
|
| 2,100 |
|
|
| 1,512 |
|
Earnings from investments in real estate |
|
| 823 |
|
|
| 183 |
|
|
| 1,799 |
|
|
| (407 | ) |
Net interest income (expense) and realized gain (loss) |
|
| (1,381 | ) |
|
| (1,258 | ) |
|
| (4,316 | ) |
|
| (1,680 | ) |
Distributable Earnings attributable to the Operating |
| $ | 42,419 |
|
| $ | 15,680 |
|
| $ | 117,808 |
|
| $ | 55,672 |
|
The following scheduletable sets forth the components of the employee compensation and benefits, general and administrative expenses, and total other income (expense) line items on our condensed combined and consolidated statement of operations. Other income (expense) is disclosed in our
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
($ in thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Cash-based employee compensation and benefits |
| $ | 23,173 |
|
| $ | 16,754 |
|
| $ | 64,885 |
|
| $ | 49,302 |
|
Compensation expense of Bridge property |
|
| 6,137 |
|
|
| 5,685 |
|
|
| 18,418 |
|
|
| 16,895 |
|
Share-based compensation |
|
| 2,453 |
|
|
| 387 |
|
|
| 17,917 |
|
|
| 1,161 |
|
Employee compensation and benefits |
| $ | 31,763 |
|
| $ | 22,826 |
|
| $ | 101,220 |
|
| $ | 67,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Administrative expenses, net of Bridge property |
| $ | 4,802 |
|
| $ | 3,067 |
|
| $ | 10,466 |
|
| $ | 8,393 |
|
Administrative expenses of Bridge property |
|
| 1,901 |
|
|
| 1,381 |
|
|
| 5,730 |
|
|
| 4,816 |
|
General and administrative expenses |
| $ | 6,703 |
|
| $ | 4,448 |
|
| $ | 16,196 |
|
| $ | 13,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Unrealized gains (losses) |
| $ | 2,566 |
|
| $ | (176 | ) |
| $ | 8,662 |
|
| $ | 782 |
|
Other expenses from Bridge property operators |
|
| (19 | ) |
|
| (52 | ) |
|
| (58 | ) |
|
| (104 | ) |
Net interest income (expense) and realized |
|
| (1,381 | ) |
|
| (1,258 | ) |
|
| (4,316 | ) |
|
| (1,680 | ) |
Total other income (expense) |
| $ | 1,166 |
|
| $ | (1,486 | ) |
| $ | 4,288 |
|
| $ | (1,002 | ) |
55
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Cash-based employee compensation and benefits | $ | 21,403 | $ | 14,279 | $ | 41,711 | $ | 32,547 | ||||||||
Compensation expense of Bridge property operators | 6,279 | 5,172 | 12,281 | 11,210 | ||||||||||||
Share based compensation | 14,624 | 388 | 15,465 | 775 | ||||||||||||
Employee compensation and benefits | $ | 42,306 | $ | 19,839 | $ | 69,457 | $ | 44,532 | ||||||||
Administrative expenses, net of Bridge property operators | $ | 3,395 | $ | 2,594 | $ | 5,665 | $ | 5,325 | ||||||||
Administrative expenses of Bridge property operators | 1,997 | 1,476 | 3,827 | 3,436 | ||||||||||||
General and administrative expenses | $ | 5,392 | $ | 4,070 | $ | 9,492 | $ | 8,761 | ||||||||
Unrealized gains (losses) | $ | 317 | $ | (71 | ) | $ | 6,098 | $ | 959 | |||||||
Other expenses from Bridge property operators | (19 | ) | (22 | ) | (41 | ) | (51 | ) | ||||||||
Net interest income/(expense) and realized gain/(loss) | (1,995 | ) | 32 | (2,935 | ) | (423 | ) | |||||||||
Total other income (expense) | $ | (1,697 | ) | $ | (61 | ) | $ | 3,122 | $ | 485 | ||||||
Distributable Earnings and Fee Related Earnings
Fee Related Earnings to the Operating Company increased $7.6by $17.8 million, or 33%147%, for the three months ended JuneSeptember 30, 2021 as compared to the three months ended JuneSeptember 30, 2020, while Distributable Earnings to the Operating Company increased by $32.1$26.7 million, or 136%171%, during the same period due to the following:
Total Fee Related Revenues increased by $15.5$34.0 million, or 39%95%, principally due to:
Fee Related Expenses increased by $7.9$8.2 million, or 47%41%, principally due to:
Net of compensation, realized performance allocations were up to $30.3and incentive fees increased by $24.7 million, or 57%, compared to the three months ended JuneSeptember 30, in the prior year,2020, due to the increased realizations in Bridge Multifamily Fund III and Bridge Debt Strategies Fund III.
Fee Related Earnings to the Operating Company increased $10.2by $36.1 million, or 27%66%, for the sixnine months ended JuneSeptember 30, 2021 as compared to the sixnine months ended JuneSeptember 30, 2020, while Distributable Earnings to the Operating Company increased by $35.4$62.1 million, or 89%112%, during the same period due to the following:
Total Fee Related Revenues increased by $19.7$53.7 million, or 26%48%, principally due to:
Fee Related Expenses increased by $9.7$17.7 million, or 26%31%, principally due to:
Net of compensation, realized performance allocations and incentive fees were up $32.7 millionup $54.4 million or 434% compared to the sixnine months ended in the prior year due to increased realizations in Bridge Multifamily Fund III and Bridge Debt Strategies Fund III.
56
Post-IPO, the amount is shown net of the non-controlling interest component of $17.1 million for the nine months ended September 30, 2021 compared to zero in the prior year.
Liquidity and Capital Resources
Our liquidity needs primarily include working capital and debt service requirements. We believe that our current sources of liquidity, which include cash generated by our operating activities, cash and funds available under our credit agreement, along with the proceeds from our IPO, will be sufficient to meet our projected operating and debt service requirements for at least the next 12 months. To the extent that our current liquidity is insufficient to fund future activities, we may need to raise additional funds. In the future, we may attempt to raise additional capital through the sale of equity securities or through debt financing arrangements. If we raise additional funds by issuing equity securities, the ownership of our existing stockholders will be diluted. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financial covenants that could restrict our operations.
As of JuneSeptember 30, 2021 and December 31, 2020, we had $61.5$188.3 million and $101.8 million respectively, of cash and cash equivalents, respectively, $74.2 million and $150.3$74.3 million of current liabilities, respectively, and $194.7 million and $150.2 million respectively, of long-term liabilities.liabilities, respectively. There were no borrowings outstanding under our revolving credit facility. We generate cash primarily from fund, property and construction management fees, and development and transaction fees. We have historically managed our liquidity and capital resource needs through (a) cash generated from our operating activities and (b) borrowings under credit agreements and other borrowing arrangements.
Ongoing sources of cash include (a) fund management fees and property management and leasing fees, which are collected monthly or quarterly, (b) transaction fee income, and (c) borrowings under our revolving credit facility.facility, if needed, and (d) issuance of capital securities in capital markets. We use cash flow from operations to pay compensation and related expenses, general and administrative expenses, income taxes, debt service, capital expenditures and to make distributions to our equity holders.
Our cash decreasedincreased by $40.3$86.4 million from December 31, 2020 to JuneSeptember 30, 2021 primarily due to the distribution$152.9 million of $75.0 million, which was distributed to members of the Company on April 5, 2021, offset by an increase in cash provided by operationsoperating activities and investing activities.
The following scheduletable presents a summary of our cash flows for the periods presented:
Six Months Ended June 30, | ||||||||
(in thousands) | 2021 | 2020 | ||||||
Net cash provided by operating activities | $ | 98,477 | $ | 57,785 | ||||
Net cash provided by (used in) investing activities | 33,195 | (21,391 | ) | |||||
Net cash used in financing activities | (171,869 | ) | (47,721 | ) | ||||
Total increase (decrease) in cash, cash equivalents, and restricted cash | $ | (40,197 | ) | $ | (11,327 | ) | ||
|
| Nine Months |
| |||||
|
| Ended September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
(in thousands) |
|
|
|
|
|
| ||
Net cash provided by operating activities |
| $ | 152,861 |
|
| $ | 79,340 |
|
Net cash provided by (used in) investing activities |
|
| 14,101 |
|
|
| (23,582 | ) |
Net cash provided by (used in) financing activities |
|
| (80,528 | ) |
|
| 13,010 |
|
Total increase in cash, cash equivalents, and |
| $ | 86,434 |
|
| $ | 68,768 |
|
Operating Activities
Cash provided by operating activities was primarily driven by our earnings in the respective periods after adjusting for significant
Nine Months Ended JuneSeptember 30, 2021 — Cash provided by operating activities was $98.5$152.9 million, consisting of net income of $124.0$242.8 million and negative adjustments for$47.0$89.2 million offset by cash provided byand $0.7 million from operating assets and liabilities of $21.5 million.liabilities. Adjustments forprimarily of $58.0$111.0 million of unrealized performance allocations $5.7and $7.8 million of unrealized earnings on equity investments, partially offset by $15.5$17.9 million of share-based compensation amortization.
57
Nine Months Ended JuneSeptember 30, 2020 — Cash provided by operating activities was $57.8$79.3 million, consisting of net income of $42.7$73.9 million, negative adjustments for non-cash items of $8.6 million, and positive adjustments fornon-cashitems of $3.3$14.0 million offset by cash provided byfor operating assets and liabilities of $11.8 million.liabilities. Adjustments for$2.6$12.0 million for unrealized performance allocations and $1.3 million of depreciation and amortization related to fixed assets and intangibles, partially offset by $1.0 million from changes in unrealized loss on general partner notes payable.
Investing Activities
Our investing activities primarily consist of lending to affiliate entities and investing activities related to our investments in Bridge Agency MBS Fund and in certain property technology companies.
Nine Months Ended JuneSeptember 30, 2021 — Net cash provided by investing activities of $33.2$14.1 million primarily consisted of $182.2$409.6 million from the repaymentcollections of notes receivable and $146.0 million related to our lending activities to affiliate entities, partially offset by $385.2 million from the issuance of notes receivable, and $27.0$10.7 million related to the purchase of investments.
Nine Months Ended JuneSeptember 30, 2020 — Net cash used in investing activities of $21.4$23.6 million primarily consisted of $135.0$108.2 million of lending to affiliate entities and related repayments of that lending of $115.2$94.9 million and $2.4$15.6 million related to the purchase of investments.
Financing Activities
Our financing activities primarily consist of distributions to our members as well as borrowings associated with our Private Placement Notes and revolving line of credit.
Nine Months Ended JuneSeptember 30, 2021 — Net cash used in financing activities of $171.9$80.5 million was primarily due to the distributions to ourthe Operating Company’s members of $157.9$176.3 million, which included a special dividend of $75.0 million, and to$14.0$41.3 million.
Nine Months Ended JuneSeptember 30, 2020 — Net cash used inprovided by financing activities of $47.7$13.0 million was primarily due to $40.1$133.0 million of distributions to members, $14.0 million of distributions tonon-controllinginterests, and $6.5 million used to repurchase shares,from borrowing activities, partially offset by a net $13.2distributions of $94.2 million from borrowings on a lineand $19.4 million to our members and non-controlling interests, respectively, and $6.6 million repurchase of credit.
Credit Facilities
In July 2020, we entered into a note purchase agreement with various lenders, pursuant to which we issued the Private Placement Notes in two tranches.
The Private Placement Notes were issued in an aggregate principal amount of $150.0 million. Concurrently with the issuance of the Private Placement Notes we entered into a secured revolving line of credit, (“LOC”), with an aggregate borrowing capacity of $75.0 million. Net proceeds from the Private Placement Notes were $147.7 million, net of arrangement fees and other expenses. A portion of the proceeds were used to repay the outstanding balances on a prior credit facility.
The Private Placement Notes have two tranches, a five-year 3.9% fixed rate that matures on July 22, 2025 and a seven-year 4.15% fixed rate that matures on July 22, 2027. Borrowings under the LOC accrue interest at LIBOR plus 2.25%. We had no borrowings against the LOC as of JuneSeptember 30, 2021 or December 31, 2020. The LOC matures on July 22, 2022.
Under the terms of the Private Placement Notes and the LOC, certain of our assets serve as pledged collateral. In addition, the Private Placement Notes and LOC contain covenants that, among other things, limit our ability to incur indebtedness. The Private Placement Notes and the LOC also containscontain a financial covenant requiring us to maintain a total leverage ratio of no more than 3.0x, minimum quarterly Earnings Before Income Taxes Depreciation and Amortization, or EBITDA, of $10.0 million and minimum unencumbered cash of $2.5 million. As of each of Juneboth September 30, 2021 and December 31, 2020, we were in compliance with all debt covenants.
Critical Accounting Policies and Estimates
The preparation of condensed combined and consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities in our financial statements. We
58
regularly assess these estimates; however, actual amounts could differ from those estimates. The impact of changes in estimates is recorded in the period in which they become known.
An accounting policy is considered to be critical if the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the effect of the estimates and assumptions on financial condition or operating performance. The accounting policies we believe to reflect our more significant estimates, judgments and assumptions that are most critical to understanding and evaluating our reported financial results are: consolidation, revenue recognition, fair value measurements, share-based andcompensation, performance
Consolidation
We consolidate all entities that we control through a majority voting interest or as the primary beneficiary of a variable interest entity or VIE. Under the VIE model, we are required to perform an analysis as to whether we have a variable interest in an entity and whether the entity is a VIE. In evaluating whether we hold a variable interest, we review all of our financial relationships to determine whether we are exposed to the risks and rewards created and distributed by an entity. We hold variable interests in certain operating subsidiaries not wholly owned by us and in our funds in which we serve as the general partner or managing member. We also assess whether the fees charged to our funds are customary and commensurate with the level of effort required to provide the services. We consider all economic interests, including indirect interests, to determine if a fee is considered a variable interest. We determined our fee arrangements with our funds are not considered to be variable interests.
If we have a variable interest in an entity, we further assess whether the entity is a VIE and, if so, whether we are the primary beneficiary. The assessment of whether an entity is a VIE requires an evaluation of qualitative factors and, where applicable, quantitative factors. These judgments include: (a) determining whether the entity has sufficient equity at risk, (b) evaluating whether the equity holders, as a group, lack the ability to make decisions that significantly affect the economic performance of the entity and (c) determining whether the entity is structured with disproportionate voting rights in relation to their equity interests.
For entities that are determined to be VIEs, we are required to consolidate those entities where we have concluded that we are the primary beneficiary. The primary beneficiary is defined as the variable interest holder with (a) the power to direct the activities of a VIE that most significantly affect the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. In evaluating whether we are the primary beneficiary, we evaluate our economic interests in the entity held either directly or indirectly by us. At each reporting date, we determine whether any reconsideration events have occurred that require us to revisit the primary beneficiary analysis, and we will consolidate or deconsolidate accordingly.
We provide investment advisory services to the funds, which have third-party investors. Certain funds are VIEs because they have not granted the third- partythird-party investors substantive rights to terminate or remove the general partner or participating rights. We do not consolidate these funds because we are not the primary beneficiary of those funds, primarily because our fee arrangements are considered customary and commensurate and thus not deemed to be variable interests, and we do not hold any other interests in those funds that are considered more than insignificant. We consolidate certain of our operating subsidiaries that are VIEs because we are the primary beneficiary.
Revenue Recognition
We recognize revenue in accordance with ASC 606.606, Revenue from Contracts with Customers. Revenue is recognized in a manner that depicts the transfer of promised goods or services to customers and for an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We are required to identify our contracts with customers, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, variable consideration is included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The guidance requires us to assess whether we are the principal versus agent in the arrangement based on the notion of control, which affects recognition of revenue on a gross or net basis. Essentially all of the revenue and operations of the Company are directly or indirectly supporting affiliated investment funds (including joint ventures and separately managed accounts) and derived from or related to their underlying investments.
Fund Management Fees
59
We recognize management fee revenues when control of the promised services is transferred to customers, in an amount that reflects the consideration that we expect to receive in exchange for those services. For asset management services and the arrangement of administrative services, we satisfy these performance obligations over time because the customer simultaneously receives and consumes the benefits of the services as they are performed.
Management fees are reflected net of certain professional and administrative services and distribution and servicing fees paid to third parties for which we are acting as an agent.
Performance Fees
We earn two types of performance fee income, incentive fees and performance allocations, as described below. The underlying investments in the funds reflect valuations on a three-month lag, or as of March 31, 2021 and March 31, 2020 for the quarters ended June 30, 2021 and June 30, 2020 for the quarters ended September 30, 2021 and September 30, 2020, respectively, and September 30, 2020 and 2019, for the yearsyear ended December 31, 2020 and 2019, respectively.
Incentive fees are generally calculated as a percentage of the profits earned in respect of certain accounts for which we are the investment manager, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax. We recognize incentive fee income only when these amounts are realized and no longer subject to significant reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period.
Performance allocations
Fair Value Measurements
GAAP establishes a hierarchical disclosure framework, which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace – including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of their fair values, as follows:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the financial instrument.
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Share-Based Compensation
Compensation expense relating to the issuance of share-based awards to employees is measured at fair value on the grant date. The compensation expense for awards that vest over a future service period is recognized over the relevant service period on a straight-line basis. The compensation expense for awards that do not require future service is recognized immediately.
The Company recognizes share-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense.
Performance
A portion of the performance allocations we earn is awarded to employees and other carry participants in the form of award letters, or the carry awards. Liability-classified carry awards to employees and other participants are accounted for as a component of employee compensation and benefits expense contemporaneously with our recognition of the related realized and unrealized performance allocation revenue. Upon a reversal of performance allocation revenue, the related compensation expense, if any, is also reversed. Liabilities recognized for carried interest amounts due to affiliates are not paid until the related performance allocation revenue is realized. We record incentive fee compensation when it is probable that a liability has been incurred and the amount is reasonably estimable. The incentive fee compensation accrual is based on a number of factors, including the cumulative activity for the period and the distribution of the net proceeds in accordance with the applicable governing agreement.
Income Tax
Following our IPO, we are now subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of any taxable income generated by Bridge that will flow through to its interest holders, including us.
Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted.
Deferred tax assets are reduced by a valuation allowance when it ismore-likely-than-not
U.S. GAAP requires us to recognize tax benefits in an amount that ismore-likely-than-not
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new information becomes available.
Contractual Obligations and Commitments
During the sixnine months ended JuneSeptember 30, 2021, there were no material changes outside of the ordinary course of business in the composition of the contractual obligations or commitments as discussed in the Prospectus under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations.”
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Off-Balance
During the periods presented we did not have, nor do we currently have, any
Recent Accounting Pronouncements
For a discussion of new accounting pronouncements recently adopted and not yet adopted, see the Note 2 “Significant Accounting Policies” to theour condensed combined and consolidated financial statements included elsewhere in this Quarterly Report on Form10-Q.
JOBS Act
As an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule
Item 3.Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including pricemarket risk, interest-rateinterest rate risk, access tocredit and cost of financingcounterparty risk, liquidity risk, counterparty risk and foreign exchange-rateexchange rate risk. Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit, or financial market dislocations.
Market Risk
Our predominant exposure to market risk is related to our role as general partner or investment manager for our specialized funds and customized separate accounts and the sensitivities to movements in the fair value of their investments, which may adversely affect our equity in income of affiliates. Since our management fees are generally based on commitments or invested capital, our management fee and advisory fee revenue is not significantly impacted by changes in investment values.
Interest Rate Risk
As of JuneSeptember 30, 2021, we had cash of $41.2$47.0 million deposited in$20.3$141.3 million deposited in an interest bearing account, with limited to no interest rate risk. Interest-earning instruments carry a degree of interest rate risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
Credit and Counterparty Risk
Access to and the cost of obtaining credit from financial institutions and other lenders may be uncertain due to market conditions, and under certain circumstances we may not be able to access financing. We are also a party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability
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Liquidity Risk
See disclosures contained in “Management’s Discussion and Analysis of financing from financial institutions may be uncertain due to market conditions,Financial Condition and we may not be able to access financing under such circumstances.
Foreign Exchange Rate Risk
We do not possess significant assets in foreign countries in which we operate or engage in material transactions in currencies other than the U.S. dollar. Therefore, changes in exchange rates are not expected to materially impact our financial statements.
Item 4.Controls and Procedures
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated, as of the end of the period covered by this Quarterly Report on FormJuneSeptember 30, 2021, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the three months ended JuneSeptember 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1.Legal Proceedings
We are, from time to time, party to various claims and legal proceedings arising out of our ordinary course of business, but we do not believe that any of these claims or proceedings will have a material effect on our business, consolidated financial condition or results of operations.
Item 1A.Risk Factors
For a discussion of the potential risks and uncertainties that could affect us or an investment in our Class A common stock, involves a high degreesee the information under the heading “Risk Factors” in Part II, Item 1A of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information included in thisour Quarterly Report on Formand in for the Prospectus dated July 15,three months ended June 30, 2021 filed pursuant to Rule 424(b) under the Securities Act with the SEC on July 19,August 17, 2021 includingand in our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making an investment decisionsubsequently filed periodic reports as such factors may be updated from time to purchase or sell shares of our Class A common stock. If any of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our Class A common stock could decline, and you could lose part ortime, all of your investment.which are accessible on the Securities and Exchange Commission’s website at www.sec.gov. The risks described belowin our Quarterly Report on Form 10-Q and in our subsequently filed periodic reports are not the only ones that we may face,risks facing us. Additional risks and additional risks or uncertainties not currently known to us or that we currently deem immaterial may also impair our business and future prospects.
Item 2.Unregistered Sales of Equity Securities
Unregistered Sales of Equity Securities
In connection with the Transactions and our IPO, we issued (a) 97,321,81997,463,981 shares of Class B common stock to the Original Equity Owners; (b) 266,809 shares of Class A common stock to the Blocker Shareholder, (c) 2,180,7372,084,796 shares of Class A common stock to the Former Equity Owners; (d) 4,781,623 Class A Units and 282,758 shares of Class A common stock to the Former Profits Interest Program Participants; and (e) 13,166,42413,198,943 Class A Units and 395,816363,294 shares of Class B common stock to certain of the current owners of the active general partners in our Seniors Housing, Office, Multifamily, Workforce and Affordable Housing, Opportunity Zone and Debt Strategies funds, which include the Continuing Equity Owners. The issuances of shares of Class A common stock, Class B common stock, Class A Units and Class B Units described in this paragraph were made in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated thereunder.
Use of Proceeds from IPO
On July 15, 2021, the SEC declared effective our registration statement on Form(File (File No. On July 20, 2021, we issued and sold 18,750,000 shares of our Class A common stock, and on August 12, 2021, we issued and sold an additional 1,416,278 shares of our Class A common stock pursuant to the underwriters’ over-allotment option, in each case at a price to the public of $16.00 per share.
Upon completion of these transactions, we received net proceeds of approximately $295.4 million, after deducting the underwriting discount of $21.8$21.9 million and estimated offering expenses of $5.5 million. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
There has been no material change in the use of proceeds from our IPO as described in the Prospectus. We used the net proceeds from the IPO to purchasepurchase 20,166,278 Class A Units directly from the Operating Company at a price per unit equal to the IPO price per share of Class A common stock in the IPO less the underwriting discounts and commissions. The Operating Company used $158.3$158.1 million in net proceeds from the sale of Class A Units to Bridge Investment Group Holdings Inc. to pay cash to redeem certain of the Class A Units held directly or indirectly by certain of the Original Equity Owners. Thus, as of the date of this Quarterly Report on Form
Item 3.Defaults Upon Senior Securities
Not Applicable.
Item 4.Mine Safety Disclosures
Not Applicable.
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Item 5.Other Information
None.
Item 6.Exhibits
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| Incorporated by Reference |
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Exhibit Number | Exhibit Description | Form | Filing Date | Exhibit Number | Filed Herewith |
3.1 | Amended and Restated Certificate of Incorporation of Bridge Investment Group Holdings Inc. | 10-Q | 8/17/21 | 3.1 |
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3.2 | Amended and Restated Bylaws of Bridge Investment Group Holdings Inc. | 10-Q | 8/17/21 | 3.2 |
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4.1 | Specimen stock certificate evidencing the shares of Class A common stock | S-1/A | 7/2/2021 | 4.1 |
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10.1 | 8-K | 7/20/2021 | 10.1 |
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10.2 | 8-K | 7/20/2021 | 10.4 |
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10.3 | 8-K | 7/20/2021 | 10.3 |
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10.4 | 8-K | 7/20/2021 | 10.2 |
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10.5# | 2021 Incentive Award Plan of Bridge Investment Group Holdings Inc. | S-1/A | 7/2/2021 | 10.5 |
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10.6# | Non-Employee Director Compensation Program of Bridge Investment Group Holdings Inc. | S-1/A | 7/2/2021 | 10.6 |
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10.7# | S-1/A | 7/2/2021 | 10.7 |
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10.8# | 10-Q | 8/17/21 | 10.8 |
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10.9# | 10-Q | 8/17/21 | 10.9 |
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10.10# | 10-Q | 8/17/21 | 10.10 |
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10.11# | 10-Q | 8/17/21 | 10.11 |
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10.12 | S-1/A | 7/2/2021 | 10.12 |
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10.13 | S-1/A | 7/2/2021 | 10.13 |
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31.1 |
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31.2 |
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32.1* | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| X |
32.2* | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| X |
101.SCH* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
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| X |
101.CAL* | Inline XBRL Taxonomy Extension Schema Document |
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| X |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
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| X |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document |
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| X |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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| X |
# Indicates management contract or compensatory plan.
* This certification is deemed not filed for purpose of Contents
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BRIDGE INVESTMENT GROUP HOLDINGS INC. | ||||||
Date: | By: | /s/ Jonathan Slager | ||||
Jonathan Slager | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
Date: | By: | /s/ Chad Briggs | ||||
Chad Briggs | ||||||
Chief Financial Officer | ||||||
(Principal Financial Officer) |
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