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INVESTMENTS

12 Months Ended

Dec. 31, 2021

6. INVESTMENTS

As of December 31, 2021 and 2020, the Company's investments were comprised of the following (in millions):


	As of December 31,
	2021		2020
Equity method investments:
Investment in Signal Trading Systems, LLC	$	—	$	2.0
Investment in 7Ridge Investments 3 LP		209.5		—
Total equity method investments		209.5		2.0

Other equity investments:
Investment in Eris Exchange Holdings, LLC		20.0		20.0
Investment in American Financial Exchange, LLC		10.6		10.6
Investment in Cboe Vest Financial Group, Inc.		2.9		2.9
Investment in Eris Digital Holdings, LLC		1.1		0.8
Investment in OCC		0.3		0.3
Other equity investments		1.4		6.1
Total other equity investments		36.3		40.7

Total investments	$	245.8	$	42.7

Equity Method Investments

Equity method investments included investments in Signal Trading Systems, LLC (“Signal”), a 50% joint venture with FlexTrade System, Inc. (“FlexTrade”) to develop and market PULSe, a multi-asset front-end order entry system. In 2020, the Company commenced an initiative to migrate PULSe, and its related activity to Cboe Silexx, LLC, a wholly-owned subsidiary of the Company. PULSe was decommissioned as of December 31, 2020, and the joint venture with FlexTrade was wound down during the first quarter of 2021. The Company concluded that the remaining investment in Signal had no future economic value and the remaining balance was written off as of March 31, 2021. The loss related to the write-off was included within acquisition-related costs in the consolidated statements of income.

On October 31, 2021, the Company, through a wholly-owned subsidiary, became a limited partner of 7Ridge Investments 3 LP (“7Ridge Fund”) in connection with 7Ridge Fund’s planned acquisition of Trading Technologies International, Inc. (“Trading Technologies”). On December 13, 2021, the Company’s subsidiary provided its financial commitment to 7Ridge Fund, and on December 21, 2021, 7Ridge Fund completed the acquisition of Trading Technologies. Trading Technologies is a global provider of next-generation professional trading software, connectivity and data solutions. The Company is strategically aligned with Trading Technologies’ vision of delivering a leading trading, connectivity and data network to the global trading community.

The Company’s investment in the 7Ridge Fund, represents a nonconsolidated variable interest entity (“VIE”). The Company has determined that consolidation of the VIE is not required as the Company is not the primary beneficiary of the 7Ridge Fund, as it does not have controlling financial interest and lacks the ability to unilaterally remove the general partner, 7Ridge Investments 3 GP Limited, direct material strategic decisions, or dissolve the entity (i.e. the Company does not have unilateral substantive “kick-out” or “liquidation” rights).

The Company’s interest in the 7Ridge Fund investment is equal to the carrying value of the investment as of December 31, 2021, or $209.5 million, which is included in investments within the consolidated balance sheets. The Company’s maximum loss exposure, in the unlikely event that all of the VIE’s assets become worthless, is limited to the carrying value of Company’s investment.

Other Equity Investments

The carrying value of other equity investments is included in investments in the consolidated balance sheets. The Company accounts for these investments using the measurement alternative given the absence of readily determinable fair values for the respective investments and due to the Company’s inability to exercise significant influence over the investments based upon the respective ownership interests held. As of December 31, 2021, other equity investments primarily reflect a 20% investment in OCC and minority investments in Eris Exchange Holdings, LLC, American Financial Exchange, LLC, and Cboe Vest Financial Group, Inc.

In January 2016, the Company, through its subsidiary Cboe Vest, LLC (“Cboe Vest”), acquired a majority of the outstanding equity of Vest, an asset investment manager focused on Target Outcome Investment strategies. The purchase price consisted of $18.9 million in cash, reflecting payments of $14.9 million to former stockholders and $4.0 million to Vest for newly issued shares, and represented an ownership interest of 60% resulting in the consolidation of Vest operations. The remaining 40% noncontrolling interest was held by the remaining Vest stockholders. The remaining Vest stockholders had a put option that could have been exercised to Vest and Vest had a call option that could have been exercised to the remaining stockholders. The put and call options could have been exercised after five years though they could have been accelerated by certain employment-related actions. The combination of the noncontrolling interest and a redemption feature resulted in a redeemable noncontrolling interest, which was classified outside of permanent equity on the consolidated balance sheet. The Company’s ownership interest decreased in August 2019 which resulted in the deconsolidation of Vest operations and the elimination of the redeemable noncontrolling interest.

In May 2020, Eris Exchange Holdings, LLC completed a restructuring transaction to spin out Eris Digital Holdings, LLC into a stand-alone entity. The restructuring qualifies as an exchange of ownership interest, though it required no additional consideration exchanged to execute the exchange of units. The restructuring did not result in a change in number of units owned by the Company or a substantial change in the Company’s ownership interest percentage. No gain or loss is recognized as a result of the restructuring. As discussed below, on October 19, 2021, the Company entered into an agreement to acquire all of the outstanding equity interests of Eris Digital Holdings, LLC. However, Eris Exchange Holdings, LLC is not a part of this transaction and the Company retains its minority equity ownership interest in Eris Exchange Holdings, LLC.

In August 2020, the Company recorded within acquisition-related costs in the consolidated statements of income an impairment charge of $4.1 million on its investment in AFX based on management’s assessment of the fair value of the investment.

On September 21, 2021, CurveGlobal Limited (“CurveGlobal”), a minority investment of the Company included within other equity investments, announced plans to wind down the company in January 2022. The Company concluded that the remaining investment in CurveGlobal had no future economic value, and thus, wrote off the investment as of September 30, 2021. CurveGlobal ceased operations on January 28, 2022. The loss related to the write-off was included within other (expense) income, net in the consolidated statements of income.

As announced on October 20, 2021, the Company plans to acquire the remaining interest in Eris Digital Holdings, LLC. The closing of the transaction is subject to regulatory review and other customary closing conditions. As a result, the timing of the closing is uncertain, but the Company presently anticipates a closing in the first half of 2022. See Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) for more information.