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Variable Interest Entities | 6 Months Ended
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Jun. 30, 2025
Variable Interest Entities |
Variable Interest Entities | 3. Variable Interest Entities We have relationships with various types of entities which may be VIEs. Certain VIEs are consolidated in our financial results. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Consolidation” for further details of our consolidation accounting policies. We did not provide financial or other support to investees designated as VIEs for the periods ended June 30, 2025 and December 31, 2024. Consolidated Variable Interest Entities Mandatory Retirement Savings Funds We hold an equity interest in Chilean mandatory privatized social security funds in which we provide asset management services. We determined the mandatory privatized social security funds, which also include contributions for voluntary pension savings, voluntary non-pension savings and compensation savings accounts, are VIEs. This is because the equity holders as a group lack the power, due to voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance and also because equity investors are protected from below-average market investment returns relative to the industry’s return, due to a regulatory guarantee that we provide. Further, we concluded we are the primary beneficiary through our power to make decisions and our significant variable interest in the funds. The purpose of the funds, which reside in legally segregated entities, is to provide long-term retirement savings. The obligation to the customer is directly related to the assets held in the funds and, as such, we present the assets as separate account assets and the obligation as separate account liabilities within our consolidated statements of financial position. Real Estate We invest in several real estate limited partnerships and limited liability companies. The entities invest in real estate properties. Certain of these entities are VIEs based on the combination of our significant economic interest and related voting rights. We determined we are the primary beneficiary as a result of our power to control the entities through our significant ownership. Due to the nature of these real estate investments, the investment balance will fluctuate as we purchase and sell interests in the entities and as capital expenditures are made to improve the underlying real estate. Sponsored Investment Funds We sponsor and invest in certain investment funds for which we provide asset management services. Although our asset management fee is commensurate with the services provided and consistent with fees for similar services negotiated at arms-length, we have a variable interest for funds where our other interests are more than insignificant. The funds are VIEs as the equity holders lack power through voting rights to direct the activities of the entity that most significantly impact its economic performance. We determined we are the primary beneficiary of the VIEs where our interest in the entity is more than insignificant and we are the asset manager. We deconsolidated a sponsored investment fund in 2025 due to the acquisition of substantial voting rights through investment in the fund by external investors. Residential Mortgage Loans We invest in asset-backed securities (“ABS”) trusts. The trusts issue various collateralized mortgage obligation certificates and purchase residential mortgage loans. The trusts are considered VIEs due to insufficient equity to sustain themselves. We concluded we are the primary beneficiary as we purchase substantially all of the certificates and have the obligation to absorb losses that could potentially be significant to the VIEs. Asset-Backed Limited Partnership We invest in an ABS limited partnership. The limited partnership issues multiple notes and purchases consumer loans, auto loans, other loans and credit facilities. The limited partnership is considered a VIE due to insufficient equity to sustain itself. We concluded we are the primary beneficiary as we have purchased all of the notes and have the obligation to absorb losses and residual returns that could potentially be significant to the VIE. ​ Assets and Liabilities of Consolidated Variable Interest Entities The carrying amounts of our consolidated VIE assets, which can only be used to settle obligations of consolidated VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2025 | ​ | December 31, 2024
​ | ​ | Total | ​ | Total | ​ | Total | ​ | Total
​ |  | assets |  | liabilities |  | assets |  | liabilities
​ | ​ | (in millions)
Mandatory retirement savings funds (1) | ​ | $ | 37,319.6 | ​ | $ | 36,950.3 | ​ | $ | 33,130.4 | ​ | $ | 32,802.2
Real estate (2) | ​ |  | 865.4 | ​ |  | 36.1 | ​ |  | 814.3 | ​ |  | 69.4
Sponsored investment funds (3) | ​ |  | 782.5 | ​ |  | 27.7 | ​ |  | 833.7 | ​ |  | 160.3
Residential mortgage loans (4) | ​ |  | 764.5 | ​ |  | 19.3 | ​ |  | 806.5 | ​ |  | 19.9
Asset-backed limited partnership (5) | ​ | ​ | 253.5 | ​ | ​ | — | ​ | ​ | 250.0 | ​ | ​ | —
Total | ​ | $ | 39,985.5 | ​ | $ | 37,033.4 | ​ | $ | 35,834.9 | ​ | $ | 33,051.8
(1) | The assets of the mandatory retirement savings funds primarily include separate account assets and equity securities. The liabilities primarily include separate account liabilities.
(2) | The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities.
(3) | The assets of sponsored investment funds are primarily fixed maturities and equity securities, certain of which are reported with other investments, and cash. The liabilities primarily include other liabilities. The consolidated statements of financial position included a $363.1 million and $309.9 million redeemable noncontrolling interest for sponsored investment funds as of June 30, 2025 and December 31, 2024, respectively. For certain sponsored investment funds, we have unfunded commitments to the VIE. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional capital when called upon to do so by the investment manager.
(4) | The assets of the residential mortgage loans VIEs primarily include residential mortgage loans. The liabilities primarily include other liabilities.
(5) | The assets of the asset-backed limited partnership VIE primarily include consumer loans, auto loans, other loans and credit facilities. These assets are reported with cash and cash equivalents, other investments and fixed maturities, trading on the consolidated statements of financial position.
Unconsolidated Variable Interest Entities We hold a variable interest in a number of VIEs where we are not the primary beneficiary. Our investments in these VIEs are reported in fixed maturities, available-for-sale; fixed maturities, trading; equity securities and other investments in the consolidated statements of financial position and are described below. Unconsolidated VIEs include certain commercial mortgage-backed securities (“CMBS”), residential mortgage-backed pass-through securities (“RMBS”) and other ABS. All of these entities were deemed VIEs because the equity within these entities is insufficient to sustain them. We determined we are not the primary beneficiary in the entities within these categories of investments. This determination was based primarily on the fact we do not own the class of security that controls the unilateral right to replace the special servicer or equivalent function. We invest in cash collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities. We have determined we are not the primary beneficiary of these entities primarily because we do not control the economic performance of the entities and were not involved with the design of the entities or because we do not have a potentially significant variable interest in the entities for which we are the asset manager. We have invested in various VIE trusts and similar entities as a debt holder. Most of these entities are classified as VIEs due to insufficient equity to sustain them. In addition, we have an entity classified as a VIE based on the combination of our significant economic interest and lack of voting rights. We have determined we are not the primary beneficiary primarily because we do not control the economic performance of the entities and were not involved with the design of the entities. We have invested in partnerships and other funds, which are classified as VIEs. The entities are VIEs as equity holders lack the power to control the most significant activities of the entities because the equity holders do not have either the ability by a simple majority to exercise substantive kick-out rights or substantive participating rights. We have determined we are not the primary beneficiary because we do not have the power to direct the most significant activities of the entities. As previously discussed, we sponsor and invest in certain investment funds that are VIEs. We determined we are not the primary beneficiary of the VIEs for which we are the asset manager but do not have a potentially significant variable interest in the funds. We hold an equity interest in Mexican mandatory privatized social security funds in which we provide asset management services. Our equity interest in the funds is considered a variable interest. We concluded the funds are VIEs because the equity holders as a group lack decision-making ability through their voting rights. We are not the primary beneficiary of the VIEs because although we, as the asset manager, have the power to direct the activities of the VIEs, we do not have a potentially significant variable interest in the funds. ​ The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Maximum exposure to
​ |  | Asset carrying value |  | loss (1)
​ | ​ | (in millions)
June 30, 2025 | ​ | ​ | ​ | ​ | ​ | ​
Fixed maturities, available-for-sale: | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ | $ | 297.8 | ​ | $ | 361.0
Residential mortgage-backed pass-through securities | ​ | ​ | 3,705.8 | ​ | ​ | 3,838.2
Commercial mortgage-backed securities | ​ | ​ | 5,168.5 | ​ | ​ | 5,507.7
Collateralized debt obligations (2) | ​ | ​ | 6,838.8 | ​ | ​ | 6,827.5
Other debt obligations | ​ | ​ | 9,979.7 | ​ | ​ | 11,479.1
Fixed maturities, trading: | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage-backed pass-through securities | ​ | ​ | 8.7 | ​ | ​ | 8.7
Commercial mortgage-backed securities | ​ | ​ | 73.2 | ​ | ​ | 73.2
Collateralized debt obligations (2) | ​ | ​ | 212.7 | ​ | ​ | 212.7
Other debt obligations | ​ | ​ | 299.5 | ​ | ​ | 299.5
Equity securities | ​ | ​ | 99.0 | ​ | ​ | 99.0
Other investments: | ​ | ​ | ​ | ​ | ​ | ​
Other limited partnership and fund interests (3) | ​ | ​ | 3,098.3 | ​ | ​ | 5,168.6
​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​
Fixed maturities, available-for-sale: | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ | $ | 308.2 | ​ | $ | 359.7
Residential mortgage-backed pass-through securities | ​ | ​ | 3,674.2 | ​ | ​ | 3,881.3
Commercial mortgage-backed securities | ​ | ​ | 5,188.0 | ​ | ​ | 5,634.3
Collateralized debt obligations (2) | ​ | ​ | 6,560.4 | ​ | ​ | 6,518.7
Other debt obligations | ​ | ​ | 8,904.0 | ​ | ​ | 10,580.8
Fixed maturities, trading: | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage-backed pass-through securities | ​ | ​ | 9.0 | ​ | ​ | 9.0
Commercial mortgage-backed securities | ​ | ​ | 44.2 | ​ | ​ | 44.2
Collateralized debt obligations (2) | ​ | ​ | 135.3 | ​ | ​ | 135.3
Other debt obligations | ​ | ​ | 210.0 | ​ | ​ | 210.0
Equity securities | ​ | ​ | 85.1 | ​ |  | 85.1
Other investments: | ​ | ​ | ​ | ​ | ​ | ​
Other limited partnership and fund interests (3) | ​ | ​ | 2,766.4 | ​ | ​ | 4,804.6
(1) | Our risk of loss is limited to our initial investment measured at amortized cost excluding portfolio layer method basis adjustments for fixed maturities, available-for-sale, plus any unfunded commitments and/or guarantees and similar provisions for collateralized debt obligations and other debt obligations. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. A carrying value of zero is used if distributions have been received in excess of our investment, resulting in a negative carrying value for the investment. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager.
(2) | Primarily consists of collateralized loan obligations backed by secured corporate loans.
(3) | As of June 30, 2025 and December 31, 2024, the maximum exposure to loss for other limited partnership and fund interests includes $259.5 million and $236.1 million, respectively, of debt within certain of our managed international real estate funds that is fully secured by assets whose value exceeds the amount of the debt, but also includes recourse to the investment manager.
Money Market Funds We are the investment manager for certain money market mutual funds. These types of funds are exempt from assessment under any consolidation model due to a scope exception for money market funds registered under Rule 2a-7 of the Investment Company Act of 1940 or similar funds. As of June 30, 2025 and December 31, 2024, money market mutual funds we manage held $5.1 billion and $4.5 billion in total assets, respectively. We have no contractual obligation to contribute to these funds; however, we provide support through the waiver of fees and through expense reimbursements. The amount of fees waived and expenses reimbursed was insignificant.

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- Definition The entire disclosure of variable interest entities (VIE), including, but not limited to the nature, purpose, size, and activities of the VIE, the carrying amount and classification of consolidated assets that are collateral for the VIE's obligations, lack of recourse if creditors (or beneficial interest holders) of a consolidated VIE have no recourse to the general credit of the primary beneficiary. An enterprise that holds a significant variable interest in a VIE but is not the primary beneficiary may disclose the nature of its involvement with the VIE and when that involvement began, the nature, purpose, size, and activities of the VIE and the enterprise's maximum exposure to loss as a result of its involvement with the VIE. + References No definition available. + Details
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