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Investments | 12 Months Ended
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Dec. 31, 2020
Equity Method Investments And Joint Ventures [Abstract] |
Investments |
1 7. | Investments
Equity Method Investments and Investments Carried Under the Measurement Alternative
(in thousands) |  | Percent Ownership1 |  |  | December 31, 2020 |  |  | December 31, 2019 |
Advanced Markets Holdings |  |  | 43 | % |  | $ | 8,867 |  |  | $ | 10,259 |
China Credit BGC Money Broking Company Limited |  |  | 33 | % |  |  | 15,119 |  |  |  | 12,214 |
Freedom International Brokerage |  |  | 45 | % |  |  | 9,800 |  |  |  | 10,142 |
Other |  |  |  |  |  |  | 3,873 |  |  |  | 7,385 |
Equity method investments |  |  |  |  |  | $ | 37,659 |  |  | $ | 40,000 |
Investments carried under measurement alternative |  |  |  |  |  |  | 349 |  |  |  | 349 |
Total equity method and investments carried under measurement alternative |  |  |  |  |  | $ | 38,008 |  |  | $ | 40,349 |
1 | Represents the Company’s voting interest in the equity method investment as of December 31, 2020.
The carrying value of the Company’s equity method investments was $37.7 million and $40.0 million as of December 31, 2020 and 2019, respectively, and is included in “Investments” in the Company’s consolidated statements of financial condition. The Company recognized gains of $5.0 million, $4.1 million and $7.4 million related to its equity method investments for the years ended December 31, 2020, 2019 and 2018, respectively. The Company’s share of the net gains or losses is reflected in “Gains (losses) on equity method investments” in the Company’s consolidated statements of operations. For the year ended December 31, 2020, the Company recorded impairment charges of $3.9 million, relating to existing equity method investments. The impairment was recorded in “Other income (loss)” in the Company’s consolidated statements of operations. For the years ended December 31, 2019 and 2018, the Company did not recognize any impairment charges relating to existing equity method investments. Summarized financial information for the Company’s equity method investments is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Statements of operations: |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 94,744 |  |  | $ | 77,211 |  |  | $ | 85,619 |
Total expenses |  |  | 71,241 |  |  |  | 61,680 |  |  |  | 72,906 |
Net income |  | $ | 23,503 |  |  | $ | 15,531 |  |  | $ | 12,713 |
|  | December 31, |
|  | 2020 |  |  | 2019 |
Statements of financial condition: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 89,627 |  |  | $ | 64,614 |
Fixed assets, net |  |  | 2,806 |  |  |  | 3,120 |
Other assets |  |  | 29,065 |  |  |  | 22,782 |
Total assets |  | $ | 121,498 |  |  | $ | 90,516 |
Payables to related parties |  |  | 2,000 |  |  |  | 2,000 |
Other liabilities |  |  | 70,020 |  |  |  | 46,287 |
Total partners’ capital |  |  | 49,478 |  |  |  | 42,229 |
Total liabilities and partners’ capital |  | $ | 121,498 |  |  | $ | 90,516 |
See Note 16—“Related Party Transactions” for information regarding related party transactions with unconsolidated entities included in the Company’s consolidated financial statements. Investments Carried Under Measurement Alternative The Company has acquired equity investments for which it did not have the ability to exert significant influence over operating and financial policies of the investees. These investments are accounted for using the measurement alternative in accordance with the guidance on recognition and measurement. The carrying value of these investments was $0.4 million as of December 31, 2020 and 2019, and they are included in “Investments” in the Company’s consolidated statements of financial condition. The Company did not recognize any gains, losses, or impairments relating to investments carried under the measurement alternative for the both the years ended December 31, 2020 and 2019. In addition, the Company owns membership shares, which are included in “Other assets” in the Company’s consolidated statements of financial condition as of December 31, 2020 and 2019. Prior to January 1, 2018, the equity investments in this line item were accounted for using the cost method in accordance with U.S. GAAP guidance, Investments—Other. These equity investments are accounted for using the measurement alternative in accordance with the guidance on recognition and measurement. The Company recognized $0.4 million of unrealized losses and $18.2 million of unrealized gains to reflect observable transactions for these shares during the years ended December 31, 2020 and 2019, respectively. The unrealized gains (losses) are reflected in “Other income (loss)” in the Company’s consolidated statements of operations. Investments in VIEs Certain of the Company’s equity method investments included in the tables above are considered VIEs, as defined under the accounting guidance for consolidation. The Company is not considered the primary beneficiary of and therefore does not consolidate these VIEs. The Company’s involvement with such entities is in the form of direct equity interests and related agreements. The Company’s maximum exposure to loss with respect to the VIEs is its investment in such entities as well as a credit facility and a subordinated loan. The following table sets forth the Company’s investment in its unconsolidated VIEs and the maximum exposure to loss with respect to such entities (in thousands).
|  | December 31, 2020 |  |  | December 31, 2019 |
|  | Investment |  |  | Maximum Exposure to Loss |  |  | Investment |  |  | Maximum Exposure to Loss |
Variable interest entities1 |  | $ | 1,258 |  |  | $ | 2,238 |  |  | $ | 4,699 |  |  | $ | 5,679 |
1 | The Company has entered into a subordinated loan agreement with Aqua, whereby the Company agreed to lend the principal sum of $980 thousand. As of December 31, 2020 and 2019, the Company’s maximum exposure to loss with respect to its unconsolidated VIEs includes the sum of its equity investments in its unconsolidated VIEs and the $980 thousand subordinated loan to Aqua.
Consolidated VIE The Company is invested in a limited liability company that is focused on developing a proprietary trading technology. The limited liability company is a VIE, and it was determined that the Company is the primary beneficiary of this VIE because the Company was the provider of the majority of this VIE’s start-up capital and has the power to direct the activities of this VIE that most significantly impact its economic performance, primarily through its voting percentage and consent rights on the activities that would most significantly influence the entity. The consolidated VIE had total assets of $7.2 million and $7.4 million as of December 31, 2020 and 2019, respectively, which primarily consisted of clearing margin. There were no material restrictions on the consolidated VIE’s assets. The consolidated VIE had total liabilities of $1.0 million and $2.1 million as of December 31, 2020 and 2019, respectively. The Company’s exposure to economic loss on this VIE was $4.8 million and $2.8 million as of December 31, 2020 and 2019, respectively.

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