UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20222023
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from________to
Commission File Number: 001-40622
BRIDGE INVESTMENT GROUP HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware82-2769085
(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): (801) 716-4500
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Class A common stock, $0.01 par value per shareBRDGNew 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. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§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 x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerox
Non-accelerated filerxoSmaller reporting companyo
Emerging growth companyx
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 Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of November 1, 2022,August 2, 2023, the registrant had 29,247,22133,347,126 shares of Class A common stock ($0.01 par value per share) outstanding and 85,551,12785,067,321 shares of Class B common stock ($0.01 par value per share) outstanding.



TABLE OF CONTENTS
Page
Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20222023 (Unaudited) and December 31, 20212022
Condensed Consolidated and Combined Statements of Operations (Unaudited) for the Three and NineSix Months Ended SeptemberJune 30, 20222023 and 20212022
Condensed Consolidated and Combined Statements of Comprehensive (Loss) Income (Unaudited) for the Three and NineSix Months Ended SeptemberJune 30, 20222023 and 20212022
Condensed Consolidated and Combined Statements of Changes in Shareholders’/Members’ Equity (Unaudited) for the Three and NineSix Months Ended SeptemberJune 30, 20222023 and 20212022
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) for the NineSix Months Ended SeptemberJune 30, 20222023 and 20212022



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended or the Securities Act,(the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended or the Exchange Act,(the “Exchange Act”), about, among other things, our operations, taxes, earnings and financial performance, and dividends. All statements other than statements of historical facts contained in this report may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected growth, future capital expenditures, fund performance and debt service obligations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “outlook,” “indicator,” “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. Accordingly, we caution you that any such forward looking statements are not guarantees of future performance and are subject to known and unknown risks, assumptions and uncertainties that are difficult to predict and beyond our ability to control. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results, performance or achievements may prove to be materially different from the results 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 those described in Part II, Item 1A, “Risk Factors” of this report and Part I, Item 1A, “Risk Factors” in our annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 18, 2022.February 27, 2023.
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 on Form 10-Q, unless the context otherwise requires, references to:
we, us, our, the Company, Bridge, Bridge Investment Group and similar references refer: (1) following the consummation of the Transactions, including our IPO,initial public offering (“IPO”), to Bridge Investment Group Holdings Inc., and, unless otherwise stated, all of its subsidiaries, including Bridge Investment Group Holdings LLC (the “Operating Company”) and, unless otherwise stated, all of the Operating Company’s subsidiaries, and (2) prior to the completion of the IPO, to the Operating Company and, unless otherwise stated, all of the Operating Company’s subsidiaries and the Contributed Bridge GPs.
assets under management or “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 is not reduced by any outstanding indebtedness or other accrued but unpaid liabilities of the assets we manage. Our calculations of AUM and fee-earning AUM 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. In addition, our calculation of AUM (but not fee-earning AUM) 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.
BIGRM” refers to Bridge Investment Group Risk Management, Inc. BIGRM is incorporated in the State of Utah and is licensed under the Utah State Captive Insurance Companies Act.
Bridge GPs refers to the following entities:
Bridge Office Fund GP LLC (“BOF I GP”)
2


Bridge Office Fund II GP LLC (“BOF II GP”)
2


Bridge Office Fund III GP LLC (“BOF III GP”)
Bridge Seniors Housing & Medical Properties Fund GP LLC (“BSH I GP”)
Bridge Seniors Housing & Medical Properties Fund II GP LLC (“BSH II GP”)
Bridge Seniors Housing Fund III GP LLC (“BSH III GP”)
Bridge Opportunity Zone Fund GP LLC (“BOZ I GP”)
Bridge Opportunity Zone Fund II GP LLC (“BOZ II GP”)
Bridge Opportunity Zone Fund III GP LLC (“BOZ III GP”)
Bridge Opportunity Zone Fund IV GP LLC (“BOZ IV GP”)
Bridge Opportunity Zone Fund V GP LLC (“BOZ V GP”)
Bridge Opportunity Zone Fund VI GP LLC (“BOZ VI GP”)
Bridge MF&CO Fund III GP LLC (“BMF III GP”)
Bridge Multifamily Fund IV GP LLC (“BMF IV GP”)
Bridge Multifamily Fund V GP LLC (“BMF V GP”)
Bridge Workforce and Affordable Housing Fund GP LLC (“BWH I GP”)
Bridge Workforce and Affordable Housing Fund II GP LLC (“BWH II GP”)
Bridge Debt Strategies Fund GP LLC (“BDS I GP”)
Bridge Debt Strategies Fund II GP LLC (“BDS II GP”)
Bridge Debt Strategies Fund III GP LLC (“BDS III GP”)
Bridge Debt Strategies Fund IV GP LLC (“BDS IV GP”)
Bridge Debt Strategies Fund V GP LLC (“BDS V GP”)
Bridge Agency MBS Fund GP LLC (“BAMBS GP”)
Bridge Net Lease Income Fund GP LLC (“BNLI GP”)
Bridge Logistics U.S. Venture I GP LLC (“BLV I GP”)
Bridge Logistics Developer GP LLC (“BLD GP”)
Bridge Logistics Value Fund II GP LLC (“BLV II GP”)
Bridge Logistics Developer GP LLC (“BLD GP”)
Bridge Single-Family Rental Fund IV GP LLC (“BSFR IV GP”)
Bridge Solar Energy Development Fund GP LLC (“BSED GP”)
Bridge Investment Group Ventures Fund GP LLC (“BIGVF GP”)
Newbury Equity Partners VI GP LLC (“NEP VI GP”)
Class A common stock” refers to the Class A common stock, $0.01 par value per share, of the Company.
Class A Units” refers to the Class A common units of the Operating Company.
Class B common stock” refers to the Class B common stock, $0.01 par value per share, of the Company.
Class B Units” refers to the Class B common units of the Operating Company.
Continuing Equity Owners” refers collectively to direct or indirect holders of Class A Units and Class B common stock who may exchange at each of their respective options (subject in certain circumstances to time-based vesting requirements and certain other restrictions), in whole or in part from time to time, their Class A Units (along with an equal number of shares of Class B common stock (and such shares shall be immediately cancelled)) for, at our election, cash or newly issued shares of Class A common stock.
3


Contributed Bridge GPs” refers to the following entities:
BOF I GP
BOF II GP
BSH I GP
BSH II GP
3


BSH III GP
BOZ I GP
BOZ II GP
BOZ III GP
BOZ IV GP
BMF III GP
BMF IV GP
BWH I GP
BWH II GP
BDS II GP
BDS III GP
BDS IV GP
fee-earning AUM” refers to the assets we manage from which we earn management fee or other revenue.
IPO” refers to the initial public offering of shares of the Company’s Class A common stock.
LLC Interests” refers to the Class A Units and the Class B Units.
Operating Company,” “Bridge Investment Group LLC” and “Bridge Investment Group Holdings LLC” refer to Bridge Investment Group Holdings LLC, a Delaware limited liability company, which was converted to a limited liability company organized under the laws of the State of Delaware from a Utah limited liability company formerly named “Bridge Investment Group LLC” in connection with the IPO.
Original Equity Owners” refers to the owners of LLC Interests in the Operating Company, collectively, prior to the IPO.
Transactions” refers to the IPO and certain organizational transactions that were effected in connection with the IPO, and the application of the net proceeds therefrom. Refer to Note 1, “Organization,” in theto our condensed consolidated and combined financial statements included elsewhere in this quarterly report on Form 10-Q for a description of the Transactions.
4


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data)
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
AssetsAssets(Unaudited)(Audited)Assets(Unaudited)(Audited)
Cash and cash equivalentsCash and cash equivalents$191,493 $78,417 Cash and cash equivalents$70,969 $183,576 
Restricted cashRestricted cash8,966 5,455 Restricted cash8,976 9,689 
Marketable securities, at fair valueMarketable securities, at fair value9,509 8,035 Marketable securities, at fair value12,624 14,614 
Receivables from affiliatesReceivables from affiliates52,895 35,379 Receivables from affiliates41,703 53,804 
Notes receivable from affiliatesNotes receivable from affiliates65,474 118,508 Notes receivable from affiliates59,030 67,244 
Other assetsOther assets80,888 44,463 Other assets71,919 70,466 
Other investmentsOther investments83,398 44,006 Other investments207,850 85,456 
Accrued performance allocationsAccrued performance allocations559,160 439,548 Accrued performance allocations428,414 554,723 
Intangible assets, netIntangible assets, net5,378 3,441 Intangible assets, net148,971 4,894 
GoodwillGoodwill55,982 9,830 Goodwill233,831 55,982 
Deferred tax assets, netDeferred tax assets, net66,275 59,210 Deferred tax assets, net62,096 54,387 
Total assetsTotal assets$1,179,418 $846,292 Total assets$1,346,383 $1,154,835 
Liabilities and shareholdersʼ equity
Liabilities and equityLiabilities and equity
Accrued performance allocations compensationAccrued performance allocations compensation$62,752 $41,020 Accrued performance allocations compensation$47,529 $66,754 
Accrued compensation and benefitsAccrued compensation and benefits18,097 15,107 Accrued compensation and benefits24,958 15,643 
Accounts payable and accrued expensesAccounts payable and accrued expenses30,621 13,586 Accounts payable and accrued expenses22,760 24,942 
Due to affiliatesDue to affiliates52,110 46,134 Due to affiliates51,513 51,966 
General Partner notes payable, at fair value9,786 12,003 
General Partner Notes Payable, at fair valueGeneral Partner Notes Payable, at fair value7,091 8,633 
Insurance loss reservesInsurance loss reserves9,425 8,086 Insurance loss reserves7,994 9,445 
Self-insurance reserves and unearned premiumsSelf-insurance reserves and unearned premiums5,268 3,504 Self-insurance reserves and unearned premiums3,645 3,453 
Line of creditLine of credit80,000 — 
Other liabilitiesOther liabilities31,184 8,973 Other liabilities39,037 30,386 
Notes payableNotes payable297,164 148,142 Notes payable446,195 297,294 
Total liabilitiesTotal liabilities$516,407 $296,555 Total liabilities$730,722 $508,516 
Commitments and contingencies (Note 17)Commitments and contingencies (Note 17)— — Commitments and contingencies (Note 17)— — 
Shareholdersʼ equity:Shareholdersʼ equity:Shareholdersʼ equity:
Preferred stock, $0.01 par value, 20,000,000 authorized, 0 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively— — 
Class A common stock, $0.01 par value, 500,000,000 authorized; 29,247,881 and 25,159,799 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively292 230 
Class B common stock, $0.01 par value, 238,087,544 and 239,208,722 authorized; 85,551,127 and 86,672,305 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively856 867 
Preferred stock, $0.01 par value, 20,000,000 authorized; 0 issued and outstanding as of June 30, 2023 and December 31, 2022Preferred stock, $0.01 par value, 20,000,000 authorized; 0 issued and outstanding as of June 30, 2023 and December 31, 2022— — 
Class A common stock, $0.01 par value, 500,000,000 authorized; 32,767,289 and 29,488,521 issued and outstanding as of June 30, 2023 and December 31, 2022, respectivelyClass A common stock, $0.01 par value, 500,000,000 authorized; 32,767,289 and 29,488,521 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively328 295 
Class B common stock, $0.01 par value, 237,680,340 and 237,837,544 authorized; 85,144,321 and 85,301,127 issued and outstanding as of June 30, 2023 and December 31, 2022, respectivelyClass B common stock, $0.01 par value, 237,680,340 and 237,837,544 authorized; 85,144,321 and 85,301,127 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively851 853 
Additional paid-in capitalAdditional paid-in capital61,244 53,527 Additional paid-in capital83,374 63,939 
Retained earningsRetained earnings22,502 17,184 Retained earnings1,101 14,230 
Accumulated other comprehensive lossAccumulated other comprehensive loss(187)(21)Accumulated other comprehensive loss(155)(220)
Bridge Investment Group Holdings Inc. equityBridge Investment Group Holdings Inc. equity84,707 71,787 Bridge Investment Group Holdings Inc. equity85,499 79,097 
Non-controlling interests in Bridge Investment Group Holdings LLCNon-controlling interests in Bridge Investment Group Holdings LLC312,296 272,482 Non-controlling interests in Bridge Investment Group Holdings LLC321,247 309,677 
Non-controlling interests in Bridge Investment Group Holdings Inc.Non-controlling interests in Bridge Investment Group Holdings Inc.266,008 205,468 Non-controlling interests in Bridge Investment Group Holdings Inc.208,915 257,545 
Total shareholdersʼ equity663,011 549,737 
Total liabilities and shareholdersʼ equity$1,179,418 $846,292 
Total equityTotal equity615,661 646,319 
Total liabilities and equityTotal liabilities and equity$1,346,383 $1,154,835 
See accompanying notes to condensed consolidated and combined financial statements.
5


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Operations (Unaudited)
(Dollar amounts in thousands, except per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Revenues:
Fund management fees$64,096 $40,576 $166,176 $105,963 
Property management and leasing fees18,788 22,510 56,683 53,592 
Construction management fees3,414 2,097 7,727 5,988 
Development fees986 1,018 3,037 2,567 
Transaction fees11,532 21,907 51,172 43,475 
Fund administration fees3,808 — 11,105 — 
Insurance premiums3,387 2,530 8,648 6,446 
Other asset management and property income4,413 1,533 9,027 4,664 
Total revenues110,424 92,171 313,575 222,695 
Investment income:
Incentive fees— — — 910 
Performance allocations:
Realized22,308 30,999 64,826 72,184 
Unrealized(16,367)53,042 119,611 111,009 
Earnings from investments in real estate818 823 2,109 1,799 
Total investment income6,759 84,864 186,546 185,902 
Expenses:
Employee compensation and benefits54,968 31,763 149,140 101,220 
Incentive fee compensation— — — 82 
Performance allocations compensation:
Realized1,321 1,855 4,047 6,096 
Unrealized3,789 2,682 21,014 10,159 
Loss and loss adjustment expenses2,204 1,429 5,395 4,346 
Third-party operating expenses6,125 11,581 19,642 26,325 
General and administrative expenses10,685 6,703 29,961 16,196 
Depreciation and amortization703 699 2,223 2,179 
Total expenses79,795 56,712 231,422 166,603 
Other income (expense):
Realized and unrealized gains, net399 2,565 4,315 8,663 
Interest income1,904 1,008 4,466 2,172 
Interest expense(4,247)(2,407)(8,769)(6,547)
Total other income (expense)(1,944)1,166 12 4,288 
Income before provision for income taxes35,444 121,489 268,711 246,282 
Income tax provision(3,203)(2,607)(14,585)(3,441)
Net income32,241 118,882 254,126 242,841 
Net income attributable to non-controlling interests in Bridge Investment Group Holdings LLC1,381 60,900 87,842 70,663 
Net income attributable to Bridge Investment Group Holdings LLC30,860 57,982 166,284 172,178 
Net income attributable to Common Control Group prior to Transactions and IPO— 3,775 — 117,971 
Net income attributable to non-controlling interests in Bridge Investment Group Holdings Inc. subsequent to Transactions and IPO25,861 43,904 138,574 43,904 
Net income attributable to Bridge Investment Group Holdings Inc. subsequent to Transactions and IPO$4,999 $10,303 $27,710 $10,303 
Earnings per share of Class A common stock—Basic and Diluted (Note 21)1
$0.17 $0.41 $0.96 $0.41 
Weighted-average shares of Class A common stock outstanding—Basic and Diluted (Note 21)1
24,157,236 22,284,351 23,778,524 22,284,351 
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Revenues:
Fund management fees$60,317 $49,380 $114,166 $102,080 
Property management and leasing fees19,130 19,616 39,029 37,895 
Construction management fees2,902 2,426 6,187 4,312 
Development fees1,337 793 1,672 2,052 
Transaction fees4,682 17,643 7,059 39,641 
Fund administration fees4,304 3,657 8,480 7,297 
Insurance premiums3,485 2,845 8,214 5,261 
Other asset management and property income2,646 2,659 5,443 4,614 
Total revenues98,803 99,019 190,250 203,152 
Investment income:
Incentive fees41 — 41 — 
Performance allocations:
Realized8,425 33,581 11,587 42,518 
Unrealized(19,284)70,116 (126,309)135,978 
Earnings from investments in real estate215 1,251 215 1,291 
Total investment (loss) income(10,603)104,948 (114,466)179,787 
Expenses:
Employee compensation and benefits56,376 46,693 107,553 94,172 
Incentive fee compensation— — 
Performance allocations compensation:
Realized495 2,165 2,227 2,725 
Unrealized(4,649)7,987 (19,319)17,225 
Loss and loss adjustment expenses1,684 1,439 4,004 3,191 
Third-party operating expenses5,219 6,749 11,329 13,517 
General and administrative expenses12,872 9,769 26,765 19,277 
Depreciation and amortization5,118 887 6,211 1,520 
Total expenses77,118 75,689 138,773 151,627 
Other income (expense):
Realized and unrealized (losses) gains, net(1,367)3,489 120 3,916 
Interest income3,728 1,353 7,182 2,562 
Interest expense(8,735)(2,901)(12,881)(4,522)
Total other (loss) income(6,374)1,941 (5,579)1,956 
Income (loss) before provision for income taxes4,708 130,219 (68,568)233,268 
Income tax expense(7,468)(5,837)(1,624)(11,382)
Net (loss) income(2,760)124,382 (70,192)221,886 
Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC(4,186)49,748 (60,435)86,461 
Net income (loss) attributable to Bridge Investment Group Holdings LLC1,426 74,634 (9,757)135,425 
Net income (loss) attributable to non-controlling interests in Bridge Investment Group Holdings Inc.6,198 61,694 (7,019)112,714 
Net (loss) income attributable to Bridge Investment Group Holdings Inc.$(4,772)$12,940 $(2,738)$22,711 
Earnings (loss) per share of Class A common stock—Basic and Diluted (Note 21)$(0.24)$0.44 $(0.21)$0.79 
Weighted-average shares of Class A common stock outstanding—Basic and Diluted (Note 21)25,143,289 24,029,107 25,105,753 23,581,393 
1 For the three and nine months ended September 30, 2021, the earnings per share amounts are for the period following the Transaction and IPO from July 16, 2021 through September 30, 2021. Refer to Note 1, “Organization” and Note 21, “Earnings per Share” for additional information.
See accompanying notes to condensed consolidated and combined financial statements.
6


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Comprehensive (Loss) Income (Unaudited)
(Dollar amounts in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income$32,241 $118,882 $254,126 $242,841 
Other comprehensive income (loss) - foreign currency translation adjustments, net of tax(162)(13)(166)(6)
Total comprehensive income32,079 118,869 253,960 242,835 
Less: comprehensive income attributable to non-controlling interests in Bridge Investment Group Holdings LLC1,381 60,900 87,842 70,663 
Comprehensive income attributable to Bridge Investment Group Holdings LLC30,698 57,969 166,118 172,172 
Less: comprehensive income attributable to Common Control Group prior to Transactions and IPO— 3,775 — 117,971 
Less: comprehensive income attributable to non-controlling interests in Bridge Investment Group Holdings Inc. subsequent to Transactions and IPO25,861 43,904 138,574 43,904 
Comprehensive income attributable to Bridge Investment Group Holdings Inc. subsequent to Transactions and IPO$4,837 $10,290 $27,544 $10,297 
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Net (loss) income$(2,760)$124,382 $(70,192)$221,886 
Other comprehensive (loss) income—foreign currency translation adjustments, net of tax(22)(13)65 (4)
Total comprehensive income (loss)(2,782)124,369 (70,127)221,882 
Less: comprehensive (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC(4,186)49,748 (60,435)86,461 
Comprehensive income (loss) attributable to Bridge Investment Group Holdings LLC1,404 74,621 (9,692)135,421 
Less: comprehensive (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings Inc.6,198 61,694 (7,019)112,714 
Comprehensive (loss) income attributable to Bridge Investment Group Holdings Inc.$(4,794)$12,927 $(2,673)$22,707 
See accompanying notes to condensed consolidated and combined financial statements.
7


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Changes in Shareholders’/Members’ Equity (Unaudited)
(Dollar amounts in thousands, except per share data)
Class A
Common Stock
Class B
Common Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive Income
(Loss)
NCI in Operating
Company or
CCG(1)
NCI in Bridge
Investment Group
Holdings Inc.(2)
Total Shareholdersʼ/
Membersʼ Equity
Balance as of June 30, 2022$291 $857 $60,962 $26,364 $(25)$323,141 $269,407 $680,997 
Net income— — — 4,999 — 1,381 25,861 32,241 
Exchange of Class A Units for Class A common stock and redemption of corresponding Class B common stock including the deferred tax effect and amounts payable under the Tax Receivable Agreement(1)(2)— — — — (2)
Share-based compensation, net of forfeitures— — 4,358 — — 822 4,444 9,624 
Capital contributions— — — — — 12 — 12 
Distributions— — — — — (13,060)(37,778)(50,838)
Dividends on Class A Common Stock/Units, $0.30 per share— — — (8,861)— — — (8,861)
Foreign currency translation adjustment— — — — (162)— — (162)
Reallocation of equity— — (4,074)— — — 4,074 — 
Balance as of September 30, 2022$292 $856 $61,244 $22,502 $(187)$312,296 $266,008 $663,011 
(1)Non-controlling interests (“NCI”) in Bridge Investment Group Holdings LLC or Common Control Group
(2)NCI in Bridge Investment Group Holdings Inc.
Class A
Common Stock
Class B
Common Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated Other Comprehensive Income (Loss)Non-controlling Interest in Bridge Investment Group Holdings LLCNon-controlling Interest in Bridge
Investment Group
Holdings Inc.
Total Equity
Balance as of March 31, 2023$327 $853 $73,104 $10,723 $(133)$336,586 $220,137 $641,597 
Net income (loss)— — — (4,772)— (4,186)6,198 (2,760)
Conversion of profit interest awards— — 7,500 — — — — 7,500 
Exchange of Class A Units for Class A common stock including the deferred tax effect and amounts payable under the Tax Receivable Agreement(1)(20)— — — — (20)
Fair value of non-controlling interest in acquired business— — — — — 2,168 — 2,168 
Capital contributions from non-controlling interests— — — — — 4,218 — 4,218 
Share-based compensation, net of forfeitures— (1)5,511 — 436 5,173 11,119 
Distributions— — — — — (17,975)(25,314)(43,289)
Dividends on Class A Common Stock/Units, $0.15 per share— — — (4,850)— — — (4,850)
Foreign currency translation adjustment— — — — (22)— — (22)
Reallocation of equity— — (2,721)— — — 2,721 — 
Balance as of June 30, 2023$328 $851 $83,374 $1,101 $(155)$321,247 $208,915 $615,661 
Class A
Common Stock
Class B
Common Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated Other Comprehensive Income (Loss)Non-controlling Interest in Bridge Investment Group Holdings LLCNon-controlling Interest in Bridge
Investment Group
Holdings Inc.
Total Equity
Balance as of March 31, 2022$289 $859 $59,247 $21,038 $(12)$311,915 $245,088 $638,424 
Net income— — — 12,940 — 49,748 61,694 124,382 
Exchange of Class A Units for Class A common stock and redemption of corresponding Class B common stock including the deferred tax effect and amounts payable under the Tax Receivable Agreement(2)— — — — 
Share-based compensation, net of forfeitures— — 2,119 — — 4,428 6,553 
Capital contributions— — — — — 31 — 31 
Distributions— — — — — (38,559)(42,212)(80,771)
Dividends on Class A Common Stock/Units, $0.26 per share— — — (7,614)— — — (7,614)
Foreign currency translation adjustment— — — — (13)— — (13)
Reallocation of equity— — (409)— — — 409 — 
Balance as of June 30, 2022$291 $857 $60,962 $26,364 $(25)$323,141 $269,407 $680,997 
See accompanying notes to condensed consolidated financial statements.
8


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Changes in Shareholders’/Members’ Equity (Unaudited)
(Dollar amounts in thousands, except per share data)
Net Investment in
CCG(1)
Class A
Common Stock
Class B
Common Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive Income
(Loss)
NCI in Operating
Company or
CCG(2)
NCI in Bridge
Investment Group
Holdings Inc.(3)
Total Shareholdersʼ/
Membersʼ Equity
Balance as of June 30, 2021$157,253 $— $— $— $— $11 $12,377 $— $169,641 
Net income prior to Transactions and IPO3,775 — — — — — 1,799 — 5,574 
Foreign currency translation adjustment prior to Transactions and IPO— — — — — (11)— — (11)
Share-based compensation prior to Transactions and IPO196 — — — — — 19 — 215 
Distributions prior to Transactions and IPO(18,377)— — — — — (3,186)— (21,563)
Settlement of accrued performance allocations compensation liability with equity14,247 — — — — — — — 14,247 
Recognition of non-controlling interests in certain subsidiaries concurrent with Transactions and IPO(142,986)— — — — — 142,986 — — 
Derecognition of Bridge Debt Strategies Fund GP LLC2,337 — — — — — — — 2,337 
Effects of Transactions and purchase of Operating Company Class A Units(16,445)28 975 15,442 — — — — — 
Issuance of Class A common stock sold in IPO, net of underwriting discount and issuance costs— 187 — 277,006 — — — (139,875)137,318 
Purchase of membership interests in the Operating Company— — (108)(157,955)— — — 158,063 — 
Issuance of Class A common stock from Underwriters' exercise of over-allotment option, net of underwriting discount and issuance costs— 14 — 18,174 — — — (18,188)— 
Deferred tax effect resulting from purchase of Class A Units, net of amounts payable under Tax Receivable Agreement— — — 18,730 — — — — 18,730 
Equity reallocation between controlling and non-controlling interests subsequent to Transactions and IPO— — — (119,149)— — — 119,149 — 
Capital Contributions subsequent to Transactions and IPO— — — — — — 186 — 186 
Net income subsequent to Transactions and IPO— — — — 10,303 — 59,101 43,904 113,308 
Foreign currency translation subsequent to Transactions and IPO— — — — — (2)— — (2)
Share-based compensation subsequent to Transactions and IPO— — 531 — — 1,702 2,238 
Distributions subsequent to Transactions and IPO— — — — — — (18,515)(5,628)(24,143)
Balance as of September 30, 2021$— $230 $867 $52,779 $10,303 $(2)$194,771 $159,127 $418,075 
Class A
Common Stock
Class B
Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-controlling Interest in Bridge Investment Group Holdings LLCNon-controlling Interest in Bridge
Investment Group
Holdings Inc.
Total Equity
Balance as of December 31, 2022$295 $853 $63,939 $14,230 $(220)$309,677 $257,545 $646,319 
Net income— — — (2,738)— (60,435)(7,019)(70,192)
Conversion of profits interest awards— 7,492 — — — — 7,500 
Exchange of Class A Units for Class A common stock and redemption of corresponding Class B common stock, including the deferred tax effect and amounts payable under the Tax Receivable Agreement(1)— — — — 
Fair value of non-controlling interest in acquired business— — — — — 86,365 — 86,365 
Capital contributions from non-controlling interests— — — — — 4,229 — 4,229 
Share-based compensation, net of forfeitures23 (1)8,667 — — 798 10,992 20,479 
Distributions— — — — — (19,387)(49,329)(68,716)
Dividends on Class A Common Stock/Units, $0.32 per share— — — (10,391)— — — (10,391)
Foreign currency translation adjustment— — — — 65 — — 65 
Reallocation of equity— — 3,274 — — — (3,274)— 
Balance as of June 30, 2023$328 $851 $83,374 $1,101 $(155)$321,247 $208,915 $615,661 
For a description of the Transactions related to our initial public offering (“IPO”) refer to Note 1, “Organization.”
(1)Net investment in Common Control Group
(2)NCI in Bridge Investment Group Holdings LLC or Common Control Group
(3)NCI in Bridge Investment Group Holdings Inc.
Class A
Common Stock
Class B
Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-controlling Interest in Bridge Investment Group Holdings LLCNon-controlling Interest in Bridge
Investment Group
Holdings Inc.
Total Equity
Balance as of December 31, 2021$230 $867 $53,527 $17,184 $(21)$272,482 $205,468 $549,737 
Net income— — — 22,711 — 86,461 112,714 221,886 
Conversion of 2019 profit interest awards— (8)— — — — — 
Exchange of Class A Units for Class A common stock and redemption of corresponding Class B common stock including the deferred tax effect and amounts payable under the Tax Receivable Agreement10 (10)780 — — — — 780 
Issuance of Class A Units for acquisition— — — — — — 14,930 14,930 
Fair value of non-controlling interest in acquired business— — — — — 20,053 — 20,053 
Share-based compensation, net of forfeitures43 — 3,689 — — 14 10,072 13,818 
Capital contributions— — — — — 201 — 201 
Distributions— — — — — (56,070)(70,803)(126,873)
Dividends on Class A Common Stock/Units, $0.47 per share— — — (13,531)— — — (13,531)
Foreign currency translation adjustment— — — — (4)— — (4)
Reallocation of equity— — 2,974 — — — (2,974)— 
Balance as of June 30, 2022$291 $857 $60,962 $26,364 $(25)$323,141 $269,407 $680,997 
See accompanying notes to condensed consolidated and combined financial statements.
9


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Changes in Shareholders’/Members’ EquityCash Flows (Unaudited)
(Dollar amounts in thousands, except per share data)thousands)
Class A
Common Stock
Class B
Common Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive Income
(Loss)
NCI in Operating
Company or
CCG(1)
NCI in Bridge
Investment Group
Holdings Inc.(2)
Total Shareholdersʼ/
Membersʼ Equity
Balance as of December 31, 2021$230 $867 $53,527 $17,184 $(21)$272,482 $205,468 $549,737 
Net income— — — 27,710 — 87,842 138,574 254,126 
Conversion of 2019 profits interest awards— (8)— — — — — 
Exchange of Class A Units for Class A common stock and redemption of corresponding Class B common stock including the deferred tax effect and amounts payable under the Tax Receivable Agreement11 (11)778 — — — — 778 
Issuance of Class A Units for acquisition— — — — — — 14,930 14,930 
Fair value of non-controlling interest in acquired business— — — — — 20,053 — 20,053 
Share-based compensation, net of forfeitures43 — 8,046 — — 836 14,517 23,442 
Capital contributions— — — — — 213 — 213 
Distributions— — — — — (69,130)(108,580)(177,710)
Dividends on Class A Common Stock/Units, $0.77 per share— — — (22,392)— — — (22,392)
Foreign currency translation adjustment— — — — (166)— — (166)
Reallocation of equity— — (1,099)— — — 1,099 — 
Balance as of September 30, 2022$292 $856 $61,244 $22,502 $(187)$312,296 $266,008 $663,011 
Six Months Ended June 30,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income$(70,192)$221,886 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization6,211 1,520 
Amortization of financing costs and debt discount and premium570 303 
Share-based compensation20,479 13,818 
Equity in income of investments2,006 (4,837)
Changes in unrealized gain (loss) on General Partner Notes Payable(1,386)822 
Non-cash lease amortization29 (208)
Unrealized performance allocations126,309 (135,978)
Unrealized accrued performance allocations compensation(19,319)17,225 
Change in deferred income taxes291 (63)
Changes in operating assets and liabilities:
Receivable from affiliates12,101 1,969 
Prepaid and other assets(4,157)708 
Accounts payable and accrued expenses(2,179)11,453 
Accrued payroll and benefits8,579 13,548 
Other liabilities(4,548)(694)
Insurance loss and self-insurance reserves(1,260)465 
Accrued performance allocations compensation94 442 
Due to affiliates(952)— 
Net cash provided by operating activities72,676 142,379 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments(30,711)(35,384)
Distributions from investments40 855 
Sale of marketable securities4,420 — 
Issuance of notes receivable(135,039)(242,905)
Proceeds from collections on notes receivable143,252 318,255 
Purchase of tenant improvements, furniture and equipment(1,633)(788)
Deposits— 661 
Cash paid for acquisition, net of cash acquired(319,364)(15,089)
Net cash (used in) provided by investing activities(339,035)25,605 
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions from non-controlling interests4,229 201 
Distributions to non-controlling interests(68,716)(126,873)
Repayments of General Partner Notes Payable(159)(460)
Dividends paid on Class A common stock(10,391)(13,531)
Proceeds from revolving line of credit250,000 50,000 
Payments on revolving line of credit(170,000)(50,000)
Borrowings on private notes150,000 — 
Payments of deferred financing costs(1,924)(1,015)
Net cash provided by (used in) financing activities153,039 (141,678)
Net (decrease) increase in cash, cash equivalents, and restricted cash(113,320)26,306 
Cash, cash equivalents and restricted cash - beginning of period193,265 83,872 
Cash, cash equivalents and restricted cash - end of period$79,945 $110,178 
(1)NCI in Bridge Investment Group Holdings LLC or Common Control Group
(2)NCI in Bridge Investment Group Holdings Inc.















See accompanying notes to condensed consolidated financial statements.

10


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Changes in Shareholders’/Members’ Equity (Unaudited)
(Dollar amounts in thousands, except per share data)
Net Investment in
CCG(1)
Class A
Common Stock
Class B
Common Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive Income
(Loss)
NCI in Operating
Company or
CCG(2)
NCI in Bridge
Investment Group
Holdings Inc.(3)
Total Shareholdersʼ/
Membersʼ Equity
Balance as of December 31, 2020$186,091 $— $— $— $— $$15,376 $— $201,471 
Net income prior to Transactions and IPO117,971 — — — — — 11,562 — 129,533 
Foreign currency translation adjustment prior to Transactions and IPO— — — — — (4)— — (4)
Share-based compensation prior to Transactions and IPO14,704 — — — — — 975 — 15,679 
Capital contributions prior to Transactions and IPO422 — — — — — 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 equity14,247 — — — — — — — 14,247 
Recognition of non-controlling interests in certain subsidiaries concurrent with Transactions and IPO(142,986)— — — — — 142,986 — — 
Derecognition of Bridge Debt Strategies Fund GP LLC2,337 — — — — — — — 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 and issuance costs— 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 Underwriters' exercise of over-allotment option, net of underwriting discount and issuance costs— 14 — 18,174 — — — (18,188)— 
Deferred tax effect resulting from purchase of Class A Units, net of amounts payable under Tax Receivable Agreement— — — 18,730 — — — — 18,730 
Equity reallocation between controlling and non-controlling interests subsequent to Transactions and IPO— — — (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— — 531 — — 1,702 2,238 
Distributions subsequent to Transactions and IPO— — — — — — (18,514)(5,628)(24,142)
Balance as of September 30, 2021$— $230 $867 $52,779 $10,303 $(2)$194,771 $159,127 $418,075 
For a description of the Transactions related to our initial public offering (“IPO”) refer to Note 1.
(1)Net investment in Common Control Group
(2)NCI in Bridge Investment Group Holdings LLC or Common Control Group
(3)NCI in Bridge Investment Group Holdings Inc.
See accompanying notes to condensed consolidated and combined financial statements.
11


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited), Continued
(Dollar amounts in thousands)
Nine Months Ended September 30,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$254,126 $242,841 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization2,223 2,179 
Amortization of financing costs and debt discount and premium604 392 
Share-based compensation23,442 17,917 
Equity in income of investments(3,241)(7,828)
Changes in unrealized gain (loss) on General Partner notes payable(1,218)(830)
Amortization of lease liabilities(454)(203)
Unrealized performance allocations(119,611)(111,009)
Unrealized accrued performance allocations compensation21,014 10,159 
Change in deferred income taxes(312)— 
Changes in operating assets and liabilities:
Receivable from affiliates(16,741)(8,136)
Prepaid and other assets(7,758)(1,929)
Accounts payable and accrued expenses16,693 (430)
Accrued payroll and benefits2,990 2,374 
Other liabilities6,865 3,816 
Insurance loss and self-insurance reserves3,102 1,630 
Accrued performance allocations compensation718 1,918 
Net cash provided by operating activities182,442 152,861 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments(74,927)(10,667)
Proceeds from sale of investments— 1,274 
Distributions from investments1,376 — 
Sale of marketable securities1,300 — 
Issuance of notes receivable(377,350)(385,165)
Proceeds from collections on notes receivable451,187 409,552 
Purchase of tenant improvements, furniture and equipment(626)(893)
Deposits1,543 — 
Cash paid for acquisition, net of cash acquired(15,089)— 
Net cash (used in) provided by investing activities(12,586)14,101 
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions from non-controlling interests213 931 
Distributions to members— (176,273)
Proceeds from issuance of common stock—IPO, net of underwriting discount and issuance costs— 277,193 
Purchase of membership interests in Operating Company— (158,063)
Proceeds from issuance of common stock —Underwriters' exercise of over-allotment option, net of underwriting discount and issuance costs— 18,188 
Distributions to non-controlling interests(177,710)(41,327)
Repurchase of membership interests— (110)
Repayments of General Partner notes payable(999)(1,067)
Dividends paid on Class A common stock(22,392)— 
Proceeds from revolving line of credit50,000 85,800 
Payments on revolving line of credit(50,000)(85,800)
Borrowings on private notes150,000 — 
Payments of deferred financing costs(2,381)— 
Net cash used in financing activities(53,269)(80,528)
Net increase in cash, cash equivalents, and restricted cash116,587 86,434 
Cash, cash equivalents and restricted cash - beginning of period83,872 107,354 
Cash, cash equivalents and restricted cash - end of period$200,459 $193,788 
See accompanying notes to condensed consolidated and combined financial statements.
Six Months Ended June 30,
20232022
Supplemental disclosure of cash flow information:
Cash paid for income taxes$1,782 $2,066 
Cash paid for interest8,237 3,118 
Non-cash investing and financing activities:
Establishment of lease liabilities in exchange for lease right-of-use assets$550 $18,808 
Write down of right-of-use assets and lease liabilities for lease termination(3,032)— 
Origination of short-term loan receivable for prepaid acquisitions— 40,000 
Conversion of note receivable to equity interest investment1,559 — 
Deferred tax effect resulting from exchange of Class A Units under Tax Receivable Agreement499 5,948 
Deferred tax effect from conversion of profits interests awards7,500 — 
Issuance of Class A Units for acquisition— 14,930 
Non-controlling interest assumed in business combination86,365 20,053 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$70,969 $102,777 
Restricted cash8,976 7,401 
Cash, cash equivalents, and restricted cash$79,945 $110,178 
12


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited), continued
(Dollar amounts in thousands)

Nine Months Ended September 30,
20222021
Supplemental disclosure of cash flow information:
Cash paid for income taxes$5,039 $3,492 
Cash paid for interest6,137 8,066 
Non-cash investing and financing activities:
Establishment of lease liabilities in exchange for lease right-of-use assets$19,216 $— 
Origination of short-term loan receivable for prepaid acquisitions40,000 — 
Deferred tax effect resulting from exchange of Class A Units under Tax Receivable Agreement6,754 — 
Settlement of accrued performance allocations compensation liability with equity— 14,247 
Derecognition of Bridge Debt Strategies Fund GP LLC— 2,337 
Issuance of Class A Units for acquisition14,930 — 
Non-controlling interest assumed in business combination20,053 — 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$191,493 $188,338 
Restricted cash8,966 5,450 
Cash, cash equivalents, and restricted cash$200,459 $193,788 
1311


BRIDGE INVESTMENT GROUP HOLDINGS INC.
Notes to Condensed Consolidated and Combined Financial Statements
1.    ORGANIZATION
Bridge Investment Group Holdings Inc. (the(“we,” “us,” “our,” the “Company” or “Bridge”) is a leading, vertically integrated real estatealternative investment manager, diversified across specialized asset classes. Our business operation includesBridge combines its nationwide operating platform with dedicated teams of investment professionals focused on various specialized and synergistic investment platforms, including Multifamily, Workforce and Affordable Housing, Seniors Housing, Office, Development, Net Lease Income, Logistics, Debt Strategies, Agency MBS, Single-Family Rental, PropTechProperty Technology, Renewable Energy and Solar Infrastructure. We provide investors with a diverse range of real estate investment products managed by our dedicated, specialized and synergistic investment teams.Secondaries. Our broad range of products and vertically integrated structure allow us to capture new market opportunities and serve investors with various investment objectives. 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 organically develop and strategically acquire an array of investment platforms focused on sectors of the U.S. real estate market and secondaries investments that we believe are the most attractive.
The Company was incorporated as a Delaware corporation on March 18, 2021, for the purpose of facilitating the Company’s initial public offering (“IPO”) and other related transactions in order to carry on the business of Bridge Investment Group Holdings LLC (formerly known as Bridge Investment Group LLC, or, the “Operating Company”), and its wholly owned subsidiaries.
The Company’s principal asset is a controlling financial interest in the Operating Company through its ownership of the Operating Company’s Class A common units (“Class A Units”) and 100% of the Class B common units (“Class B Units”) (voting only). The Company isacts as the sole managing member of the Operating Company and, its only material asset is its ownership interest in the Operating Company. As the sole managing member of the Operating Company, Bridge Investment Group Holdings Inc.as a result, indirectly operates and controls all of the Operating Company’s business and affairs.

affairs and its direct and indirect subsidiaries. As a result, the Company consolidates the financial results of the Operating Company and reports non-controlling interests related to the Class A Units. The assets and liabilities of the Operating Company represent substantially all of the Company’s consolidated assets and liabilities, with the exception of certain deferred income taxes and payables due to affiliates pursuant to the Tax Receivable Agreement. Refer to Note 15, “Income Taxes,” for additional information. As of June 30, 2023, the Company held approximately 25% of the economic interest in the Operating Company. To the extent the Operating Company’s members exchange their Class A Units into our Class A common stock in the future, the Company’s economic interest in the Operating Company will increase.
The Operating Company is the ultimate controlling entity, through its wholly owned subsidiary Bridge Fund Management Holdings LLC, of the following investment manager entities, which we refer to collectively as the Fund Managers: Bridge Multifamily Fund Manager LLC, Bridge Seniors Housing Fund Manager LLC (“BSHM”), Bridge Debt Strategies Fund Manager LLC, Bridge Office Fund Manager LLC (“BOFM”), Bridge Development Fund Manager LLC, Bridge Agency MBS Fund Manager LLC, Bridge Net Lease Industrial Fund Manager LLC, Bridge Logistics Properties Fund Manager LLC, Bridge Single-Family Rental Fund Manager LLC, Bridge Investment Group Ventures Fund Manager LLC, and Bridge Renewable Energy Fund Manager LLC and Newbury Partners-Bridge LLC (together, the “Fund Managers”). The Fund Managers provide real estate and fund investment advisory services to multiple investment funds and other vehicles, including joint venture real estate projects, separately managed accounts and privately offered real estate-related limited partnerships, including any parallel investment vehicles and feeder funds (collectively, the “funds”). The Operating Company is entitled to a pro rata portion of the management fees ofearned from providing these services to the funds based on its ownership in the Fund Managers.Managers, which ranges from 60% to 100%.
Each time that we establish a new fund, our direct owners establish a new general partner for that fund (each, a “General Partner”). We refer to these general partnersGeneral Partners collectively as the “Bridge GPs.” The Operating Company and the Bridge GPs are under common control by the direct owners of the Operating Company and the Bridge GPs. Under the terms of the Bridge GP operating agreements, theythe General Partners are entitled to performance fees from the funds once certain threshold returns are achieved for the limited partners.
12


Reorganization in Connection with IPO
In connection with the IPO, the Company completed a series of organizational transactions (the “Transactions”). The Transactions included:
The Operating Company amended and restated its existing limited liability company agreement to, among other things, (1) convert the Operating Company to a limited liability company organized under the laws of the State of Delaware, (2) change the name of the Operating Company from “Bridge Investment Group LLC” to “Bridge Investment Group Holdings LLC,” (3) convert all existing ownership interests in the Operating Company into 97,463,981 Class A common units (“Class A Units”)Units and a like amount of Class B common units (“Class B Units”)Units of the Operating Company and (4) appoint the Company as the sole managing member of the Operating Company upon its acquisition of Class A Units and Class B Units (“LLC Interests;Interests”);
The Company amended and restated its certificate of incorporation to, among other things, provide for (1) the recapitalization of the Company’s outstanding shares of existing common stock into one share of our Class A common stock, (2) the authorization of additional shares of our Class A common stock, with each share of our Class A common stock entitling its holder to one vote per share on all matters presented to the Company’s stockholders generally and (3) the authorization of shares of our Class B common stock, with each share of our Class B common stock entitling its holder to ten votes per share on all matters presented to the Company’s stockholders generally, and that shares of our Class B common stock may only be held by the Continuing Equity Ownerssuch direct and indirect holders of Class A Units and our Class B common stock as may exchange at each of their respective options (subject in certain circumstances to time-based vesting requirements and certain other restrictions), in whole or in part from time to time, their Class A Units (along with an equal number of shares of our Class B common stock (and such shares shall be immediately cancelled)) for, at our election, cash or newly issued shares of our Class A common stock) and their respective permitted transferees;transferees (collectively, the “Continuing Equity Owners”);
14


A series of transactions were effectuated such that, among other things, direct and indirect owners of interests in the Operating Company, various fund manager entities, and certain Bridge GPs (the “Contributed Bridge GPs”) contributed all or part of their respective interests to the Operating Company shares of our Class B common stock and Class A Units, a portion of which were further contributed to the Company in exchange for shares of our Class A common stock; and
The Company entered into (1) a stockholders agreement with certain of the Continuing Equity Owners (including each of our then executive officers), (2) a registration rights agreement with certain of the Continuing Equity Owners (including each of our then executive officers) and (3) a tax receivable agreement with the Operating Company and the Continuing Equity Owners, as amended and restated (the “Tax Receivable Agreement” or “TRA”).
Initial Public Offering
On July 20, 2021, the Company completed its initial public offering ofIPO, in which it sold 18,750,000 shares of our 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 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 IPO price per share of our Class A common stock in the IPO, less the underwriting discounts and commissions and estimated offering expenses. The Operating Company used net proceeds from the public offering to pay approximately $139.9 million in cash to redeem certain of the Class A Units held directly or indirectly by certain of the owners of LLC Interests in the Operating Company, prior to the IPO (collectively, “Original Equity Owners”). Refer to Note 16, “Shareholders’ Equity,” for additional information.
In connection with the IPO, owners of the Contributed Bridge GPs contributed 24% to 40% of 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 combined financial statements prior to the IPO include 100% of the operations of the Contributed Bridge GPs for the periods presented on the basis of common control.
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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 used 100% of the net proceeds of approximately $18.2 million, after taking into account the underwriting discounts and commissions and estimated offering expenses, to purchase 1,416,278 newly issued Class A Units directly from the Operating Company, at a price per Class A Unit equal to the IPO price per share of our Class A common stock in the IPO, less the underwriting discounts and commissions and estimated offering expenses payable by the Company. The Operating Company used all of the net proceeds from the sale of Class A Units to the Company related to this over-allotment option to redeem certain of the Class A Units held directly or indirectly by certain of the Original Equity Owners.
Prior to the IPO, the Operating Company and the then-existing Bridge GPs were under common control by the Original Equity Owners (the “Common Control Group”). The Original Equity Owners had the ability to control the Operating Company and each applicable Bridge GP and manage and operate these entities through the Fund Managers, a common board of directors, common ownership, and shared resources and facilities. The Operating Company and the then-existing Bridge GPs represented the predecessor history for the consolidated operations. As a result, the financial statements for the periods prior to the IPO are the combined financial statements of the Operating Company and the then-existing Bridge GPs, as applicable, as the predecessor to the Company for accounting and reporting purposes. We carried forward unchanged the value of the related assets and liabilities recognized in the Contributed Bridge GPs’ financial statements prior to the IPO into our financial statements. We have assessed the Contributed Bridge GPs for consolidation subsequent to the Transactions and IPO and have concluded that the Contributed Bridge GPs represent variable interests for which the Operating Company is the primary beneficiary. As a result, the Operating Company consolidates the Contributed Bridge GPs following the Transactions. BDS I GP LLC was not contributed as part of the Transactions and as such, was derecognized upon the completion of the IPO.
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 combined statement of operations. The carrying amounts of the non-controlling interest in BSHM and BOFM were adjusted to zero.
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Following the Transactions and the IPO, the Company became a holding company whose principal asset is a controlling financial interest in the Operating Company through its ownership of the Operating Company’s Class A Units and 100% of the Class B Units (voting only). The Company acts as the sole managing member of the Operating Company and, as a result, indirectly operates and controls all of the Operating Company’s business and affairs and its direct and indirect subsidiaries. As a result, the Company consolidates the financial results of the Operating Company and reports non-controlling interests related to the Class A Units. The assets and liabilities of the Operating Company represent substantially all of the Company’s consolidated assets and liabilities, with the exception of certain deferred income taxes and payables due to affiliates pursuant to the Tax Receivable Agreement. Refer to Note 15, “Income Taxes,” for additional information. As of September 30, 2022, the Company held approximately 23% of the economic interest in the Operating Company. To the extent the Operating Company’s members exchange their Class A Units into the Company’s Class A common stock in the future, the Company’s economic interest in the Operating Company will increase.
2.    SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation — The Operating Company and the Contributed Bridge GPs were historically under common control. Prior to the IPO, the financial statements were the combined financial statements of the Operating Company and the then-existing Contributed Bridge GPs. Subsequent to the IPO, the financial statements are the consolidated financial statements of the Company and its subsidiaries. The accompanying unaudited condensed consolidated and combined financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Management believes it has made all necessary adjustments (consisting of only normal recurring items) such that the condensed consolidated and combined financial statements are presented fairly and that estimates made in preparing the condensed consolidated and combined financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The condensed consolidated and combined financial statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the Company’s audited consolidated and combined financial statements included in its annual report on Form 10-K for the fiscal year ended December 31, 2021,2022, filed with the Securities and Exchange Commission (“SEC”).
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Reclassifications
— Certain prior year amounts on the condensed consolidated balance sheet have been reclassified to conform with the presentation as of September 30, 2022. These prior year reclassifications included combining current and long-term asset classifications to present a non-classified balance sheet and to condense tenant improvements, furniture and equipment with other assets. These reclassifications did not affect net income or shareholders’ equity as of or for the periods ended September 30, 2022 and December 31, 2021, respectively.
Principles of Consolidation — The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary, or if the Company has the power to control an entity through a majority of voting interest or through other arrangements.
Variable Interest Entities — A VIE is consolidated by its primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through (a) power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (b) obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. The Company also considers interests held by its related parties, including de facto agents. The Company may perform a related party analysis to assess whether it is a member of a related party group that collectively meets the power and benefits criteria and, if so, whether the Company is most closely associated with the VIE. In performing the related party analysis, the Company considers both qualitative and quantitative factors, including, but not limited to: the amount and characteristics of its investment relative to the related party; the Company’s and the related party’s ability to control or significantly influence key decisions of the VIE including consideration of involvement by de facto agents; the obligation or likelihood for the Company or the related party to fund operating losses of the VIE; and the similarity and significance of the VIE’s business activities to those of the Company and the related party. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, may involve significant judgment, including the determination of which activities most significantly affect the entities’ performance, and estimates about the current and future fair values and performance of assets held by the VIE.
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Voting Interest Entities — Unlike VIEs, voting interest entities have sufficient equity to finance their activities and equity investors exhibit the characteristics of a controlling financial interest through their voting rights. The Company consolidates such entities when it has the power to control these entities through ownership of a majority of the entities’ voting interests or through other arrangements.
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 interest in the entity are recorded at fair value upon initial consolidation. Any existing equity interest held by the Company in the entity prior to the Company obtaining control will be remeasured at fair value, which may result in a gain or loss recognized upon initial consolidation. The Company may also deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any interests retained.
Non-controlling Interests — Non-controlling interests represent the share of consolidated entities owned by third parties. Bridge recognizes each non-controlling shareholder’s respective ownership at the estimated fair value of the net assets at the date of formation or acquisition. Non-controlling interests are subsequently adjusted for the non-controlling shareholder’s additional contributions, distributions and their share of the net earnings or losses of each respective consolidated entity. Net income is allocated to non-controlling interests based on the ownership interest during the period. The net income that is not attributable to Bridge is reflected in net income attributable to non-controlling interests in the condensed consolidated statements of operations and comprehensive income and shareholders’ equity.
Non-controlling interests include non-controlling interests attributable to Bridge Investment Group Holdings Inc. and non-controlling interests attributable to the Operating Company. Non-controlling interests attributable to the Operating Company represent third-party equity interests in the Operating Company subsidiaries related to general partner and fund manager equity interests as well as profits interestinterests awards. Non-controlling interests attributable to Bridge Investment Group Holdings Inc. include equity interests in the Operating Company owned by third-party investors. Non-controlling interests in the Operating Company are adjusted to reflect theirthird-party investors’ ownership percentage in the Operating PartnershipCompany at the end of the period, through a reallocation between controlling and non-controlling interest in the Operating Partnership,Company, as applicable.
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Use of Estimates — The preparation of condensed consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that estimates utilized in the preparation of the condensed consolidated financial statements are prudent and reasonable. Such estimates include those used in the valuation of investments, which directly affect accrued performance allocations and related compensation, the carrying amount of the Company's equity method investments, the measurement of deferred tax balances (including valuation allowances), and the accounting for goodwill, all of which involve a high degree of judgement and complexity and may have a significant impact on net income. Actual results could differ from those estimates and such differences could be material.
TheGlobal markets are experiencing continued volatility driven by weakening U.S. fundamentals, rising geopolitical risks in Europe, ongoing economic impacts of the COVID-19 pandemic, and international conflicts, among other factors, have caused uncertainty and disruptionsoftening growth in Asia, global supply chain disruptions, labor shortages, rising commodity prices, availability of debt financing in the global economycapital markets, high inflation and financial markets.increasing interest rates. As a result, management’s estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period.
Cash and Cash Equivalents — The Company considers all cash on hand, demand deposits with financial institutions and short-term highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are financial instruments that are exposed to concentrations of credit risk. Cash balances may be invested in money market accounts that are not insured. The Company holds and invests its cash with high-credit quality institutions in amounts that regularly exceed the amount insured by the Federal Deposit Insurance Corporation for a single financial institution. However, the Company has not realized any losses in such cash investments or accounts and believes it is not exposed to any significant credit risk.
Restricted Cash — Restricted cash primarily consists of a collateral trust account for the benefit of the insurance carriers associated with BIGRM.Bridge Investment Group Risk Management, Inc. (“BIGRM”). These funds are held as collateral for the insurance carriers in the event of a claim that would require a high deductible payment from BIGRM.
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Marketable Securities — The Company’s marketable securities are classified as trading securities and reported at fair value, with changes in fair value recognized through realized and unrealized gains (losses) in other income (expense). Fair value is based on quoted prices for identical assets in active markets. Realized gains and losses are determined on the basis for the actual cost of the securities sold. Dividends on equity securities are recognized as income when declared.
Fair Value — GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.
Financial assets and liabilities measured and reported at fair value are classified as follows:
Level 1 — Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level 2 inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Level 2 inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates.
Level 3 — Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available.
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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. Refer to Note 7, “Fair Value Measurements” for additional information.
Fair Value Option — The fair value option provides an option to elect fair value as a measurement alternative for selected financial instruments. Refer to Note 7, “Fair Value Measurements” for additional information. The fair value option may be elected only upon the occurrence of certain specified events, including when the Company enters into an eligible firm commitment, at initial recognition of 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.Notes Payable (as defined in Note 11). The carrying value of the General Partner notes payableNotes Payable represents the related General Partner lenders’ net asset value (“NAV”), in the respective fund and the General Partner lenders are entitled to receive distributions and carried interest. The NAV changes over time so marking the General Partner notes payableNotes Payable to fair value reflect these changes.
Receivables and Notes Receivable from Affiliates — Receivables consist principally of amounts due from the funds and other affiliates. These include receivables associated with fund or asset management fees, property management fees and other fees. Additionally, the Company is entitled to reimbursements and/or recovers certain costs paid on behalf of the private funds managed by the Company and related properties operated by the Company, which include: (i) organization and offering costs associated with the formation and offering; (ii) direct and indirect operating costs associated with managing the operations of the properties; and (iii) costs incurred in performing investment due diligence. During the normal course of business, the Company makes short-term uncollateralized loans to the funds for asset acquisitionacquisitions and working capital.
The Company also has notes receivable with employees to purchase an equity interest in the Company or its affiliates or managed funds. Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method.
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The Company facilitates the payments of these fees, which are recorded as receivables, principally from affiliated parties on the condensed 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 theThere were no material receivables were considered not collectible as of SeptemberJune 30, 20222023 and December 31, 2021.2022.
Accrued Performance Allocations — Performance allocations that are received in advance that remain subject to clawback are recorded as accrued performance allocations in the condensed consolidated balance sheets. 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 non-proportionate earnings allocation formula or a preferred return to certain investors. The Company’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Company calculates the accrued performance allocations that would be due to the Company for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as accrued performance allocations to reflect either (a) positive performance resulting in an increase in the accrued performance allocation to the general partner, or (b) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the accrued performance allocation to the general partner. In each scenario, it is necessary to calculate the accrued performance allocation on cumulative results compared to the accrued performance allocation recorded to date and make the required positive or negative adjustments. The Company ceases to record negative performance allocations once previously accrued performance allocations for such fund have been fully reversed. The Company is not obligated to pay guaranteed returns or hurdles in this situation, and therefore, cannot have negative performance allocations over the life of a fund. The carrying amounts of equity method investments are reflected in accrued performance allocations on the condensed consolidated balance sheets as of SeptemberJune 30, 20222023 and December 31, 2021,2022, which are based on asset valuations one quarter in arrears.
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Other Investments — A non-controlling, unconsolidated ownership interest in an entity may be accounted for using one of: (i) equity method where applicable; (ii) fair value option if elected; (iii) fair value through earnings if fair value is readily determinable, including election of NAV practical expedient where applicable; or (iv) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable.
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.
For certain equity method investments, the Company records its proportionate share of income on a one to three-monththree-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 consolidated and combined statements of cash flows under the cumulative earnings approach.
Changes in fair value of equity method investments are recorded as realized and unrealized gains (losses) in other income (expense) on the condensed consolidated and combined statements of operations.
Impairment of Investments
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.
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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 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.
Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) ASC 842”). ASC 842 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, ASC 842 was effective for annual reporting periods beginning after December 15, 2018. On June 3, 2020, the FASB extended the 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 elected to take advantage of the extended transition period afforded to EGCs and therefore adopted ASC 842 on January 1, 2022.
In July 2018, the FASB issued ASU 2018-11, Targeted Improvements to Topic 842, Leases (“ASU 2018-11”). This guidance allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. In addition, this guidance provides lessors with a practical expedient to not separate non-lease components from the associated lease components when certain criteria is met. The Company adopted ASC 842 on January 1, 2022, using the practical expedient to not apply the new lease standard in the comparative periods presented in the financial statements allowed for in ASU 2018-11. The Company also applied the package of practical expedients, which exempts the Company from having to reassess whether any expired or expiring contracts contain leases, revisit lease classification for any expired or expiring leases and reassess initial direct costs for any existing leases. The Company did not, however, elect the hindsight practical expedient to determine the lease terms for existing leases.
Upon adoption of ASC 842, the Company recorded a right-of-use (“ROU”) asset and lease liability of approximately $13.7 million and $15.8 million, respectively, which represents the aggregate discounted amount of the Company’s minimum lease obligations as of the adoption date. Included in the ROU asset was approximately $2.1 million of deferred rent and lease incentives, which was reclassified from other liabilities upon adoption of ASC 842; however, these amounts were not reclassified as of December 31, 2021, and are therefore not comparative. The adoption of this standard did not have a material impact on the condensed consolidated statement of operations for the three and nine months ended September 30, 2022, as all of the Company’s leases are still classified as operating leases, which under the new guidance will continue to be recognized as expense on a straight-line basis.
The Company determines whether an arrangement contains a lease at inception of the arrangement. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines the classification as either an operating or finance lease. The Company primarily enters into operating lease agreements, as the lessee, for office space and certain equipment. Operating leases are included in other assets and other liabilities in the condensed consolidated balance sheet. Certain leases include lease and non-lease components, which the Company accounts for separately. Lease ROUright of use (“ROU”) assets and lease liabilities are measured based on the present value of future minimum lease payments over the lease term at the commencement date. Leases may include options to extend or terminate the lease which are included in the ROU assets and lease liability when they are reasonably certain of exercise. Lease ROU assets are presented net of deferred rent and lease incentives. The Company uses its incremental borrowing rate based on information available at the inception date in determining the present value of future minimum lease payments. Operating lease expense associated with minimum lease payments is recognized on a straight-line basis over the lease term in general, administrative and other expenses in the condensed consolidated statements of income. Minimum lease payments for leases with an initial term of twelve months or less are not recorded in the condensed consolidated balance sheet. Refer to Note 17, “Commitments and Contingencies” for additional information.
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Business Combinations — The determination of whether an acquisition qualifies as an asset acquisition or business combination is an area that requires management’s use of judgment in evaluating the criteria of the screen test.
Definition of a Business — The Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business. If substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business. If not, for an acquisition to be considered a business, it would have to include an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., there is a continuation of revenue before and after the transaction). A substantive process is not ancillary or minor, cannot be replaced without significant costs, effort or delay or is otherwise considered unique or scarce. To qualify as a business without outputs, the acquired assets would require an organized workforce with the necessary skills, knowledge and experience that performs a substantive process.
Asset Acquisitions — For acquisitions that are not deemed to be businesses, the assets acquired are recognized based on their cost to the Company as the acquirer and no gain or loss is recognized. The cost of assets acquired in a group is allocated to individual assets within the group based on their relative fair values and does not give rise to goodwill. Transaction costs related to acquisition of assets are included in the cost basis of the assets acquired.
Acquisitions of Businesses — The Company accounts for acquisitions that qualify as business combinations by applying the acquisition method. Transaction costs related to acquisition of a business are expensed as incurred and excluded from the fair value of consideration transferred. The identifiable assets acquired, liabilities assumed and non-controlling interests in an acquired entity are recognized and measured at their estimated fair values. The excess of the fair value of consideration transferred over the fair values of identifiable assets acquired, liabilities assumed and non-controlling interests in an acquired entity, net of fair value of any previously held interest in the acquired entity, is recorded as goodwill. Such valuations require management to make significant estimates and assumptions.
Goodwill — Goodwill represents the excess amount of consideration transferred in a business combination above the fair value of the identifiable net assets. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had goodwill of $233.8 million and $56.0 million, and $9.8 million, respectively. In January 2022, the Company acquired a 60% interest in Gorelick Brothers Capital’s (“GBC”) asset and property management business. The acquisition of GBC was accounted for as a business combination and recorded pursuant to the acquisition method of accounting. A majority of the fair value of the purchase consideration was attributed to goodwill, which was due to synergies expected through the ability to provide a vertically integrated approach upon launching the Bridge Single-Family Rental (“Bridge SFR”) investment strategy. Refer to Note 8, “Business Combination and Goodwill” for further additional information on the GBC transaction. As of December 31, 2021, the Company had goodwill of $9.8 million related to the acquisitions of Bridge Property Management, L.C. (“BPM”) and Bridge Acquisitions, Asset Management, and Dispositions LLC (“BAA&D”) in 2012, and Bridge Commercial Real Estate LLC (“BCRE”) and affiliated companies in 2016.information.
Goodwill is assessed forThe Company performs its annual goodwill impairment at least annuallytest using a qualitative and, if necessary, a quantitative approach. As of September 30, 2022, the Company elected to change its accounting policy for the date of its annual impairment assessment from December 31 to October 1 of each year. The change in the annual impairment assessment date was to account for the complexity of the assessment, and in the event of a potential future impairment, to allow for appropriate time to determine the amount of such impairment prior to the Company’s year-end reporting requirements. As of September 30, 2022, or the date of the policy change, no impairment indicators were identified, nor did the policy change have a material affect on the Company’s condensed consolidated balance sheets, net income or shareholders’ equity as of or for the periods ended September 30, 2022 and December 31, 2021.
The Company performs its annual goodwill impairment testapproach as of October 1, or more frequently, if events and circumstances indicate that an impairment may exist. Goodwill is tested for impairment at the reporting unit level. The initial assessment for impairment under the qualitative approach is to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, a quantitative assessment is performed to measure the amount of impairment loss, if any. The quantitative assessment includes comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized equal to the lesser of (a) the difference between the carrying amount of the reporting unit and its fair value and (b) the total carrying amount of the reporting unit’s goodwill. The Company performed anits annual goodwill impairment assessment as of December 31, 2021,October 1, 2022, and determined that there was no impairment of goodwill.
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The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that it 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 SeptemberJune 30, 2022,2023, there were no indicators of goodwill impairment.
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Intangible Assets — The Company’s finite-lived intangible assets consist primarily of acquired contractual rights to earn future management and advisory fee income. Intangible assets with a finite life are amortized based on the pattern in which the estimated economic benefits of the intangible asset on a straight-line basis, ranging from 4 to 14 years. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the intangible. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset.
Revenue Recognition — Revenues consist of fund management fees, property management and leasing fees, construction management fees, development fees, transaction fees, insurance premiums, fund administration fees and other asset management and property income. The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied.
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 closed-end funds and managed accounts, generally changes from committed capital to invested capital with no change in the management fee rate. The fees are generally based on a quarterly measurement period and amounts are paid in advance of recognizing revenue. Fund management fees are recognized as revenue in the period advisory services are rendered, subject to our assessment of collectability. Fund management fees also include management fees for joint ventures and separately managed accounts. For Company sponsored closed-end funds, the capital raising period is generally 18 to 24 months. The Fund Managers charge catch-up management fees to investors who subscribe in later closings in amounts equal to the fees they would have paid if they had been in the initial closing (plus interest as if the investor had subscribed in the initial closing). Catch-up management fees are recognized in the period in which the limited partner subscribes to the fund. Fund management fees are presented net of placement agent fees, where the Company is acting as an agent in the arrangement.
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.
Fund Administration Fees — The Company earns fund administration fees as services are provided under the terms of the respective fund administration agreement. Fund administration fees include a fixed annual amount plus a percentage of invested or deployed capital. Fund administration fees also include investor services fees which are based on an annual fee per investor. Fees are earned as services are provided and are recognized on a straight-line basis.
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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.
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Other Asset Management and Property Income — Other Asset Managementasset management and Property Incomeproperty income is comprised of, among other things, interest on catch-up management fees, fees related to in-house legal and tax professional fees, which is generally billed on an hourly rate to various funds and properties managed by affiliates of the Company, and other miscellaneous fees.
Investment Income — Investment 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 Allocations — The Company accounts for accrued performance obligations, which represents a performance-based capital allocation from a fund General Partner to the Company, as earnings from financial assets within the scope of Accounting Standards Codification (“ASC”) 323, Investments—Equity Method and Joint Ventures. The underlying investments in the funds upon which the allocation is based reflect valuations on a three-month lag. The Company recognizes performance allocations as a separate revenue line item in the condensed consolidated and combined statements of operations with uncollected carried interest as of the reporting date reported within investments inaccrued performance allocations on the condensed consolidated balance sheet.sheets.
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, 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 consolidated balance sheet.sheets.
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.
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Employee Compensation and Benefits — Employee compensation and benefits comprisesinclude salaries, bonus (including discretionary awards), related benefits, share-based compensation, and cost of processing payroll. Bonuses are accrued over the employment period to which they relate. Equity-classified awards granted to employees that have a service condition are measured at fair value at date of grant and remeasured at fair value only upon a modification of the award. The fair value of profits interestinterests awards is determined using a Monte Carlo valuation at date of grant or date of modification when applicable. The fair value of Restricted Stock Units (“RSUs”) and Restricted Stock Awards is determined using the Company's closing stock price on the grant date or date of modification. The Company recognizes compensation expense over the requisite service period of the awards, with the amount of compensation expense recognized at the end of a reporting period at least equal to the fair value of the portion of the award that has vested through that date. Compensation expense is adjusted for actual forfeitures upon occurrence. Refer to Note 20, “Share-Based Compensation and Profits Interests,” for additional information.
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Incentive Fees and Performance Allocations Compensation — 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.
A portion of the performance allocations earned is awarded to employees. The Company evaluates performance allocations to determine if they are compensatory awards or equity-classified awards based on the underlying terms of the award agreements on the grant date.
Performance allocations 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.
Third-party Operating Expenses — Third-party operating expenses represent transactions, largely operation and leasing of assets, with third-party operators of real estate owned by the funds where the Company was determined to be the principal rather than the agent in the transaction.
Realized and Unrealized Gains (Losses) — Realized gains (losses) occur when the Company redeems all or a portion of an investment or when the Company receives cash income, such as dividends or distributions. Unrealized gains (losses) result from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as realized gains (losses) in the condensed consolidated and combined statements of operations.
Finally, the realized and unrealized change in gains (losses) associated with the financial instruments that we elect the fair value option is also included in realized and unrealized gains (losses).
Income Taxes — Prior to the IPO, other than our subsidiaries BIGRM and Bridge PM, Inc., the Operating Company and its subsidiaries were limited liability companies or limited partnerships and, as such, were not subject to income taxes and the individual owners of the Operating Company and its subsidiaries were required to report their distributive share of the Operating Company’s realized income, gains, losses, deductions, or credits on their individual income tax returns. In preparation for the IPO, the Company was incorporated as a corporation for U.S. federal income tax purposes and from the IPO therefore is subject to U.S. federal and state income taxes on its share of taxable income generated by the Operating Company.
The Operating Company is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by the Operating Company flows through to its members, including the Company, and is generally not subject to U.S. federal or state income tax at the level of the Operating Company. The Operating Company’s non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to local or non-U.S. income taxes. Additionally, certain subsidiaries are subject to local jurisdiction taxes at the entity level, with the related tax provision reflected in the condensed consolidated and combined statements of operations. As a result, the Operating Company does not generally record U.S. federal and state income taxes on its income or that of its subsidiaries, except for certain local and foreign income taxes discussed above.
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 bases, 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. The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of units in the Operating Company.
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Deferred income tax assets is primarily comprised of the TRA between the Operating Company and each of the Continuing Equity Owners and deferred income taxes related to the operations of BIGRM.Bridge Investment Group Risk Management, Inc. (“BIGRM”). Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent on the amount, timing and character of the Company’s future taxable income. When evaluating the realizability of deferred tax assets, all evidence – both positive and negative – is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies.
The Company is subject to the 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 exist that do not meet the minimum threshold for recognition of the related tax benefit, a liability is recorded in the condensed consolidated and combined financial statements. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as general, administrative and other expenses in the condensed consolidated and combined statements of operations. Refer to Note 15, “Income Taxes” for additional information.
Other than BIGRM and Bridge PM, Inc. (“BPM”), the Operating Company and its subsidiaries are limited liability companies and partnerships, as such, are not subject to income taxes; the individual members of the 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 TRA 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 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 our 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 TRA. The Company will retain the benefit of the remaining 15% of these net cash tax savings under the TRA.
Segments — The Company operates as one business, a fully integrated real estate investment manager. The Company’s chief operating decision maker, which is the executive chairman, utilizes a consolidated approach to assess financial performance and allocate resources. As such, the Company operates as one business segment.
Earnings Per Share Basic earnings per share is calculated by dividing net income available to our Class A common stockholders by the weighted-average number of our Class A common shares outstanding for the period.
Diluted earnings per share of our Class A common stock is computed by dividing net income available to our Class A common stockholders after giving consideration to the reallocation of net income between holders of our Class A common stock and non-controlling interests, by the weighted-average number of shares of our Class A common stock outstanding during the period adjusted to give effect to potentially dilutive securities, if any. Potentially dilutive securities include unvested Restricted Stock Awards, RSUs, and Class A Units exchangeable on a one-for-one basis with shares of our Class A common stock. The effect of potentially dilutive securities is reflected in diluted earnings per share of our Class A common stock using the more dilutive result of the treasury stock method or the two-class method.
Unvested share-based payment awards, including Restricted Stock Awards and RSUs, that contain non-forfeitable rights to dividends (whether paid or unpaid) are participating securities. Outstanding Class A Units are also considered participating securities. As a result of being participating securities, Restricted Stock Awards, RSUs and Class A Units are considered in the computation of earnings per share of our Class A common stock pursuant to the two-class method.
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Recently Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which has subsequently been amended. The amended guidance requires a company to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Prior to ASU 2016-13, GAAP required an “incurred loss” methodology that delayed recognition until it was probable a loss had been incurred. Under ASU 2016-13, the allowance for credit losses must be deducted from the amortized cost of the financial asset to present the net amount expected to be collected and the income statement will reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. Financial instruments measured at fair value are not within the scope of this guidance. The guidance was effective for the Company on January 1, 2023, and was adopted using a modified retrospective transition method. The adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements of the Company.
Upon adoption of ASU 2016-13, the Company assessed the collection risk characteristics of its outstanding receivables and allocated them into the following pools of receivables: receivables from affiliates, notes receivables from affiliates and notes receivables from employees. The Company’s receivables are predominantly with its investment funds, which have low risk of credit loss based on the Company’s historical experience. Historical credit loss data may be adjusted for current conditions and reasonable and supportable forecasts, including the Company’s expectation of near-term realization based on the liquidity of the affiliated investment funds.
3.    REVENUE
The Company earns base management fees for the day-to-day operations and administration of its managed private funds and other investment vehicles. Other revenue sources include construction and development fees, insurance premiums, fund administration fees, and other asset management and property income, which includes property management and leasing fees, and are described in more detail in Note 2, “Significant Accounting Policies”. The following tables present revenues disaggregated by significant product offerings, which align with the Company’s performance obligations and the basis for calculating each amount for the three and ninesix months ended SeptemberJune 30, 20222023 and 20212022 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
FUND MANAGEMENT FEES2022202120222021
Funds$62,642 $38,827 $161,468 $101,808 
Joint ventures and separately managed accounts1,454 1,749 4,708 4,155 
Total fund management fees$64,096 $40,576 $166,176 $105,963 

Three Months Ended September 30,Nine Months Ended September 30,
PROPERTY MANAGEMENT AND LEASING FEES2022202120222021
Seniors Housing$6,869 $6,433 $21,035 $19,589 
Multifamily6,564 4,536 17,841 12,951 
Office2,979 11,541 11,326 21,052 
Single-Family Rental2,376 — 6,481 — 
Total property management and leasing fees$18,788 $22,510 $56,683 $53,592 
Three Months Ended June 30,Six Months Ended June 30,
FUND MANAGEMENT FEES2023202220232022
Funds$59,176 $47,617 $111,349 $98,826 
Joint ventures and separately managed accounts1,141 1,763 2,817 3,254 
Total fund management fees$60,317 $49,380 $114,166 $102,080 
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
CONSTRUCTION MANAGEMENT FEES2022202120222021
PROPERTY MANAGEMENT AND LEASING FEESPROPERTY MANAGEMENT AND LEASING FEES2023202220232022
MultifamilyMultifamily$2,692 $1,295 $5,975 $3,353 Multifamily$6,871 $5,964 $13,587 $11,277 
Seniors HousingSeniors Housing6,662 7,059 13,530 14,165 
OfficeOffice555 730 1,457 2,308 Office3,042 4,083 6,956 8,347 
Seniors Housing100 72 228 327 
Single-Family RentalSingle-Family Rental67 — 67 — Single-Family Rental2,555 2,510 4,956 4,106 
Total construction management fees$3,414 $2,097 $7,727 $5,988 
Total property management and leasing feesTotal property management and leasing fees$19,130 $19,616 $39,029 $37,895 
Three Months Ended September 30,Nine Months Ended September 30,
TRANSACTION FEES2022202120222021
Acquisition fees$7,869 $19,838 $39,540 $37,627 
Brokerage fees3,663 2,069 11,632 5,848 
Total transaction fees$11,532 $21,907 $51,172 $43,475 
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Three Months Ended June 30,Six Months Ended June 30,
CONSTRUCTION MANAGEMENT FEES2023202220232022
Multifamily$1,791 $1,900 $4,029 $3,282 
Office694 468 1,523 902 
Seniors Housing154 58 299 128 
Logistics211 — 282 — 
Other52 — 54 — 
Total construction management fees$2,902 $2,426 $6,187 $4,312 
Three Months Ended June 30,Six Months Ended June 30,
TRANSACTION FEES2023202220232022
Acquisition fees$4,267 $15,075 $6,442 $31,672 
Brokerage fees415 2,568 617 7,969 
Total transaction fees$4,682 $17,643 $7,059 $39,641 
For the three and ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, no individual client represented 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 SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had $8.5$15.2 million and $3.2$8.7 million, respectively, of deferred revenues, which is included in other liabilities inon the condensed consolidated balance sheets for the periods then ended. During the ninethree and six months ended SeptemberJune 30, 2022,2023, the Company recognized $3.2$4.7 and $7.9 million, respectively, as revenue from amounts included in the deferred revenue balance as of December 31, 2021.2022. The Company expects to recognize deferred revenues within a year of the balance sheet date.
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4.    MARKETABLE SECURITIES
The Company invests a portion of the premiums received at BIGRM in exchange traded funds and mutual funds. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company’s investment securities are summarized as follows (in thousands):
CostUnrealized
Gains
Unrealized
Losses
Fair
Value
CostUnrealized (Gains) LossesFair Value
September 30, 2022:
June 30, 2023:June 30, 2023:
Common shares in publicly traded companyCommon shares in publicly traded company$77 $— $— $77 Common shares in publicly traded company$152 $10 $162 
Exchange traded fundsExchange traded funds1,422 — (48)1,374 Exchange traded funds1,824 — 1,824 
Mutual fundsMutual funds8,456 — (398)8,058 Mutual funds11,005 (367)10,638 
Total marketable securitiesTotal marketable securities$9,955 $— $(446)$9,509 Total marketable securities$12,981 $(357)$12,624 
December 31, 2021:
December 31, 2022:December 31, 2022:
Common shares in publicly traded companyCommon shares in publicly traded company$132 $(46)$86 
Exchange traded fundsExchange traded funds$1,159 $16 $(4)$1,171 Exchange traded funds2,171 (54)2,117 
Mutual fundsMutual funds6,873 18 (27)6,864 Mutual funds12,884 (473)12,411 
Total marketable securitiesTotal marketable securities$8,032 $34 $(31)$8,035 Total marketable securities$15,187 $(573)$14,614 
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5.    INVESTMENTS
The Company has interests in 152181 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 sponsoredBridge-sponsored funds. The Company’s investments are summarized below (in thousands):
Carrying ValueCarrying Value
InvestmentsInvestmentsSeptember 30, 2022December 31, 2021InvestmentsJune 30, 2023December 31, 2022
Accrued performance allocations(1)
Accrued performance allocations(1)
$559,160 $439,548 
Accrued performance allocations(1)
$428,414 $554,723 
Other investments:Other investments:Other investments:
Partnership interests in Company-sponsored funds(2)
Partnership interests in Company-sponsored funds(2)
64,465 31,984 
Partnership interests in Company-sponsored funds(2)
182,318 65,289 
Investments in third-party partnerships(3)
Investments in third-party partnerships(3)
11,569 7,701 
Investments in third-party partnerships(3)
14,153 11,798 
Other(4)
Other(4)
7,364 4,321 
Other(4)
11,379 8,369 
Total other investmentsTotal other investments$83,398 $44,006 Total other investments$207,850 $85,456 
(1)Represents various investment accounts inheld by the Bridge GPs for carried interest in the Contributed Bridge GPBridge-sponsored funds. There is a disproportionate allocation of returns to the Company as general partner or equivalent based on the extent to which cumulative performance of the fund exceeds minimum return hurdles. Investment is valued using NAV of the respective vehicle.vehicle, which are based on asset valuations one quarter in arrears.
(2)Partnership interests in Company-sponsored funds are valued using NAV of the respective vehicle.
(3)Investments in limited partnership interest in third-party private property technology (“PropTech”) venture capital firms are valued using NAV of the respective vehicle.
(4)Other investments are accounted for using the measurement alternative to measure at cost adjusted for any impairment and observable price changes.
The Company recognized incomea loss related to its accrued performance allocations and other investments of $6.3 million and $86.6$12.2 million for the three months ended SeptemberJune 30, 20222023 and 2021, respectively, and $188.8 million and $192.8income of $107.2 million for the ninethree months ended SeptemberJune 30, 2022, and 2021, respectively, of which $5.9a loss of $10.9 million and $84.0income of $103.7 million for three months ended SeptemberJune 30, 2023 and 2022, respectively, related to accrued performance allocations recognized under the equity method. The Company recognized a loss related to its accrued performance allocations and other investments of $114.6 million for the six months ended June 30, 2023 and income of $182.4 million for the six months ended June 30, 2022, and 2021, respectively, and $184.4of which a loss of $114.7 million and $183.2income of $178.5 million for ninethree months ended SeptemberJune 30, 20222023 and 2021,2022, respectively, related to accrued performance allocations recognized under the equity method.
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Of the total accrued performance allocations balance as of SeptemberJune 30, 20222023 and December 31, 2021, $62.82022, $47.5 million and $41.0$66.8 million, respectively, were payable to affiliates and are included in accrued performance allocations compensation in the condensed consolidated balance sheets as of the periods then ended.
Fair value of the accrued performance allocations 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. Subsequent to the quarter ended June 30, 2023, Bridge Multifamily Fund III sold the majority of its assets to a newly formed continuation vehicle managed by Bridge as further described in Note 22. This transaction included a liquidity discount, which is expected to reduce our total accrued performance allocation by approximately 6% to 8%, and is not yet reflected in the reported amounts. In addition, any other changes in the markets in which our managed funds operate, and the impact market conditions have on underlying asset valuations, may not yet be reflected in reported amounts.
The Company evaluates each of its equity method investments, excluding Accrued Performance Allocations,accrued performance allocations, to determine if any were significant as defined by the SEC. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, no individual equity method investment held by the Company met the significance criteria. As a result, the Company is not required to provide separate financial statements for any of its equity method investments.
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6.    NOTES RECEIVABLES FROM AFFILIATES
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had the following notes receivable from affiliates outstanding (in thousands):
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
Bridge Logistics U.S. Venture I$29,325 $31,644 
Bridge Single-Family Rental Fund IVBridge Single-Family Rental Fund IV$21,624 $40,566 
Bridge Office Fund IIBridge Office Fund II17,000 3,000 Bridge Office Fund II13,000 11,000 
Bridge Single-Family Rental Fund IV15,000 — 
Bridge Office Fund IBridge Office Fund I15,000 6,500 
Bridge Net Lease Industrial Income FundBridge Net Lease Industrial Income Fund3,500 — 
Bridge Debt Strategies Fund IIBridge Debt Strategies Fund II— 5,000 
Bridge Multifamily Fund V— 55,000 
Bridge Seniors Housing Fund III— 24,500 
Total short-term notes receivables from affiliatesTotal short-term notes receivables from affiliates$61,325 $114,144 Total short-term notes receivables from affiliates$53,124 $63,066 
Notes receivables from employeesNotes receivables from employees4,149 4,364 Notes receivables from employees5,906 4,178 
Total notes receivable from affiliatesTotal notes receivable from affiliates$65,474 $118,508 Total notes receivable from affiliates$59,030 $67,244 
Interest on the short-term notes receivables from affiliates accrues at a weighted-average fixed rate of 4.025%4.94% and 4.82% per annum. Asannum as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively. As of June 30, 2023 and December 31, 2022, the Company had approximately $0.7$1.1 million and $0.3$0.4 million, respectively, of interest receivable outstanding, which is included in other assets in the accompanying condensed consolidated balance sheets for the periods then ended.
During 2021,2023 and 2022, the Company executed multiple notes with employees, none of whom are executive officers or immediate family members of executive officers, which were primarily used to invest in the Company or the Operating Company. As of SeptemberJune 30, 2023 and December 31, 2022, the aggregate outstanding principal amount outstanding was $4.1 million.$5.9 million and $4.2 million, respectively. These employee notes maturereceivable have staggered maturity dates beginning in 2027 and2026. Certain employee loans are interest-only for the first two years after origination, while all other employee loans accrue interest on a monthly basis after origination. The employee notes receivable accrued interest at a weighted-average rate of 5.00% and 4.025% per annum.annum as of June 30, 2023 and December 31, 2022, respectively.
7.    FAIR VALUE MEASUREMENTS
Equity Securities: Equity securities traded on a national securities exchange are stated at the last reported sales price as of the condensed consolidated balance sheet dates, June 30, 2023 and December 31, 2022. To the extent these equity securities are actively traded and valuation adjustments are not applied, they are classified as Level I.
Exchange traded funds: Valued using the market price of the fund as of the condensed consolidated balance sheet dates, SeptemberJune 30, 20222023 and December 31, 2021.2022. Exchange traded funds valued using quoted prices are classified within Level 1 of the fair value hierarchy.
Mutual funds: Valued at the number of shares of the underlying fund multiplied by the closing NAV per share quoted by that fund as of the condensed consolidated balance sheet dates, SeptemberJune 30, 20222023 and December 31, 2021.2022. The value of the specific funds the Company has invested in are validated with a sufficient level of observable activity to support classification of the fair value measurement as Level 1 in the fair value hierarchy.
Accrued performance allocations and partnership interests: The Company generally values its investments in accrued performance allocations and partnership interests using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining a fair value. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the NAV per share practical expedient.
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Other investments: Investments are accounted for using the measurement alternative to measure at cost adjusted for any impairment and observable price changes. Unrealized gains or losses on other investments are included in unrealized gains (losses) on the condensed consolidated and combined statements of operations.
General Partner notes payable:Notes Payable: Valued using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value.
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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.
The following table presents assets that are measured at fair value on a recurring basis as of SeptemberJune 30, 20222023 and December 31, 20212022 (in thousands):
Level 1Level 2Level 3Measured at
NAV
Total
September 30, 2022
Assets:
Common shares in publicly traded company$77 $— $— $— $77 
Exchange traded funds1,374 — — — 1,374 
Mutual funds8,058 — — — 8,058 
Accrued performance allocations— — — 559,160 559,160 
Partnership interests— — — 76,034 76,034 
Other investments— — 7,364 — 7,364 
Total assets at fair value$9,509 $— $7,364 $635,194 $652,067 
Liabilities:
General Partner notes payable$— $— $— $9,786 $9,786 
December 31, 2021
Assets:
Exchange traded funds$1,171 $— $— $— $1,171 
Mutual funds6,864 — — — 6,864 
Accrued performance allocations— — — 439,548 439,548 
Partnership interests— — — 39,685 39,685 
Other investments— — 4,321 — 4,321 
Total assets at fair value$8,035 $— $4,321 $479,233 $491,589 
Liabilities:
General Partner notes payable$— $— $— $12,003 $12,003 
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Level 1Level 2Level 3Measured at
NAV
Total
June 30, 2023
Assets:
Common shares in publicly traded company$162 $— $— $— $162 
Exchange traded funds1,824 — — — 1,824 
Mutual funds10,638 — — — 10,638 
Accrued performance allocations— — — 428,414 428,414 
Partnership interests— — — 196,471 196,471 
Other investments— — 11,379 — 11,379 
Total assets at fair value$12,624 $— $11,379 $624,885 $648,888 
Liabilities:
General Partner Notes Payable$— $— $— $7,091 $7,091 
December 31, 2022
Assets:
Common shares in publicly traded company$86 $— $— $— $86 
Exchange traded funds2,117 $— $— $— $2,117 
Mutual funds12,411 — — — 12,411 
Accrued performance allocations— — — 554,723 554,723 
Partnership interests— — — 77,087 77,087 
Other investments— — 8,369 — 8,369 
Total assets at fair value$14,614 $— $8,369 $631,810 $654,793 
Liabilities:
General Partner Notes Payable$— $— $— $8,633 $8,633 
The following table presents a rollforward of Level 3 assets at cost adjusted for any impairment and observable price changes (in thousands):
Other
Investments
Balance as of December 31, 20212022$4,3218,369 
Purchases3,0431,451 
Conversion of note receivable1,559 
Balance as of SeptemberJune 30, 20222023$7,36411,379 
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Accrued performance allocations, investments in funds, and investments in limited partnership interests in third-party private funds are valued using NAV of the respective vehicle. The following table presents investments carried at fair value using NAV (in thousands):
Fair ValueUnfunded
Commitments
Fair ValueUnfunded
Commitments
September 30, 2022:
June 30, 2023:June 30, 2023:
Accrued performance allocationsAccrued performance allocations$559,160 $— Accrued performance allocations$428,414 N/A
Partnership interests:Partnership interests:Partnership interests:
Company-sponsored open-end fundCompany-sponsored open-end fund27,198 150 Company-sponsored open-end fund$47,873 $— 
Company-sponsored closed-end fundsCompany-sponsored closed-end funds37,267 5,330 Company-sponsored closed-end funds134,445 28,665 
Third-party closed-end fundsThird-party closed-end funds11,569 6,072 Third-party closed-end funds14,153 8,127 
Total partnership interestsTotal partnership interests$76,034 $11,552 Total partnership interests$196,471 $36,792 
  
December 31, 2021:
December 31, 2022:December 31, 2022:
Accrued performance allocationsAccrued performance allocations$439,548 $— Accrued performance allocations$554,723 N/A
Partnership interests:Partnership interests:Partnership interests:
Company-sponsored open-end fundCompany-sponsored open-end fund15,474 — Company-sponsored open-end fund$26,169 $20,755 
Company-sponsored closed-end fundsCompany-sponsored closed-end funds16,510 20,885 Company-sponsored closed-end funds39,120 3,763 
Third-party closed-end fundsThird-party closed-end funds7,701 2,436 Third-party closed-end funds11,798 5,569 
Total partnership interestsTotal partnership interests$39,685 $23,321 Total partnership interests$77,087 $30,087 
The Company can redeem its investmentinvestments in the Company-sponsored open-end fundfunds with a 60-day notice. The Company’s interests in its closed-end funds are not subject to redemption, with distributions to be received through liquidation of underlying investments of the funds. The closed-end funds generally have eight-to-ten year- to ten-year terms, which may be extended in certain circumstances.
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Fair Value Information of Financial Instruments Reported at Cost
The carrying values of cash, accounts receivable, due from and to affiliates, interest payable, and accounts payable approximate fair value due to their short-term nature and negligible credit risk.
The following table presents the carrying amounts and estimated fair values of financial instruments reported at amortized cost (in thousands):
Level 1Level 2Level 3TotalCarrying
Value
Level 1Level 2Level 3TotalCarrying
Value
As of September 30, 2022:
As of June 30, 2023:As of June 30, 2023:
Notes payable (private notes)Notes payable (private notes)$— $— $270,857 $270,857 $300,000 Notes payable (private notes)$— $— $418,857 $418,857 $450,000 
As of December 31, 2021:
As of December 31, 2022:As of December 31, 2022:
Notes payable (private notes)Notes payable (private notes)$— $— $144,577 $144,577 $150,000 Notes payable (private notes)$— $— $270,270 $270,270 $300,000 
Fair values of the private notes were estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments. As of June 30, 2022, the discount rate range used in determining the fair value of the private notes was between 5.90% and 8.48%. An increase in market interest rates would decrease the estimated fair value of the private notes.
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8.    BUSINESS COMBINATION AND GOODWILL
Acquisition of Newbury Partners LLC
On February 13, 2023, affiliates of Bridge entered into a definitive agreement to purchase substantially all of the assets of Newbury Partners LLC (“Newbury”), a Delaware limited liability company, pursuant to the terms of an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and among the Operating Company, Newbury Partners-Bridge LLC, a Delaware limited liability company (an indirect wholly owned subsidiary of the Operating Company, the “Buyer”), Newbury, Richard Lichter and RLP Navigator LLC, a Delaware limited liability company (collectively, the “Newbury Holders”). Bridge acquired substantially all of Newbury’s assets and assumed certain of Newbury’s liabilities for total consideration of $320.1 million paid in cash, subject to certain purchase price adjustments as set forth in the Asset Purchase Agreement (the “Newbury Acquisition”). The transaction closed on March 31, 2023 (the “Acquisition Date”).
During the quarter ended June 30, 2023, the Company made certain measurement period adjustments to equity method investments acquired from Newbury in order to reflect asset valuations as of the Acquisition Date which included the related adjustments to non-controlling interest and goodwill. As of June 30, 2023, the estimated fair values and allocation of consideration are preliminary as the Company continues to evaluate the underlying inputs and assumptions. Accordingly, these provisional values may be subject to adjustment during the measurement period, not to exceed one year from the Acquisition Date, based upon new information obtained about facts and circumstances that existed at the time of closing (in thousands).
Consideration
Cash$319,364 
Liabilities assumed736 
Total consideration$320,100 
Assets acquired and liabilities assumed
Net tangible acquired assets$79,727 
Trade name(1)
3,000 
Client relationship(1)
48,000 
Management contracts(1)
98,000 
Fair value of net identifiable assets acquired$228,727 
Non-controlling interest(1)
(86,365)
Goodwill(1)
177,738 
Total assets acquired and liabilities assumed, net$320,100 
(1)The fair value was determined using Level 3 assumptions.
In connection with the Newbury Acquisition, the Company expensed the transaction costs of $3.5 million, which is included in general and administrative expenses on the condensed consolidated statement of operations for the six months ended June 30, 2023.
In connection with the Newbury Acquisition, the Company allocated $98.0 million, $48.0 million, and $3.0 million of the purchase price to the fair value of management contracts, client relationships and trade name, respectively. The fair value of management contracts was estimated based upon estimated net cash flows generated from those contracts, discounted at 16.0%, with remaining lives estimated between 4 and 10 years for fund management contracts. The fair value of client relationships was estimated based upon estimated net cash flows expected to be generated under future management contracts, discounted at 22%, with a remaining estimated useful life of 14 years. The trade name was valued using a relief-from-royalty method, based on estimated savings from an avoided royalty rate of 1% on expected revenue discounted at 21.0%, with an estimated useful life of 10 years.
The carrying value of goodwill associated with Newbury was $177.7 million as of the Acquisition Date and is attributable to expected synergies and the assembled workforce of Newbury.
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As part of the Newbury Acquisition, approximately $0.7 million of liabilities were assumed by the Operating Company as part of the total consideration.
Supplemental information on a pro forma basis, as if the Newbury Acquisition had been consummated on January 1, 2022, is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Total revenues and investment (loss) income$88,200 $214,748 $86,299 $404,726 
Net income attributable to Bridge Investment Group Holdings Inc.(4,772)12,319 (5,041)21,423 
The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable. These results are not necessarily indicative of the Company’s consolidated financial condition or statements of operations in future periods or the results that actually would have been realized had the Company and Newbury been a combined entity during the periods presented. These pro forma amounts have been calculated after applying the following adjustments that were directly attributable to the Newbury Acquisition:
adjustments to reflect the exclusion of accrued performance allocation income and related compensation for certain Newbury funds that were not acquired as part of the Newbury Acquisition;
adjustments to include the impact of the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied on January 1, 2022, together with the consequential tax effects;
adjustments to reflect compensation agreements and profits interests awards granted to certain transferred employees, as if they were granted on January 1, 2022;
adjustments to include interest expense related to the 2023 Private Placement Notes and the draw on our Credit Facility (as defined herein) as if it had been consummated on January 1, 2022 and adjustments to exclude interest expense related to the line of credit that was not assumed by the Company in the Newbury Acquisition;
adjustments to reflect the tax effects of the Newbury Acquisition and the related adjustments as if Newbury had been included in the Company’s results of operations as of January 1, 2022; and
adjustments to reflect the pro-rata economic ownership attributable to Bridge.
Included in the pro forma financial information for the six months ended June 30, 2023 is $3.5 million and $4.6 million of transaction costs incurred by the Company and Newbury, respectively. There were no transaction costs incurred for the three months ended June 30, 2023 or for three and six months ended June 30, 2022, respectively.
Acquisition of Gorelick Brothers Capital
On January 31, 2022, the Company acquired certain assets of Gorelick Brothers Capital (“GBC”), including a 60% interest in GBC’s asset and property management business (the “GBC Acquisition”). The 60% interest in GBC’s asset and property management business was acquired by the Operating Company for consideration of $30.0 million (total implied value of $50.0 million) with 50% paid in cash and 50% with 694,412 Class A Units of the Operating Company, which was based on a 15-day average of the Company’s closing stock price prior to the closing of the transaction. Upon consummation of the GBC Acquisition, (i) the GBC team and Bridge launched a single-family rental (“SFR”) strategy on the Bridge platform, (ii) Bridge and the former key principals of GBC formed and jointly own a new SFR investment manager within Bridge, and (iii) Bridge and the former GBC principals completed a $660.0 million recapitalization of a portfolio comprising more than 2,700 homes in 14 markets, concentrated in the Sunbelt and certain Midwest markets of the United States. The Operating Company now indirectly owns a 60% majority of the newly created Bridge SFR investment manager, and the former principals of GBC own the remaining 40%.
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A majority of the fair value of the purchase consideration was attributed to goodwill, with synergies expected to accrue from the vertically integrated Bridge SFR investment strategy. As part of the transaction, approximately $1.0 million of liabilities were assumed by the Operating Company as consideration for the purchase price. As of SeptemberJune 30, 2022, the2023, these assumed liabilities assumed have been paid. The number of Class A Units of the Operating Company that were transferred to GBC as a portion of the total consideration was based on an average closing price of the Company’s Class A common stock from January 13, 2022 through January 27, 2022. Class A Units of the Operating Company are exchangeable on a one-for-one basis with our Class A common stock, subject to certain conditions.
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The following table summarizes the total consideration for the GBC acquisitionAcquisition and the related purchase price allocation for the assets acquired, liabilities assumed and non-controlling interests (in thousands):
Consideration
Cash$15,089 
Class A Units14,930 
Total consideration for equity interest acquired$30,019 
Assets acquired, liabilities assumed and non-controlling interests
Cash$56 
Working capital623 
Trade name(1)
150 
In place contracts(1)
3,195 
Other liabilities(104)
Fair value of net assets acquired$3,920 
Non-controlling interest(1)
(20,053)
Goodwill(1)
46,152 
Total assets acquired, liabilities assumed and non-controlling interests, net$30,019 
(1)The fair value was determined using Level 3 assumptions.
In connection with the GBC Acquisition, the Company expensed the closing costs during the period in which they were incurred, which is included in general and administrative expenseexpenses on the condensed consolidated statement of operations for the period then ended.
Intangible assets acquired consist of fund and property management contracts and trade name. The fair value of management contracts was estimated based upon estimated net cash flows generated from those contracts, discounted at 8.5% with remaining lives estimated between 5five and 10ten years for fund management contracts and 30-days30 days for property management contracts. The trade name was valued using a relief-from-royalty method, based on estimated savings from an avoided royalty rate of 1%1.0% on expected revenue discounted at 8.5%, with an estimated useful life of 4 years.
9.    INSURANCE LOSS RESERVES AND LOSS AND LOSS ADJUSTMENT EXPENSES
BIGRM is a wholly owned subsidiary of Bridge and is licensed under the Utah Captive Insurance Companies Act. BIGRM provides the following insurance policies:
Lease Security Deposit Fulfillment (limits $500 per occurrence/per property unit);
Lessor Legal Liability (limits $100,000$0.1 million per occurrence/per property unit);
Workers’ Compensation Deductible Reimbursement (limit $250,000 per occurrence);
Property Deductible Reimbursement ($1,500,0001.5 million per occurrence/$3,000,0005.0 million policy annual aggregate); and
General Liability Deductible Reimbursement ($5,000,0005.0 million in excess of $25,000 per occurrence; $10,000,000$10.0 million policy annual aggregate).
Effective June 20, 2023, BIGRM renewed its annual insurances policies, with the policy annual aggregate for Property Deductible Reimbursement insurance increasing from $3.0 million to $5.0 million.
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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. Additionally, 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. Insurance expenses and the insurance 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 SeptemberJune 30, 2022.2023. 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 SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had reserved $9.4$8.0 and $8.1$9.4 million, respectively.
10.    SELF-INSURANCE RESERVES
Medical Self-Insurance Reserves — The Company is primarily self-insured for employee health benefits. The Company records its self-insurance liability based on claims filed and an estimate of claims incurred but not yet reported. There is stop-loss coverage for amounts in excess of $200,000$0.2 million per individual per year and a maximum claim liability of $17.9$18.0 million. If more claims are made than were estimated or if the costs of actual claims increase beyond what was anticipated, reserves recorded may not be sufficient and additional accruals may be required in future periods. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had reserved $3.6$2.8 million and $2.5$2.3 million, respectively.
Property and Casualty Reserves — As part of its property management business, the Company arranges for property and casualty risk management for the properties and entities affiliated with the Company (the “Insurance Program”). The Company uses a broker to arrange for insurers to provide coverage deemed necessary by management and required by lenders or property owners. Under the terms of the risk management program, each property has a $25,000 deductible for property and casualty claims for insured events. Insured property losses in excess of $25,000 for multifamily properties and $50,000 of commercial office properties are self-insured or fully insured as described below.
The Risk Management Program for property risks includes a Self-Insured Retention (“SIR”) component in order to more efficiently manage the risks. TheAs of June 30, 2023, the Company’s SIR is comprised ofincludes a layer of losses that the Company is responsible for satisfying after the properties have met their $25,000 deductible for each claim. That layer covers losses between $25,000 and $100,000 and has no$250,000, with an annual aggregate limit for that layer of risk.$2.0 million. All multifamily and single-family losses above $100,000$250,000 are fully insured. For commercial office and seniorseniors housing properties, all losses are fully insured after the $50,000 deductible has been met. For commercial office, logistics and net lease properties, all losses are fully insured after the $100,000$50,000 deductible has been met and for single-family rental properties all losses are fully insured after the $250,000 deductible has met. BIGRM, the captive risk management company wholly owned by the Operating Company, provides a $5.0 million insurance policy to cover the following: 100% of the $3.0$5.0 million layer above the multifamily deductible and SIR. All losses above $3.0$5.0 million are fully insured by multiple outside insurance carriers. OnEffective June 20, 20222023, the per-occurrence limit increased from $750,000 for any single loss is $1.5 million with anthe annual aggregate limit of $2.0increasing from $3.0 million to a per-occurrence limit of $1.5 million for any single loss with an aggregate limit of $3.0$5.0 million. 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% of the insurable value of the property affected for a particular loss. Any catastrophic losses in non-CAT Zones are insured with the same $25,000/$50,000 deductibles and SIR of $75,000 for multifamily properties as outlined above.
On June 20, 2020, the Company added a general liability self-insured retentionSIR aggregate limit of $10.0 million with a per occurrenceper-occurrence limit of $2.0 million and per location limit of $4.0 million, which was increased on June 20, 2022 to a per-occurrence of limit $5.0 million and per location limit of $10.0 million. Any insurance claims above these limits are fully insured by multiple outside insurance carriers. BPM insured this retention with the BIGRM captive. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had reserved $1.6$0.8 million and $1.0$1.1 million, respectively.
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the total self-insurance reserve liability was $5.3$3.6 million and $3.5 million, respectively.
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11.    GENERAL PARTNER NOTES PAYABLE
The Bridge GPs traditionally have a General Partner commitment to the respective fund, which is usually satisfied by affiliatesaffiliates’ direct investment into the funds. For the General Partner commitments for BSH I GP and BMF III GP this commitment was satisfied by 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 NoteNotes 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 the related GP Lender’s net asset value in the fund. The GP Lenders are entitled to all returned capital and profit distributions net of management fees and carried interest. We have elected the fair value option for the General Partner Notes Payable so that changes in value are recorded in unrealized gains (losses). The following table summarizes the carrying value of the General Partner Notes Payable (in thousands):
Fair ValueFair Value
CommitmentSeptember 30, 2022December 31, 2021CommitmentJune 30, 2023December 31, 2022
Bridge Seniors Housing Fund IBridge Seniors Housing Fund I$4,775 $4,502 $5,309 Bridge Seniors Housing Fund I$4,775 $3,705 $4,319 
Bridge Multifamily Fund IIIBridge Multifamily Fund III9,300 5,284 6,694 Bridge Multifamily Fund III9,300 3,386 4,314 
TotalTotal$14,075 $9,786 $12,003 Total$14,075 $7,091 $8,633 
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. During the three and nine months ended September 30, 2022 and 2021, the Company incurred $0.8 million and $0.8 million and $2.0 million and $1.9 million, respectively, of interest expense related to distributions during the periods then ended.
12.    LINE OF CREDIT
On June 3, 2022, the Operating Company entered into a credit agreement with CIBC, Inc. and Zions Bancorporation, N.A. d/b/a Zions First NationNational Bank as Joint Lead Arrangers (the “Credit Agreement”). The Credit Agreement allows for total revolving commitments of up to $125.0 million, which may be increased up to $225.0 million, contingent on certain criteria being met (the “Credit Facility”). The Credit Facility matures on June 3, 2024, subject to potential extension under certain circumstances.
Borrowings under the Credit Facility bear interest based on a pricing grid with a range of a 2.50% to 3.00% over the Term Secured Overnight Financing Rate (“SOFR”) as determined by the Company’s leverage ratio, or upon achievement of an investment grade rating, interest is then based on a range of 1.75% to 2.25% over Term SOFR. The Credit Facility is also subject to a quarterly unused commitment fee of up to 0.20%, which is based on the daily unused portion of the Credit Facility. Borrowings under the Credit Facility may be repaid at any time during the term of the Credit Agreement, but the Credit Facility requires paydown at least once annually.
On January 31, 2023, the Company entered into an amendment to the Credit Facility, pursuant to which (i) the Company exercised its option to increase the total revolving commitments under the Credit Facility to $225.0 million, (ii) the variable interest rates under the applicable pricing grid were each increased by 15 basis points and (iii) the quarterly unused commitment fee was increased to 0.25%.
Under the terms of the amended Credit Agreement, certain of the Operating Company’s assets serve as pledged collateral. In addition, the Credit Agreement contains covenants that, among other things, limit the Operating Company’s ability to: incur indebtedness; create, incur or allow liens; merge with other companies; pay dividends or make distributions; engage in new or different lines of business; and engage in transactions with affiliates. The Credit Agreement also contains financial covenants requiring the Operating Company to maintain (1) a debt to Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) ratio of no more than 3.75x, (2) minimum liquidity of $15.0$15 million and (3) minimum quarterly EBITDA of $15 million and minimum EBITDA for the trailing four fiscal quarters of $80 million.
The carrying value of the Credit Facility approximates fair value, as the loan is subject to variable interest rates that adjust with changes in market rates and market conditions and the current interest rate approximates that which would be available under similar financial arrangements.
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On July 22, 2020, the Operating Company entered ininto a secured revolving line of credit to borrow up to $75.0 million (“Line of Credit”). Borrowings under this arrangement accrued interest at LIBOR plus 2.25%. The Line of Credit contained various financial covenants applicable to the Operating Company. The covenants required the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.0x, (2) minimum liquidity of $2.5 million, (3) $20.0 million of affiliate deposits in a specific financial institution and (4) minimum quarterly EBITDA of $10.0 million. The Line of Credit was to mature on July 22, 2022, however the Company terminated the Line of Credit in June 2022 in connection with its entry into the Credit Agreement.
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TheAs of June 30, 2023, the outstanding balance on the Credit Facility was $80.0 million with a weighted-average interest rate in effect for the Credit Facility as of September 30, 2022 was 5.30%7.00%. During the three and ninesix months ended SeptemberJune 30, 2022,2023, the Company incurred interest expense of approximately $0$2.5 million and $61,000,$2.9 million, respectively, and unused commitments fees of $48,000$45,000 and $64,000,$0.1 million, respectively. During the three and nine months ended September 30, 2021, theThe Company incurred interest expense of approximately $17,000$0.1 million and $38,000, respectively.unused commitments fees of $16,000 for both the three and six months ended June 30, 2022.
Debt issuance costs related to the Credit Facility and Line of Credit are included in other assets in the condensed consolidated balance sheets as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively.
As of SeptemberJune 30, 2022,2023, the Company was in full compliance with all debt covenants.
13.    NOTES PAYABLE
On July 22, 2020, the Operating Company entered into a $150.0 million Note Purchase Agreement,note purchase agreement, pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $75.0 million of 3.9% with a five-year term maturing on July 22, 2025, and $75.0 million of 4.15% notes with a seven-year term maturing on July 22, 2027 (the “2020 Private Placement Notes”). The 2020 Private Placement Notes have two tranches: a 5-year 3.9% fixed rate tranche that matures on July 22, 2025 and a 7-year 4.15% fixed rate tranche that matures on July 22, 2027.
On June 3, 2022, the Operating Company entered into a $150.0 million note purchase agreement pursuant to which the Operating Company issued two tranches of senior notes in a private placement.placement offering. The transaction consisted of $75.0 million of 5.00%5.0% notes with a ten-year term maturing on July 12, 2032, and $75.0 million of 5.10%5.1% notes with a twelve-year term maturing on July 12, 2034 (the “2022 Private Placement Notes,”Notes”).
On February 13, 2023, the Operating Company entered into a $150.0 million note purchase agreement pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $120.0 million of 6.0% notes with a seven-year term maturing on March 29, 2030 and $30.0 million of 6.1% notes with a ten-year term maturing on March 29, 2033 (the “2023 Private Placement Notes” and together with the 2020 Private Placement Notes and 2022 Private Placement Notes, the “Private Placement Notes”). The 2023 Private Placement Notes closed in connection with the closing of the Newbury Acquisition.
Under the terms of the Private Placement Notes, certain of the Operating Company’s assets are pledged as collateral. The Private Placement Notes contain covenants that, among other things, limit the Operating Company’s ability to: incur indebtedness; create, incur or allow liens; merge with other companies; engage in new or different lines of business; and engage in transactions with affiliates. The Private Placement Notes also contain financial covenants requiring the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.75x, (2) minimum liquidity of $15.0 million and (3) minimum quarterly EBITDA of $15.0 million and minimum EBITDA for the trailing four fiscal quarters of $80.0 million.
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, unamortized deferred financing costs were $2.8$3.8 million and $1.9$2.7 million, respectively, and the net carrying value of the Private Placement Notes was $297.2$446.2 million and $148.1$297.3 million, respectively. As of SeptemberJune 30, 2022,2023, the Company was in full compliance with all debt covenants.
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The following table presents scheduled principal payments of the Private Placement Notes as of SeptemberJune 30, 20222023 (in thousands):
20252025$75,000 2025$75,000 
20262026— 2026— 
2027202775,000 
ThereafterThereafter225,000 Thereafter300,000 
TotalTotal$300,000 Total$450,000 
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 Private Placement Notes are recorded as a reduction of the corresponding debt obligation. All debt issuance costs are amortized over the remaining term of the related obligation.
The following table presents the activity of the Company’s debt issuance costs for the nine months ended September 30, 2022 (in thousands):
Unamortized debt issuance costs as of December 31, 2021$1,858 
Debt issuance costs incurred1,324 
Amortization of debt issuance costs(346)
Unamortized debt issuance costs as of September 30, 2022$2,836 
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During the three and nine months ended SeptemberJune 30, 20222023 and 2021,2022, interest expense was $3.2$5.7 million and $6.2 million, respectively, and $1.5 million, respectively. During the six months ended June 30, 2023 and $4.52022, interest expense was $9.1 million and $3.0 million, respectively.
14.    REALIZED AND UNREALIZED GAINS (LOSSES)
Realized gains (losses) in the condensed consolidated and combined 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 the General Partner NoteNotes Payable 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 table summarizestables summarize realized gains (losses) on investments and other financial instruments for the three and ninesix months ended SeptemberJune 30, 20222023 and 20212022 (in thousands):
Three Months Ended
September 30, 2022
Three Months Ended
September 30, 2021
Three Months Ended June 30, 2023Three Months Ended June 30, 2022
Net Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
Total
Net Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
Total
Net Realized
Gains (Losses)
Net Unrealized Gains (Losses)
Total
Net Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
Total
Investment in Company-sponsored fundsInvestment in Company-sponsored funds$1,508 $(3,097)$(1,589)$(1)$(1,269)$(1,270)Investment in Company-sponsored funds$619 $(2,448)$(1,829)$(256)$5,097 $4,841 
Investment in third-party partnershipsInvestment in third-party partnerships(126)214 88 (98)683 585 Investment in third-party partnerships(46)(92)(138)(49)(42)
Other investments— — — 2,832 2,836 
General Partner Notes PayableGeneral Partner Notes Payable(1,495)3,535 2,040 — 414 414 General Partner Notes Payable(25)469 444 28 (1,021)(993)
Total realized and unrealized gains (losses)Total realized and unrealized gains (losses)$(113)$652 $539 $(95)$2,660 $2,565 Total realized and unrealized gains (losses)$548 $(2,071)$(1,523)$(277)$4,083 $3,806 
Nine Months Ended
September 30, 2022
Nine Months Ended
September 30, 2021
Net Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
TotalNet Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
Total
Investment in Company-sponsored funds$1,258 $760 $2,018 $(5)$3,184 $3,179 
Investment in third-party partnerships(187)1,808 1,621 (410)2,206 1,796 
Other investments— — — 2,854 2,858 
General Partner Notes Payable(1,563)2,781 1,218 — 830 830 
Total realized and unrealized gains (losses)$(492)$5,349 $4,857 $(411)$9,074 $8,663 
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Six Months Ended June 30, 2023Six Months Ended June 30, 2022
Net Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
TotalNet Realized
Gains (Losses)
Net Unrealized
Gains (Losses)
Total
Investment in Company-sponsored funds$165 $(1,517)$(1,352)$(249)$3,857 $3,608 
Investment in third-party partnerships(151)33 (118)(61)1,593 1,532 
General Partner Notes Payable(191)1,577 1,386 (68)(754)(822)
Total realized and unrealized gains (losses)$(177)$93 $(84)$(378)$4,696 $4,318 
15.    INCOME TAXES
The Company is taxed as a corporation for U.S. federal and state income tax purposes. In addition to U.S. federal and state income taxes, the Company is subject to local and foreign income taxes, with respect to the Company’s allocable share of any taxable income generated by the Operating Company that flows through to the Company.
The Operating Company and its subsidiaries, other than BIGRM and Bridge PM, Inc.,BPM, are limited liability companies or limited partnerships and, as such, are not subject to income taxes. The individual owners of the Operating Company and its subsidiaries are required to report their distributive share of realized income, gains, losses, deductions, or credits on their individual income tax returns.
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In connection withThe deferred income tax asset related to the exchanges of Operating Company interests for our Class A common stock byTRA and the Original Equity Owners in July and August 2021, the Company’s ownership in the Operating Company increased, which resulted in a deferred tax asset. Additionally, in connection with the exchange transactions the Company recorded an initial corresponding TRA liability as of $44.4June 30, 2023 was $61.8 million representing 85%and $51.5 million, respectively, and $53.9 million and $52.0 million as of the incremental net cash tax savings for the Company due to the exchanging Original Equity Owners. During the nine months ended September 30,December 31, 2022, certain Original Equity Owners exchanged a portion of their Class A Units for our Class A common stock, which also resultedrespectively. The increase in a redemption of the corresponding Class B common stock. The exchange increased the deferred income tax asset from $59.0 million,during the three and the corresponding TRA liability from $46.1 million, as of December 31, 2021, to $65.7 million and $52.1 million as of September 30, 2022, respectively.
The Company’s effective tax rate was approximately 1% and 2% for the quarters ended September 30, 2022 and 2021, respectively, and 5% and 2% for the ninesix months ended SeptemberJune 30, 20222023 was primarily attributed to the collapse of 2020 profits interests awards into shares of Class A common stock and 2021, respectively. Class A Units, as further described in Note 16.
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 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 not subject to U.S. federal taxes prior to the Transactions and the IPO and (b) a portion of income is allocated to non-controlling interests, and the tax liability on such income is borne by the holders of such non-controlling interests.
For the three and six months ended June 30, 2023, the Company utilized the discrete effective tax rate method, as allowed by ASC 740-270-30-18, “Income Taxes – Interim Reporting,” to calculate its interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate (“AETR”) is impractical because it is not possible to reliably estimate the AETR. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. The Company believes that, at this time, the use of the discrete method is more appropriate than the AETR method as (i) the estimated AETR method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings and (ii) small changes in the projected ordinary annual income would result in significant changes in the AETR. The Company will re-evaluate the use of the discrete method each quarter until it is deemed appropriate to return to the AETR method.
The Company’s AETR was approximately 2% and 4% for the three and six months ended June 30, 2022, respectively.
The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more likely than not that all or a portion of the deferred tax asset may not be realized.
As of SeptemberJune 30, 2022,2023, the Company had no unrecognized tax positions and does not expect any changes to uncertain tax positions within the next 12 months.
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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, based on information available to the Company as of the date hereof, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated and combined financial statements.
16.    SHAREHOLDERS’ EQUITY
Initial Public Offering
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. Subsequent to the Transactions, the Operating Company consolidates the Contributed Bridge GPs. These condensed consolidated and combined financial statements include 100% of the results of operations and performance of the Contributed Bridge GPs for the periods presented, including prior to the IPO, on the basis of common control prior to the Transactions. 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 consolidated and combined 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 represented the voting interest and Classes C and D represented 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 (and at interim points in the life of a fund), the fund has not achieved investment returns that exceed the preferred return threshold or (in all cases) the applicable Bridge GP receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Bridge GP will be obligated to repay an amount equal to the excess of amounts previously distributed to the Bridge GP over the amounts to which the Bridge GP was ultimately entitled (generally net of income tax liabilities associated with related allocations of taxable income).
All of the distributable earnings of the Operating Company prior to the IPO were payable to the Original Equity Owners. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, there was $0.2 million and $1.4$0.5 million that was declared that had not yet been distributed to Original Equity Owners.
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Changes in Shareholders’ Equity and Non-Controlling Interests
Collapse of 2020 Profits Interests Awards
On January 1, 2023, certain of the Company’s 2020 profits interests awards were collapsed into 801,927 shares of our Class A common stock and 2,025,953 Class A Units. The profits interests were collapsed based on their fair values and the relative value of the Company, based on distributable earnings attributable to the Operating Company, distributable earnings of the applicable subsidiary where such profits interests were held, and the market price of our Class A common stock as of the date of the collapse. This resulted in a decrease in net income attributable to non-controlling interests for periods subsequent to January 1, 2023; however, there was a corresponding increase in the number of outstanding Class A Units and shares of our Class A common stock. The collapse of the 2020 profits interests awards was partially accounted for as a modification and partially accounted for as cancellations. For the 2020 profits interests awards that were cancelled, the Company accelerated the recognition of the unamortized share-based compensation expense amounting to $0.3 million for the six months ended June 30, 2023.
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Collapse of 2019 Profits InterestInterests Awards
On January 1, 2022, certain of the Company’s 2019 profits interests awards were collapsed into 790,424 shares of our Class A common stock and 13,255,888 Class A Units. The profits interests were collapsed based on their fair values and the relative value of the Company, based on Distributable Earningsdistributable earnings attributable to the Operating Company, Distributable Earningsdistributable earnings of the applicable subsidiary where such profits interests were held, and the market price of the Company’sour Class A common stock as of the date of the collapse. This resulted in a decrease in net income attributable to non-controlling interests for periods subsequent to January 1, 2022; however, there was a corresponding increase in the number of outstanding Class A Units and shares of our Class A common stock. The collapse of the 2019 profits interests awards was partially accounted for as a modification and partially accounted for as cancellations. For the 2019 profits interestinterests awards that were cancelled, the Company accelerated the recognition of the unamortized share-based compensation expense amounting to $0.6 million for the ninesix months ended SeptemberJune 30, 2022.
Issuance of Class A Units for GBC Acquisition
In January 2022, the Company acquired a 60% interest in GBC’s asset and property management business for consideration of $30 million, with 50% paid in cash and 50% withpaid through the issuance of 694,412 Class A Units of the Operating Company valued at $14.9 million, which was based on an average of the Company’s closing stock price of our Class A common stock prior to the closing of the GBC Acquisition.
Redemptions of Non-controlling Interest in Bridge Investment Group Holdings Inc.
Certain current and former employees of the Company directly or indirectly own interests in the Operating Company, presented as non-controlling interests in the Operating Company. Non-controlling interests in the Operating Company have the right to require the Operating Company to redeem part or all of such member’s Class A Units for cash based on the market value of an equivalent number of shares of our Class A common stock at the time of redemption, or at the Company’s election as managing member of the Operating Company, through issuance of shares of our Class A common stock on a one-for-one basis. At the end of each period, non-controlling interests in the Operating Company is adjusted to reflect their ownership percentage in the Operating Company at the end of the period, through a reallocation between controlling and non-controlling interests in the Operating Company.
During the three and ninesix months ended SeptemberJune 30, 2022, 156,478 and 1,137,1622023, 161,754 Class A Units respectively, were redeemed, with the issuance of our Class A common stock on a one-for-one basis.
Bridge Investment Group Holdings Inc.
The Company has two classes of common stock outstanding, Class A common stock and Class B common stock. Our Class A common stock is traded on the New York Stock Exchange. As of SeptemberJune 30, 2022,2023, the Company is authorized to issue 500,000,000 shares of Class A common stock with a par value of $0.01 per share, 238,087,544237,680,340 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 our Class A common stock is entitled to one vote and each share of our Class B common stock is entitled to ten votes. Refer to Note 1, “Organization” for additional information about the Company’s common stock.
As of SeptemberJune 30, 2022, 29,247,8812023, 32,767,289 shares of our Class A common stock (including Restricted Stock) were outstanding, 85,551,12785,144,321 shares of our Class B common stock were outstanding, and no shares of preferred stock were outstanding.
3839


The following table presents a reconciliation of Bridge Investment Group Holdings Inc. common stock for the ninesix months ended SeptemberJune 30, 2022:2023:
Bridge Investment Group Holdings Inc.Bridge Investment Group Holdings Inc.
Class A
Common
Stock
Class A
Restricted
Common
Stock
Class B
Common
Stock
Class A
Common
Stock
Class A
Restricted
Common
Stock
Class B
Common
Stock
Balance as of December 31, 202122,742,137 2,417,662 86,672,305 
Class A common stock issued - 2019 Profits Interests conversion56,134 734,290 — 
Balance as of December 31, 2022Balance as of December 31, 202224,484,585 5,003,936 85,301,127 
Class A common stock issued - 2020 profits interests conversionClass A common stock issued - 2020 profits interests conversion8,671 793,256 — 
Class A common stock issued - unitholder conversionsClass A common stock issued - unitholder conversions1,137,162 — (1,121,178)Class A common stock issued - unitholder conversions161,754 — (111,754)
Class A restricted common stock issuedClass A restricted common stock issued— 2,269,349 — Class A restricted common stock issued— 2,424,142 (45,052)
Class A restricted common stock forfeitedClass A restricted common stock forfeited— (108,853)— Class A restricted common stock forfeited— (109,055)— 
Class A restricted common stock vestedClass A restricted common stock vested299,152 (299,152)— Class A restricted common stock vested598,495 (598,495)— 
Balance as of September 30, 202224,234,585 5,013,296 85,551,127 
Balance as of June 30, 2023Balance as of June 30, 202325,253,505 7,513,784 85,144,321 
Dividends are made to our Class A common stockholders and distributions are made to members of the Operating Company and holders of non-controlling interests in subsidiaries. Distributions are reflected when paid in the condensed consolidated and combined statements of stockholders’ equity, while dividends on our Class A common stock are reflected when declared by the Company’s board of directors.
During the three and ninesix months ended SeptemberJune 30, 2023 and 2022, the Company declared and paid the following dividends on our Class A common stock (dollars in thousands, except per share amounts):
Dividend Record DateDividend Record DateDividend Payment DateDividend per Share of Common StockDividend to Common StockholdersDividend Record DateDividend Payment DateDividend per Share of Common StockDividend to Common Stockholders
March 10, 2023March 10, 2023March 24, 2023$0.17 $5,541 
June 2, 2023June 2, 2023June 16, 20230.15 4,850 
$0.32 $10,391 
March 11, 2022March 11, 2022March 25, 2022$0.21 $5,917 March 11, 2022March 25, 2022$0.21 $5,917 
June 3, 2022June 3, 2022June 17, 20220.26 7,614 June 3, 2022June 17, 20220.26 7,614 
September 2, 2022September 16, 20220.30 8,861 
$0.77 $22,392 $0.47 $13,531 
Bridge Investment Group Holdings LLC
Prior to the IPO, the Operating Company had three classes of membership interests: (i) Class A; (ii) Class B-1; and (iii) Class B-2. Class A and Class B-1 represented the voting equity holders and Class B-2 represented profits interests awarded to employees of the Operating Company. Class B-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 B-1 and B-2 interests had a capital account interest of zero. The holders of Class B-1 and B-2 interests were entitled to distributions in excess of the defined threshold per the respective award. The holders of Class B-2 interests did not have voting rights. As part of the Transactions, the Class B-1 and Class B-2 Unitsinterests were exchanged for Class A Units in the Operating Company. As part of the Transactions, and IPO, 97,463,981 new Class B Units were issued.
Net profits and any other items of income are allocated to the members’ capital accounts in a manner that is consistent with their respective ownership percentages. Distributions to members are generally made 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 directors. During the three and ninesix months ended SeptemberJune 30, 2022, $13.12023, $18.0 million and $69.1$19.4 million, respectively, was distributed to non-controlling interests in the Operating Company and $37.8$25.3 million and $108.6$49.3 million, respectively, was distributed to non-controlling interest in the Company. During the three and ninesix months ended SeptemberJune 30, 2021, $21.72022, $38.6 million and $35.7$56.1 million, respectively, was distributed to the Operating Company’s members and $5.6$42.2 million and $70.8 million, respectively, was distributed to non-controlling interests in the Operating Company.
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The Operating Company’s Members’members’ capital interests are transferable; however, transfers are subject to obtaining the prior written consent of the Company, with certain exceptions for transfers to affiliated parties. Members’ liability is limited to the capital account balance. Distributions are reflected in the condensed consolidated and combined statements
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of changes in shareholders equity when declared by the board of directors and consist of distributions to members and non-controlling interest holders.
As of SeptemberJune 30, 2022,2023, the Company is the sole managing member of the Operating Company, and owns 29,247,88132,767,289 Class A Units and 97,463,981 Class B Units (voting only), respectively, of the Operating Company, which is 23%represents 25% 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 Intereststhe Operating Company’s Class A Units and Class B Units for the ninesix months ended SeptemberJune 30, 2022:2023:
Bridge Investment Group Holdings LLCBridge Investment Group Holdings LLC
Class A
Units
Class B
Units
Class A
Units
Class B
Units
Balance as of December 31, 2021109,699,232 97,463,981 
Balance as of December 31, 2022Balance as of December 31, 2022124,445,671 97,463,981 
Issuance of Class A UnitsIssuance of Class A Units14,760,227 — Issuance of Class A Units2,844,638 — 
Forfeiture of unvested Class A UnitsForfeiture of unvested Class A Units(13,788)— Forfeiture of unvested Class A Units(48,191)— 
Balance as of September 30, 2022124,445,671 97,463,981 
Balance as of June 30, 2023Balance as of June 30, 2023127,242,118 97,463,981 
17.    COMMITMENTS AND CONTINGENCIES
The Company leases office space generally under long-term non-cancelable operating lease agreements. The terms of each lease are unique and some permit early cancellation, while other leases have only a short period of time remaining on what was originally a longer dated lease agreement that is nearing the maturity. Certain leases contain renewal options, rent escalations, 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.
The following is a summary oftable summarizes the Company’s leases as of SeptemberJune 30, 2023 and December 31, 2022 (dollar amounts in thousands):
Right-of-use assets, included in Other assets$15,539 
Lease Liabilities, included in Other liabilities$17,881 
Weighted-average remaining lease term (in years)4.4
Weighted-average discount rate4.22 %
June 30, 2023December 31, 2022
Right-of-use assets, included in Other assets$12,203 $15,260 
Lease Liabilities, included in Other liabilities$14,642 $17,490 
Weighted-average remaining lease term (in years)3.94.2
Weighted-average discount rate4.05 %4.24 %
The components of lease expense included in general and administrative in the condensed consolidated and combined statements of operations for the three and ninesix months ended SeptemberJune 30, 2023 and 2022 are as follows (in thousands):
Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Operating lease costs$1,116 $3,237 
Variable lease costs71 173 
Total lease costs, included in general and administrative expenses$1,187 $3,410 
Cash paid for amounts included in the measurement of operating lease liabilities$1,043 $3,104 
Of the total leases costs for the three and nine months ended September 30, 2022, $0 and $0.4 million, respectively, was related to short-term leases with a term of less than one year. Total rent expense for all of the Company’s office leases for the three and nine months ended September 30, 2021 was $1.0 million and $3.0 million, respectively, (net of lease incentive amortization of and $0.1 million and $0.2 million, respectively).
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Operating lease costs$1,332 1,0562,3412,121
Variable lease costs42 70106102
Total lease costs, included in general and administrative expenses$1,374 $1,126 $2,447 $2,223 
Cash paid for amounts included in the measurement of operating lease liabilities$1,445 $894 $2,737 $2,061 
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As of SeptemberJune 30, 2022,2023, the maturities of operating lease liabilities were as follows (in thousands):
Remainder of 2022$1,273 
20235,140 
2023 (excluding the six months ended June 30, 2023)2023 (excluding the six months ended June 30, 2023)$2,811 
202420244,163 20243,969 
202520253,222 20253,041 
202620263,061 20262,924 
202720272,667 
ThereafterThereafter2,738 Thereafter105 
Total lease liabilitiesTotal lease liabilities19,597 Total lease liabilities15,517 
Less: Imputed interestLess: Imputed interest(1,716)Less: Imputed interest(875)
Total operating lease liabilitiesTotal operating lease liabilities$17,881 Total operating lease liabilities$14,642 
Allocated Performance Income — Allocated performance income is affected by changes in the fair values of the underlying investments in the funds that we advise. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. Generally, if at the termination of a fund (and at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the applicable Bridge GP receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Bridge GP will be obligated to repay carried interest that was received by the Bridge GP in excess of the amounts to which the Bridge GP is entitled. This contingent obligation is normally reduced by income taxes paid by the members of the Bridge GP (including the Company) related to its carried interest. Additionally, at the end of the life of the funds there could be a payment due to a fund by the Bridge GP if the Bridge GP has recognized more performance income than was ultimately earned. The general partner clawback obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund.
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, 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 $173.1$183.6 million and $120.9$177.7 million, respectively, of which $34.5$68.9 million and $106.9$141.4 million, respectively, is reimbursable to the Bridge GPs by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. If the funds were liquidated at their fair values as of SeptemberJune 30, 2022,2023, there would be no contingent repayment obligation or liability.
Legal Matters — In the normal course of business, the Company is party to certain claims or legal actions. Although the amount of the ultimate exposure cannot be determined at this time, the Company believes that the resolution of these matters will not have a material adverse effect on its financial position, liquidity or results of operations.
Standby Letters of Credit — As of SeptemberJune 30, 2022,2023, the Company has guaranteed a $6.8 million standby letter of credit related to the self-insurance program of the properties owned by the funds. Additionally, as of SeptemberJune 30, 2022,2023, the Company has guaranteed a $362 thousand$0.4 million standby letter of credit related to an operating lease.
Indemnifications and Other Guarantees — 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 consolidated balance sheet as of SeptemberJune 30, 2022.2023. Based on past experience, management believes that the risk of loss related to these indemnities is remote.
The Company may incur contingent liabilities for claims that may be made against it in the future. The Company enters into contracts that contain a variety of representations, warranties and covenants. For example, the Company, and certain of the Company’s funds have provided non-recourse carve-out guarantees for fraud, willful misconduct and other customary wrongful acts, in connection with certain investment vehicles that the Company manages. The Company’s maximum exposure under these arrangements is currently unknown, and the Company’s liabilities for these matters would require a claim to be made against the Company in the future.
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The Operating Company may provide guaranties to a lending institution for certain loans held by employees for investment in Bridge funds not to exceed $8.0 million. There were no outstanding loans guaranteed by the Operating Company under this program as of June 30, 2023.
18.    VARIABLE INTEREST ENTITIES
A VIE is an entity that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties, or whose equity holders lack the characteristics of a controlling financial interest. The Company sponsors private funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and performance-based fees. These private funds are established as limited partnerships or equivalent structures. Limited partners of the private funds do not have either substantive liquidation rights, or substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of limited partners or by a single limited partner. Accordingly, the absence of such rights, which represent voting rights in a limited partnership, results in the private funds being considered VIEs. The nature of the Company’s involvement with its sponsored funds comprises fee arrangements and equity interests. The fee arrangements are commensurate with the level of management services provided by the Company and contain terms and conditions that are customary to similar at-market fee arrangements.
The Company does not consolidate its sponsored private funds where it has insignificant direct equity interests or capital commitments to these funds as general partner. As the Company’s direct equity interests in its sponsored private funds as general partner absorb insignificant variability, the Company is considered to be acting in the capacity of an agent of these funds and is therefore not the primary beneficiary of these funds. The Company accounts for its equity interests in unconsolidated sponsored private funds under the equity method. Additionally, the Company has investments in funds sponsored by third parties that we do not consolidate as we are not the primary beneficiary. The Company’s maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated private funds, totaling $76.0$196.5 million and $39.7$77.1 million as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively, which is included in other investments on the condensed consolidated balance sheets.sheets for the periods then ended.
The Operating Company consolidates certain VIEs for which it isDuring the primary beneficiary. Pre-IPO VIEs consisted of certain operating entities not wholly owned bythree months ended June 30, 2023, the Company made a direct investment in Bridge Solar Energy Development Fund LP. Due to the timing of capital raising efforts, the Company’s equity interest was considered significant to the fund as of June 30, 2023, and included Bridge Seniors Housing Fund Manager LLC, Bridge Debt Strategies Fund Manager LLC, Bridge Office Fund Manager LLC, Bridge Agency MBS Fund Manager LLC, Bridge Net Lease Fund Manager LLC, Bridge Logistics Properties Fund Manager LLC, and certain Bridge GPs. As part ofas a result the Transactions and IPO,fund was consolidated in 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 incomeCompany’s financial statements for the period then ended. The carrying amounts of the non-controlling interest in BSHM and BOFM were adjusted to zero.
The assets of the Operating Company’s consolidated VIEs totaled $1,110.2$1,283.2 million and $787.3$1,099.5 million as of SeptemberJune 30, 20222023 and December 31, 20212022 respectively, while the liabilities of the consolidated VIEs totaled $453.5$685.0 million and $249.7$455.6 million as of the same dates, respectively. The assets of the consolidated VIEs may only be used to settle obligations of the same VIE. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities. Additionally, the Operating Company is a VIE that is consolidated by the Company.
19.    RELATED PARTY TRANSACTIONS
Receivables from Affiliates
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 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.
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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. The Company considers its corporate professionals and non-consolidated funds to be affiliates.
Amounts dueReceivables from affiliates were comprised of the following as of June 30, 2023 and December 31, 2022 (in thousands):
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
Fees receivable from non-consolidated fundsFees receivable from non-consolidated funds$32,394 $23,991 Fees receivable from non-consolidated funds$21,802 $31,712 
Payments made on behalf of and amounts due from non-consolidated entitiesPayments made on behalf of and amounts due from non-consolidated entities20,501 11,388 Payments made on behalf of and amounts due from non-consolidated entities19,901 22,092 
Total receivables from affiliatesTotal receivables from affiliates$52,895 $35,379 Total receivables from affiliates$41,703 $53,804 
Notes Receivables from Affiliates
As of June 30, 2023 and December 31, 2022, the Company had total notes receivables from affiliates of $59.0 million and $67.2 million, respectively. Refer to Note 6, “Notes Receivables from Affiliates” for additional information.
Due to Affiliates
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had accrued $52.1$51.5 million and $46.1$52.0 million, respectively, due to affiliates in connection with the TRA, which was included in due to affiliates on the condensed consolidated balance sheets for the periods then ended. Refer to Note 2, “Significant Accounting Policies,” and Note 15, “Income Taxes” for additional information.
20.    SHARE-BASED COMPENSATION AND PROFITS INTERESTS
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’sour Class A common stock were initially reserved for issuance. Pursuant to the terms of the 2021 Incentive Award Plan, the number of shares available for issuance under the 2021 Incentive Award Plan increases automatically on the first day of each calendar commencing on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (a) 2% of the number of outstanding shares of our Class A common stock (calculated on an “as-converted” basis taking into account any and all securities (including membership interests in the Operating Company) convertible into, or exercisable, exchangeable, or redeemable for, Class A common stock) on the final day of the immediately preceding calendar year and (b) an amount determined by our board of directors. On January 1, 2022,2023, the number of shares available under the 2021 Incentive Award Plan increased to 8,836,972.11,412,508. As of SeptemberJune 30, 2022, 4,476,9672023, 4,400,905 shares remained available for future grants. Restricted Stock and RSUs are subject to graded vesting with approximately one-third of such grants vesting on the third, fourth and fifth anniversaries of the grant date. At vesting of the RSUs, the Company issues shares of Class A common stock.
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. Share-based compensation expense is included in employee compensation and benefits in the condensed consolidated and combined statement of operations, with the corresponding increase included in additional paid-in capital or non-controlling interests on the condensed consolidated balance sheet. If the recipient leavesceases to be employed by the Company prior to vesting of the Restricted Stock or RSUs, the awards are forfeited. During the three and nine months ended September 30, 2022, theThe Company reversed approximately $0.3 million and $0.4 million, respectively, of share-based compensation related to Restricted Stock and RSU forfeitures.forfeitures of approximately $0.4 million and $0.6 million for the three and six months ended June 30, 2023, respectively, and $0.1 million for the three and six months ended June 30, 2022.
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 equivalentsdividends during the vesting period. RSUs represent rights to one share of common stock for each unit. Holders of RSUs receive dividendsdividend equivalents during the vesting period but do not have voting rights.
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During the ninesix months ended SeptemberJune 30, 2022, 50,1372023, 31,000 RSUs were issued at a weighted-average fair value per share of $23.84.$12.05.
The following table summarizes Restricted Stock activity for the ninesix months ended SeptemberJune 30, 2022 (in thousands, except per share data):2023:
Restricted
Stock
Weighted-Average
 Fair Value per Share
Restricted
Stock
Weighted-Average
 Fair Value per Share
Balance as of December 31, 20212,417,662 $15.82 
Balance as of December 31, 2022Balance as of December 31, 20225,013,796 $20.54 
IssuedIssued3,003,639 24.30 Issued3,217,398 12.01 
VestedVested(299,152)23.83 Vested(598,495)17.67 
ForfeitedForfeited(108,853)19.47 Forfeited(118,915)17.74 
Balance as of September 30, 20225,013,296 $20.34 
Balance as of June 30, 2023Balance as of June 30, 20237,513,784 $17.16 
The total value at grant date of Restricted Stock and RSUs granted during the ninesix months ended SeptemberJune 30, 2022,2023 was $73.0$38.6 million and $1.2$0.4 million, respectively. As of SeptemberJune 30, 2022, 5,013,2962023, 7,513,784 shares of Restricted Stock and 66,63797,637 RSUs were expected to vest with an aggregate intrinsicfair value of $72.7$85.3 million and $1.0$1.1 million, respectively.
As of SeptemberJune 30, 2022,2023, the aggregate unrecognized compensation cost for all unvested Restricted Stock and RSU awards was $67.5$74.5 million, which is expected to be recognized over a weighted-average period of 2.82.4 years.
Profits Interests
The Operating Company issued profits interests in the Operating Company and certain Fund Managers in 2019, 2020, and 2021 to certain members of management to participate in the growth of the 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 from 5% to 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) anti-dilutive shares. The fair value of these awards was determined using a Monte Carlo Valuation model. Each of the awards has an earnings threshold for distributions and equity appreciation. The grant date fair value of the profits interests awards are expensed over the vesting period. The award shares are subject to graded vesting with approximately one-third of such grants vesting on the third, fourth and fifth anniversaries of the grant date. The Operating Company also issued anti-dilutive awards to active partners. Since the anti-dilutive awards were fully vested, the Company recorded 100% of the fair value as share-based compensation in the year the anti-dilutive shares were granted. Certain of the 2019 and 2020 profits interests awards have been collapsed into shares of our Class A common stock and Class A Units, as further described in Note 16, “Shareholders’ Equity.”
In August 2022, the Company issued profits interests in certain Fund Managers to certain members of management to participate in the growth of the respective Fund Managers (the “2022 profits interests”). Each of the 2022 profits interests awards have an earnings threshold for distributions. The 2022 profits interests are also subject to continued employment and graded vesting with approximately one-third of such grants vesting on the first, second and third anniversary of the vesting commencement date. The grant date fair value was determined to be $8.0 million using a Monte Carlo Valuation model, which will be expensed over the respective vesting periods.
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On March 31, 2023, the Company issued profits interests in certain Fund Managers to certain members of management to participate in the growth of the respective Fund Managers (the “2023 profits interests”). Each of the 2023 profits interests awards have an earnings threshold for distributions. The 2023 profits interests are also subject to continued employment and graded vesting with approximately one-third of such grants vesting on the third, fourth and fifth anniversary of the vesting commencement date. The grant date fair value was determined to be $33.9 million using a Monte Carlo Valuation model, which will be expensed over the respective vesting periods. The following assumptions were used in the Monte Carlo simulation valuation:
Weighted Average
Risk free rate3.6 %
Volatility40.0 %
Expected cost of equity16.8 %
Discount rate17.1 %
If the recipient of a profits interests award leavesawards ceases to be employed by the Company after the awards vest, the Company has the option to repurchase such profits interests at fair value. If the recipient leavesceases to be employed by the Company prior to vesting, a portion to all of the recipient’s awards are forfeited.
At SeptemberAs of June 30, 2022,2023, the aggregate unrecognized compensation cost for all unvested profits interests awards was $10.9$32.5 million, which is expected to be recognized over a weighted-average period of 2.02.9 years.
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The following table summarizes our share-based compensation expense associated with our profits interests awards, Restricted Stock, and RSUs, which is recorded in employee compensation and benefits on the condensed consolidated and combined statementstatements of operations and comprehensive income (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Antidulutive profits interest awards$— $— $— $13,609 
Profits interests award sharesProfits interests award shares3,875 956 6,331 2,811 Profits interests award shares$3,946 $841 5,933 2,457 
Restricted Stock and RSUsRestricted Stock and RSUs5,749 1,497 17,111 1,497 Restricted Stock and RSUs7,173 5,712 14,546 11,361 
Total share-based compensationTotal share-based compensation$9,624 $2,453 $23,442 $17,917 Total share-based compensation$11,119 $6,553 $20,479 $13,818 
As of SeptemberJune 30, 2022,2023, unrecognized share-based compensation on Restricted Stock, RSUs and profits interests awards is expected to be recognized as follows (in thousands):
As of September 30, 2022As of June 30, 2023
TotalRestricted Stock
and RSUs
Profits interest
awards
TotalRestricted Stock
and RSUs
Profits Interests
Awards
Remainder of 2022$8,386 $5,873 $2,513 
202328,826 23,098 5,728 
Remainder of 2023Remainder of 2023$18,344 $15,302 $3,042 
2024202423,618 21,433 2,185 202439,524 28,649 10,875 
2025202512,522 12,090 432 202528,519 19,359 9,160 
202620264,999 4,985 14 202615,149 9,197 5,952 
Thereafter68 68 — 
202720274,897 1,979 2,918 
20282028562 556 
TotalTotal$78,419 $67,547 $10,872 Total$106,995 $74,492 $32,503 
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21.    (LOSS) EARNINGS PER SHARE
Basic and diluted earnings per share of Class A common stock is presented only for the three and nine months ended September 30, 2022 and for the period of July 16, 2021 through September 30, 2021. There were no shares of our Class A common stock outstanding prior to the Transactions and the IPO, therefore, no earnings per share information has been presented for any period prior to the date of the IPO. The following table presents our EPS(loss) earnings per share for the three and ninesix months ended SeptemberJune 30, 2022, respectively,2023 and for the period of July 16, 2021 through September 30, 20212022 (in thousands, except per share amounts):
Three Months Ended
September 30, 2022
Nine Months Ended
September 30, 2022
July 16, 2021 through
September 30, 2021
Three Months Ended June 30,Six Months Ended June 30,
Net income attributable to Bridge Investment Group Holdings Inc.$4,999 $27,710 $10,054 
2023202220232022
Net (loss) income attributable to Bridge Investment Group Holdings Inc.Net (loss) income attributable to Bridge Investment Group Holdings Inc.$(4,772)$12,940 $(2,738)$22,711 
Less:Less:Less:
Income allocated to Restricted Stock and RSUsIncome allocated to Restricted Stock and RSUs662 (953)(979)Income allocated to Restricted Stock and RSUs— (915)— (1,608)
Distributions on Restricted Stock and RSUsDistributions on Restricted Stock and RSUs(1,527)(3,915)— Distributions on Restricted Stock and RSUs(1,142)(1,436)(2,448)(2,432)
Net income available to Class A common shareholders - basic and diluted$4,134 $22,842 $9,075 
Net (loss) income available to Class A common stockholders, dilutedNet (loss) income available to Class A common stockholders, diluted(5,914)10,589 (5,186)18,671 
Denominator:Denominator:Denominator:
Weighted-average shares of Class A common stock outstanding - basic and diluted24,157,236 23,778,524 22,284,351 
Earnings per share of Class A common stock - basic and diluted$0.17 $0.96 $0.41 
Weighted-average shares of Class A common stock outstanding—basic and dilutedWeighted-average shares of Class A common stock outstanding—basic and diluted25,143,289 24,029,107 25,105,753 23,581,393 
(Loss) earnings per share of Class A common stock—basic and diluted(Loss) earnings per share of Class A common stock—basic and diluted$(0.24)$0.44 $(0.21)$0.79 
Basic earnings per share is calculated by dividing earnings available to our Class A common shareholders by the weighted-average number of our Class A common shares outstanding for the period. Restricted Stock and RSUs that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested Restricted Stock and RSUs have been excluded as applicable, from earnings available to our Class A common stockholders used in basic and diluted earnings per share.
Diluted earnings per share of our Class A common stock is computed by dividing earnings available to Bridge Investment Group Holdings Inc., giving consideration to the reallocation of net income (loss) between holders of our Class A common stock and non-controlling interests, by the weighted-average number of shares of our Class A common stock outstanding adjusted to give effect to potentially dilutive securities, if any.
Shares of the Company’sour 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.
22.    SUBSEQUENT EVENTS
Other thanRedemption of Equity Interests
On July 1, 2023, certain of the Company’s 2021 profits interests awards were collapsed into 489,407 shares of Class A common stock and 2,429,453 Class A Units. The profits interests were collapsed based on their fair values and the relative value of the Company, based on Distributable Earnings attributable to the Operating Company, Distributable Earnings of the applicable subsidiary where such profits interests were held, and the market price of the Company’s Class A common stock as disclosed elsewhereof the date of the collapse. This resulted in these notesa decrease in net income attributable to condensed, consolidated and combined financial statements, nonon-controlling interests for periods subsequent events have occurred that would require recognitionto July 1, 2023; however, there was a corresponding increase in the condensed, consolidatednumber of outstanding Class A Units and combined financial statements or disclosureshares of Class A common stock.
Investments
On July 3, 2023, the Company withdrew a $20.0 million investment in Bridge Agency MBS Fund and recognized a realized loss of approximately $1.9 million. On July 31, 2023, the Company reinvested $20.0 million in its Bridge Agency MBS Fund.
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On July 31, 2023, Bridge Multifamily Fund III agreed to sell a portfolio of real estate assets to Bridge Multifamily CV LP (the “Continuation Fund”) in a transaction valued at $550 million, with additional equity raised by the Continuation Fund to support further investment in the accompanying footnotes.portfolio of real estate assets. The Continuation Fund provides additional time and capital to further invest in the portfolio of real estate assets, while also offering liquidity to existing limited partners of Bridge Multifamily Fund III, who were provided a choice to receive liquidity or continue their investment in the Continuation Fund.
Credit Facility
On July 7, 2023, the Company repaid the outstanding balance of $80 million on its Credit Facility. On July 27, 2023, the Company made a draw of $80 million on its Credit Facility.
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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 on Form 10-Q, including the condensed consolidated and combined financial statements and related notes, and should be read in conjunction with the accompanying tables and our annual audited financial statements in our annual report on Form 10-K, filed with the SEC on March 18, 2022.February 27, 2023. 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. In addition, amounts and percentages in the tables below may reflect rounding adjustments and consequently totals may not appear to sum.
Overview
We are a leading, vertically integrated real estatealternative investment manager, diversified across specialized asset classes, with approximately $43.8$48.9 billion of AUM as of SeptemberJune 30, 2022.2023. Bridge combines its nationwide operating platform with dedicated teams of investment professionals focused on various specialized and synergistic investment platforms, including Multifamily, Workforce and Affordable Housing, Seniors Housing, Single-Family Rental, Development, Net Lease Income, Logistics, Debt Strategies, Agency MBS, Office, Property Technology, Renewable Energy and Secondaries. Our broad range of products and vertically integrated structure allow us to capture new market opportunities and serve investors with various investment objectives. 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 organically develop and strategically acquire an array of investment platforms focused on sectors of the U.S. real estate market and secondaries investments that we believe are the most attractive. We have extensive multi-channel distribution capabilities and currently manage capital on behalf of more than 220 global institutions and more than 12,000 individual investors across our investment strategies.
Business Segment
We operate as one business, a fully integrated real estatealternative investment manager. The Company’s chief operating decision maker, which is the executive chairman, utilizes a consolidated approach to assess financial performance and allocate resources. As such, the Company operates as one business segment.

Recent Events

On January 31, 2022,February 13, 2023, affiliates of Bridge entered into a definitive agreement to purchase substantially all of the Company acquired certain assets of Gorelick Brothers CapitalNewbury Partners LLC (“GBC”Newbury”), including a 60% interest in GBC’s assetDelaware limited liability company, pursuant to the terms of an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and property management business (the “GBC Acquisition”). The 60% interest in GBC’s asset and property management business was acquired byamong the Operating Company, for consideration of approximately $30 million (total implied value of $50 million) with 50% paid in cash and 50% with 694,412 Class A UnitsNewbury Partners-Bridge LLC, a Delaware limited liability company (an indirect wholly owned subsidiary of the Operating Company, which was based onthe “Buyer”), Newbury, Richard Lichter and RLP Navigator LLC, a 15-day averageDelaware limited liability company (collectively, the “Newbury Holders”). Bridge acquired substantially all of the Company’s closing stockNewbury’s assets and assumed certain of Newbury’s liabilities for total consideration of $320.1 million paid in cash, subject to certain purchase price prior to the closing of the GBC Acquisition. Upon consummation of the GBC Acquisition, (i) the GBC team and Bridge launched a single-family rental (“SFR”) strategy on the Bridge platform, (ii) Bridge and the former key principals of GBC formed and jointly own a new SFR investment manager within Bridge, and (iii) Bridge and the former GBC principals completed a $660 million recapitalization of a portfolio comprising more than 2,700 homes in 14 markets, concentratedadjustments as set forth in the Sunbelt and certain Midwest markets of the United States.Asset Purchase Agreement (the “Newbury Acquisition”). The Operating Company now indirectly owns a 60% interest in the newly created Bridge SFR investment manager, and the former principals of GBC own the remaining 40%. Refer totransaction closed on March 31, 2023. See Note 8, “Business Combination and Goodwill,” to our condensed consolidated and combined financial statements in this quarterly report on Form 10-Q for additional information on this transaction.

In July 2022, the Company launched Bridge Solar Energy Development (“Bridge Solar”), in partnership with Lumen Energy Inc. (“Lumen”). Lumen is a leader in the clean energy software and energy project development process technology space. Bridge believes that its national footprint and local expertise, combined with Lumen’s data-driven technology, will streamline the analysis and implementation of solar in the high-demand commercial market. This partnership will offer design, procurement, construction and operation of solar projects on properties owned by Bridge-managed funds and third-party assets.

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In August 2022, the Company launched an additional investment strategy, Bridge Ventures. Bridge Ventures will focus on both early- and later-stage PropTech companies, and expects to pursue investments in industry-leading PropTech funds. The growth of e-commerce, remote workplaces, environmental, social and governance (“ESG”) adoption, and the digitalization of real estate has and is expected to continue to contribute to the increased adoption of PropTech in the post-Pandemic era. This investment strategy will leverage the Bridge platform to deploy and scale new technologies.more information.
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.
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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:
The extent to which fund investors favor private markets investments. Our ability to attract new capital is partially dependent on fund investors’ views of alternative investments relative to traditional asset classes. We believe our fundraising efforts will continue to be subject to certain fundamental asset management trends, including (1) the increasing importance and market share of alternative investment strategies to fund investors of all types as fund investors focus on lower correlated and absolute levels of return, (2) the increasing demand for private markets from private wealth fund investors, (3) shifting asset allocation policies of institutional fund investors, (4) de-leveraging of the global banking system, bank consolidation and increased regulatory requirements and (5) increasing barriers to entry and growth.
Our ability to generate strong, stable returns and retain investor capital throughout the market cycle. Our ability to raise and retain capital is significantly dependent on our track record and the investment returns we are able to generate for our fund investors. The capital we raise drives growth in our AUM, management fees and performance fees. Although our AUM and fees generated have grown significantly since our inception and particularly in recent years, a significant deterioration in the returns we generate for our fund investors, adverse market conditions or an outflow of capital in the alternative asset management industry in general, or in the real estate space in which we specialize, could negatively affect our future growth rate. In addition, market dislocations, contractions or volatility could adversely affect our returns in the future, which could in turn affect our fundraising abilities. Our ability to retain and attract fund investors also depends on our ability to build and maintain strong relationships with both existing and new fund investors, many of whom place significant emphasis on an asset manager’s track record of strong fund performance and distributions. While we believe that our reputation for generating attractive risk-adjusted returns is favorable to our ability to continue to attract investors, we may face greater challenges in raising capital for new verticals as we continue to expand our market presence and asset classes.
Our ability to source investments with attractive risk-adjusted returns. Our ability to continue to grow our revenue is dependent on our continued ability to source and finance attractive investments and efficiently deploy the capital that we have raised. Capital deployed in any one quarter may vary significantly from period to period with the fluctuating availability of attractive opportunities, which are dependent on a number of factors, including debt financing, the general macroeconomic environment, market positioning, valuation, size, the liquidity of such investment opportunities, and the long-term nature of our investment strategies. Each of these factors impact our ability to efficiently and effectively invest our growing pool of fund capital and maintain our revenue growth over time. The increaseIncreases in prevailing interest rates could affect not only our returns on debt and mortgage-backed securities, but also our ability to deploy capital for Bridge-sponsored fundfunds due to the increased cost of, and ability to secure, borrowings. Moreover, with respect to our Debt Strategies and Agency MBS Funds, macro-economic trends or adverse credit and interest rate environments affecting the quality or quantity of new issuance debt and mortgage-backed securities or a substantial increase in defaults could adversely affect our ability to source investments with attractive risk-adjusted returns.
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The attractiveness of our product offerings to a broad and evolving investor base. Investors in our industry may have changing investment priorities and preferences over time, including with respect to risk appetite, portfolio allocation, desired returns and other considerations. We continue to expand and diversify our product offerings to increase investment options for our fund investors, while balancing this expansion with our goal of continuing to deliver the consistent, attractive returns that have cultivated our reputation. We believe that continuing to strikeachieving that balance is crucial to both our fund investors’ success and satisfaction, as well as our ability to maintain our competitive position and grow our revenue.
Our ability to maintain our data advantage relative to competitors. Our proprietary data and technology platforms, analytical tools and deep industry knowledge allow us to provide our fund investors with customized investment solutions, including specialized asset management services, tailored reporting packages, customized performance benchmarks as well as experienced and responsive compliance, administration, and tax capabilities. Our ability to maintain our data advantage is dependent on a number of factors, including our continued access to a broad set of private market information and our ability to grow our relationships with sophisticated partners and wealth management platforms.
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Business Environment
Global markets areshifted dramatically in 2022, experiencing continuedsignificant volatility driven by weakeningincreasing concerns over persistent inflation, rising interest rates, slowing economic growth and geopolitical uncertainty, which has continued in 2023. Inflation persisted at multi-decade highs in many major economies around the world, prompting central banks to pursue monetary policy tightening actions that created, and are likely to continue to create, headwinds to economic growth. However, U.S. fundamentals, rising geopolitical risksinflation has moderated somewhat and decreased from 5% in Europe, ongoing economic impacts of the COVID-19 pandemic, softening growthMarch 2023 to 3% in Asia, global supply chain disruptions, labor shortages, rising commodity prices, availability of debt financingJune 2023, its lowest point in the capital markets, high inflation and increasing interest rates.last two years.
We continue to closely monitor developments related to COVID-19 to assess any negative impacts to our business. In particular, itIt is possible that our future results may be adversely affected by resulting slowdowns in fundraising activity, the pace of capital deployment and the expansion of our tenant base and our ability to collect rental income when due. See “Risk Factors—Risks Related to Our Industry—The COVID-19 pandemic has caused severe disruptions inBusiness—Difficult economic, market and political conditions may adversely affect our businesses, including by reducing the U.S. and global economy, may affectvalue or hampering the investment returnsperformance of the investments made by our funds or reducing the ability of our funds has disrupted,to raise or deploy capital, each of which could materially reduce our revenue, earnings and may continue to disrupt, industries in which wecash flow and adversely affect our funds operatefinancial prospects and could potentially negatively impact us or our funds”condition” in our annual report on Form 10-K.
Key Financial Measures
OurWe manage our business using financial measures and key operating metrics that we believe reflect the productivity of our core investment activities. We prepare our condensed consolidated financial and operating measures are discussed below.statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Additional information regarding our significant accounting policies can be found in Note 2, “Significant Accounting Policies,” to our condensed consolidated and combined financial statements, which appear elsewhereincluded in this quarterly report on Form 10-Q. Our key financial and operating measures are discussed below.
Revenues
Fund Management Fees. Our Fund Managementfund management fees are generally based on a defined percentage of total commitments, invested capital, or net asset value (“NAV”) of the investment portfolios that we manage. Generally, with respect to fund management fees charged on committed capital, fund management fees are earned at the management fee rate on committed capital and, beginning at the expiration of the investment period, on invested capital. The majority of our fee-earning AUM pays fees on committed capital during the respective funds’ investment periods, which generally produces more management fee revenue than fees paid on invested capital. The fees are generally based on a quarterly measurement period and paid in advance. We typically share a portion of the fees we earn on capital raised through wirehouse and distribution channels. Fund management fees are recognized as revenue in the period in which advisory services are rendered, subject to our assessment of collectability. As of SeptemberJune 30, 2022,2023, our weighted-average management fee varies by fund and is based upon the size of the commitment; however, the low average for a single fund is 0.85%0.50% and the high average for a single fund is 1.99%2.50% of committed or invested capital for our closed-end funds. Fund management fees also includes management fees for joint ventures and separately managed assets. Management fees for those types of assets isare usually less than 1% and typically charged on invested capital or invested equity. For our sponsored closed-end funds, our capital raising period is traditionally 18 to 24 months. After the initial closing of a closed-end fund, we charge catch-up management fees to investors who subscribe in subsequent closings in amounts equal to the fees they would have paid if they had subscribed in the initial closing plus interest. Catch-up management fees are recognized in the period in which the investor subscribes to the fund. Fund management fees are presented net of placement agent fees, where we are acting as an agent in the arrangement.
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Property Management and Leasing Fees. We have vertically integrated platforms where we operatemanage a significant percentage of the real estate properties owned by our funds. As of SeptemberJune 30, 2022,2023, we managed approximately 100% of the multifamily properties, 94%100% of the workforce and affordable housing properties, 81%80% of the office properties, and 39%44% of the seniors housing properties owned by our funds. We also provide property management services for a limited number of third-party owned assets. These fees are based upon cash collections at the managed properties and traditionally range from 2.5% to 3.5% for multifamily and workforce and affordable housing properties, 2% to 3% for office properties and 4% to 5% for seniors housing properties. Additionally, we receive leasing fees upon the execution of a leasing agreement for our office assets. We determined that certain third-party asset management costs, for which we are deemed to be the primary obligor, are recorded as gross revenue with a corresponding expense. The gross presentation has no impact on our net income to the extent the expense incurred, and corresponding cost reimbursement income are recognized, in the same period.recognized. The offset is recorded in third-party operating expenses on the condensed consolidated and combined statements of operations.
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Construction Management Fees and Development Fees. The majority of our equity funds have a value-add component, where we seek to make improvements or reposition the properties, or have a development strategy. Similar to Property Management Fees,property management fees, we perform the construction management and development management for certain managed properties and receive fees for these services. These fees are earned as the work is completed. The rates usedcharged are based upon market rates and are updated on an annual basis. For small projects, we occasionally charge an immaterial flat fee. For significant projects, the range is generally 0.5% to 5.0% of construction costs.
Transaction Fees. We earn transaction fees associated with the due diligence related to the acquisition of assets and origination of debt financing for assets. The fee is recognized upon the acquisition of the asset or origination of the mortgage or other debt. For the nine months ended September 30, 2022, theThe fee range for acquisition fees wasis generally 0.5% to 1.0% of the gross acquisition cost of the investment or, in the case of development projects, the total development budget, and the fee range for debt origination wasis generally 0.3% to 1.0%.
Fund administrationAdministration Fees. The Company earns fund administration fees for providing suchfund administration services to ourits funds. Fund administration fees include a fixed annual amount plus a percentage of invested or deployed capital. Fund administration fees also include investor services fees, which are based on an annual fee per investor. Fees are earned as services are provided, and are recognized on a straight-line basis.
Insurance Premiums. BIGRM is our subsidiary that provides certain insurance products for multifamily and commercial properties owned by the funds. BIGRM insures direct risks including lease security deposit fulfillment, tenant legal liability, workers compensation deductible, property deductible and general liability deductible reimbursements. Tenant legal 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,includes, among other things, interest on catch-up management fees, fees related to in-house legal and tax professional fees,services, which are generally billed on an hourly rate to various Bridge funds and properties, and other miscellaneous fees.
Performance Fees. We earn two types of performance fee revenues: incentive fees and performance allocations, as described below. Incentive fees comprise fees earned from certain fund investor investment mandates for which we do not have a general partner interest in a fund. Performance allocations include the allocation of performance-based fees, commonly referred to as carried interest, from limited partners in the funds to us. As of SeptemberJune 30, 2022,2023, we had approximately $16.5$17.9 billion of carry-eligible fee-earning AUM across approximately 4349 funds and other vehicles, of which 2218 were in accrued carried interest positions.
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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 investors in our customers.funds. 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 are included in accrued performance allocations compensation in the condensed 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 (“ASC”) Topic 606 or (“ASC 606,606”), Revenue from Contracts with Customers. We recognize income attributable to performance allocations from a fund based on the amount that would be due to us pursuant
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to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date. Accordingly, the amount recognized as performance allocation income 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. We record the amount of carried interest allocated to us as of each period end as accrued performance allocations which is included as a component of investments in the condensed consolidated balance sheets. Performance allocations are 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 governing documents. Performance allocations are subject to reversal to the extent that the amount received to date exceeds the amount due to us based on cumulative results. As such, a liability is accrued for the potential clawback obligations if amounts previously distributed to us would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life.
Earnings (Losses) from Investments in Real Estate. The Company’s share of the investee’s income and expenses for the Company’s equity method investments (exclusive of carried interest) is included in investment income as earnings (losses) from investments in real estate.
Expenses
Employee Compensation and Benefits. Compensation comprisesincludes salaries, bonuses (including discretionary awards), related benefits, share-based compensation, compensatory awards, and the cost of processing payroll. Bonuses are accrued over the employment period to which they relate.
Share-Based Compensation. To further align the interests of our employees with our shareholders and to cultivate a strong sense of ownership and commitment to our Company, certain employees also are eligible to receive unvested Class A restricted common stock (“Restricted Stock”), Restricted Stock Units (“RSUs”), and profits interests awards. Equity-classified awards granted to employees that have a service condition only are measured at fair value at date of grant and remeasured at fair value only upon a modification of the award. The fair value of the Restricted Stock and RSUs isawards are based upon our stock price aton the grant date. The fair value for profits interests awards classified as equity is determined using a Monte Carlo valuation on the grant date or date of modification. We recognize compensation expense on a straight-line basis over the requisite service period of the awards, not contingent on employment, with the amount of compensation expense recognized at the end of a reporting period at least equal to the fair value of the portion of the award that has vested through that date. Compensation expense is adjusted for actual forfeitures upon occurrence. Refer to Note 20, “Share-Based Compensation and Profits Interests,” into our condensed consolidated and combined financial statements included in this quarterly report on Form 10-Q for additional information about equity awards.
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Performance Allocations Compensation. Performance fee-related compensation deemed to be compensatory awards represents the portion of performance allocation revenue and incentive fees that have been awarded to employees as a form of long-term incentive compensation. Performance fee-related compensation is generally tied to the investment performance of the funds. Up to 60% of performance allocation revenue is awarded to employees as part of our long-term incentive compensation plan, fostering alignment of interest with our fund investors and investors, and retaining key investment professionals. Performance allocations related compensation is accounted for as compensation expense in conjunction with the related performance allocation revenue and, until paid, is recorded as a component of accrued performance allocations compensation in the condensed consolidated balance sheet.sheets. Amounts presented as realized indicate the amounts paid or payable to employees based on the receipt of performance allocation revenue from realized investment activity. Performance allocations related compensation expense may be subject to reversal to the extent that the related performance allocation revenue is reversed. Performance allocations related compensation paid to employees may be subject to clawback on an after-tax basis under certain scenarios. Incentive fee-related compensation is accrued as compensation expense when it is probable and estimable that payment will be made.
Loss and Loss Adjustment Expenses. AmountLoss and loss adjustment expenses includes the estimated liability (based upon actuarial reports) of both losses which have been reported to us, but have not been processed and paid, and losses relating to insured events which have occurred but have not been reported to us.
Third-party Operating Expenses. Costs representsThird-party operating expenses represent transactions, largely operation and leasing of assets, with third-party operators of real estate owned by the funds where we were determined to be the principal rather than the agent in the transaction.
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General and Administrative Expenses. General and administrative expenses include costs primarily related to professional services, occupancy, travel, communication and information services, transaction costs, and other general operating items.
Depreciation and Amortization. Deprecation or amortization of tenant improvements, furniture and equipment and intangible assets is expensed on a straight-line basis over the useful life of the asset.
Other Income (Expense)
Realized and unrealized gains (losses)Unrealized Gains (Losses). Realized and unrealized gains (losses) occur when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized gains (losses) resultsresult from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized gains (losses) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains(losses)gains (losses) in the condensed consolidated and combined statements of operations. Finally, the realized and unrealized gain (loss) associated with the financial instruments that we elect the fair value option is also included in net realized and unrealized gains (losses).
Interest Income. Interest (other than interest on catch-up management fees), dividends and other investment income are included in interest income. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established.
Other Income (Expense). Other income (expense) relates to non-operating and non-investment related expenses, which at times can include changes in our TRA liability.
Interest Expense. Interest expense includes interest related to our privately offered notes, or the 2020 and 2022 Private Placement Notes, which have a weighted-average fixed coupon rate of 4.025% and 5.05%5.03%, respectively. Our former line of credit facility that was terminated in June 2022 had a variable interest rate of LIBOR plus 2.25%. Our new revolving credit facilityThe Credit Facility (as defined herein), executed in June 2022, incurs interest based on a pricing grid, as determined by the Company’s leverage ratio, over Term Secured Overnight Financing Rate (“SOFR”) and an unused commitment fee of up to 0.20%0.25%, which is based on the daily unused portion of the revolving credit facility.Credit Facility. As of SeptemberJune 30, 20222023, the weighted-average interest rate on our revolving credit facilitythe Credit Facility was 5.30%7.00%.
Income Tax Provision. Income tax expense consists of taxes paid or payable by us and our operating subsidiaries. We are taxed as a corporation for U.S. federal and state income tax purposes and, as a result, 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 will flow through to its members. The Operating Company has historically been
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treated as a partnership for U.S. federal and state income tax purposes. As such, income generated by the Operating Company flows through to its members and is generally not subject to U.S. federal or state income tax at the Operating Company level. Our non-U.S. subsidiaries operate as corporate entities in non-U.S. jurisdictions. Accordingly, in some cases, these entities are subject to local or non-U.S. income taxes. In addition, certain subsidiaries are subject to local jurisdiction taxes at the entity level, with the related tax provision reflected in the condensed consolidated and combined statements of operations.
Net Income (Loss) Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net Income (loss) Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC represent the economic interests held by management and third parties 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 govern allocations of income or loss.
Net Income (Loss) Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net Income (Loss) Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. represents the economic interests in the Operating Company held by the third-party owners of Class A Units of the Operating Company. Non-controlling interests in Bridge Investment Group Holdings 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.
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For additional discussion of components of our condensed consolidated and combined financial statements, refer to Note 2, “Significant Accounting Policies,” into our condensed consolidated and combined financial statements.statements included 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
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 is not reduced by 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 fee-earning AUM 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. In addition, our calculation of AUM (but not fee-earning AUM) 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.
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The following table below presents a rollforward of our AUM for the three and ninesix months ended SeptemberJune 30, 20222023 and 20212022 (dollar amounts in millions):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
AUM as of beginning of periodAUM as of beginning of period$41,969 $28,749 $36,315 $25,214 AUM as of beginning of period$48,805 $38,847 $43,292 $36,315 
New capital / commitments raised(1)
New capital / commitments raised(1)
1,361 1,496 3,851 2,891 
New capital / commitments raised(1)
319 1,389 6,181 2,490 
Distributions / return of capital(2)
Distributions / return of capital(2)
(398)(345)(1,442)(661)
Distributions / return of capital(2)
(327)(461)(513)(1,044)
Change in fair value and acquisitions(3)
Change in fair value and acquisitions(3)
901 1,882 5,109 4,338 
Change in fair value and acquisitions(3)
95 2,194 (68)4,208 
AUM as of end of periodAUM as of end of period$43,833 $31,782 $43,833 $31,782 AUM as of end of period$48,892 $41,969 $48,892 $41,969 
IncreaseIncrease1,864 3,033 7,518 6,568 Increase87 3,122 5,600 5,654 
Increase %Increase %%10 %21 %21 %Increase %0.2 %8.0 %12.9 %15.6 %
(1)New capital / commitments raised generally represents limited partner capital raised by our funds and other vehicles, including any reinvestments in our open-ended vehicles. New capital / commitments raised for the six months ended June 30, 2023 includes $5.1 billion of AUM attributed to the Newbury Acquisition.
(2)Distributions / return of capital generally represents the realization proceeds realized from the disposition of assets, current income, or capital returned to investors.
(3)Change in fair value and acquisitions generally represents realized and unrealized activity on investments held by our funds and other vehicles (including changes in fair value and changes in leverage) as well as the net impact of fees, expenses, and non-investment income.
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Fee-Earning AUM
Fee-earning AUM reflects the assets from which we earn management fee revenue. The assets we manage that are included in our fee-earning AUM typically pay management fees based on capital commitments, invested capital or, in certain cases, NAV, depending on the fee terms.
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.
Our calculation of fee-earning AUM may differ from the calculations of other investment managers and, as a result, may not be comparable to similar measures presented by other investments managers. The following table below presents a rollforward of our total fee-earning AUM for the three and six months ended SeptemberJune 30, 2022 2023 and 20212022 (dollar amounts in millions):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Fee-earning AUM as of beginning of periodFee-earning AUM as of beginning of period$15,542 $10,819 $13,363 $10,214 Fee-earning AUM as of beginning of period$22,168 $14,657 $17,334 $13,363 
Increases (capital raised/deployment)(1)
Increases (capital raised/deployment)(1)
1,273 1,422 3,823 2,838 
Increases (capital raised/deployment)(1)
254 985 5,224 2,550 
Changes in fair market valueChanges in fair market value(6)(21)Changes in fair market value27 (13)12 
Decreases (liquidations/other)(2)
Decreases (liquidations/other)(2)
(229)(106)(612)(891)
Decreases (liquidations/other)(2)
(211)(102)(307)(383)
Fee-earning AUM as of end of periodFee-earning AUM as of end of period$16,580 $12,140 $16,580 $12,140 Fee-earning AUM as of end of period$22,238 $15,542 $22,238 $15,542 
IncreaseIncrease$1,038 $1,321 $3,217 $1,926 Increase$70 $885 $4,904 $2,179 
Increase %Increase %%12 %24 %19 %Increase %0.3 %6.0 %28.3 %16.3 %
(1)Increases generally represent limited partner capital raised or deployed by our funds and other vehicles that is fee-earning when raised or deployed, respectively, including any reinvestments in our open-ended vehicles. Increases for the six months ended June 30, 2023 includes $4.3 billion of fee-earning AUM attributed to the Newbury Acquisition.
(2)Decreases generally represent liquidations of investments held by our funds or other vehicles or other changes in fee basis, including the change from committed capital to invested capital after the expiration or termination of the investment period.
Capital raising activities and deployment coupled with the launch of new funds led comparative fee-earning AUM, excluding contributions from the Newbury Acquisition, to increase $4.4$2.4 billion, or 37%16%, from approximately $12.1 billion as of SeptemberJune 30, 20212022 to approximately $16.6 billion as of SeptemberJune 30, 2022.2023.
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The following table summarizes the balances of fee-earning AUM by fund as of SeptemberJune 30, 20222023 and 20212022 and December 31, 20212022 (in millions):
As of June 30,As of December 31,
202320222022
Fee-Earning AUM by Fund
Bridge Debt Strategies Fund IV$2,773 $2,038 $2,381 
Bridge Multifamily Fund V2,233 1,471 2,143 
Newbury Equity Partners Fund V1,951 — — 
Bridge Workforce Fund II1,719 1,212 1,719 
Bridge Opportunity Zone Fund IV1,476 1,476 1,476 
Newbury Equity Partners Fund IV1,408 — — 
Bridge Multifamily Fund IV1,358 1,342 1,347 
Bridge Opportunity Zone Fund III1,019 1,019 1,019 
Newbury Equity Partners Fund III895 — — 
Bridge Debt Strategies Fund III872 1,137 1,028 
Bridge Seniors Housing Fund II782 797 793 
Bridge Seniors Housing Fund I615 626 615 
Bridge Workforce Fund I556 556 556 
Bridge Opportunity Zone Fund V551 240 504 
Bridge Opportunity Zone Fund I482 482 482 
Bridge Office Fund I424 499 478 
Bridge Opportunity Zone Fund II408 408 408 
Bridge Debt Strategies IV JV Partners349 158 142 
Bridge Debt Strategies Fund II280 280 280 
Bridge Logistics U.S. Venture I273 250 256 
Bridge Agency MBS Fund254 194 245 
Bridge Net Lease Industrial Income Fund233 95 179 
Bridge Single-Family Rental Fund IV231 227 229 
Bridge Debt Strategies III JV Partners211 264 223 
Bridge Office Fund II161 176 161 
Bridge Debt Strategies II JV Partners139 152 145 
Bridge Multifamily Fund III138 228 188 
Bridge Office I JV Partners108 130 132 
Bridge Office III JV Partners92 — 93 
Bridge Seniors Housing Fund III65 57 66 
Newbury Equity Partners Fund VI49 — — 
Bridge Opportunity Zone Fund VI42 — — 
Morrocroft Neighborhood Fund III1
32 — 32 
Bridge Logistics U.S. Venture II26 — — 
Bridge Office II JV Partners21 
Bridge Solar Energy Development Fund I— — 
Bridge Multifamily III JV Partners
Bridge Ventures Fund I— — 
Bridge Debt Strategies I JV Partners— 18 
Total Fee-Earning AUM$22,238 $15,542 $17,334 
Average remaining fund life of closed-end funds, in years7.2 $7.9 7.7 
As of September 30,As of December 31,
202220212021
Fee-Earning AUM by Fund
Bridge Debt Strategies Fund IV$2,036 $1,118 $1,133 
Bridge Multifamily Fund V1,922 305 976 
Bridge Workforce Fund II1,719 616 915 
Bridge Opportunity Zone Fund IV1,476 1,002 1,490 
Bridge Multifamily Fund IV1,327 1,284 1,284 
Bridge Debt Strategies Fund III1,028 1,485 1,286 
Bridge Opportunity Zone Fund III1,019 1,019 1,019 
Bridge Seniors Housing Fund II793 809 805 
Bridge Seniors Housing Fund I615 626 626 
Bridge Workforce Fund I556 523 556 
Bridge Office Fund I512 500 499 
Bridge Opportunity Zone Fund I482 482 482 
Bridge Opportunity Zone Fund II408 408 408 
Bridge Opportunity Zone Fund V338 — — 
Bridge Logistics U.S. Venture I305 — 110 
Bridge Debt Strategies Fund II280 516 354 
Bridge Debt Strategies III JV Partners241 334 308 
Bridge Single-Family Rental Fund IV229 — — 
Bridge Multifamily Fund III188 294 269 
Bridge Net Lease Income Fund182 31 29 
Bridge Agency MBS Fund176 127 123 
Bridge Office Fund II176 130 176 
Bridge Debt Strategies IV JV Partners150 79 129 
Bridge Debt Strategies II JV Partners145 221 195 
Bridge Office I JV Partners132 129 130 
Bridge Seniors Housing Fund III58 33 33 
Morrocroft Neighborhood Fund III1
32 — — 
Bridge Office III JV Partners27 — — 
Bridge Debt Strategies I JV Partners18 18 18 
Bridge Office II JV Partners
Bridge Multifamily III JV Partners
Bridge Debt Strategies Fund I— 40 — 
Total Fee-Earning AUM$16,580 $12,140 $13,363 
1 (1)    Morrocroft Neighborhood Fund III, LP is a single-family rental fund managed by Bridge Single-Family Rental Fund Manager LLC, which is a subsidiary of the Company.
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Our average remaining fund life for our closed-end funds was approximately 7.9 years as of September 30, 2022, 8.0 years as of December 31, 2021, and 7.5 years as of September 30, 2021.
Undeployed Capital
As of SeptemberJune 30, 2022,2023, we had $3.9$4.1 billion of undeployed capital available to be deployed for future investment or reinvestment. Of this amount, $2.4$3.0 billion is currently fee-earning based on commitments and $1.5$1.1 billion will be fee-earning if and when it is deployed.
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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 fundsBridge Multifamily Funds II, III, IV, Bridge Workforce Housing Fund I and our first workforceBridge Debt Funds II and affordable housing fundsIII in the top quartile for their vintage. Our historical investment returns for our closed-end funds by platform are shown in the chart below (dollar amounts in millions).:
Investment Performance Summary as of September 30, 2022
Closed-End Funds(1)
(Investment Period Beginning, Ending Date)
Cumulative Fund Committed Capital(2)
Unreturned Drawn Capital plus Accrued Pref(3)
Cumulative Investment Invested Capital(4)
Realized Investment Value(5)
Unrealized Investment Value(6)
Unrealized Investment MOIC(7)
Total Investment Fair Value(8)
Total Investment MOIC(9)
Investor Levered Gross IRR(10)
Investor Levered Net IRR(11)
(in millions)
Equity Strategies Funds
Multifamily
Bridge Multifamily I
(Mar 2009, Mar 2012)
$124 $— $150 $280 $— N/A$280 1.87x20.8 %15.1 %
Bridge Multifamily II
(Apr 2012, Mar 2015)
596 — 605 1,264 — N/A1,264 2.09x30.3 %23.0 %
Bridge Multifamily III
 (Jan 2015, Jan 2018)
912 — 878 1,745 444 3.09x2,189 2.49x27.7 %21.3 %
Bridge Multifamily IV
 (Jun 2018, Jun 2021)
1,590 1,490 1,400 310 2,774 2.19x3,084 2.20x38.8 %30.4 %
Total Multifamily Funds$3,222 $1,490 $3,033 $3,599 $3,218 2.31x$6,817 2.25x28.9 %22.7 %
Workforce & Affordable Housing
Bridge Workforce Housing I
 (Aug 2017, Aug 2020)
$619 $648 $572 $110 $1,219 2.32x$1,329 2.32x33.7 %27.1 %
Bridge Workforce Housing II
 (Aug 2020, to present)
1,741 810 891 62 990 1.18x1,052 1.18x25.9 %12.8 %
Total Workforce & Affordable Housing Funds$2,360 $1,458 $1,463 $172 $2,209 1.63x$2,381 1.63x32.4 %24.4 %
Office
Bridge Office I
 (Jul 2017, Jul 2020)
$573 $660 $608 $185 $511 1.13x$696 1.15x4.1 %1.4 %
Bridge Office II
(Dec 2019, to present)
208 207 206 35 280 1.53x315 1.53x27.0 %20.9 %
Total Office Funds$781 $867 $814 $220 $791 1.24x$1,011 1.24x7.2 %4.0 %
Seniors Housing
Bridge Seniors I
 (Jan 2014, Jan 2018)
$578 $798 $695 $393 $459 1.09x$852 1.23x4.3 %1.8 %
Bridge Seniors II
 (Mar 2017, Mar 2020)
820 817 723 217 762 1.34x979 1.35x9.3 %6.2 %
Total Seniors Housing Funds$1,398 $1,615 $1,418 $610 $1,221 1.23x$1,831 1.29x6.4 %3.7 %
Debt Strategies Funds
Bridge Debt I
 (Sep 2014, Sep 2017)
$132 $— $219 $262 $1.24x$264 1.21x8.3 %5.7 %
Bridge Debt II
 (July 2016, July 2019)
1,002 244 2,503 2,694 281 1.33x2,975 1.19x11.3 %9.0 %
Bridge Debt III
 (May 2018, May 2021)
1,624 1,028 5,496 5,005 1,080 1.27x6,085 1.11x12.2 %9.6 %
Bridge Debt IV
 (Nov 2020, to present)
2,888 1,896 6,466 4,815 1,802 1.04x6,617 1.02x7.8 %6.2 %
Total Debt Strategies Funds$5,646 $3,168 $14,684 $12,776 $3,165 1.14x$15,941 1.09x11.1 %8.7 %
Investment Performance Summary as of June 30, 2023
Closed-End Funds(1)
(Investment Period Beginning, Ending Date)
Cumulative Fund Committed Capital(2)
Unreturned Drawn Capital plus Accrued Pref(3)
Cumulative Investment Invested Capital(4)
Realized Investment Value(5)
Unrealized Investment Value(6)
Unrealized Investment MOIC(7)
Total Investment Fair Value(8)
Total Investment MOIC(9)
Investor Levered Net IRR(10)
Investor Unlevered Net IRR(11)
(in millions)
Equity Strategies Funds
Multifamily
Bridge Multifamily I
(Mar 2009, Mar 2012)
$124 $— $150 $280 $— N/A$280 1.87x15.1 %15.1 %
Bridge Multifamily II
(Apr 2012, Mar 2015)
596 — 605 1,264 — N/A1,264 2.09x23.0 %22.5 %
Bridge Multifamily III
(Jan 2015, Jan 2018)
912 605 893 1,825 174 1.52x1,999 2.24x18.5 %18.0 %
Bridge Multifamily IV
(Jun 2018, Jun 2021)
1,590 1,576 1,476 398 2,551 1.98x2,949 2.00x20.5 %19.9 %
Bridge Multifamily V
(Jul 2021, to present)
2,257 1,103 962 27 757 0.81x784 0.81x(25.2)%(21.8)%
Total Multifamily Funds(12)
$5,479 $3,284 $4,086 $3,794 $3,481 1.52x$7,275 1.78x18.1 %17.6 %
Workforce & Affordable Housing
Bridge Workforce Housing I
(Aug 2017, Aug 2020)
$619 $665 $592 $164 $1,058 2.03x$1,222 2.06x18.2 %18.2 %
Bridge Workforce Housing II
(Aug 2020, to present)
1,741 1,103 973 89 970 1.09x1,059 1.09x(0.5)%— %
Total Workforce & Affordable Housing Funds(12)
$2,360 $1,768 $1,565 $253 $2,028 1.44x$2,281 1.46x12.5 %12.2 %
Office
Bridge Office I
(Jul 2017, Jul 2020)
$573 $699 $622 $211 $219 0.68x$430 0.69x(15.3)%(14.9)%
Bridge Office II
(Dec 2019, Dec 2022)
208 215 242 76 214 1.20x290 1.20x5.7 %5.7 %
Total Office Funds(12)
$781 $914 $864 $287 $433 0.84x$720 0.83x(10.8)%(10.1)%
Seniors Housing
Bridge Seniors I
(Jan 2014, Jan 2018)
$578 $846 $732 $412 $386 0.92x$798 1.09x(1.1)%(0.9)%
Bridge Seniors II
(Mar 2017, Mar 2020)
820 865 736 248 683 1.26x931 1.26x3.2 %3.2 %
Bridge Seniors III
(Nov 2020, to present)
48 33 24 31 1.38x33 1.38x5.5 %5.3 %
Total Seniors Housing Funds(12)
$1,446 $1,744 $1,492 $662 $1,100 1.11x$1,762 1.18x1.0 %1.1 %
Debt Strategies Funds
Bridge Debt I
(Sep 2014, Sep 2017)
$132 $— $219 $264 $— N/A$264 1.21x5.9 %5.9 %
Bridge Debt II
(July 2016, July 2019)
1,002 249 2,645 2,840 272 1.35x3,112 1.18x8.7 %8.6 %
Bridge Debt III
(May 2018, May 2021)
1,624 876 5,809 5,551 892 1.29x6,443 1.11x9.0 %8.9 %
Bridge Debt IV
(Nov 2020, to present)
2,888 2,844 7,820 5,635 2,542 1.10x8,177 1.05x8.0 %7.2 %
Total Debt Strategies Funds(12)
$5,646 $3,969 $16,493 $14,290 $3,706 1.17x$17,996 1.09x8.5 %8.3 %
59


Footnotes:
The investment performance presented herein is intended to illustrate the performance of investments held by the funds and other vehicles we manage and the potential for which is relevant to the performance-based fees to Bridge. Other than the Investor Levered GrossUnlevered Net IRR and the Investor Levered Net IRR numbers presented, herein, the cash flows in the investment performance do not reflect the cash flows used in presentations of fund performance due to the fund level expenses, reserves, and reinvested capital.
56


(1)Close-EndedClosed-End Funds represented herein does not include performance for (i) Opportunity Zone funds as such funds are invested in active development projects and have minimal stabilized assets, or (ii) funds that are currently raising capital, including our open-ended funds.funds, (iii) funds related to the acquisition of the investment management business of Gorelick Brothers Capital, LLC that closed on January 31, 2022 where Bridge is not acting as the general partner, or (iv) funds related to the acquisition of the investment management business of Newbury Partners, LLC that closed on March 31, 2023. Each fund identified contemplates all associated parallel and feeder limited partnerships in which investors subscribe and accordingly share common management. All intercompany accounts and transactions have been eliminated in the combined presentation. Values and performance presented herein are the combined investor returns gross of any applicable legal entity taxes.
(2)Cumulative Fund Committed Capital represents total capital commitments to the fund (excluding joint ventures or separately managed accounts).
(3)Unreturned Drawn Capital plus Accrued Pref represents the amount the fund needs to distribute to its investors as a return of capital and a preferred return before the General Partner is entitled to receive performance fees or allocations from the fund.
(4)Cumulative Investment Invested Capital represents the total cost of investments since inception (including any recycling or refinancing of investments). This figure will differ from Cumulative Paid-In Capital, which represents the total contributions or drawn down commitments from all investors since inception.
(5)Realized Investment Value represents net cash proceeds received in connection with all investments, including distributions from investments and disposition proceeds.
(6)Unrealized Investment Value represents the estimated liquidation values that are generally based upon appraisals, contracts and internal estimates. There can be no assurance that Unrealized Investment Fair Value will be realized at valuations shown, and realized values will depend on numerous factors including, among others, future asset-level operating results, asset values and market conditions at the time of disposition, transaction costs, and the timing and manner of disposition, all of which may differ from the assumptions on which the Unrealized Investment Fair Value are based. Direct fund investments in real property are held at cost minus transaction expenses for the first six months.
(7)Unrealized Investment MOIC represents the Multiple on Invested Capital (“MOIC”) for Total Investment Fair Value associated with unrealized investments before management fees, fund level expenses and carried interest, divided by Cumulative Investment Invested Capital attributable to those unrealized investments.
(8)Total Investment Fair Value represents the sum of Realized Investment Value and Unrealized Investment Value, before management fees, expenses and carried interest.
(9)Total Investment MOIC represents the MOIC for Total Investment Fair Value divided by Cumulative Investment Invested Capital.
(10)Investor Levered GrossNet IRR is an annualized realized and unrealized fund-level internal rate of return to fee-paying fund investors, computed from inception based on the effective dates of cash inflows (capital contributions) and cash outflows (distributions) and the remaining fair value, (to fee-paying investors), grossnet of the investors actual management fees, fund-level expenses, and carried interest. Net return information reflects aggregated fund-level returns for fee-paying investors using actual management fees paid by the fund. The actual management fee rates from individual investors will be higher and lower than the actual aggregate fund level rate. This return may differ from actual investor level returns due to timing, variance in fees paid by investors, and other investor-specific investment costs such as taxes. Because IRRs are time-weighted calculations, for certain newer funds with short measurement periods, IRRs may be amplified by fund leverage and early fund expenses and may not be meaningful. For certain IRRs calculated with an initial date less than one year from the reporting date, the IRR presented is de-annualized, representing such period's return.
(11)Investor LeveredUnlevered Net IRR is an annualized realized and unrealized internal rate of return to fee-paying fund investors, sincecomputed from inception based on the dateeffective dates of cash inflows (capital contributions and drawdowns on fund lines of credit) and cash outflows (distributions and repayments on fund lines of credit) and the first capital call,remaining fair value (after removing outstanding balances on fund lines of credit), net of the investors actual management fees, fund levelfund-level expenses, and carried interest. Net return information reflects the aggregated fundfund-level returns for fee-paying investor level returns net of all fees, which may differ from an individual investor's returns due to timing of investment, variance ininvestors using actual management fees paid by the fund. The actual management fee rates from individual investors will be higher and lower than the actual aggregate fund level rate. Because IRRs are time-weighted calculations, for newer funds with short measurement periods, this IRR may be amplified by early fund expenses and may not be meaningful. For IRRs calculated with an initial date less than one year from the reporting date, the IRR presented is de-annualized, representing such period's return.
(12)Any composite returns presented herein do not represent actual returns received by any one investor and other investor-specificare for illustrative purposes only. Composite performance is based on actual cash flows of the funds within a strategy over the applicable timeframes and are prepared using certain assumptions. Each fund has varied investment costs such as taxes.periods and investments were made during different market environments; past performance of prior funds within a strategy is not a guarantee of future results. Fund investors generally pay fees based on a defined percentage of total commitments during the investment period and invested capital thereafter, but some fund investors may pay fees based on invested capital for the life of the fund according to the applicable governing documents.
60


The returns presented above are those of the primary funds in each platform and not those of the Company. The returns presented above do not include returns for joint ventures or separately managed accounts. 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 co-investment vehicles or separately managed accounts or each non-U.S. partnership due to varied management fee structures, timing of investments, contributions and distributions and additional structuring costs and taxes.
There is no guarantee that any fund or other vehicle within a platform will achieve its investment objectives or achieve comparable investment returns.

57


Results of Operations
Three Months Ended SeptemberJune 30, 20222023 Compared to the Three Months Ended SeptemberJune 30, 20212022
Revenues
Three Months Ended September 30,Amount
Change
%
Change
Three Months Ended June 30,Amount
Change
%
Change
(in thousands)(in thousands)20222021(in thousands)20232022
Revenues:Revenues:Revenues:
Fund management feesFund management fees$64,096 $40,576 $23,520 58 %Fund management fees$60,317 $49,380 $10,937 22 %
Property management and leasing feesProperty management and leasing fees18,788 22,510 (3,722)(17 %)Property management and leasing fees19,130 19,616 (486)(2 %)
Construction management feesConstruction management fees3,414 2,097 1,317 63 %Construction management fees2,902 2,426 476 20 %
Development feesDevelopment fees986 1,018 (32)(3 %)Development fees1,337 793 544 69 %
Transaction feesTransaction fees11,532 21,907 (10,375)(47 %)Transaction fees4,682 17,643 (12,961)(73 %)
Fund administration feesFund administration fees3,808 — 3,808 N/AFund administration fees4,304 3,657 647 18 %
Insurance premiumsInsurance premiums3,387 2,530 857 34 %Insurance premiums3,485 2,845 640 22 %
Other asset management and property incomeOther asset management and property income4,413 1,533 2,880 188 %Other asset management and property income2,646 2,659 (13)— %
Total revenuesTotal revenues$110,424 $92,171 $18,253 20 %Total revenues$98,803 $99,019 $(216)— %
Fund Management Fees. Our fee-earning AUM increased from approximately $12.1by $2.4 billion, or 37%16%, asexclusive of Septemberthe Newbury Acquisition, from June 30, 20212022 to $16.6 billion as of SeptemberJune 30, 2022.2023. Our weighted-average management fee, which varies largely due to the size of investor commitments, was 1.49%1.37% as of both SeptemberJune 30, 2023 compared to 1.54% as of June 30, 2022. The decrease from June 30, 2022 and September 30, 2021.was partially attributed to the Newbury Acquisition as these secondary funds generally have a lower weighted-average management fee range than other Bridge-sponsored funds.
The $23.5Fund management fees increased by $10.9 million, or 58%22%, increase in fund management fee was largely dueprimarily attributed to the Newbury Acquisition coupled with timing of capital raising activities for Bridge Opportunity Zone Fund V, which launched in March 2022, and the final closings for Bridge Debt Strategies Fund IV and Bridge Workforce and Affordable Housing Fund II which launched in 2020,the second half of 2022, and Bridge Multifamily Fund V which launched in 2021, and Bridge Opportunity Zone Fund V and Bridge Single-Family Rental Fund IV, both of which launched in 2022.January 2023. These four fundsfactors contributed an additional $24.7$17.1 million of fund management fees for the three months ended SeptemberJune 30, 20222023 compared to the three months ended SeptemberJune 30, 2021.2022. These increases were partially offset by reductions in fee-earning AUM,decreases of which $1.7$6.2 million was primarily attributed to Bridge Debt Strategies Funds IIthe timing of placement agent fees and III.timing of one-time catch-up fees.
Included in fund management
61


There were no catch-up fees was $12.7 million in one-time catch up feesrecognized for the three months ended SeptemberJune 30, 2023, compared to one-time catch-up fees of $4.0 million for the three months ended June 30, 2022, compared to 2021, which waswere primarily attributed to the timing of capital raising for Bridge Multifamily Fund V, Bridge Workforce and Affordable Housing Fund II which had its final closing in September 2022, and Bridge MultifamilyDebt Strategies Fund V, whichIV. The following chart presents the composition of our fund management fees for the three months ended June 30, 2023 and 2022 (dollar amounts in millions)(1):
Q2 2023 vs Q2 2022.jpg
(1)Fund management fees for the three months ended June 30, 2022 excludes fees for those funds launched in the third quarter of 2021.subsequent to such date.
Property Management and Leasing Fees. Property management and leasing fees decreased by $3.7$0.5 million, or 17%2%, primarily due to a reduction in leasing fees from commercial real estate in the Atlanta region during the third quarter of 2021 that did not reoccur in 2022. These decreases werecommissions, which was partially offset by the acquisition of the SFR property management business, which was part of the GBC Acquisition, and ana 6% increase in the number of multifamily and workforce and affordable housing, seniors housing, and single-family rental properties under management.
Construction Management and Fees. Construction management fees increased by $0.5 million, or 20%, primarily due to commercial office and logistics properties under management.
Development Fees. Development fees increased by $0.5 million, or 69%, primarily due to timing of projects.
Transaction Fees. Transaction fees decreased by $10.4$13.0 million, or 47%73%, primarily due to a reduction in diligenceacquisition fees driven by lesslower volume of real estate transactions during the three months ended SeptemberJune 30, 20222023 compared to the three months ended SeptemberJune 30, 2021.2022.
Fund Administration Fees. Fund administration fees were $3.8increased by $0.6 million, or 18%, during the three months ended SeptemberJune 30, 2022, for services Bridge began providing on January 1, 2022.2023, correlated with the increase in our AUM.
Insurance Premiums. Insurance premiums increased by $0.9$0.6 million, or 34%22%, largely due to the increase in AUM.
Other Asset Management and Property Income. Other asset management and property income increased by $2.9 million, or 188%, primarily due to an increase in other income driven by the growth in AUM.
5862


Investment income
Three Months Ended September 30,Amount
Change
%
Change
(in thousands)20222021
Investment income:
Performance allocations:
Realized$22,308 $30,999 $(8,691)(28)%
Unrealized(16,367)53,042 (69,409)(131)%
Earnings from investments in real estate818 823 (5)(1)%
Total investment income$6,759 $84,864 $(78,105)(92)%
Three Months Ended June 30,Amount
Change
%
Change
(in thousands)20232022
Investment (loss) income:
Incentive fees$41 $— $41 — 
Performance allocations:
Realized$8,425 $33,581 $(25,156)(75)%
Unrealized(19,284)70,116 (89,400)(128)%
Earnings from investments in real estate215 1,251 (1,036)(83)%
Total investment (loss) income$(10,603)$104,948 $(115,551)(110)%
Performance allocations. Net performance allocations decreased by $78.1$114.6 million, or 93%111%. The following table reflects our carried interest and incentive fees by fund (in thousands):
Three Months Ended September 30, 2022Three Months Ended September 30, 2021Three Months Ended
June 30, 2023
Three Months Ended
June 30, 2022
RealizedUnrealizedRealizedUnrealizedRealizedUnrealizedRealizedUnrealized
BMF IV GPBMF IV GP$— $(10,191)$— $66,381 
BMF III GPBMF III GP$19,805 $(21,084)$28,389 $(15,956)BMF III GP5,525 (10,049)29,916 (11,121)
BDS III GP2,176 (8,358)2,610 3,502 
BOF II GPBOF II GP— (1,546)— 796 
BAMBS GPBAMBS GP— (1,153)— (151)
BLV I GPBLV I GP— (241)— — 
BWH I GPBWH I GP— (137)— 17,192 
BDS IV GPBDS IV GP— (5,717)— 2,474 BDS IV GP— — 493 (2,698)
BDS II GP327 (1,792)— 7,209 
BWH I GP— (195)— 19,740 
BAMBS GP— (155)— (969)
BOF I GP— — — (6,268)
BWH II GPBWH II GP— — — 6,597 
BSH III GPBSH III GP— 182 — — BSH III GP— 148 — — 
BNLI GPBNLI GP— 922 — — BNLI GP— 219 — 695 
BLV I GP— 1,244 — — 
BOF II GP— 1,858 — 1,259 
BWH II GP— 2,724 — 943 
BMF IV GP— 4,912 — 41,108 
BSFR IV GPBSFR IV GP— 9,092 — — BSFR IV GP— 388 — — 
BDS III GPBDS III GP2,900 790 2,040 (3,900)
NEP V GP(1)
NEP V GP(1)
— 408 — — 
BDS II GPBDS II GP— 2,080 1,132 (3,675)
TotalTotal$22,308 $(16,367)$30,999 $53,042 Total$8,425 $(19,284)$33,581 $70,116 
For(1)    The performance allocation income for Newbury Partners Fund V represents the three months ended September 30, 2022portion payable to former employees of Newbury Partners and 2021, realized gains were primarily related to dispositions in Bridge Multifamily Fund III. therefore no portion of such amount will be retained by the Company.
Unrealized performance allocation (loss) income allocation is recorded one quarter in arrears, and as such the unrealized performance allocation (loss) income for the three months ended SeptemberJune 30, 20222023 and 20212022 reflects asset valuations as of June 30,March 31, 2023 and 2022, and 2021, respectively. For the three months ended SeptemberJune 30, 2022,2023, the decrease in unrealized performance allocations was largely due to market depreciation from properties within our multifamily funds, and includes the timingreversal of realizationsrealized performance allocation income during the second quarters of both 2023 and 2022. For the three months ended June 30, 2023 and 2022, the realized performance allocations were primarily related to dispositions in Bridge Multifamily Fund III and tax distributions in Bridge Debt Strategies Fund III during the third quarter of 2022 compared to 2021,Funds II and the related reversal of unrealized performance allocation income, coupled with market appreciation from properties within our multifamily and workforce and affordable housing real estate equity funds that was recognized during the third quarter of 2021. These decreases were partially offset by market appreciation recognized in the third quarter of 2022 related to properties in Bridge Single-Family Rental Fund IV.III.
5963


Expenses
Three Months Ended September 30,Amount
Change
%
Change
Three Months Ended June 30,Amount
Change
%
Change
(in thousands)(in thousands)20222021(in thousands)20232022
Expenses:Expenses:Expenses:
Employee compensation and benefitsEmployee compensation and benefits$54,968 $31,763 $23,205 73 %Employee compensation and benefits$56,376 $46,693 $9,683 21 %
Incentive fee compensationIncentive fee compensation— — 
Performance allocations compensation:Performance allocations compensation:Performance allocations compensation:
Realized gains1,321 1,855 (534)(29)%
Unrealized gains3,789 2,682 1,107 41 %
RealizedRealized495 2,165 (1,670)(77)%
UnrealizedUnrealized(4,649)7,987 (12,636)(158)%
Loss and loss adjustment expensesLoss and loss adjustment expenses2,204 1,429 775 54 %Loss and loss adjustment expenses1,684 1,439 245 17 %
Third-party operating expensesThird-party operating expenses6,125 11,581 (5,456)(47)%Third-party operating expenses5,219 6,749 (1,530)(23)%
General and administrative expensesGeneral and administrative expenses10,685 6,703 3,982 59 %General and administrative expenses12,872 9,769 3,103 32 %
Depreciation and amortizationDepreciation and amortization703 699 %Depreciation and amortization5,118 887 4,231 477 %
Total expensesTotal expenses$79,795 $56,712 $23,083 41 %Total expenses$77,118 $75,689 $1,429 %
Employee Compensation and Benefits. Employee compensation and benefits increased by $23.2$9.7 million, or 73%21%, largely due to a $16.0net increase of $5.1 million increase in salaries bonuses and benefits attributed to higher headcount driven by the increase in our AUM and the number of Bridge-sponsored funds, including the launch of the SFR platform upon consummation of the GBC Acquisitionwhich was largely offset by a reduction in January 2022.bonus expense. An additional increase of $7.2$4.6 million was attributed to Restricted Stock and RSUs that were issued concurrent with the IPO in July 2021 and for awards granted in January 20222023 and the additional expense related to the 2022 profits interests awards granted in the third quarter of 2022.2022 and 2023 profits interests granted in the first quarter of 2023.
Performance Allocation Compensation. Net performance allocation compensation increaseddecreased by approximately $0.6$14.3 million, or 13%141%, due to a $1.1$12.6 million increasedecrease in unrealized performance allocation compensation offset byand a decrease of $0.5$1.7 million related to realized performance allocation awards, which is directly correlated to our performance allocations (loss) income during the three months ended SeptemberJune 30, 20222023 compared to the three months ended SeptemberJune 30, 2021. In addition, the increase was attributed to the carried interest awards issued to certain employees in December 2021.2022.
Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses increased by $0.8$0.2 million, or 54%17%, primarily due to tenant, workers compensation, and general liability insurance losses incurred or paid during the three months ended SeptemberJune 30, 20222023 compared to 2021.the three months ended June 30, 2022.
Third-party Operating Expenses. Third-party operating expenses decreased by $5.5$1.5 million, or 47%23%, primarily due to a reduction in leasing commissions incurred during the third quarter of 2021 that did not reoccur in 2022.and operating expenses related to seniors housing properties managed.
General and Administrative Expenses. General and administrative expenses increased by $4.0$3.1 million, or 59%32%, primarily due an increaseattributed to $2.2 million of consolidated fund-level expenses coupled with increases in insurance, professional services, software licensing fees, and travelother expenses correlated with the increase in AUM.AUM and the number of properties managed.
Depreciation and Amortization. Depreciation and amortization increased by $4.2 million, or 477%, primarily attributed to additional amortization for intangibles acquired as part of the Newbury Acquisition.
Other income (expense)
Three Months Ended September 30,Amount
Change
%
Change
Three Months Ended June 30,Amount
Change
%
Change
(in thousands)(in thousands)20222021(in thousands)20232022
Other income (expense)Other income (expense)Other income (expense)
Realized and unrealized gains, net$399 $2,565 $(2,166)(84)%
Realized and unrealized (losses) gains, netRealized and unrealized (losses) gains, net$(1,367)$3,489 $(4,856)(139)%
Interest incomeInterest income1,904 1,008 896 89 %Interest income3,728 1,353 2,375 176 %
Interest expenseInterest expense(4,247)(2,407)(1,840)76 %Interest expense(8,735)(2,901)(5,834)201 %
Total other income (expense)$(1,944)$1,166 $(3,110)(267)%
Total other (loss) incomeTotal other (loss) income$(6,374)$1,941 $(8,315)(428)%
6064


Realized and Unrealized (Losses) Gains, Net. Net realized and unrealized (losses) gains decreased $2.2by $4.9 million, or 139%, for the three months ended SeptemberJune 30, 2022,2023, primarily due to unrealized appreciation recognized foron certain PropTechother investments during the thirdsecond quarter of 2021 that did not reoccur in 2022.
Interest Income. Interest income increased $0.9by $2.4 million, or 89%176%, largely due to additional interest income driven by the increase in interest rates and the weighted-average outstanding cash and cash equivalents between periods, timing of distribution income and the timing of short-term borrowings by our funds.
Interest expenseExpense. Interest expense increased $1.8by $5.8 million, or 76%201%, due to the $150 million of private placement notes2022 Private Placement Notes that funded in July 2022, which have a weighted-average interest rate of 5.05%., the $150 million of 2023 Private Placement Notes that funded in March 2023, which have a weighted-average interest rate of 6.01%, and the $80.0 million of net proceeds drawn on the Credit Facility during 2023.
Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net income (loss) attributable to non-controlling interests in Bridge Investment Group Holdings LLC is comprised of non-controlling interests related to the Operating Company’s subsidiaries and to our profits interests programs. The following table summarizes the allocation of net (loss) income to the non-controlling interests in the Operating Company (in thousands):
Three Months Ended September 30,Three Months Ended June 30,
2022202120232022
Non-controlling interests related to General Partners - realizedNon-controlling interests related to General Partners - realized$12,460 $17,142 Non-controlling interests related to General Partners - realized$5,066 $18,409 
Non-controlling interests related to General Partners - unrealizedNon-controlling interests related to General Partners - unrealized(14,386)31,604 Non-controlling interests related to General Partners - unrealized(6,173)32,316 
Non-controlling interests related to Fund ManagersNon-controlling interests related to Fund Managers(1,446)2,155 Non-controlling interests related to Fund Managers(3,189)(2,228)
Non-controlling interests related to 2019 profits interests awardsNon-controlling interests related to 2019 profits interests awards159 8,517 Non-controlling interests related to 2019 profits interests awards110 44 
Non-controlling interests related to 2020 profits interests awardsNon-controlling interests related to 2020 profits interests awards1,895 895 Non-controlling interests related to 2020 profits interests awards— 689 
Non-controlling interests related to 2021 profits interests awardsNon-controlling interests related to 2021 profits interests awards$2,699 $587 Non-controlling interests related to 2021 profits interests awards— 518 
Total$1,381 $60,900 
Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLCNet (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC$(4,186)$49,748 
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 $25.9$6.2 million and $138.6$61.7 million during the three months ended SeptemberJune 30, 20222023 and 2021,2022, respectively.
On January 1, 2022, our 20192023, certain of the Company’s 2020 profits interests awards were collapsed into 790,424801,927 shares of our Class A common stock and 13,255,8882,025,953 Class A Units inUnits. Certain of the Operating Company. We expect that the 20202021 profits interests awards will bewere collapsed into Class A Units in the Operating Company (or shares of our Class A common stock) on or about January 1, 2023, and that 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 or about July 1, 2023. The 2021 profits interests will bewere collapsed based on their then-current fair values and the relative value of the Company, based on Distributable Earnings (as defined subsequently) 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 non-controlling interests for the applicable periods; however, there will also be a corresponding increase in the number of outstanding Class A Units at the Operating Company or(or shares of our Class A common stock.stock).
Income tax expense
Income tax expense increased by $1.6 million, or 28%, primarily due to the reversal of unrealized accrued performance allocations during the six months ended June 30, 2023.
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NineSix Months Ended SeptemberJune 30, 20222023 Compared to the NineSix Months Ended SeptemberJune 30, 20212022
Revenues
Nine Months Ended September 30,Amount
Change
%
Change
Six Months Ended June 30,Amount
Change
%
Change
(in thousands)(in thousands)20222021(in thousands)20232022
Revenues:Revenues:Revenues:
Fund management feesFund management fees$166,176 $105,963 $60,213 57 %Fund management fees$114,166 $102,080 $12,086 12 %
Property management and leasing feesProperty management and leasing fees56,683 53,592 3,091 %Property management and leasing fees39,029 37,895 1,134 %
Construction management feesConstruction management fees7,727 5,988 1,739 29 %Construction management fees6,187 4,312 1,875 43 %
Development feesDevelopment fees3,037 2,567 470 18 %Development fees1,672 2,052 (380)(19 %)
Transaction feesTransaction fees51,172 43,475 7,697 18 %Transaction fees7,059 39,641 (32,582)(82 %)
Fund administration feesFund administration fees11,105 — 11,105 N/AFund administration fees8,480 7,297 1,183 16 %
Insurance premiumsInsurance premiums8,648 6,446 2,202 34 %Insurance premiums8,214 5,261 2,953 56 %
Other asset management and property incomeOther asset management and property income9,027 4,664 4,363 94 %Other asset management and property income5,443 4,614 829 18 %
Total revenuesTotal revenues$313,575 $222,695 $90,880 41 %Total revenues$190,250 $203,152 $(12,902)(6 %)
Fund Management Fees. Our fee-earning AUM increased from approximately $12.1by $2.4 billion, or 37%16%, asexclusive of Septemberthe Newbury Acquisition, from June 30, 20212022 to $16.6 billion as of SeptemberJune 30, 2022.2023. Our weighted-average management fee, which varies largely due to the size of investor commitments, was 1.49%1.37% as of both SeptemberJune 30, 2023 compared to 1.54% as of June 30, 2022. The decrease from June 30, 2022 and September 30, 2021.was partially attributed to the Newbury Acquisition as these secondary funds generally have a lower weighted-average management fee range than other Bridge-sponsored funds.
This resulted in an increase in fundFund management fees of $60.2increased by $12.1 million, or 57%12%, largely dueprimarily attributed to the launchNewbury Acquisition coupled with the timing of new funds in 2021, including Bridge Opportunity Zone Fund IV and Bridge Multifamily Fund V, coupled withcapital raising for Bridge Opportunity Zone Fund V, and Bridge Single-Family Rental Fund IV, both of which launched in 2022. These four funds contributed an additional $39.9 million of fund management feesMarch 2022, and the final closings for nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Increased fee-earning AUM was also attributed to capital raisesBridge Multifamily Fund V in our other funds, mainly fromJanuary 2023 and Bridge Debt Strategies Fund IV and Bridge Workforce and Affordable Housing Fund II and Bridge Debt Strategies Fund IV, which generatedin the second half of 2022. These factors contributed an additional $24.8$24.2 million of fund management fees.fees for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. These increases were partially offset by decreases of $12.1 million due to the timing of placement agent and one-time catch-up fees and reductions in fee-earning AUM of which $4.5 million was primarily attributed to Bridge Debt Strategies Funds II and III.fund-level assets realized during the respective periods.
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Included in fund management fees are one-time catch upcatch-up fees of $24.9$2.7 million for the ninesix months ended SeptemberJune 30, 20222023, which were primarily related to Bridge Multifamily Fund V and Bridge Opportunity Zone Fund V, compared to one-time catch upcatch-up fees of $10.4$12.4 million for the ninesix months ended SeptemberJune 30, 2021,2022, which waswere primarily attributed to the timing of capital raising for Bridge Multifamily Fund V, Bridge Workforce and Affordable Housing Fund II, that launched in 2020 and Bridge MultifamilyDebt Strategies Fund V, which launched in 2021.IV. The following chart presents the composition of our fund management fees for the ninesix months ended SeptemberJune 30, 20222023 and 2021, respectively2022 (dollar amounts in millions)(1):
brdg-20220930_g1.jpgQ2 2023 vs 2022.jpg
(1)Fund management fees for the ninesix months ended SeptemberJune 30, 20212022 excludes fees for those funds launched subsequent to such date.
Property Management and Leasing Fees. Property management and leasing fees increased by $3.1$1.1 million, or 6%3%, primarily due to acquisition of the SFR property management business, which was part of the GBC Acquisition, and ana 6% increase in the number of multifamily, workforce and affordable housing, seniors housing and senior housingsingle-family rental properties under management. These increases weremanagement, which was partially offset by a reduction in leasing commissions.
Construction Management Fees. Construction management fees recognized in the third quarterincreased by $1.9 million, or 43%, primarily due to multifamily and commercial office properties under management.
Development Fees. Development fees decreased by $0.4 million, or 19%, primarily due to timing of 2021 that did not reoccur in 2022.projects.
Transaction Fees. Transaction fees increaseddecreased by $7.7$32.6 million, or 18%82%, primarily driven by a $4.0$27.9 million increasedecrease in due diligence fees attributed to a slowdown in the deployment of $2.2 billion of capital during the ninesix months ended SeptemberJune 30, 2022.2023. The remaining $3.7$4.7 million increasedecrease was related to a reduction of debt origination fees, which werewas largely due to an increase in acquisitions and mortgage re-financingsorigination fees for mortgages related to multifamily and single-family rental assets.deployment during the first quarter of 2022.
Fund Administration Fees. Fund administration fees were $11.1increased by $1.2 million, or 16%, during the ninesix months ended SeptemberJune 30, 2022, for services2023 largely due to the Company began providing on January 1, 2022.increase in fee-earning AUM.
Insurance Premiums. Insurance premiums increased by $2.2$3.0 million, or 34%56%, largely due to the increase in AUM.
Other Asset Management and Property Income. Other asset management and property income increased by $4.4$0.8 million, or 94%18%, primarily due to an increase in other income driven by the growth in AUM.
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Investment income
Nine Months Ended September 30,Amount
Change
%
Change
Six Months Ended June 30,Amount
Change
%
Change
(in thousands)(in thousands)20222021(in thousands)20232022
Investment income:
Investment (loss) income:Investment (loss) income:
Incentive feesIncentive fees$— $910 $(910)(100)%Incentive fees$41 $— $41 — %
Performance allocations:Performance allocations:Performance allocations:
RealizedRealized64,826 72,184 (7,358)(10)%Realized11,587 42,518 (30,931)(73)%
UnrealizedUnrealized119,611 111,009 8,602 %Unrealized(126,309)135,978 (262,287)(193)%
Earnings from investments in real estateEarnings from investments in real estate2,109 1,799 310 17 %Earnings from investments in real estate215 1,291 (1,076)(83)%
Total investment income$186,546 $185,902 $644 — %
Total investment (loss) incomeTotal investment (loss) income$(114,466)$179,787 $(294,253)(164)%
Performance allocations. Net performance allocations increaseddecreased by $1.2$293.2 million, or 1%164%. The following table reflects our carried interest and incentive fees by fund (in thousands):
Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021Six Months Ended June 30, 2023Six Months Ended June 30, 2022
RealizedUnrealizedRealizedUnrealizedRealizedUnrealizedRealizedUnrealized
BMF IV GPBMF IV GP$— $110,376 $— $70,097 BMF IV GP$— $(37,518)$— $105,464 
BMF III GPBMF III GP5,798 (22,529)31,625 (1,820)
BWH I GPBWH I GP— 25,808 — 29,707 BWH I GP— (22,289)— 26,003 
BDS III GPBDS III GP2,900 (15,599)7,604 (7,501)
BWH II GPBWH II GP— 12,019 — 943 BWH II GP— (13,774)— 9,295 
BDS II GPBDS II GP— (4,881)2,796 (1,954)
BSFR IV GPBSFR IV GP— 9,092 — — BSFR IV GP— (3,222)— — 
BOF II GPBOF II GP— 6,274 — 2,117 BOF II GP— (2,974)— 4,416 
BDS IV GPBDS IV GP2,889 (2,889)493 2,154 
BLV I GPBLV I GP— (1,852)— — 
BSH III GPBSH III GP— 170 — — 
BOF I GPBOF I GP— — — (65)
BNLI GPBNLI GP— 1,617 — — BNLI GP— 304 — 695 
BLV I GP— 1,244 — — 
BSH III GP— 182 — — 
BDS I GP— — — 35 
BOF I GP— (65)— (9,738)
BAMBS GPBAMBS GP— (863)— (280)BAMBS GP— 336 — (709)
BDS II GP3,123 (3,746)— 15,437 
BDS IV GP493 (3,563)— 3,423 
BDS III GP9,780 (15,859)18,203 18,829 
BMF III GP51,430 (22,905)53,981 (19,561)
NEP V GP(1)
NEP V GP(1)
— 408 — — 
TotalTotal$64,826 $119,611 $72,184 $111,009 Total$11,587 $(126,309)$42,518 $135,978 
(1)    The performance allocation income for Newbury Partners Fund V represents the portion payable to former employees of Newbury Partners and therefore no portion of such amount will not be retained by the Company.
The realized performance income and unrealized performance income (loss) allocation is recorded one quarter in arrears, and as such the performance allocation income (loss) for the ninesix months ended SeptemberJune 30, 20222023 and 20212022 reflects asset valuations as of June 30,March 31, 2023 and 2022, and 2021, respectively. For the ninesix months ended SeptemberJune 30, 2022,2023, the increasedecrease in unrealized performance allocationallocations was largely due to market appreciationdepreciation from properties within our multifamily and workforce and affordable housing single-family rental,funds and commercial office real estate equitywithin our credit funds, and includes the reversal of realized performance allocation income during the third quarters of both 2022 and 2021.respective period. For the ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, the realized performance allocations were primarily related to dispositions in our Bridge Multifamily Fund III and tax distributions in Bridge Debt Strategies Funds III and IV.
Fair value of the accrued performance allocations 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. Subsequent to the quarter ended June 30, 2023, Bridge Multifamily Fund III.III sold the majority of its assets to a newly formed continuation vehicle managed by Bridge. This transaction included a liquidity discount which is expected to reduce our total accrued performance allocation by approximately 6% to 8%, and is not yet reflected in reported amounts. In addition, any other changes in the markets in which our managed funds operate, and the impact market conditions have on underlying asset valuations, may not yet be reflected in reported amounts.
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Expenses
Nine Months Ended September 30,Amount
Change
%
Change
Six Months Ended June 30,Amount
Change
%
Change
(in thousands)(in thousands)20222021(in thousands)20232022
Expenses:Expenses:Expenses:
Employee compensation and benefitsEmployee compensation and benefits$149,140 $101,220 $47,920 47 %Employee compensation and benefits$107,553 $94,172 $13,381 14 %
Incentive fee compensationIncentive fee compensation— 82 (82)(100)%Incentive fee compensation— — %
Performance allocations compensation:Performance allocations compensation:Performance allocations compensation:
Realized gains4,047 6,096 (2,049)(34)%
Unrealized gains21,014 10,159 10,855 107 %
RealizedRealized2,227 2,725 (498)(18)%
UnrealizedUnrealized(19,319)17,225 (36,544)(212)%
Loss and loss adjustment expensesLoss and loss adjustment expenses5,395 4,346 1,049 24 %Loss and loss adjustment expenses4,004 3,191 813 25 %
Third-party operating expensesThird-party operating expenses19,642 26,325 (6,683)(25)%Third-party operating expenses11,329 13,517 (2,188)(16)%
General and administrative expensesGeneral and administrative expenses29,961 16,196 13,765 85 %General and administrative expenses26,765 19,277 7,488 39 %
Depreciation and amortizationDepreciation and amortization2,223 2,179 44 %Depreciation and amortization6,211 1,520 4,691 309 %
Total expensesTotal expenses$231,422 $166,603 $64,819 39 %Total expenses$138,773 $151,627 $(12,854)(8)%
Employee Compensation and Benefits. Employee compensation and benefits increased by $47.9$13.4 million, or 47%14%, largely due to a $42.4net increase of $6.7 million increase in salaries bonuses and benefits attributed to higher headcount driven by the increase in our AUM and the number of Bridge-sponsored funds, including the launch of the SFR platform upon consummation of the GBC Acquisitionwhich was largely offset by a reduction in January 2022.bonus expense. An additional increase of $5.5$6.7 million was attributed to Restricted Stock and RSUs that were issued concurrent with the IPO in July 2021 and for thoseRSU awards granted in January 20222023 and the additional expense related to the 2022 profits interests awards that were granted in the third quarter of 2022. These increases were partially offset by a reduction in share-based compensation expense attributed to2022 and the anti-dilutive shares associated with the 20212023 profits interests awards that were fully vested upon issuancegranted in the secondfirst quarter of 2021.2023.
Performance Allocation Compensation. Performance allocation compensation increaseddecreased by $8.8$37.0 million, or 54%186%, primarily due to a $10.9$36.5 million increasedecrease in unrealized performance allocation compensation which was offset byand a decrease of $2.0$0.5 million related to realized performance allocation awards, which is directly correlated to our performance allocationsallocation (loss) during the six months ended June 30, 2023 compared to performance allocation income during the ninesix months ended SeptemberJune 30, 2022 compared to the nine months ended September 30, 2021. This increase was coupled with the carried interest awards issued to certain employees in December 2021.2022.
Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses increased by $1.0$0.8 million, or 24%25%, primarily due to tenant, workers compensation, and general liability insurance losses incurred or paid during the ninesix months ended SeptemberJune 30, 20222023 compared to 2021.2022.
Third-party Operating Expenses. Third-party operating expenses decreased by $6.7$2.2 million, or 25%16%, primarily due to a decrease in leasing commissions from commercial real estateand a reduction in the Atlanta region during 2021, which did not reoccur in 2022.operating expenses related to seniors housing properties managed.
General and Administrative Expenses. General and administrative expenses increased by $13.8$7.5 million, or 85%39%, primarily due to $3.5 million of transaction costs incurred related to the Newbury Acquisition, $2.2 million of consolidated fund-level expenses, $0.6 million related to lease termination costs for one our corporate offices, an increase in insurance, professional services, software licensing fees, rent and travel costsother expenses correlated towith the increase in AUM.AUM and the number of properties managed.
Depreciation and Amortization. Depreciation and amortization increased by $4.7 million, or 309%, primarily attributed to additional amortization for intangibles acquired as part of the Newbury Acquisition.
Other income (expense)
Six Months Ended June 30,Amount
Change
%
Change
(in thousands)20232022
Other income (expense)
Realized and unrealized gains (losses), net$120 $3,916 $(3,796)(97)%
Interest income7,182 2,562 4,620 180 %
Interest expense(12,881)(4,522)(8,359)185 %
Total other income$(5,579)$1,956 $(7,535)(385)%
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Other income (expense)
Nine Months Ended September 30,Amount
Change
%
Change
(in thousands)20222021
Other income (expense)
Realized and unrealized gains (losses), net$4,315 $8,663 $(4,348)(50)%
Interest income4,466 2,172 2,294 106 %
Interest expense(8,769)(6,547)(2,222)34 %
Total other income$12 $4,288 $(4,276)(100)%
Realized and Unrealized Gains (Losses), Net. Net realized and unrealized gains (losses) decreased $4.3by $3.8 million, or 50%97%, for the ninesix months ended SeptemberJune 30, 2022,2023, primarily due to unrealized appreciation recognized on certain other investments during the nine months ended September 30, 2021 that did not reoccur during the nine months ended September 30,second quarter of 2022.
Interest Income. Interest income increased $2.3by $4.6 million, or 106%180%, largely due to the timing of short-term borrowings by Bridge-sponsored funds coupled with an increase in the funds and additionalrelated weighted-average outstanding interest income driven by therate between periods, as well as an increase interest rates and in the weighted-average outstanding cash and cash equivalents between periods.
Interest expenseExpense. Interest expense increased $2.2by $8.4 million, or 34%185%, primarily due to the $150 million of private placement notes2022 Private Placement Notes that funded in July 2022, which have a weighted-average interest rate of 5.05%., the $150 million of 2023 Private Placement Notes that funded in March 2023, which have a weighted-average interest rate of 6.01%, and the $80.0 million of net proceeds drawn on the Credit Facility during 2023.
Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC is comprised of non-controlling interests related to the Operating Company’s subsidiaries and to our profits interests programs. The following table summarizes the allocation of net (loss) income to the non-controlling interests in the Operating Company (in thousands):
Nine Months Ended September 30,Six Months Ended June 30,
2022202120232022
Non-controlling interests related to General Partners - realizedNon-controlling interests related to General Partners - realized$36,962 $17,142 Non-controlling interests related to General Partners - realized$5,685 $24,502 
Non-controlling interests related to General Partners - unrealizedNon-controlling interests related to General Partners - unrealized48,701 31,605 Non-controlling interests related to General Partners - unrealized(60,751)63,086 
Non-controlling interests related to Fund ManagersNon-controlling interests related to Fund Managers(4,052)5,652 Non-controlling interests related to Fund Managers(5,479)(2,606)
Non-controlling interests related to 2019 profits interests awardsNon-controlling interests related to 2019 profits interests awards202 14,676 Non-controlling interests related to 2019 profits interests awards110 44 
Non-controlling interests related to 2020 profits interests awardsNon-controlling interests related to 2020 profits interests awards2,812 1,002 Non-controlling interests related to 2020 profits interests awards— 917 
Non-controlling interests related to 2021 profits interests awardsNon-controlling interests related to 2021 profits interests awards3,217 586 Non-controlling interests related to 2021 profits interests awards— 518 
Total$87,842 $70,663 
Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLCNet (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC$(60,435)$86,461 
Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net loss attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $7.0 million and net income attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $138.6 million and $43.9$112.7 million during the ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, respectively.
On January 1, 2022, our 20192023, certain of the Company’s 2020 profits interests awards were collapsed into 790,424801,927 shares of our Class A common stock and 13,255,8882,025,953 Class A Units inUnits. Certain of the Operating Company. We expect that the 20202021 profits interests awards will bewere collapsed into Class A Units in the Operating Company (or shares of our Class A common stock) on or about January 1, 2023, and that 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 or about July 1, 2023. The profits interests will bewere collapsed based on their then-current fair values and the relative value of the Company, based on Distributable Earnings (as defined subsequently) 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 non-controlling interests for the applicable periods; however, there will also be a corresponding increase in the number of outstanding Class A Units at the Operating Company or(or shares of our Class A common stock.stock).
Income tax expense
Income tax expense decreased by $9.8 million, or 86%, primarily due to the reversal of unrealized accrued performance allocations during the six months ended June 30, 2023.
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Non-GAAP Financial Measuresfinancial measures
We use non-GAAP financial measures, such as Distributable Earnings, Fee Related Earnings, Fee Related Revenues and Fee Related Expenses, to supplement financial information presented in accordance with generally accepted accounting principles in the United States, or GAAP. We believe that excluding certain items from our GAAP results allows management to better understand our condensed consolidated financial performance from period to period and better project our future condensed consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Fee Related Revenues and Fee Related Expenses are presented separately in our calculation of non-GAAP measures in order to better illustrate the profitability of our Fee Related Earnings. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons.
There are limitations to the use of the non-GAAP financial measures presented in this report. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for measures prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each of Distributable Earnings, Fee Related Earnings, Fee Related Revenues and Fee Related Expenses to its most directly comparable GAAP financial measure are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items.
Distributable Earnings. Distributable Earnings is a key performance measure used in our industry and is evaluated regularly by management in making resource deployment and compensation decisions, and in assessing our performance. We believe that reporting Distributable Earnings is helpful to understanding our business and that investors should review the same supplemental financial measure that management uses to analyze our performance.
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, income (loss) from consolidated Bridge-sponsored funds, unrealized performance allocations and related compensation expense, unrealized gains (losses), share-based compensation, cash net income attributable to non-controlling interests, charges (credits) related to corporate actions and non-recurring items. Such items, where applicable, include: charges associated with acquisitions or strategic investments, changes in the TRA liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions, impairment charges associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract terminations and employee severance. Distributable Earnings is not a measure of performance calculated in accordance with GAAP. Although we believe the inclusion or exclusion of these items provides investors with a meaningful indication of our core operating performance, the use of Distributable Earnings without consideration of the related GAAP measures is not adequate due to the adjustments described herein. This measure supplements 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—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.
Fee Related Earnings. Fee Related Earnings is a supplemental performance measure used to assess our ability to generate profits from fee-based revenues that are measured and received on a recurring basis. Fee Related Earnings differs from net income (loss) before provision for income taxes, computed in accordance with GAAP in that it adjusts for the items included in the calculation of Distributable Earnings, and also adjusts Distributable Earnings to exclude realized performance allocations income and related compensation expense, net insurance income, earnings from investments, in real estate,net insurance income, earnings from investments, net interest (interest income less interest expense), net realized gain/gain (loss), income (loss) from consolidated fund investments, and, if applicable, certain general and net administrative expenses when the timing of any future payment is uncertain. Fee Related Earnings is not a measure of performance calculated in accordance with GAAP. The use of Fee Related Earnings without consideration of the related GAAP measures is not adequate due to the adjustments described herein. Our calculations of Fee Related 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.
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Fee Related Revenues. Fee Related Revenues is a component of Fee Related Earnings. Fee Related Revenues is comprised ofincludes fund management fees, transaction fees net of any third-party operating expenses, net earnings from Bridge property operators, development fees, and other asset management and property income. Net earnings from Bridge property operators is calculated as a summation of property management, leasing fees and construction management fees less third-party operating expenses and property operating expenses. Property operating expenses is calculated as a summation of employee compensation and benefits, general and administrative expenses and interest expense at our property operators. We believe our vertical integration enhances returns to our shareholders and fund investors, and we view the net earnings from Bridge property operators as part of our fee related revenue as these services are provided to essentially all of the real estate properties in our equity funds. Net earnings from Bridge property operators is a metric that is included in management’s review of our business. Please refer to the reconciliation below to the comparable line items on the condensed consolidated and combined statements of operations. Fee Related Revenues differs from revenue computed in accordance with U.S. GAAP in that it excludes insurance premiums.premiums and income (loss) from consolidated fund investments. Additionally, Fee Related Revenues is reduced by the costs associated with our property operations, which are managed internally in order to enhance returns to the Limited Partners in our funds.
Fee Related Expenses. Fee Related Expenses is a component of Fee Related Earnings. Fee Related Expenses differs from expenses computed in accordance with GAAP in that it does not include incentive fee compensation, performance allocations compensation, share-based compensation, loss and loss adjustment expenses associated with our insurance business, depreciation and amortization, or charges (credits) related to corporate actions and non-recurring items, expenses from consolidated fund investments, and expenses attributable to non-controlling interests in consolidated entities. Additionally, Fee Related Expenses is reduced by the costs associated with our property operations, which are managed internally in order to enhance returns to the Limited Partners in our funds. Fee Related Expenses are used in management’s review of the business. Please refer to the reconciliation below to the comparable line items on the condensed consolidated and combined statements of operations.
Fee Related Revenues and Fee Related Expenses are presented separately in our calculation of non-GAAP measures in order to better illustrate the profitability of our Fee Related Earnings.
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Income before provision for income taxes is the GAAP financial measure most comparable to Distributable Earnings and Fee Related Earnings. The following table sets forth a reconciliation of net income to Distributable Earnings attributable to the Operating Company and to Total Fee Related Earnings attributable to the Operating Company for the three and ninesix months ended SeptemberJune 30, 20222023 and 20212022 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Net income$32,241 $118,882 $254,126 $242,841 
Income tax provision3,203 2,607 14,585 3,441 
Income before provision for income taxes35,444 121,489 268,711 246,282 
Net (loss) incomeNet (loss) income$(2,760)$124,382 $(70,192)$221,886 
Income tax expenseIncome tax expense7,468 5,837 1,624 11,382 
Income (loss) before provision for income taxesIncome (loss) before provision for income taxes4,708 130,219 (68,568)233,268 
Depreciation and amortizationDepreciation and amortization703 699 2,223 2,179 Depreciation and amortization5,118 887 6,211 1,520 
Impact of fund consolidationImpact of fund consolidation2,259 — 2,259 — 
Less: Unrealized performance allocationsLess: Unrealized performance allocations16,367 (53,042)(119,611)(111,009)Less: Unrealized performance allocations19,284 (70,116)126,309 (135,978)
Plus: Unrealized performance allocations compensationPlus: Unrealized performance allocations compensation3,789 2,682 21,014 10,159 Plus: Unrealized performance allocations compensation(4,649)7,987 (19,319)17,225 
Less: Unrealized (gains) losses, netLess: Unrealized (gains) losses, net(387)(2,566)(4,350)(8,662)Less: Unrealized (gains) losses, net1,368 (3,483)(125)(3,962)
Plus: Share-based compensationPlus: Share-based compensation9,624 2,453 23,442 17,917 Plus: Share-based compensation11,119 6,553 20,479 13,818 
Less: Net income attributable to noncontrolling interests in subsidiaries(3,307)(12,154)(2,180)(21,916)
Plus: Transaction and non-recurring costs(1)
Plus: Transaction and non-recurring costs(1)
— — 4,118 — 
Less: Cash income attributable to non-controlling interests in subsidiariesLess: Cash income attributable to non-controlling interests in subsidiaries865 977 2,721 1,127 
Less: Net realized performance allocations attributable to non-controlling interestsLess: Net realized performance allocations attributable to non-controlling interests(12,460)(17,142)(36,962)(17,142)Less: Net realized performance allocations attributable to non-controlling interests(5,066)(18,409)(5,685)(24,502)
Distributable Earnings attributable to the Operating CompanyDistributable Earnings attributable to the Operating Company49,773 42,419 152,287 117,808 Distributable Earnings attributable to the Operating Company35,006 54,615 68,400 102,516 
Realized performance allocations and incentive feesRealized performance allocations and incentive fees(22,308)(30,999)(64,826)(73,094)Realized performance allocations and incentive fees(8,466)(33,581)(11,628)(42,518)
Realized performance allocations and incentive fees compensationRealized performance allocations and incentive fees compensation1,321 1,855 4,047 6,178 Realized performance allocations and incentive fees compensation498 2,165 2,230 2,725 
Net realized performance allocations to non-controlling interestsNet realized performance allocations to non-controlling interests12,460 17,142 36,962 17,142 Net realized performance allocations to non-controlling interests5,066 18,409 5,685 24,502 
Net insurance income (loss)(1,183)(1,101)(3,253)(2,100)
Net insurance (income) lossNet insurance (income) loss(1,801)(1,406)(4,210)(2,070)
(Earnings) losses from investments in real estate(Earnings) losses from investments in real estate(818)(823)(2,109)(1,799)(Earnings) losses from investments in real estate(215)(1,251)(215)(1,291)
Net interest (income) expense and realized (gain) lossNet interest (income) expense and realized (gain) loss2,323 1,381 4,304 4,316 Net interest (income) expense and realized (gain) loss5,006 1,529 5,704 1,979 
Less: Net income attributable to noncontrolling interests in subsidiaries3,307 12,154 2,180 21,916 
Less: Cash income attributable to non-controlling interests in subsidiariesLess: Cash income attributable to non-controlling interests in subsidiaries(865)(977)(2,721)(1,127)
Total Fee Related EarningsTotal Fee Related Earnings44,875 42,028 129,592 90,367 Total Fee Related Earnings34,229 39,503 63,245 84,716 
Less: Total Fee Related Earnings attributable to non-controlling interests(3,307)(12,154)(2,180)(21,916)
Total Fee Related Earnings attributable to non-controlling interestsTotal Fee Related Earnings attributable to non-controlling interests865 977 2,721 1,127 
Total Fee Related Earnings attributable to the Operating CompanyTotal Fee Related Earnings attributable to the Operating Company$41,568 $29,874 $127,412 $68,451 Total Fee Related Earnings attributable to the Operating Company$35,094 $40,480 $65,966 $85,843 
(1)    Transaction costs and non-recurring expenses represent transaction costs related to the Newbury Acquisition and lease termination costs related to one of our corporate offices.
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The following table sets forth our total Fee Related Earnings and Distributable Earnings for the three and ninesix months ended SeptemberJune 30, 20222023 and 20212022 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Fund-level fee revenuesFund-level fee revenuesFund-level fee revenues
Fund management feesFund management fees$64,096 $40,576 $166,176 $105,963 Fund management fees$60,353 $49,380 $114,202 $102,080 
Transaction feesTransaction fees11,532 21,907 51,172 43,475 Transaction fees4,682 17,643 7,059 39,641 
Total net fund-level fee revenuesTotal net fund-level fee revenues75,628 62,483 217,348 149,438 Total net fund-level fee revenues65,035 67,023 121,261 141,721 
Net earnings from Bridge property operatorsNet earnings from Bridge property operators1,294 4,969 6,341 9,049 Net earnings from Bridge property operators2,828 2,108 6,071 4,318 
Development feesDevelopment fees986 1,018 3,037 2,567 Development fees1,337 793 1,672 2,052 
Fund administration feesFund administration fees3,808 — 11,105 — Fund administration fees4,304 3,657 8,480 7,297 
Other asset management and property incomeOther asset management and property income4,413 1,533 9,027 4,664 Other asset management and property income2,636 2,659 5,433 4,614 
Fee Related RevenuesFee Related Revenues86,129 70,003 246,858 165,718 Fee Related Revenues76,140 76,240 142,917 160,002 
Cash-based employee compensation and benefitsCash-based employee compensation and benefits(34,242)(23,173)(96,901)(64,885)Cash-based employee compensation and benefits(35,248)(30,120)(66,870)(61,946)
Net administrative expensesNet administrative expenses(7,012)(4,802)(20,365)(10,466)Net administrative expenses(6,663)(6,617)(12,802)(13,340)
Fee Related ExpensesFee Related Expenses(41,254)(27,975)(117,266)(75,351)Fee Related Expenses(41,911)(36,737)(79,672)(75,286)
Total Fee Related EarningsTotal Fee Related Earnings44,875 42,028 129,592 90,367 Total Fee Related Earnings34,229 39,503 63,245 84,716 
Fee Related Earnings margin52 %60 %52 %55 %
Net income attributable to non-controlling interests in Operating Company subsidiaries(3,307)(12,154)(2,180)(21,916)
Total fee related earnings to the Operating Company41,568 29,874 127,412 68,451 
Total Fee Related Earnings attributable to non-controlling interestsTotal Fee Related Earnings attributable to non-controlling interests865 977 2,721 1,127 
Total Fee Related Earnings to the Operating CompanyTotal Fee Related Earnings to the Operating Company35,094 40,480 65,966 85,843 
Realized performance allocations and incentive feesRealized performance allocations and incentive fees22,308 30,999 64,826 73,094 Realized performance allocations and incentive fees8,466 33,581 11,628 42,518 
Realized performance allocations and incentive fees compensationRealized performance allocations and incentive fees compensation(1,321)(1,855)(4,047)(6,178)Realized performance allocations and incentive fees compensation(498)(2,165)(2,230)(2,725)
Net realized performance allocations attributable to non-controlling interestsNet realized performance allocations attributable to non-controlling interests(12,460)(17,142)(36,962)(17,142)Net realized performance allocations attributable to non-controlling interests(5,066)(18,409)(5,685)(24,502)
Net insurance income1,183 1,101 3,253 2,100 
Earnings from investments in real estate818 823 2,109 1,799 
Net insurance income (loss)Net insurance income (loss)1,801 1,406 4,210 2,070 
Earnings (losses) from investments in real estateEarnings (losses) from investments in real estate215 1,251 215 1,291 
Net interest income (expense) and realized gain (loss)Net interest income (expense) and realized gain (loss)(2,323)(1,381)(4,304)(4,316)Net interest income (expense) and realized gain (loss)(5,006)(1,529)(5,704)(1,979)
Distributable Earnings attributable to the Operating CompanyDistributable Earnings attributable to the Operating Company$49,773 $42,419 $152,287 $117,808 Distributable Earnings attributable to the Operating Company$35,006 $54,615 $68,400 $102,516 
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The following table sets forth the components of the employee compensation and benefits, general and administrative expenses, and total other income (expense) line items on our condensed consolidated and combined statements of operations. Other income (expense) is disclosed in our non-GAAP measures based upon the nature of the income. Realized amounts are disclosed separately in order to determine Distributable Earnings. Other income from Bridge property operators is included in net earnings from Bridge property operators (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Cash-based employee compensation and benefitsCash-based employee compensation and benefits$34,242 $23,173 $96,901 $64,885 Cash-based employee compensation and benefits$35,248 $30,120 $66,870 $61,946 
Compensation expense of Bridge property operatorsCompensation expense of Bridge property operators11,102 6,137 28,797 18,418 Compensation expense of Bridge property operators10,009 10,020 20,204 18,408 
Share-based compensationShare-based compensation9,624 2,453 23,442 17,917 Share-based compensation11,119 6,553 20,479 13,818 
Employee compensation and benefitsEmployee compensation and benefits$54,968 $31,763 $149,140 $101,220 Employee compensation and benefits$56,376 $46,693 $107,553 $94,172 
Administrative expenses, net of Bridge property operatorsAdministrative expenses, net of Bridge property operators$7,012 $4,802 $20,365 $10,466 Administrative expenses, net of Bridge property operators$6,663 $6,617 $12,802 $13,340 
Administrative expenses of Bridge property operatorsAdministrative expenses of Bridge property operators3,673 1,901 9,596 5,730 Administrative expenses of Bridge property operators3,976 3,152 7,612 5,937 
Transaction and non-recurring costsTransaction and non-recurring costs— — 4,118 — 
Impact of fund consolidationImpact of fund consolidation2,233 — 2,233 — 
General and administrative expensesGeneral and administrative expenses$10,685 $6,703 $29,961 $16,196 General and administrative expenses$12,872 $9,769 $26,765 $19,277 
Unrealized gains (losses)Unrealized gains (losses)$387 $2,566 $4,350 $8,662 Unrealized gains (losses)$(1,368)$3,483 $125 $3,962 
Other expenses from Bridge property operatorsOther expenses from Bridge property operators(8)(19)(34)(58)Other expenses from Bridge property operators— (13)— (27)
Net interest income (expense) and realized gain (loss)Net interest income (expense) and realized gain (loss)(2,323)(1,381)(4,304)(4,316)Net interest income (expense) and realized gain (loss)(5,006)(1,529)(5,704)(1,979)
Total other income (expense)$(1,944)$1,166 $12 $4,288 
Total other (loss) incomeTotal other (loss) income$(6,374)$1,941 $(5,579)$1,956 
Distributable Earnings and Fee Related Earnings to the Operating Company
Total Fee Related Earnings to the Operating Company increaseddecreased by $11.7$5.4 million, or 39%13%, for the three months ended SeptemberJune 30, 2022,2023, compared to the three months ended SeptemberJune 30, 2021,2022, while Distributable Earnings to the Operating Company increaseddecreased by $7.4$19.6 million, or 17%36%, during the same period due to the following:
Total Fee Related Revenues increasedfee related revenues decreased by $16.1$0.1 million, or 23%, principally due to:
Fund management fees increased by $23.5 million, or 58%, primarily due to capital raising and timing of deployment of capital for new funds in 2022 and 2021, which increased our fee-earning AUM by 37% compared to our fee-earning AUM at September 30, 2021; and
Transaction fees decreased by $10.4$13.0 million, or 47%73%, driven by the deployment of $633.4 million of capital during the three months ended September 30, 2022 compared to $1.3 billion during the three months ended September 30, 2021. The decrease is attributeddue to reduced volume of real estate transactions dueattributed to the current macroeconomic environment, including increasing interest rates and availability of debt financing.financing; and
Fund management fees increased by $11.0 million, or 22%, primarily due to the timing of capital raising between 2023 and 2022.
Net earnings from Bridge property operators decreasedincreased by $3.7$0.7 million, or 74%34%, driven by a reduction in leasing commissions that were incurred during 2021 that did not reoccur in 2022, which was partially offset by an increase in the number of managed units which grew from approximately 52,000 units as of SeptemberJune 30, 20212023 compared to approximately 65,000 units as of SeptemberJune 30, 2022.
Fee Related Expensesrelated expenses increased by $13.3$5.2 million, or 47%14%, principally due to:
Cash-based employee compensation and benefits increased by $11.1$5.1 million, or 48%17%, primarily due to increased headcount driven by the 37%16% increase in our fee-earning AUM, exclusive of the Newbury Acquisition, and new investment strategies launched in 2021 and 2022;2022, which was partially offset by a reduction in 2023 bonuses; and
Net administrative expenses increased by $2.2 million,$46,000, or 46%1%, primarily due to higher insurancean increase in professional services, software licensing fees, and professional fees related to being a publicly traded company afterother additional expenses correlated with the IPOincrease in JulyAUM and the number of 2021.properties managed.
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Net of related compensation, and non-controlling interest allocations, realized performance allocations and incentive fees decreased by $3.5$23.4 million, or 29%75%, compared to 2021,2022, due to the timing of realizations in Bridge Multifamily Fund III and Bridge Debt Strategies Funds II and III.
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Total Fee Related Earnings to the Operating Company increaseddecreased by $59.0$19.9 million, or 86%23%, for the ninesix months ended SeptemberJune 30, 2022,2023, compared to the ninesix months ended SeptemberJune 30, 2021,2022, while Distributable Earnings to the Operating Company increaseddecreased by $34.5$34.1 million, or 29%33%, during the same period due to the following:
Total Fee Related Revenues increasedfee related revenues decreased by $81.1$17.1 million, or 49%11%, principally due to:
Transaction fees decreased by $32.6 million, or 82%, due to reduced volume of real estate transactions attributed to the current macroeconomic environment, including increasing interest rates and availability of debt financing; and
Fund management fees increased by $60.2$12.1 million, or 57%12%, primarily due to the timing of capital raising between 2023 and timing of deployment of capital for new funds in 2022 and 2021 which increased our fee-earning AUM by 37% compared to fee-earning AUM at September 30, 2021; and
Transaction fees increased by $7.7 million, or 18%, driven by the deployment of $2.2 billion of capital primarily for multifamily and workforce and affordable housing assets and debt investments.2022.
Net earnings from Bridge property operators decreasedincreased by $2.7$1.8 million, or 30%41%, driven by a reductionan increase in leasing commissions incurred during 2021 that did not reoccur in 2022, which was partially offset by the number of managed units which grew from approximately 52,000 units as of SeptemberJune 30, 20212023 compared to approximately 65,000 units as of SeptemberJune 30, 2022.
Fee Related Expensesrelated expenses increased by $41.9$4.4 million, or 56%6%, principally due to:
Cash-based employee compensation and benefits increased by $32.0$4.9 million, or 49%8%, primarily due to increased headcount driven by the 37%16% increase in our fee-earning AUM, exclusive of the Newbury Acquisition, and new investment strategies launched in 2021 and 2022;2022, which was partially offset by a reduction in 2023 bonuses; and
Net administrative expenses increaseddecreased by $9.9$0.5 million, or 95%4%, primarily due to higher insurance and professional feesone-time transaction costs related to being a publicly traded company after the IPO.Newbury Acquisition, lease termination costs for one our corporate offices, and an increase in professional services, software licensing fees, rent and other additional expenses correlated with the increase in AUM.
Net of related compensation, realized performance allocations and incentive fees decreased by $5.3$30.4 million, or 8%76%, compared to 2021,2022, primarily due to the timing of realizations in Bridge Multifamily Fund III and Bridge Debt Strategies Funds III. The results for 2021 prior to the IPO in July 2021 included 100% of the net realized performance allocationsII, III and incentive fees as the financial statements were combined with the respective Bridge GPs. Post-IPO, the amount is shown net of the realized general partner non-controlling interest component of $37.0 million for 2022 compared to $17.1 million in 2021. Taking into consideration this non-controlling interest, the realized performance allocations and incentive fees, net of related compensation, decreased by $25.2 million or 51%.IV.
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 sources, along with the proceeds from the IPO and Private Placement Notes, 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 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. We operate in a rapidly evolving and unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures. Accordingly, there can be no assurance that we may not be required to raise additional funds through the sale of equity or debt securities or from credit facilities. Additional capital, if needed, may not be available on satisfactory terms, or at all.
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, we had total assets of $1,179.4$1,346.4 million and $846.3$1,154.8 million, respectively, which included $191.5$71.0 million and $78.4$183.6 million of cash and cash equivalents, respectively, and total liabilities of $516.4$730.7 million and $296.6$508.5 million, respectively. There were no borrowings outstanding under our revolving credit facility.the Credit Facility. We generate cash primarily from fund management fees, property and construction management fees, leasing fees, development fees, transaction fees, and fund administration 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.
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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.the Credit Facility. In the future, we will also evaluate opportunities, based on market conditions, to access the 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.
We do not have any off-balance sheet arrangements that would expose us to any liability or require us to fund losses or guarantee target returns to investors in our funds that are not reflected in our condensed consolidated and combined financial statements. Refer to Note 17, “Commitments and Contingencies” and Note 18, “Variable Interest Entities” to our condensed consolidated and combined financial statements included elsewhere in this quarterly report on Form 10-Q for additional information on commitments and contingencies and variable interest entities, respectively.
The following table presents a summary of our cash flows for the ninesix months ended SeptemberJune 30, 20222023 and 20212022 (in thousands):
Nine Months Ended September 30,Six Months Ended June 30,
2022202120232022
Net cash provided by operating activitiesNet cash provided by operating activities$182,442 $152,861 Net cash provided by operating activities$72,676 $142,379 
Net cash (used in) provided by investing activitiesNet cash (used in) provided by investing activities(12,586)14,101 Net cash (used in) provided by investing activities(339,035)25,605 
Net cash used in financing activities(53,269)(80,528)
Net increase in cash, cash equivalents, and restricted cash$116,587 $86,434 
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities153,039 (141,678)
Net (decrease) increase in cash, cash equivalents, and restricted cashNet (decrease) increase in cash, cash equivalents, and restricted cash$(113,320)$26,306 
Operating Activities
Cash (used in) provided by operating activities was primarily driven by our earnings in the respective periods after adjusting for significant non-cash activity, including non-cash performance allocations and incentive fees, the related non-cash performance allocations and incentive fee related compensation expense, non-cash investment income, non-cash share-based compensation, depreciation, amortization and impairments, and the effect of changes in working capital and other activities. Operating cash inflows primarily included the receipt of management fees, property management and leasing fees, and realized performance allocations and incentive fees, while operating cash outflows primarily include payments for operating expenses, including compensation and general and administrative expenses.
For the ninesix months ended SeptemberJune 30, 2023 — cash provided by operating activities was $72.7 million, primarily consisting of adjustments for non-cash items of $135.2 million offset by a net loss during the period of $70.2 million and cash provided by operating assets and liabilities of $7.7 million. Adjustments for non-cash items primarily consisted of a $126.3 million reversal of unrealized performance allocations, $20.5 million of share-based compensation, and $6.2 million of depreciation and amortization, which was partially offset by a reduction of $19.3 million in unrealized accrued performance allocations compensation.
For the six months ended June 30, 2022 — cash provided by operating activities was $182.4$142.4 million, primarily consisting of net income of $254.1$221.9 million offset by adjustments for non-cash items of $77.6$107.4 million and cash provided by operating assets and liabilities of $5.9$27.9 million. Adjustments for non-cash items primarily consisted of $119.6$136.0 million unrealized performance allocations and $3.2$4.8 million of equity in income from equity method investments, which was offset by $23.4$13.8 million of share-based compensation and $21.0$17.2 million of unrealized accrued performance allocations compensation.
For the nine months ended September 30, 2021 — cash provided by operating activities was $152.9 million, consisting of net income of $242.8 million and adjustments for non-cash items of $89.2 million, offset by cash provided by operating assets and liabilities of $0.7 million. Adjustments for non-cash items primarily consisted of $111.0 million of unrealized performance allocations, $7.8 million of earnings on equity investments, partially offset by $17.9 million of share-based compensation amortization.
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 PropTech companies.other investments.
For the ninesix months ended SeptemberJune 30, 20222023 — net cash used in investing activities of $12.6$339.0 million primarily consisted of $451.2$319.4 million in cash paid for the Newbury Acquisition, issuances of notes receivable of $135.0 million, and $30.7 million for purchases of investments. These decreases were primarily offset by $143.3 million in collections of notes receivable related to our lending activities to affiliate entities.
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For the six months ended June 30, 2022 — net cash provided by investing activities of $25.6 million primarily consisted of $318.3 million in collections of notes receivable related to our lending activities to affiliate entities, which was offset by issuances of notes receivables of $377.4$242.9 million, $74.9$35.4 million for purchases of investments, and $15.1 million used for the GBC Acquisition.
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For the nine months ended September 30, 2021 — net cash provided by investing activitiesacquisition of $14.1 million primarily consisted of $409.6 million from the collections of notes receivable related to our lending activities to affiliate entities, which was offset by issuances of notes receivables of $385.2 million and $10.7 million for purchases of investments.GBC.
Financing Activities
Our financing activities primarily consist of distributions to our members and shareholders as well as borrowings associated with our private placement notesPrivate Placement Notes (as defined herein) and revolving credit facility,Credit Facility, and at times proceeds from issuances of our common stock.
For the ninesix months ended SeptemberJune 30, 2023 — net cash provided by financing activities of $153.0 million was largely due to the $150.0 million in proceeds received from our 2023 Private Placement Notes, net proceeds of $80.0 million drawn on our Credit Facility, both of which were used to fund the Newbury Acquisition, and $4.2 million of capital contributions from non-controlling interests. These increases were partially offset by $68.7 million of distributions paid to non-controlling interests, $10.4 million of dividends paid to our Class A common stockholders, and the payment of deferred financing costs related to the amendment to our Credit Facility and the 2023 Private Placement Notes.
For the six months ended June 30, 2022 — net cash used in financing activities of $53.3$141.7 million was largely due to $177.7$126.9 million of distributions paid to non-controlling interests and $22.4$13.5 million of dividends paid to our Class A common stockholders, in addition to paydowns on the revolving line of credit of $50.0 million and the payment of deferred financing costs related to the new Credit Facility entered into in June 2022 and the 2022 Private Placement Notes.2022. These cash outflows were offset by $150.0 million in proceeds received from our 2022 Private Placement Notes.
Fordraws on the nine months ended September 30, 2021 — Net cash used in financing activitiesrevolving line of $80.5 million was primarily due to the distributions to the Operating Company’s memberscredit of $176.3 million, which included a special dividend of $75.0 million, and to non-controlling interests of $41.3$50.0 million. In addition, we paid $158.1 million for the purchase of interests in the Operating Company in connection with the IPO. These uses of funds were partially offset by net proceeds of $295.4 million from the issuance of common stock in the IPO.
Corporate Credit Facilities
On June 3, 2022, the Operating Company entered into a credit agreement with CIBC, Inc. and Zions Bancorporation, N.A. d/b/a Zions First NationNational Bank as Joint Lead Arrangers (“(the “Credit Facility”).
On January 31, 2023, the Company entered into an amendment to the Credit Agreement”). TheFacility, pursuant to which (i) the Company exercised its option to increase total commitments under the Credit Agreement allows for total revolving commitments of up to $125.0 million, which may be increased upFacility to $225.0 million, contingent on certain criteria being met (the “Credit Facility”)(ii) the variable interest rates under the applicable pricing grid were each increased by 15 basis points and (iii) the quarterly unused commitment fee was increased to 0.25%.
The Credit Facility matures on June 3, 2024, subject to potential extension under certain circumstances.
Borrowings under the Credit Facility bear interest based on a pricing grid with a range of a 2.50%2.65% to 3.00%3.15% over the Term Secured Overnight Financing Rate (“SOFR”) as determined by the Operating Company’s leverage ratio, or upon achievement of an investment grade rating, interest is then based on a range of 1.75%1.90% to 2.25%2.40% over Term SOFR. The Credit Facility is also subject to a quarterly unused commitment fee of up to 0.20%0.25%, which is based on the daily unused portion of the Credit Facility. Borrowings under the Credit Facility may be repaid at any time during the term of the Credit Agreement, but require paydown at least once annually.annually or if the aggregate commitments exceed certain thresholds for an extended period of time.
Under the terms of the Credit Agreement,Facility, certain of the Operating Company’s assets serve as pledged collateral. In addition, the Credit AgreementFacility contains covenants that, among other things, limit the Operating Company’s ability to incur:to: incur indebtedness; create, incur or allow liens; merge with other companies; pay dividends or make distributions; engage in new or different lines of business; and engage in transactions with affiliates. The Credit AgreementFacility also contains financial covenants requiring the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.75x, (2) minimum liquidity of $15.0 million and (2)(3) minimum quarterly EBITDA of $15 million and minimum EBITDA for the trailing four fiscal quarters of $80 million.
The weighted-average interest rate in effect for the Credit Facility as of SeptemberJune 30, 20222023 was 5.30%7.00%. As of SeptemberJune 30, 2022, there2023, $80.0 million was no outstanding balance on the Credit Facility.
InOn July 2020, we entered into7, 2023, the Company repaid the outstanding balance of $80 million on its Credit Facility. On July 27, 2023, the Company made a secured revolving linedraw of credit, (“Line of Credit”), with an aggregate borrowing capacity of $75.0 million. Borrowings under the Line of$80 million on its Credit accrued interest at LIBOR plus 2.25%. The Line of Credit was to mature on July 22, 2022, however it was terminated in June 2022 in conjunction with the new Credit Agreement.Facility.
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Private Placement Notes
On July 22, 2020, the Operating Company entered into a $150.0 million note purchase agreement, with various lenders, pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $75.0 million of 3.9% notes in two tranches with an aggregate principal amounta five-year term maturing on July 22, 2025, and $75.0 million of $150.0 million4.15% notes with a seven-year term maturing on July 22, 2027 (the “2020 Private Placement Notes”). Net proceeds from the 2020 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 2020 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.
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On June 3, 2022, the Operating Company entered into a $150.0 million note purchase agreement pursuant to which the Operating Company issued two tranches of senior notes in a private placement with a weighted-average interest rate of 5.05% as of the issuance date.offering. The transaction consisted of $75$75.0 million of 5.00%5.0% notes with a ten-year term maturing on July 12, 2032, and $75$75.0 million of 5.10%5.1% notes with a twelve-year term maturing on July 12, 2034 (the “2022 Private Placement Notes”).
On February 13, 2023, the Operating Company entered into a $150 million note purchase agreement pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $120 million of 6.0% notes with a seven-year term maturing on March 29, 2030 and $30 million of 6.1% notes with a ten-year term maturing on March 29, 2033 (the “2023 Private Placement Notes” and together with the 2020 and 2022 Private Placement Notes, the “Private Placement Notes”). The 2023 Private Placement Notes closed in connection with the closing of the Newbury Acquisition.
Under the terms of the Private Placement Notes, certain of the Operating Company’s assets are pledged as collateral. The Private Placement Notes contain covenants that, among other things, limit the Operating Company’s ability to: incur indebtedness; create, incur or allow liens; merge with other companies; engage in new or different lines of business; and engage in transactions with affiliates. The Private Placement Notes also contain financial covenants requiring the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.75x, (2) minimum liquidity of $15.0 million and (3) minimum quarterly EBITDA of $15.0 million and minimum EBITDA for the trailing four fiscal quarters of $80.0 million.
Debt Covenants
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company was in full compliance with all debt covenants.
Critical Accounting Policies and Estimates
The preparation of our condensed consolidated and combined financial statements in accordance with GAAP requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a more complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our condensed consolidated and combined financial statements, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 20212022 and Note 2, “Significant Accounting Policies,” to our condensed consolidated and combined financial statement for the year ended December 31, 2021.statements included in this quarterly report on Form 10-Q. There have been no significant changes in our critical accounting estimates during the quarter ended SeptemberJune 30, 20222023.
Recent Accounting Pronouncements
For a discussion of new accounting pronouncements recently adopted and not yet adopted, refer to Note 2, “Significant Accounting Policies” into our condensed consolidated and combined financial statements.statements included in this quarterly report on Form 10-Q.
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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 IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.2 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Class A common stock held by non-affiliates exceeded $700 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
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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 market risk, interest rate risk, credit and counterparty risk, liquidity risk, and foreign exchange 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 SeptemberJune 30, 2022,2023, we had cash of $117.5$35.4 million deposited in non-interest bearing accounts and $74.0$35.6 million deposited in an interest bearinginterest-bearing account, with limited to no interest rate risk. In addition, our Credit Facility bears interest based on a margin over SOFR (see the disclosures contained in “—Corporate Credit Facilities”). 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.
Liquidity Risk
See the disclosures contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
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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.
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Item 4.Controls and Procedures
Conclusion Regarding the EffectivenessEvaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) 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.conditions.
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 Form 10-Q, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.procedures. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of SeptemberJune 30, 2022,2023, 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 SeptemberJune 30, 2022,2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies, which may be identified during this process.
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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
There have been no material changes from the risk factors previously disclosed in Part 1, Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 20212022.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
There were no unregistered equity securities sold from JulyJanuary 1, 20222023 to SeptemberJune 30, 2022.2023, other than as previously disclosed in our current reports on Form 8-K.
Item 3.Defaults Upon Senior Securities
Not Applicable.None.
Item 4.Mine Safety Disclosures
Not Applicable.
Item 5.Other Information
Rule 10b5-1 Trading Plans

On November 7, 2022,During the Company entered into amended and restated employment agreements with eachthree months ended June 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) under the executive directorsExchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the Company to reflect termsaffirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” as defined in the Company’s executive emeritus policy, including availabilityItem 408(c) of continued eligibility for regularly scheduled vesting of equity interests following retirement, subject to compliance with the terms set forth in such policy. Copies of the amended employment agreements are filed as Exhibits 10.1-10.4 to this quarterly report on Form 10-Q.Regulation S-K.
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Item 6.Exhibits
Incorporated by Reference
Exhibit NumberExhibit DescriptionFormFiling DateExhibit NumberFiled Herewith
3.110-Q8/17/213.1
3.210-Q8/17/213.2
4.1S-1/A7/2/214.1
10.1#X
10.2#X
10.3#X
10.4#X
31.1X
31.2X
32.1*X
32.2*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)X
101.CAL*Inline XBRL Taxonomy Extension Schema DocumentX
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)X
# Indicates management contract or compensatory plan.
Incorporated by Reference
Exhibit NumberExhibit DescriptionFormFiling DateExhibit NumberFiled Herewith
3.110-Q8/17/213.1
3.210-Q8/17/213.2
31.1X
31.2X
32.1*X
32.2*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)X
101.CAL*Inline XBRL Taxonomy Extension Schema DocumentX
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)X
*This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
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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: November 9, 2022August 8, 2023By:/s/ Jonathan Slager
Jonathan Slager
Chief Executive Officer
(Principal Executive Officer)
Date: November 9, 2022August 8, 2023By:/s/ Katherine Elsnab
Katherine Elsnab
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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