Bridge Investment (BRDG) - 2023 Q3 - Quarterly Report

Assets Under Management (AUM) - As of September 30, 2023, the company has approximately $49.4 billion in assets under management (AUM) [161] - As of September 30, 2023, the company's Assets Under Management (AUM) increased to$ 49.427 billion, up from $43.833 billion as of the same date in 2022, reflecting a year-over-year increase of 12.1% [209] - The company had approximately$ 17.5 billion of carry-eligible fee-earning AUM across approximately 49 funds [181] - The fee-earning AUM as of the end of the period was $21.779 billion, a decrease of 2.1% from$ 22.238 billion at the beginning of the period [211] - Comparative fee-earning AUM increased by $0.9 billion, or 6%, from$ 16.58 billion as of September 30, 2022, to $17.34 billion as of September 30, 2023 [213] - Total fee-earning AUM reached$ 21.779 billion as of September 30, 2023, up from $16.580 billion as of September 30, 2022 [215] - As of September 30, 2023, the company had$ 3.6 billion of undeployed capital available for future investment or reinvestment [218] - Of the undeployed capital, $2.2 billion is currently fee-earning based on commitments, while$ 1.4 billion will be fee-earning upon deployment [218] Financial Performance - The company’s performance is influenced by macroeconomic trends, including inflation and rising interest rates, which have created headwinds to economic growth [170] - The company’s future performance is heavily dependent on its ability to generate strong, stable returns and retain investor capital throughout market cycles [167] - New capital commitments raised for the nine months ended September 30, 2023, totaled $6.479 billion, compared to$ 3.851 billion for the same period in 2022, representing a significant increase of 68% [202] - Total revenues for the three months ended September 30, 2023, were $106.271 million, a decrease of$ 4.153 million or 4% compared to $110.424 million for the same period in 2022 [227] - Total revenues for the nine months ended September 30, 2023, were$ 296.5 million, a decrease of $17.1 million, or 5%, compared to$ 313.6 million for the same period in 2022 [257] - The company reported a net loss of $88.1 million for the nine months ended September 30, 2023, compared to a net income of$ 254.1 million for the same period in 2022 [315][316] Expenses and Costs - Total expenses for the three months ended September 30, 2023, were $88.9 million, an increase of$ 9.2 million, or 11%, compared to $79.8 million for the same period in 2022 [247] - Employee compensation and benefits increased by$ 3.6 million, or 7%, primarily due to a net increase in salaries and benefits from higher headcount driven by increased AUM [240] - General and administrative expenses increased by $1.5 million, or 14%, attributed to consolidated fund-level expenses and increases in professional services related to the rise in AUM [242] - Fund management fees decreased by$ 2.646 million, or 4%, primarily due to a reduction of $16.0 million from one-time catch-up fees recognized in Q3 2022 [228] - Interest expense increased by$ 3.6 million, or 85%, due to the issuance of Private Placement Notes with weighted-average interest rates of 5.05% and 6.01% [245] Investment Performance - The company recognized a change in fair value and acquisitions of $809 million for the three months ended September 30, 2023, compared to$ 901 million for the same period in 2022 [209] - The company has a demonstrated record of producing attractive returns for fund investors across its platforms [219] - Total investment loss income for the three months ended September 30, 2023, was $(30.178) million, a decrease of$ 36.937 million or 546% compared to $6.759 million for the same period in 2022 [236] - Unrealized performance allocations for the three months ended September 30, 2023, were$ (50.940) million, compared to $(16.367) million for the same period in 2022, representing a 211% increase in losses [236] Acquisitions and Growth - The company acquired Newbury Partners LLC for a total consideration of$ 320.1 million, which closed on March 31, 2023 [163] - The company continues to expand and diversify its product offerings to meet the changing investment priorities of its investor base [169] - Fund management fees increased by $9.4 million, or 6%, primarily due to the Newbury Acquisition and the timing of capital raising for funds launched in 2022 and 2023 [258] Debt and Liquidity - The Company entered into a$ 150 million note purchase agreement on February 13, 2023, issuing two tranches of notes with interest rates of 6.0% and 6.1% [347] - The Company was in full compliance with all debt covenants as of September 30, 2023 [332] - The Credit Facility matures on June 3, 2024, with an option for potential extension under certain circumstances [326] - The company believes current liquidity sources will be sufficient to meet projected operating and debt service requirements for at least the next 12 months [308] Employee Compensation - The company reported a performance allocation revenue tied to investment performance, with up to 60% of this revenue awarded to employees as long-term incentive compensation [189] - Employee compensation and benefits increased by $16.971 million, or 11%, largely due to a net increase in salaries and benefits attributed to higher headcount [273] - Cash-based employee compensation and benefits increased by$ 3.0 million, or 9%, primarily due to increased headcount driven by a 6% increase in fee-earning AUM [305] Risk Management - The company is exposed to credit and counterparty risk due to reliance on financial institutions for credit, with efforts made to limit exposure to reputable counterparties [355] - The company does not have significant foreign assets or transactions in currencies other than the U.S. dollar, minimizing foreign exchange rate risk impact [356]