Investment group

BRIDGE INVESTMENT GROUP HOLDINGS INC. Management report on financial position and results of operations (Form 10-Q)

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 combined and consolidated
financial statements and related notes, and should be read in conjunction with
the accompanying tables and our annual audited financial statements in our final
prospectus for our IPO, filed with the SEC on July 19, 2021 pursuant to Rule
424(b) under the Securities Act, or the Prospectus. 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.

Overview

We are a leading, vertically integrated real estate investment manager,
diversified across specialized asset classes, with approximately $31.8 billion
of AUM as of September 30, 2021. 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 develop an array of investment platforms focused on
sectors of the U.S. real estate market that we believe are the most attractive.
We have extensive multi-channel distribution capabilities and currently manage
capital on behalf of more than one hundred global institutions and more than
6,500 individual investors across our investment strategies.

Activity area

We operate our business in a single segment, real estate investment management,
which is how our chief operating decision maker (who is our chairman) reviews
financial performance and allocates resources.

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.

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,

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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 attractive investments and efficiently deploy the capital that we have
raised. Although the capital deployed in any one quarter may vary significantly
from period to period due to the availability of attractive opportunities and
the long-term nature of our investment strategies, we believe that our ability
to efficiently and effectively invest our growing pool of fund capital puts us
in a favorable position to maintain our revenue growth over time. Our ability to
identify attractive investments and execute on those investments, including any
value-add strategies with respect to such investments, is dependent on a number
of factors, including the general macroeconomic environment, market positioning,
valuation, size, and the liquidity of such investment opportunities. 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. Furthermore, fluctuations in prevailing
interest rates could affect not only our returns on debt and mortgage-backed
securities, but also our cost of, and ability to secure, borrowings to finance
our equity asset acquisitions.
?
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 strike 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.

Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 a
global pandemic. The spread of COVID-19 throughout the world led many countries
to institute a variety of measures to contain the viral spread, which led to
significant disruption and uncertainty in the global financial markets. While
many of the initial restrictions in the United States have been relaxed or
lifted in an effort to generate more economic activity, the risk of future
outbreaks of COVID-19, or variants thereof, or of other public health crises
remain, and some restrictions remain in place and lifted restrictions may be
reimposed to mitigate risks to public health in jurisdictions where additional
outbreaks have been detected. Moreover, even where restrictions are and remain
lifted, the timing and effectiveness of vaccine distribution and other factors
could lead people to continue to self-isolate and not participate in the economy
at pre-pandemic levels for a prolonged period of time, potentially further
delaying global economic recovery.

We continue to closely monitor developments related to COVID-19 and assess any
negative impacts to our business. The COVID-19 pandemic has affected, and may
further affect, our business in various ways. In particular, it is possible that
our future results may be adversely affected by 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 in
the U.S. and global economy, may affect the investment returns of our funds, has
disrupted, and may continue to disrupt, industries in which we and our funds
operate and could potentially negatively impact us or our funds."

As the global response to COVID-19 continues to evolve, including recovery from
the pandemic, our primary focus continues to be the safety and well-being of our
employees and their families, as well as the seamless functioning of the firm in
serving our stakeholders and fund investors who have entrusted us with their
capital, as well as our tenants and residents at properties we own and/or
manage. Some of our employees continue to work remotely. Our technology
infrastructure has proven to be robust and capable of supporting this model. We
have implemented rigorous protocols for remote work across the firm, including
increased cadence of group calls and updates, and frequent communication across
leadership and working levels. We are leveraging technology to ensure our teams
stay connected and productive, and that our culture remains strong even in these
unusual circumstances. In cases where we are not yet able to meet with our fund
investors in person, we continue to actively communicate with our fund investors
and all of our

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stakeholders by videoconference, teleconference and e-mail. The investment committees continue to meet on their normal schedule, and the company continues to operate through the investment, asset management and corporate support functions.

Main financial measures

Our key financial and operating measures are discussed below. Additional
information regarding our significant accounting policies can be found in Note
2, "Significant Accounting Policies," to our condensed combined and consolidated
financial statements, which appear elsewhere in this Quarterly Report on Form
10-Q.

Revenues

Fund Management Fees. Fund 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 September 30, 2021, our weighted-average
management fee varies by fund and based upon the size of the commitment;
however, the low average for a single fund is 0.56% and our high average for a
single fund is 1.99% of committed or invested capital for our closed-end funds.
Fund management fees also includes management fees for joint ventures and
separately managed assets. 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.

Property Management and Leasing Fees. We have vertically integrated platforms
where we operate a significant percentage of the real estate properties owned by
our funds. As of September 30, 2021, we managed approximately 97% of the
multifamily properties, 86% of the office properties and 31% 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 assets, 2% to 3% for office assets and 4% to 5% for
seniors housing assets. 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.
The offset is recorded in third-party operating expenses on the condensed
combined and consolidated statement of operations.

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, 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 used 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. The rates used are based upon market rates and
are updated on an annual basis. For the nine months ended September 30, 2021,
the fee range for acquisition fees was 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 was 0.25% to 1.0% of
the acquisition price of the real estate acquired or value of the mortgage.

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.

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Other Asset Management and Property Income. Other asset management and property
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 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 September 30, 2021, we had
approximately $12.1 billion of carry-eligible capital across approximately 43
funds and joint ventures, of which 22 were in accrued carried interest
positions.

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 our customers. 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 included
in accrued performance allocations compensation in the condensed combined and
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 Topic 606, or ASC 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 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 combined and 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.

Expenses

Employee Compensation and Benefits. Compensation comprises salaries, bonuses
(including discretionary awards), related benefits, share-based compensation,
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 restricted stock,
RSUs, profits interests awards and performance allocations. 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 is
based upon our stock price at 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 remeasurement. 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. See Note 22 "Share-Based Compensation
and Profits Interests" to our condensed combined and consolidated financial
statements for more information about equity awards.

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Performance Allocations Compensation. Performance fee-related compensation
deemed to be liability 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 40% 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 combined and consolidated balance 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 fees. The amount includes the estimated liability (based on actuarial reports) of the two losses that were reported to us but which were not processed and paid, and losses related to insured events that occurred but did not occur to us. been reported.

Third-party Operating Expenses. Costs represents 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.

General and administrative expenses. General and administrative expenses include costs related primarily to professional services, occupancy, travel, communication and information services and other general operating items.

Depreciation and amortization. Depreciation or amortization of leasehold improvements, furniture and equipment and intangible assets is expensed on a straight-line basis over the useful life of the asset.

Other income (expenses)

Investment Income (Loss). Realized investment income (loss) occurs when the
Company redeems all or a portion of its investment or when the Company receives
cash income, such as dividends or distributions. Unrealized investment income
(loss) results from changes in the fair value of the underlying investment as
well as from the reversal of previously recognized unrealized income (loss) at
the time an investment is realized. The Company's share of the investee's income
and expenses for the Company's equity method investments (exclusive of carried
interest) is also included within other investment income (loss). Investment
income (loss) is presented together as realized and unrealized income (losses)
in the condensed combined and consolidated statements of operations. Finally,
the realized and unrealized change in income (loss) associated with the
financial instruments that we elect the fair value option is also included in
realized and unrealized investment income (loss).

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.

Interest Expense. Interest expense includes interest related to our two tranches
of privately offered notes, or the Private Placement Notes, which have a
weighted-average fixed coupon rate of 4.03% and our revolving credit facility,
which has a variable interest rate of LIBOR plus 2.25%.

Income Tax Provision. Income tax expense consists of taxes paid or payable by us
and our operating subsidiaries. Following our IPO, we became a public company on
July 16, 2021, and 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 been historically
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. subsidiary operates as a corporate entity in
non-U.S. jurisdictions. Accordingly, in some cases, this entity is 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 combined and consolidated statements of operations.

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. 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

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Inc. are allocated a share of the income or loss in the Operating company in proportion to their relative property interests, after examining the contractual provisions that govern the allocation of income or loss.

Net Income Attributable to Non-Controlling Interests in Bridge Investment Group
Holdings LLC. Net Income 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.

For more information on the elements of our combined and consolidated summary financial statements, refer to Note 2, “Significant accounting policies”, of our combined and consolidated summary financial statements.

Operating metrics

We monitor certain operational metrics that are common to the asset management industry or that we believe provide important data about our business.

Assets under management

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 does not deduct 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 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.

The table below presents rollforwards of our AUM for the three and nine months
ended September 30, 2021:



                                                   Three Months       Nine Months
                                                      Ended              Ended
                                                    September          September
(in millions)                                        30, 2021           30, 2021
Balance as of beginning of period                  $     28,749       $     

25 214

New capital / commitments raised(1)                       1,496             

2,891

Distributions / return of capital(2)                       (345 )             (661 )
Change in fair value and acquisitions(3)                  1,882              4,338
AUM as of end of period                            $     31,782       $     31,782
Increase                                                  3,033              6,568
Increase %                                                   10 %               21 %





(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.
(2)
Distributions / return of capital generally represents realized proceeds 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.

Paid 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, as almost all funds pay management fees based on commitments or invested capital.

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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 table below presents rollforwards
of our total fee-earning AUM for the three and nine months ended September 30,
2021:



                                               Three Months               Nine Months
                                                  Ended                      Ended
($ in millions)                             September 30, 2021        September 30, 2021
Balance as of beginning of period          $             10,819       $     

10,214

Increases (capital raised/deployment)(1)                  1,422             

2,838

Changes in fair market value                                  5                       (21 )
Decreases (liquidations/other)(2)                          (106 )                    (891 )
Fee-earning AUM as of end of period        $             12,140       $            12,140
Increase                                                  1,321                     1,926
Increase %                                                   12 %                      19 %




(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.
(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.

The launch of new funds resulted in an increased fee-earning AUM during first
nine months of 2021 and in 2020. Fee-earning AUM increased from approximately
$10.2 billion as of December 31, 2020 to $12.1 billion as of September 30, 2021
due to our capital raising activities and deployment. The following table
summarizes our balances of fee-earning AUM by fund at September 30, 2021 and
2020 and December 31, 2020 and 2019:



                                                September 30,             December 31,
(in millions)                                  2021        2020         2020        2019
Fee-Earning AUM by Fund
Bridge Multifamily Fund III                  $    294     $   468     $    401     $   527
Bridge Multifamily III JV Partners                  5          10           10          13
Bridge Multifamily Fund IV                      1,284       1,574        1,574       1,579
Bridge Multifamily Fund V                         305           -            -           -
Bridge Workforce Fund I                           523         419          499         608
Bridge Workforce Fund II                          616          72          166           -
Bridge Opportunity Zone Fund I                    482         482          482         466
Bridge Opportunity Zone Fund II                   408         408          408         414
Bridge Opportunity Zone Fund III                1,019         330        1,028           -
Bridge Opportunity Zone Fund IV                 1,002           -            -           -
Bridge Office Fund I                              500         500          500         548
Bridge Office I JV Partners                       129         154          154         154
Bridge Office Fund II                             130          89           89          81
Bridge Office II JV Partners                        6          21           21           7
Bridge Seniors Housing Fund I                     626         626          626         626
Bridge Seniors Housing Fund II                    809         789          769         937
Bridge Seniors Housing Fund III                    33           -           33           -
Bridge Debt Strategies Fund I                      40          48           41          48
Bridge Debt Strategies I JV Partners               18          18           18          18
Bridge Debt Strategies Fund II                    516         819          678         933
Bridge Debt Strategies II JV Partners             221         361          343         408
Bridge Debt Strategies Fund III                 1,485       1,549        1,549       1,279
Bridge Debt Strategies III JV Partners            334         403          416          81
Bridge Debt Strategies Fund IV                  1,118           -          305           -
Bridge Debt Strategies Fund IV JV Partners         79           -            -           -
Bridge Logistics Net Lease Fund                    31           -            -           -
Bridge Agency MBS Fund                            127          70          104           -
Total Fee-Earning AUM by Fund                $ 12,140     $ 9,210     $ 10,214     $ 8,727



The average remaining life of our closed-end funds was approximately 7.5 years at September 30, 2021 against 8.3 years at December 31, 2020.

                                       44

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Capital not deployed

As of September 30, 2021, we had $2.1 billion of undeployed capital available to
be deployed for future investment or reinvestment. Of this amount $0.8 billion
is currently fee earning based on commitments and $1.3 billion will be fee
earning if and when it is deployed.

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 funds and our workforce and affordable housing funds in the
top quartile for their vintage. Our historical investment returns for our
closed-end funds by platform are shown in the chart below.



                                                              Performance 

Summary to September 30, 2021

                                                     Unreturned
                                                       Drawn                                                                       Total                 Fund
                                       Fund          Capital +        Cumulative       Realized       Remaining                     Fair        TFV     Gross       Net
                                    Committed         Accrued          Invested        Proceeds      Fair Value      Unrealized    Value        MOIC     IRR        IRR
(in millions)                      Capital (2)        Pref (3)       Capital (4)         (5)          (RFV) (6)       MOIC (7)    TFV (8)       (9)      (10)       (11)
Closed-End Funds(1)
(Investment Period Beginning,
Ending Date)
Equity Strategies Funds
Multifamily
Bridge Multifamily I
  (Mar 2009, Mar 2012)             $        124     $          -     $        150     $      280     $         -             NA   $    280      1.87x     21.0 %     15.3 %
Bridge Multifamily II
  (Apr 2012, Mar 2015)                      596                -              605          1,264               -             NA      1,264      2.09x     30.2 %     23.4 %
Bridge Multifamily III
  (Jan 2015, Jan 2018)                      912                -              873          1,341             710          2.77x      2,051      2.35x     28.0 %     21.4 %
Bridge Multifamily IV
  (Jun 2018, Jun 2021)                    1,590            1,444            1,312            144           2,222          1.80x      2,366      1.80x     44.8 %     33.9 %
Total Multifamily Funds                   3,221            1,444            2,941          3,030           2,932          1.98x      5,962      2.03x    29.3%       22.8 %

Bridge Workforce Housing I
  (Aug 2017, Aug 2020)                      619              598              531             72           1,037          2.09x      1,109      2.09x     41.8 %     33.3 %

Seniors Housing
Bridge Seniors I
  (Jan 2014, Jan 2018)                      578              754              629            295             590          1.41x        885      1.41x      7.8 %      5.3 %
Bridge Seniors II
  (Mar 2017, Mar 2020)                      820              812              709            148             768          1.28x        915      1.29x     40.4 %      6.9 %
Total Senior Housing Funds                1,399            1,566            1,338            442           1,358          1.34x      1,801      1.35x      8.7 %      5.9 %

Bridge Office I
  (Jul 2017, Jul 2020)                      573              609              537            115             582          1.29x        697      1.30x     10.1 %      7.3 %

Total Equity Strategies Funds             5,812            4,216            5,347          3,659           5,910          1.70x      9,569      1.79x     24.0 %     17.9 %

Debt Strategies Funds
Bridge Debt I
  (Sep 2014, Sep 2017)                      132               51              219            215              48          1.02x        263      1.20x      8.5 %      6.5 %
Bridge Debt II
  (July 2016, July 2019)                  1,002              538            2,299          2,217             530          1.29x      2,746      1.19x     11.7 %      9.3 %
Bridge Debt III
  (May 2018, May 2021)                    1,624            1,507            5,207          4,173           1,572          1.21x      5,745      1.10x     15.1 %     11.8 %
Total Debt Strategies Funds               2,757            2,095            7,725          6,605           2,149          1.23x      8,754      1.13x     12.9 %     10.1 %





Footnotes:

(1)
May not foot due to rounding. 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.
(2)
Fund Committed Capital represents total capital commitments to the fund,
excluding joint ventures or separately managed accounts.
(3)
Unreturned Drawn Capital and Accrued Preferred represents the amount the fund
needs to distribute to its investors as a return of capital and a preferred
return before it is entitled to receive performance fees or allocations from the
fund.
(4)
Cumulative Invested Capital represents the total cost of investments since
inception (including any recycling or refinancing of investments).
(5)
Realized Proceeds represents net cash proceeds received in connection with all
investments, including distributions from investments and disposition proceeds.
(6)
Remaining Fair Value ("RFV") is the estimated liquidation values of remaining
fund investments that are generally based upon appraisals, contracts and
internal estimates. There can be no assurance that RFV 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
RFV are based. Direct fund investments in real property are held at cost minus
transaction expenses for the first nine months from investment.
(7)
Unrealized MOIC represents the Multiple of Invested Capital ("MOIC") for RFV
before management fees, expenses and carried interest, divided by the remaining
invested capital attributable to those unrealized investments.
(8)
Total Fair Value ("TFV") represents the sum of Realized Proceeds and Remaining
Fair Value, before management fees, expenses and carried interest.
(9)
TFV MOIC represents MOIC for Total Fair Value before management fees, expenses
and carried interest, divided by Cumulative Invested Capital.

                                       45

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(ten)

Fund Gross IRR is an annualized realized and unrealized fund-level internal rate
of return to fund investors of all investments, before management fees, expenses
and carried interest.
(11)
Fund Net IRR is an annualized realized and unrealized internal rate of return to
fund investors, net of management fees, expenses and carried interest. Net
internal rate of return information reflects average fund level returns, which
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.

The returns presented above are those of the primary funds in each platform and
not those of the Company. 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 a fund or other vehicle within a platform will achieve its investment objectives or achieve comparable investment returns.

Results of operations

Three Months Ended September 30, 2021 compared to Three Months Ended September
30, 2020

Revenues



                                                Three Months Ended
                                                   September 30,           Amount           %
(in thousands)                                  2021          2020         Change        Change

Revenues:
Fund management fees                         $   40,576     $  26,624     $  13,952            52 %
Property management and leasing fees             22,510        13,747         8,763            64 %
Construction management fees                      2,097         1,792           305            17 %
Development fees                                  1,018           738           280            38 %
Transaction fees                                 21,907         5,085        16,822           331 %
Insurance premiums                                2,530         2,220           310            14 %

Other income from asset and property management 1,533 1,146

    387            34 %
Total revenues                               $   92,171     $  51,352     $  40,819            79 %




Fund Management Fees. Fund management fees increased by $14.0 million, or 52%,
largely due to the launch of new funds. Bridge Debt Strategies Fund IV, Bridge
Seniors Housing Fund III, Bridge Opportunity Zone Fund IV and Bridge Multifamily
Fund V, all of which had their first closing subsequent to September 30, 2020,
contributed $10.4 million of fund management fees for the three months ended
September 30, 2021. The remaining increase is due to increased fee earning AUM
related to capital raises in our other funds. Revenue from these new funds were
primarily offset by decreases totaling $0.9 million in fund management fees from
Bridge Multifamily Fund III, Bridge Debt Strategies Fund II, and Bridge Debt
Strategies Fund III due to a decrease in fee-earning AUM in these funds.

Our fee-earning AUM increased from $9.2 billion as of September 30, 2020 to
$12.1 billion as of September 30, 2021. Our weighted-average management fee
increased from 1.43% for the three months ended September 30, 2020 to 1.49% for
the three months ended September 30, 2021. Our weighted-average management fee
varies largely due to the size of investor commitments. Our funds generally
offer lower management fee percentages for commitments over certain thresholds,
which is the main driver in the change in the weighted-average management fee.
In addition, we launched our first open-ended fund in Bridge Agency MBS Fund in
June 2020 and Bridge Logistics Net Lease Fund in July 2021, each of which
charges management fees at a lower rate and is based on each investor's
quarterly NAV.

Property Management and Leasing Fees. Property management and leasing fees
increased by $8.8 million, or 64%, primarily due to significant leasing activity
in the Atlanta region and an increase in the number of properties that we
manage, which increased from 44,000 units at September 30, 2020 to 52,000 units
at September 30, 2021.

Construction management costs. Construction management costs increased slightly by
$ 0.3 million, or 17%.

                                       46

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Development Fees. Development fees increased by $0.3 million, or 38%, due to an
increase in the number of development deals under management, largely due to
continued development of projects under Bridge Opportunity Zone Funds I and II,
and the launch of Bridge Opportunity Zone Fund III in 2020 and Bridge
Opportunity Zone Fund IV in 2021.

Transaction Fees. Transaction fees increased by $16.8 million, or 331%. Overall,
we saw a $14.5 million increase in our due diligence fees, and a $2.3 million
increase in debt origination fees, which were largely due to an increase in
acquisitions and mortgage re-financings related to development and multifamily
assets due to $1.3 billion of deployment during the quarter.

Insurance premiums. Insurance premiums increased by $ 0.3 million, or 14%, due to the increase in the number of assets held by the funds we manage and which are insured.

Other Asset Management and Real Estate Income. Other income increased by $ 0.4 million, or 34%, due to an increase in legal fees and other income.

Investment income



                                             Three Months Ended
                                                September 30,           Amount         %
(in thousands)                                2021          2020        Change       Change

Investment income:
Performance allocations
Realized                                   $   30,999     $  4,437     $ 26,562          599 %
Unrealized                                     53,042       14,663       38,379          262 %
Earnings from investments in real estate          823          183          640          350 %
Total investment income                    $   84,864     $ 19,283     $ 65,581          340 %



Total investment income. Total investment income increased by $ 65.6 million
in large part thanks to our performance allocations.

Performance awards. Performance allowances increased by $ 64.9 million. The following table reflects our deferred interest and incentive commissions by fund:



                     Three Months Ended             Three Months Ended
                     September 30, 2021             September 30, 2020
(in thousands)   Realized       Unrealized      Realized       Unrealized
BMF III          $  28,389     $    (15,956 )   $   4,437     $          -
BMF IV                   -           41,108             -                -
BWH I                    -           19,740             -            3,694
BWH II                   -              943             -                -
BDS I                    -                -             -               37
BDS II                   -            7,209             -            2,168
BDS III              2,610            3,502             -           12,749
BDS IV                   -            2,474             -            7,277
BOF I                    -           (6,268 )           -          (11,262 )
BOF II                   -            1,259             -                -
AMBS                     -             (969 )           -                -
Total            $  30,999     $     53,042     $   4,437     $     14,663




For the three months ended September 30, 2021, the increase in unrealized
performance allocation was largely due to an increase in performance income
allocation related to the market appreciation from properties within our
multifamily and workforce and affordable housing real estate equity funds and
favorable market conditions in our debt funds. Performance income allocation is
recorded one quarter in arrears, and as such the performance allocation income
reflects asset valuations as of June 30, 2021. The change in the Bridge
Multifamily Fund III unrealized performance allocations is attributable to the
monetization of performance allocations.

Income from investments in real estate. Income from real estate investments increased by $ 0.6 million, due to distributions from investments in Bridge Multifamily Fund III linked to GP Lenders.

                                       47

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Expenses



                                         Three Months Ended
                                            September 30,           Amount         %
(in thousands)                            2021          2020        Change       Change

Expenses:

Employee compensation and benefits $ 31,763 $ 22,826 $ 8,937

           39 %
Performance allocations compensation
Realized                                    1,855          438        1,417          324 %
Unrealized                                  2,682        1,542        1,140           74 %
Loss and loss adjustment expenses           1,429        1,535         (106 )         -7 %
Third-party operating expenses             11,581        6,033        5,548           92 %
General and administrative expenses         6,703        4,448        2,255           51 %
Depreciation and amortization                 699          672           27            4 %
Total expenses                         $   56,712     $ 37,494     $ 19,218           51 %




Employee Compensation and Benefits. Employee compensation and benefits increased
by $8.9 million, or 39%, million due to increased salaries, bonuses and benefits
of $6.9 million due to increased headcount, driven by our increase in AUM and
the number of Bridge-sponsored funds. Further, share-based compensation expense
was $2.1 million higher for the three months ended September 30, 2021 compared
to the three months ended September 30, 2020 due to share-based compensation
related to our 2021 profits interests awards and restricted stock and RSUs that
were issued concurrent with the IPO.

Performance award remuneration. Performance award compensation increased by $ 2.6 million, or 129%, due to an increase in $ 1.4 million linked to performance awards made and to a $ 1.2 million increase in the remuneration of performance allowances not realized due to the increase in performance allowances of investment income in 2021.

Loss and loss adjustment fees. Claims settlement costs are stable and decrease by $ 0.1 million.

Third-party Operating Expenses. Third-party operating expenses increased by $5.5
million, or 92%, primarily due to leasing commissions on our significant leasing
of commercial real estate in the Atlanta region.

General and administrative expenses. General and administrative expenses increased by $ 2.3 million, or 51%, mainly due to higher insurance, audit, advisory and other fees related to our IPO.

Depreciation and Amortization. Depreciation and amortization was stable compared
to the prior year period.

Other income (expense)



                                               Three Months Ended
                                                  September 30,          Amount         %
(in thousands)                                  2021          2020       Change      Change
Other income (expense)
Net realized and unrealized gains (losses)   $    2,565     $   (143 )   $ 2,708        1894 %
Interest income                                   1,008          358         650         182 %
Interest expense                                 (2,407 )     (1,701 )      (706 )        42 %
Total other income (expense)                 $    1,166     $ (1,486 )   $ 2,652         178 %




Realized and Unrealized Gains (Losses). Realized and unrealized gains increased
to $2.6 million for the three months ended September 30, 2021 compared to losses
of $0.1 million for the prior year period due to the unrealized appreciation of
our investments in third-party private proptech venture capital firms.

Interest income. Interest income increased $ 0.7 million, or 182%, largely due to increased borrowing from the funds.

Interest Expense. Interest expense increased by $0.7 million, or 42%, due to
interest expense attributable to the issuance of the Private Placement Notes in
July 2020.

Net Income Attributable to Non-Controlling Interests in Bridge Investment Group
Holdings LLC. Net income attributable to non-controlling interests in Bridge
Investment Group Holdings LLC is comprised of non-controlling interests related
to the Operating

                                       48
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Company's subsidiaries and to our profits interests programs. The following
table summarizes the allocation of the non-controlling interests in the
Operating Company:



                                                            Three Months Ended
                                                              September 30,
(in thousands)                                            2021              2020
Non-controlling interests related to General
Partners - realized                                   $      17,142     $   

Non-controlling interests related to General
Partners - unrealized                                        31,604         

Non-controlling interests related to Fund Managers            2,155         

2 107

Non-controlling interests related to 2019 profits
interests awards                                              8,517         

1 982

Non-controlling interests related to 2020 profits
interests awards                                                895         

Non-controlling interests related to 2021 profits
interests awards                                                587                -
Total                                                 $      60,900     $      4,089






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 $43.9 million during the three months ended
September 30, 2021.



We expect that the 2019 profits interests awards will be collapsed into Class A
Units in the Operating Company (or shares of our Class A common stock) on
December 31, 2021, the 2020 profits interests awards will be collapsed into
Class A Units in the Operating Company (or shares of our Class A common stock)
on December 31, 2022, and that all 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 June 30, 2023. The profits interests will
be collapsed based on their then-current fair values and the relative value of
the Company, based on Distributable Earnings (as defined below) 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 (and shares of our
Class B common stock) or shares of our Class A common stock.

Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30,
2020

Revenues



                                           Nine Months Ended
                                             September 30,            Amount           %
(in thousands)                            2021           2020         Change        Change
Revenues:
Fund management fees                   $  105,963     $   78,066     $  27,897            36 %
Property management and leasing fees       53,592         45,114         8,478            19 %
Construction management fees                5,988          5,569           419             8 %
Development fees                            2,567          1,315         1,252            95 %
Transaction fees                           43,475         20,724        22,751           110 %
Insurance premiums                          6,446          4,725         1,721            36 %
Other asset management and property
income                                      4,664          4,690           (26 )          -1 %
Total revenues                         $  222,695     $  160,203     $  62,492            39 %




Fund Management Fees. Fund management fees increased by $27.9 million, or 36%,
largely due to the launch of new funds. Bridge Workforce and Affordable Housing
Fund II, Bridge Debt Strategies Fund IV, Bridge Seniors Housing Fund III, Bridge
Opportunity Zone Fund III, Bridge Opportunity Zone Fund IV and Bridge
Multifamily Fund V, all of which had their first closing in 2020 or 2021,
contributed $33.0 million of management fees, which includes $11.8 million of
catch-up management fees. Revenue from these new funds were primarily offset by
decreases of $5.1 million in fund management fees from Bridge Multifamily Fund
III, Bridge Debt Strategies Fund II, and Bridge Debt Strategies Fund III, due to
the reduction in fee earning AUM. Our fee-earning AUM increased from $9.2
billion as of September 30, 2020 to $12.1 billion as of September 30, 2021.

Property management and rental fees. Increase in property management and rental fees $ 8.5 million, or 19%, mainly due to a significant rental activity in the Atlanta Region.

Construction management costs. Construction management fees are stable and increase by $ 0.4 million, or 8%.

                                       49

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Development Fees. Development fees increased by $1.3 million, or 95%, due to an
increase in the number of development deals under management, largely due to
continued development of projects under Bridge Opportunity Zone Funds I and II,
and the launch of Bridge Opportunity Zone Fund III in 2020 and Bridge
Opportunity Zone Fund IV in 2021.

Transaction Fees. Transaction fees increased by $22.8 million, or 110%. Overall,
we saw a $19.8 million increase in our due diligence fees, and a $3.0 million
increase in debt origination fees, which were largely due to an increase in
acquisitions and mortgage re-financings related to multifamily assets and
development assets.

Insurance premiums. Insurance premiums increased by $ 1.7 million, or 36%, due to the increase in the number of assets held by the funds we manage and which are insured.

Other Asset Management and Real Estate Income. Other income from asset management and real estate was stable, down 1%.

Investment income



                                             Nine Months Ended
                                                September 30,          Amount          %
(in thousands)                               2021          2020        Change        Change
Investment income:
Incentive fees                             $     910     $      -     $     910           NA
Performance allocations
Realized                                      72,184       13,872        58,312          420 %
Unrealized                                   111,009       12,045        98,964          822 %
Earnings from investments in real estate       1,799         (407 )       2,206          542 %
Total investment income                    $ 185,902     $ 25,510     $ 160,392          629 %



Total investment income. Total investment income increased by $ 160.4 million, in large part thanks to our performance allocations.

Performance awards. Performance allowances increased by $ 157.3 million, in large part thanks to our deferred interest. The following table reflects our realized and unrealized performance allocations by fund:



                     Nine Months Ended              Nine Months Ended
                     September 30, 2021             September 30, 2020
(in thousands)   Realized       Unrealized      Realized       Unrealized
BMF III          $  53,981     $    (19,561 )   $       -     $          -
BMF IV                   -           70,097             -                -
BWH I                    -           29,707             -            8,661
BWH II                   -              943             -                -
BDS I                    -               35           (12 )           (124 )
BDS II                   -           15,437         1,956          (24,066 )
BDS III             18,203           18,829        11,928           19,550
BDS IV                   -            3,423             -           16,043
BOF I                    -           (9,738 )           -           (7,926 )
BOF II                   -            2,117             -                -
AMBS                     -             (280 )           -                -
BSHI                     -                -             -              (93 )
Total            $  72,184     $    111,009     $  13,872     $     12,045




The increase in unrealized performance allocations was largely due to an
increase in performance income allocation related to the market appreciation
from properties within our multifamily and workforce and affordability housing
real estate equity funds and favorable market conditions in our debt funds.
Performance income allocation is recorded one quarter in arrears, and as such
the performance allocation income reflects asset valuations as of June 30, 2021.
The nine months ended September 30, 2020 reflects the impact on valuations from
the disruption due to the pandemic, which in particular adversely impacted the
valuation of Bridge Debt Strategies Fund II, due to the selloff in the credit
markets of mortgage-backed securities in the last week of March 2020 as
redemptions and margin calls created a wave of forced selling in the market,
which caused a significant decrease in the fair value of the accrued performance
allocations for the nine months ended September 30, 2020. The change in the
Bridge Multifamily Fund III unrealized performance allocations is attributable
to the monetization of performance allocations.

                                       50

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In addition, we have earned incentive fees of $ 0.9 million related to the disposition of certain investments managed during the first nine months of 2021. No such disposition occurred during the first nine months of 2020.

Income from investments in real estate. Income from real estate investments increased by $ 2.2 million, due to distributions from investments in Bridge Multifamily Fund III linked to GP Lenders.

Expenses



                                          Nine Months Ended
                                            September 30,           Amount         %
(in thousands)                           2021          2020         Change       Change
Expenses:

Employee compensation and benefits $ 101,220 $ 67,358 $ 33,862

           50 %
Incentive fee compensation                    82             -           82 

N / A

Performance allocations compensation
Realized                                   6,096         1,343        4,753          354 %
Unrealized                                10,159         1,398        8,761          627 %
Loss and loss adjustment expenses          4,346         3,213        1,133           35 %
Third-party operating expenses            26,325        21,676        4,649           21 %
General and administrative expenses       16,196        13,209        2,987           23 %
Depreciation and amortization              2,179         2,016          163            8 %
Total expenses                         $ 166,603     $ 110,213     $ 56,390           51 %




Employee Compensation and Benefits. Employee compensation and benefits increased
by $33.9 or 50% million due to increased salaries, bonuses, and benefits of
$16.1 million due to increased headcount, driven by our increase in AUM and the
number of Bridge-sponsored funds. In addition, for the nine months ended
September 2020, bonuses were reduced due to the impact of the COVID-19 pandemic.
Restricted stock and RSUs were issued for the first time during the three months
ended September 30, 2021 and related expense was $1.5 million. Further,
share-based compensation expense related to our profits interests programs
increased by $15.3 million, of which $13.6 million is due to the anti-dilutive
shares associated with the 2021 profits interests awards that are fully vested
upon issuance.

Performance Allocations Compensation. Performance allocations compensation
increased by $13.5 million, due to a $4.7 million increase in realized
performance allocation awards and a $8.8 million decrease in unrealized
performance allocation compensation from increased investment income performance
allocations during the nine months ended September 30, 2021 compared to the nine
months ended September 30, 2020.

Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses increased
by $1.1 million due to increased claims in Dallas related to ice storms as well
as a fire at one of our multifamily properties in the Atlanta region.

Third party operating expenses. Third-party operating expenses increased by $ 4.6 million, or 21%, due to an increase in properties managed by third parties, which increased in proportion to the increase in the number of properties managed by the Company.

General and Administrative Expenses. General and administrative expenses
increased by $3.0 million, or 23%, primarily due to higher insurance, audit and
consulting fees related to our IPO and increased travel, which was lower in 2020
due to the impact of the COVID-19 pandemic.

Depreciation and amortization. Depreciation increased slightly by $ 0.2 million, or 8%, due to the growth in our fixed assets.

Other income (expenses)

                                       51

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                                      Nine Months Ended
                                         September 30,          Amount         %
(in thousands)                        2021          2020        Change      Change
Other income (expense)
Net realized and unrealized gains   $   8,663     $    663     $  8,000        1207 %
Interest income                         2,172          961        1,211         126 %
Interest expense                       (6,547 )     (2,626 )     (3,921 )       149 %
Total other income (expense)        $   4,288     $ (1,002 )   $  5,290         528 %




Realized and Unrealized Gains. Realized and unrealized gains increased by $8.0
million largely due to $4.7 million and $2.8 million unrealized appreciation of
our investments in Bridge Multifamily Fund III and Bridge Senior Housing Fund I,
respectively.

Interest income. Interest income increased $ 1.2 million, in large part due to the increase in borrowing funds.

Interest Expense. Interest expense increased by $3.8 million, primarily due to
interest expense attributable to the issuance of the Private Placement Notes in
July 2020.

Net Income Attributable to Non-Controlling Interests in Bridge Investment Group
Holdings LLC. Net Income Attributable to Non-Controlling Interests in Bridge
Investment Group Holdings LLC is comprised of non-controlling interest related
to the Operating Company's subsidiaries and to our profits interests programs.
The following table summarizes the allocation of the non-controlling interest in
the Operating Company:



                                                            Nine Months Ended
                                                              September 30,
(in thousands)                                           2021              2020
Non-controlling interests related to General
Partners - realized                                  $      17,142     $    

Non-controlling interests related to General
Partners - unrealized                                       31,605          

Non-controlling interests related to Fund Managers           5,652          

6,740

Non-controlling interests related to 2019 profits
interests awards                                            14,676          

3,834

Non-controlling interests related to 2020 profits
interests awards                                             1,002          

Non-controlling interests related to 2021 profits
interests awards                                               586                 -
Total                                                $      70,663     $      10,574




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 $43.9 million during the nine months ended
September 30, 2021.



Non-GAAP Financial Measures

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, unrealized performance allocations and related compensation
expense, unrealized gains (losses), share-based compensation, 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 Tax Receivable Agreement 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.
These measures supplement 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.

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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 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 interest (interest income
less interest expense), net realized gain/(loss), 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.

Fee Related Revenues. Fee Related Revenues is a component of Fee Related
Earnings. Fee Related Revenues is comprised of fund management fees, transaction
fees, 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 combined and
consolidated statements of operations. Fee Related Revenues differs from revenue
computed in accordance with GAAP in that it excludes insurance premiums.
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, 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 combined and consolidated 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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Net 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 and to
Fee Related Earnings for the three- and nine-months ended September 30, 2021 and
2020.



                                            Three Months Ended           Nine Months Ended
                                               September 30,               September 30,
(in thousands)                              2021          2020           2021          2020
Net income                                $ 118,882     $  31,258     $  242,841     $  73,919
Income tax provision                          2,607           397          3,441           579
Income before provision for income
taxes                                       121,489        31,655        246,282        74,498
Depreciation and amortization                   699           672          2,179         2,016
Less: Unrealized performance
allocations                                 (53,042 )     (14,663 )     (111,009 )     (12,045 )
Plus: Unrealized performance
allocations compensation                      2,682         1,542         10,159         1,398
Less: Unrealized (gains) losses              (2,566 )         176         (8,662 )        (782 )
Plus: Share-based compensation                2,453           387         17,917         1,161
Less: Net income attributable to
non-controlling interests
 in Fund Managers                           (12,154 )      (4,089 )      (21,916 )     (10,574 )
Less: Realized performance allocations
to General Partners                         (17,142 )           -        (17,142 )           -
Distributable earnings attributable to
the Operating
 Company                                     42,419        15,680        117,808        55,672
Realized performance allocations and
incentive fees                              (30,999 )      (4,437 )      (73,094 )     (13,872 )
Realized performance allocations and
incentive fees
  compensation                                1,855           438          6,178         1,343
Realized performance allocations to
General Partners                             17,142             -         17,142             -
Net insurance income                         (1,101 )        (685 )       (2,100 )      (1,512 )
(Earnings) losses from investments in
real estate                                    (823 )        (183 )       (1,799 )         407
Net interest (income) expense and
realized (gain) loss                          1,381         1,258          4,316         1,680
Net income attributable to
non-controlling interests in
 Fund Managers                               12,154         4,089         21,916        10,574
Total Fee Related Earnings                   42,028        16,160         90,367        54,292
Less: Net income attributable to
non-controlling
 interests in Fund Managers                 (12,154 )      (4,089 )      (21,916 )     (10,574 )
Total fee related earnings to the
Operating Company                         $  29,874     $  12,071     $   68,451     $  43,718




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The following table shows our total commission income and distributable income for the three and nine month periods ended. September 30, 2021 and 2020.


                                            Three Months Ended           Nine Months Ended
                                               September 30,               September 30,
($ in thousands)                            2021          2020          2021          2020
Fund-level fee revenues
Fund management fees                      $  40,576     $  26,624     $ 105,963     $  78,066
Transaction fees                             21,907         5,085        43,475        20,724
Total net fund-level fee revenues            62,483        31,709       149,438        98,790
Net earnings from Bridge property
operators                                     4,969         2,388         9,049         7,192
Development fees                              1,018           738         2,567         1,315
Other asset management and property
income                                        1,533         1,146         4,664         4,690
Fee Related Revenues                         70,003        35,981       165,718       111,987
Cash-based employee compensation and
benefits                                    (23,173 )     (16,754 )     (64,885 )     (49,302 )
Net administrative expenses                  (4,802 )      (3,067 )     (10,466 )      (8,393 )
Fee Related Expenses                        (27,975 )     (19,821 )     (75,351 )     (57,695 )
Total Fee Related Earnings                   42,028        16,160        90,367        54,292
Fee Related Earnings margin                      60 %          45 %          55 %          48 %
Net income attributable to
non-controlling interests in
 Fund Managers                              (12,154 )      (4,089 )     (21,916 )     (10,574 )
Total fee related earnings to the
Operating Company                            29,874        12,071        68,451        43,718
Realized performance allocations and
incentive fees                               30,999         4,437        73,094        13,872
Realized performance allocations and
incentive fees
 compensation                                (1,855 )        (438 )      (6,178 )      (1,343 )
Realized performance allocations to
General Partners                            (17,142 )           -       (17,142 )           -
Net insurance income                          1,101           685         2,100         1,512
Earnings from investments in real
estate                                          823           183         1,799          (407 )
Net interest income (expense) and
realized gain (loss)                         (1,381 )      (1,258 )      (4,316 )      (1,680 )
Distributable Earnings attributable to
the Operating
 Company                                  $  42,419     $  15,680     $ 117,808     $  55,672




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 combined and consolidated statement 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.



                                             Three Months Ended           Nine Months Ended
                                               September 30,                September 30,
($ in thousands)                             2021          2020          2021          2020
Cash-based employee compensation and
benefits                                  $   23,173     $  16,754     $  64,885     $  49,302
Compensation expense of Bridge property
  operators                                    6,137         5,685        18,418        16,895
Share-based compensation                       2,453           387        

17,917 1,161 Compensation and employee benefits $ 31,763 $ 22,826 $ 101,220 $ 67,358

Administrative expenses, net of Bridge
property
  operators                               $    4,802     $   3,067     $  10,466     $   8,393
Administrative expenses of Bridge
property
  operators                                    1,901         1,381         

5,730 4,816 General and administrative expenses $ 6,703 $ 4.448 $ 16,196 $ 13,209

Unrealized gains (losses)                 $    2,566     $    (176 )   $   8,662     $     782
Other expenses from Bridge property
operators                                        (19 )         (52 )         (58 )        (104 )
Net interest income (expense) and
realized
  gain (loss)                                 (1,381 )      (1,258 )      (4,316 )      (1,680 )
Total other income (expense)              $    1,166     $  (1,486 )   $   4,288     $  (1,002 )




                                       55
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Distributable gains and gains related to costs Operating company

Fee Related Earnings to the Operating Company increased by $17.8 million, or
147%, for the three months ended September 30, 2021 as compared to the three
months ended September 30, 2020, while Distributable Earnings to the Operating
Company increased by $26.7 million, or 171%, during the same period due to the
following:

Total fee income increased by $ 34.0 million, or 95%, mainly due to:

?
Fund management fees increased by $14.0 million, or 52%, primarily due to new
funds launched in 2021 and 2020.
?
Transaction fees increased by $16.8 million, or 331%, largely due to an increase
in acquisitions and mortgage re-financings primarily related to multifamily
assets, which is driven by deployment.
?
Net earnings from Bridge property operators increased by $2.6 million or 108%
due to our increased leasing activity in the Atlanta region.

Fee-related costs increased by $ 8.2 million, or 41%, mainly due to:

?
Cash-based employee compensation and benefits increased by $6.4 million, or 38%,
primarily due to increased headcount.
?
Net administrative expenses increased by $1.7 million, or 57%, due to increased
expenses related to the public offering that were not deemed to be offering
costs. Additionally, net administrative expenses were lower in 2020 due to
reduced travel and office spend due to the COVID-19 pandemic.

Net of compensation, realized performance allocations and incentive fees
increased by $24.7 million, or 57%, compared to the three months ended September
30, 2020, due to the increased realizations in Bridge Multifamily Fund III and
Bridge Debt Strategies Fund III. The prior year period included 100% of the net
realized performance allocations and incentive fees as the financial statements
were combined with the respective general partners. Post-IPO, the amount is
shown net of the non-controlling interest component of $17.1 million for the
three months ended September 30, 2021 compared to zero in the prior year.

Fee Related Earnings to the Operating Company increased by $36.1 million, or
66%, for the nine months ended September 30, 2021 as compared to the nine months
ended September 30, 2020, while Distributable Earnings to the Operating Company
increased by $62.1 million, or 112%, during the same period due to the
following:

Total fee income increased by $ 53.7 million, or 48%, mainly due to:

?
Fund management fees increased by $27.9 million, or 36%, primarily due to new
funds launched subsequent in 2021 and 2020.
?
Transaction fees increased by $22.8 million, or 110%, largely due to an increase
in acquisitions and mortgage re-financings related to our multifamily assets.
?
Net earnings from Bridge property operators increased by $1.9 million or 26% due
to our increased leasing activity in the Atlanta region.

Fee-related costs increased by $ 17.7 million, or 31%, mainly due to:

?
Cash-based employee compensation and benefits increased by $15.6 million, or
32%, due to increased headcount, and lower bonuses were paid in the first nine
months of 2020.
?
Net administrative expenses increased by $2.1 million, or 25%, due to increased
expenses related to the IPO that were not deemed to be offering costs.
Additionally, net administrative expenses were lower in 2020 due to reduced
travel and office spend due to the COVID-19 pandemic.

Net of compensation, realized performance allocations and incentive fees were up
$54.4 million or 434% compared to the nine months ended in the prior year due to
increased realizations in Bridge Multifamily Fund III and Bridge Debt Strategies
Fund III.

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Post-IPO, the amount is shown net of the non-controlling interest component of
$17.1 million for the nine months ended September 30, 2021 compared to zero in
the prior year.

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 agreement, along with the proceeds from our IPO, 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.

As of September 30, 2021 and December 31, 2020, we had $188.3 million and $101.8
million of cash and cash equivalents, respectively, $74.2 million and $74.3
million of current liabilities, respectively, and $194.7 million and $150.2
million of long-term liabilities, respectively. There were no borrowings
outstanding under our revolving credit facility. We generate cash primarily from
fund, property and construction management fees, and development and transaction
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. In the future, we will
also evaluate opportunities, based on market conditions, to access the capital
markets.

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, if needed, and
(d) issuance of capital securities in 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.

Our cash increased by $86.4 million from December 31, 2020 to September 30, 2021
primarily due to $152.9 million of cash provided by operating activities and
$295.4 million of proceeds from the issuance of common stock from our IPO,
including the underwriters' exercise of their over-allotment option. The sources
of cash were partially offset by $217.6 million of distributions to members and
non-controlling interests and $158.1 million purchase of membership interests in
the Operating Company.

The following table presents a summary of our cash flows for the periods
presented:



                                                            Nine Months
                                                        Ended September 30,
                                                         2021          2020
(in thousands)
Net cash provided by operating activities             $  152,861     $  

79,340

Net cash provided by (used in) investing activities       14,101       (23,582 )
Net cash provided by (used in) financing activities      (80,528 )      13,010
Total increase in cash, cash equivalents, and
  restricted cash                                     $   86,434     $  68,768




Operating Activities

Cash 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,
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 included
payments for operating expenses, including compensation and general and
administrative expenses.

Nine Months Ended September 30, 2021 - Cash provided by operating activities was
$152.9 million, consisting of net income of $242.8 million and negative
adjustments for non-cash items of $89.2 million and $0.7 million from operating
assets and liabilities. Adjustments for non-cash items primarily consisted of
$111.0 million of unrealized performance allocations and $7.8 million of
unrealized earnings on equity investments, partially offset by $17.9 million of
share-based compensation and $10.1 million of changes in unrealized accrued
performance allocations compensation.

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Nine Months Ended September 30, 2020 - Cash provided by operating activities was
$79.3 million, consisting of net income of $73.9 million, negative adjustments
for non-cash items of $8.6 million, and positive adjustments of $14.0 million
for operating assets and liabilities. Adjustments for non-cash items primarily
consisted of $12.0 million for unrealized performance allocations.

Investment 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 property technology companies.

Nine Months Ended September 30, 2021 - Net cash provided by investing activities
of $14.1 million primarily consisted of $409.6 million from collections of notes
receivable related to our lending activities to affiliate entities, partially
offset by $385.2 million from the issuance of notes receivable, and $10.7
million related to the purchase of investments.

Nine months ended September 30, 2020 – Net cash used in investing activities of
$ 23.6 million consisted mainly of $ 108.2 million loans to affiliated entities and related repayments of this loan from $ 94.9 million and $ 15.6 million related to the purchase of investments.

Fundraising activities

Our financing activities primarily consist of distributions to our members as
well as borrowings associated with our Private Placement Notes and revolving
line of credit, and in connection with the IPO, proceeds from equity financings.

Nine Months Ended September 30, 2021 - Net cash used in financing activities of
$80.5 million was primarily due to the distributions to the Operating Company's
members of $176.3 million, which included a special dividend of $75.0 million,
and to non-controlling interests of $41.3 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.

Nine Months Ended September 30, 2020 - Net cash provided by financing activities
of $13.0 million was primarily due to $133.0 million from borrowing activities,
partially offset by distributions of $94.2 million and $19.4 million to our
members and non-controlling interests, respectively, and $6.6 million repurchase
of membership interests.

Credit Facilities

In july 2020, we entered into a Note Purchase Agreement with various lenders, pursuant to which we issued the Private Placement Notes in two tranches.

The Private Placement Notes were issued in an aggregate principal amount of
$150.0 million. Concurrently with the issuance of the Private Placement Notes we
entered into a secured revolving line of credit, ("LOC"), with an aggregate
borrowing capacity of $75.0 million. Net proceeds from the 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 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. Borrowings under the LOC accrue interest at LIBOR plus 2.25%. We had
no borrowings against the LOC as of September 30, 2021 or December 31, 2020. The
LOC matures on July 22, 2022.

Under the terms of the Private Placement Notes and the LOC, certain of our
assets serve as pledged collateral. In addition, the Private Placement Notes and
LOC contain covenants that, among other things, limit our ability to incur
indebtedness. The Private Placement Notes and the LOC also contain a financial
covenant requiring us to maintain a total leverage ratio of no more than 3.0x,
minimum quarterly Earnings Before Income Taxes Depreciation and Amortization, or
EBITDA, of $10.0 million and minimum unencumbered cash of $2.5 million. As of
both September 30, 2021 and December 31, 2020, we were in compliance with all
debt covenants.

Critical accounting conventions and estimates

The preparation of condensed combined and consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of revenues, expenses, assets, and liabilities and disclosure
of contingent assets and liabilities in our financial statements. We

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regularly evaluate these estimates; however, actual amounts could differ from these estimates. The impact of changes in estimates is recorded in the period in which they are known.

An accounting policy is considered to be critical if the nature of the estimates
or assumptions is material due to the levels of subjectivity and judgment
necessary to account for highly uncertain matters or the susceptibility of such
matters to change, and the effect of the estimates and assumptions on financial
condition or operating performance. The accounting policies we believe reflect
our more significant estimates, judgments and assumptions that are most critical
to understanding and evaluating our reported financial results are:
consolidation, revenue recognition, fair value measurements, share-based
compensation, performance fee-related compensation and accounting for income
taxes.

Consolidation

We consolidate all entities that we control through a majority voting interest
or as the primary beneficiary of a variable interest entity or VIE. Under the
VIE model, we are required to perform an analysis as to whether we have a
variable interest in an entity and whether the entity is a VIE. In evaluating
whether we hold a variable interest, we review all of our financial
relationships to determine whether we are exposed to the risks and rewards
created and distributed by an entity. We hold variable interests in certain
operating subsidiaries not wholly owned by us and in our funds in which we serve
as the general partner or managing member. We also assess whether the fees
charged to our funds are customary and commensurate with the level of effort
required to provide the services. We consider all economic interests, including
indirect interests, to determine if a fee is considered a variable interest. We
determined our fee arrangements with our funds are not considered to be variable
interests.

If we have a variable interest in an entity, we further assess whether the
entity is a VIE and, if so, whether we are the primary beneficiary. The
assessment of whether an entity is a VIE requires an evaluation of qualitative
factors and, where applicable, quantitative factors. These judgments include:
(a) determining whether the entity has sufficient equity at risk, (b) evaluating
whether the equity holders, as a group, lack the ability to make decisions that
significantly affect the economic performance of the entity and (c) determining
whether the entity is structured with disproportionate voting rights in relation
to their equity interests.

For entities that are determined to be VIEs, we are required to consolidate
those entities where we have concluded that we are the primary beneficiary. The
primary beneficiary is defined as the variable interest holder with (a) the
power to direct the activities of a VIE that most significantly affect the
entity's economic performance and (b) the obligation to absorb losses of the
entity or the right to receive benefits from the entity that could potentially
be significant to the VIE. In evaluating whether we are the primary beneficiary,
we evaluate our economic interests in the entity held either directly or
indirectly by us. At each reporting date, we determine whether any
reconsideration events have occurred that require us to revisit the primary
beneficiary analysis, and we will consolidate or deconsolidate accordingly.

We provide investment advisory services to the funds, which have third-party
investors. Certain funds are VIEs because they have not granted the third-party
investors substantive rights to terminate or remove the general partner or
participating rights. We do not consolidate these funds because we are not the
primary beneficiary of those funds, primarily because our fee arrangements are
considered customary and commensurate and thus not deemed to be variable
interests, and we do not hold any other interests in those funds that are
considered more than insignificant. We consolidate certain of our operating
subsidiaries that are VIEs because we are the primary beneficiary.

Revenue recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with
Customers. Revenue is recognized in a manner that depicts the transfer of
promised goods or services to customers and for an amount that reflects the
consideration to which we expect to be entitled in exchange for those goods or
services. We are required to identify our contracts with customers, identify the
performance obligations in a contract, determine the transaction price, allocate
the transaction price to the performance obligations in the contract and
recognize revenue when (or as) the entity satisfies a performance obligation. In
determining the transaction price, variable consideration is included only to
the extent that it is probable that a significant reversal in the amount of
cumulative revenue recognized would not occur when the uncertainty associated
with the variable consideration is resolved. The guidance requires us to assess
whether we are the principal versus agent in the arrangement based on the notion
of control, which affects recognition of revenue on a gross or net basis.
Essentially all of the revenue and operations of the Company are directly or
indirectly supporting affiliated investment funds (including joint ventures and
separately managed accounts) and derived from or related to their underlying
investments.

Fund Management Fees

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We recognize management fee revenues when control of the promised services is
transferred to customers, in an amount that reflects the consideration that we
expect to receive in exchange for those services. For asset management services
and the arrangement of administrative services, we satisfy these performance
obligations over time because the customer simultaneously receives and consumes
the benefits of the services as they are performed.

Management fees are reflected net of certain professional and administrative
services and distribution and servicing fees paid to third parties for which we
are acting as an agent.

Performance Fees

We earn two types of performance fee income, incentive fees and performance
allocations, as described below. The underlying investments in the funds reflect
valuations on a three-month lag, or as of June 30, 2021 and June 30, 2020 for
the quarters ended September 30, 2021 and September 30, 2020, respectively, and
September 30, 2020 for the year ended December 31, 2020.

Incentive fees are generally calculated as a percentage of the profits earned in
respect of certain accounts for which we are the investment manager, subject to
the achievement of minimum return levels or performance benchmarks. 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 income
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 refer to the allocation of performance fees (typically
15% to 20%) from limited partners in certain funds. We account for our
performance allocations under the equity method of accounting. Certain funds
will allocate carried interest to us, based on cumulative fund 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 each respective fund's
governing documents. We recognize income attributable to performance allocations
from a fund based on the amount that would be due to us pursuant 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.
Carried interest is generally 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. Carried
interest is generally subject to reversal to the extent that the amount received
to date exceeds the amount due to us based on cumulative results. Performance
allocation is presented separately as investment income within the condensed
combined and consolidated statements of operations, and the accrued but unpaid
carried interest as of the reporting date reported in within investments in the
condensed combined and consolidated balance sheets.

Fair value assessments

GAAP establishes a hierarchical disclosure framework, which prioritizes and
ranks the level of market price observability used in measuring financial
instruments at fair value. Market price observability is affected by a number of
factors, including the type of financial instrument, the characteristics
specific to the financial instrument and the state of the marketplace -
including the existence and transparency of transactions between market
participants. Financial instruments with readily available quoted prices in
active markets generally will have a higher degree of market price observability
and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and
disclosed based on the observability of inputs used in the determination of
their fair values. Note 2 "Significant Accounting Policies" to our condensed
combined and consolidated financial statements describes the criteria for
assigning financial assets and liabilities to Levels 1, 2, and 3.

In certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the level in the fair value
hierarchy within which the fair value measurement in its entirety falls has been
determined based on the lowest level input that is significant to the fair value
measurement in its entirety. Our assessment of the significance of a particular
input to the fair value measurement in its entirety requires judgment and
consideration of factors specific to the financial instrument.

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Share-based compensation

Compensation expense relating to the issuance of share-based awards to employees
is measured at fair value on the grant date. The compensation expense for awards
that vest over a future service period is recognized over the relevant service
period on a straight-line basis. The compensation expense for awards that do not
require future service is recognized immediately.

The Company recognizes waivers of share-based awards in the period in which they occur as a reversal of previously recognized compensation expense.

Compensation linked to performance fees

A portion of the performance allocations we earn is awarded to employees and
other carry participants in the form of award letters, or the carry awards.
Liability-classified carry awards to employees and other participants are
accounted for as a component of employee 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. We record 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
distribution of the net proceeds in accordance with the applicable governing
agreement.

Income Tax

Following our IPO, we are now 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 Bridge that will flow through to its interest
holders, including us. We have historically been treated as a partnership for
U.S. federal and state income tax purposes. As a result, prior to our IPO, we
were not subject to U.S. federal and state income taxes. The provision for
income taxes in the historical consolidated statements of operations consists of
local and foreign income taxes.

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 basis, 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.

Deferred tax assets are reduced by a valuation allowance when it is more likely
than not a portion or all of the deferred tax assets will not be realized. The
realization of deferred tax assets is dependent on the amount of our 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.

U.S. GAAP requires us to recognize tax benefits in an amount that is more likely
than not to be sustained by the relevant taxing authority upon examination. We
analyze our tax filing positions in all of the U.S. federal, state, local and
foreign tax jurisdictions where we are required to file income tax returns, as
well as for all open tax years in these jurisdictions. If, based on this
analysis, we determine 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 combined and consolidated financial
statements. We recognize interest and penalties, if any, related to unrecognized
tax benefits as general and administrative expenses in the condensed combined
and consolidated statements of operations. If recognized, the entire amount of
unrecognized tax positions would be recorded as a reduction in the provision for
income taxes.

Tax laws are complex and subject to different interpretations by the taxpayer
and respective governmental taxing authorities. Significant judgment is required
in determining tax expense and in evaluating tax positions, including evaluating
uncertainties under GAAP. We review our tax positions quarterly and adjust our
tax balances as new information becomes available.

Obligations and contractual commitments

During the nine months ended September 30, 2021, there were no material changes
outside of the ordinary course of business in the composition of the contractual
obligations or commitments as discussed in the Prospectus under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Contractual Obligations."

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Off-balance sheet provisions

During the periods presented, we have not had, and currently do not have, any off-balance sheet arrangements as defined in the SK Regulation.

Recent accounting positions

For a discussion of new accounting pronouncements recently adopted and not yet adopted, see Note 2 “Significant accounting policies” to our combined and consolidated summary financial statements.

Employment 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 $1.07
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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