Rialto Investments, the distressed asset arm of home builder Lennar Corp., took a $10 million charge relating to its joint venture with AllianceBernstein LP in the third quarter.
The charge was tied to mark-to-market adjustments on the investment portfolio of the joint venture.
Still, Rialto contributed $5.7 million of operating earnings to Lennar in 3Q.
The fund purchases distressed assets under the federal government's Public-Private Investment Program.
Rialto ran up nearly $34 million of expenses in 3Q, consisting primarily of costs relating to portfolio operations, management of investments for others, and due diligence expenses associated with both completed and abandoned transactions.
It booked revenues of more than $42 million, consisting mainly of interest income plus fees for managing and servicing assets for others. One year prior, revenues were $38 million -- strictly from interest income.
Lennar Corp. posted net earnings of nearly $21 million, down from $30 million one year prior. (In trading, its stock was up 4% at press time.)
Lennar Financial Services saw its operating earnings increase to $8 million from nearly $7 million due to cost savings initiatives in its title business.
