Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Related Party Transactions Investment Advisory Agreement The Company entered into an Investment Advisory Agreement with the Advisor in which the Advisor, subject to the overall supervision of the Company’s Board of Trustees, manages the day-to-day operations of, and provides investment advisory services to the Company. Pursuant to the Investment Advisory Agreement with the Advisor, the Company pays the Advisor a fee for investment advisory and management services consisting of two components—a base management fee (the “Management Fee”) and an incentive fee (the “Incentive Fee”). Management Fee The Management Fee is payable quarterly in arrears and is calculated at an annual rate of 0.50% based on the average value of the Company’s gross assets at the end of the two most recently completed quarters. Incentive Fee The Incentive Fee consists of two parts. The first part, referred to as the “Incentive Fee on Income,” is calculated and payable quarterly in arrears based on the Company’s “pre-incentive fee net investment income” (as defined below) for the immediately preceding quarter. The term “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the Management Fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred share, but excluding the Incentive Fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing the Company’s pre-incentive fee net investment income, the calculation methodology will look through total return swaps (to the extent the Company invests in any, which it does not currently intend to) as if the Company owned the referenced assets directly. The payment of the Incentive Fee on Income shall be subject to payment of a preferred return to investors each quarter, expressed as a quarterly rate of return on the value of the Company’s net assets at the end of the most recently completed calendar quarter, subject to a “catch up” feature (as described below). The calculation of the Incentive Fee on Income is as follows: •No Incentive Fee on Income shall be payable to the Advisor in any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the preferred return rate of 1.25% per quarter (or 5.00% annualized) (the “Preferred Return”) on net assets; •100% of the dollar amount of the Company’s pre-incentive fee net investment income, if any, that exceeds the Preferred Return but is less than or equal to 1.429% in any calendar quarter (or 5.71% annualized) shall be payable to the Advisor. This portion of the Incentive Fee on Income is referred to as the “catch up” and is intended to provide the Advisor with an incentive fee of 12.5% on all of the Company’s pre-incentive fee net investment income when the Company’s pre-incentive fee net investment income reaches 1.429% (or 5.71% annualized) in any calendar quarter; and •For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.429% in any calendar quarter (or 5.71% annualized), the Incentive Fee on Income shall equal 12.5% of the dollar amount of the Company’s pre-incentive fee net investment income as the Preferred Return and catch up will have been achieved. The second part of the incentive fee, referred to as the “Incentive Fee on Capital Gains During Operations,” shall be calculated based on the Company’s “Capital Gains During Operations” (as defined below) and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, if earlier). “Capital Gains During Operations” means the Company’s cumulative realized capital gains from the date of the Company’s election to be regulated as a BDC through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis. For the purpose of computing the Company’s Capital Gains During Operations, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly. Therefore, realized gains and realized losses on the disposition of any reference assets, as well as unrealized depreciation on reference assets retained in the derivative financial instrument or swap, will be included on a cumulative basis in the calculation of the Company’s Capital Gains During Operations. The Incentive Fee on Capital Gains During Operations equals 12.5% of the Company’s Capital Gains During Operations, less the aggregate amount of any previously paid Incentive Fee on Capital Gains During Operations. GAAP requires that the incentive fee accrual be calculated assuming a hypothetical liquidation of the Company based upon investments held at the end of each period. In such a calculation, in order to calculate the accrual for the Incentive Fee on Capital Gains During Operations in accordance with GAAP for a given period, the Company includes unrealized appreciation in calculating the accrual for the Incentive Fee on Capital Gains During Operations even though such unrealized appreciation is not included in calculating the capital gains incentive fee payable under the Investment Advisory Agreement. There can be no assurance that such unrealized appreciation will be realized in the future. Accordingly, the accrual for the Incentive Fee on Capital Gains During Operations, as calculated and accrued in accordance with GAAP, does not necessarily represent amounts that will be payable under the Investment Advisory Agreement. For the three and six months ended June 30, 2025, the Company accrued $0.0 million and $0.2 million in Incentive Fee on Capital Gains During Operations on unrealized appreciation in accordance with GAAP, none of which was payable to the Advisor under the Investment Advisory Agreement. On June 7, 2024 a Fee Waiver Agreement (“fee waiver”) was entered into between the Advisor and the Company. Under the terms of the fee waiver, (a) the Advisor shall waive its Management Fee indefinitely and (b) the Advisor shall waive its Incentive Fee for a period of 12 months after the initial closing of the Company’s private placement of Common Shares of beneficial interests. Administration Agreement The Company entered into an administration agreement with Benefit Street Partners (the “Administration Agreement”), pursuant to which Benefit Street Partners (in such capacity, the “Administrator”) provides the Company with office facilities and certain administrative services necessary for the Company to conduct its business. At the request of the Administrator, the Company may reimburse certain costs and expenses incurred in connection with this agreement. Expense Limitation Agreement The Company has entered into an Expense Limitation Agreement (the ‘Expense Limitation Agreement”) with the Advisor. Under the Expense Limitation Agreement, the Advisor agrees on a quarterly basis to reimburse the Company’s Specified Expenses (as defined below) to the extent that such annualized Specified Expenses in respect of the relevant quarter exceed 0.10% of the Company’s quarter-end net asset value (the “Expense Limitation”). Any reimbursement is not subject to recoupment. Specified Expenses shall mean the Company’s initial organizational and offering costs as well as its total operating expenses, inclusive of any fees the Company has agreed to bear pursuant to 4(b) of the Administration Agreement, but excluding (1) expenses directly related to the interest costs and structuring costs for borrowing and line(s) of credit, taxes, litigation or extraordinary expenses; (2) any tax, litigation and extraordinary expenses related to any structuring, litigation or other actions taken by the Advisor to preserve or enhance the value of investments for the Company’s shareholders; and (3) the incentive fees. The Expense Limitation Agreement shall be in effect during the term of the Company, unless and until the Board of Trustees approves its modification or termination. Co-Investments The Company may originate loans alongside its affiliated entities in co-investment transactions. Prior to engaging in co-investment transactions, the Company obtained approval from the Board pursuant to the October 3, 2024 exemptive order issued by the SEC, which superseded a prior order issued May 1, 2018.
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