Securities Act File

Investment Company Act File No. 811-24187

 

 

 

U.S.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM

 

REGISTRATION STATEMENT

REGISTRATION STATEMENT

 

CLEARLAKE PRIVATE MARKETS FUND

(Exact name of Registrant as specified in Charter)

 

c/o Clearlake Capital RIC Management, LLC

233 Wilshire Boulevard, Suite 800

Santa Monica, 90401

(Address of principal executive offices)

(310)

(Registrant’s number)

Fred Ebrahemi

John Cannon

Clearlake Capital RIC Management, LLC

233 Wilshire Boulevard, Suite 800

Santa Monica, 90401

(Name and address of agent for service)

 

 

: As soon as practicable after the effective date of this Registration Statement.

 

It is proposed that this filing will become effective (check appropriate box)

 

If appropriate, check the following box:

 

Check each box that appropriately characterizes the Registrant:

 

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

 

 

 

Class		Ticker Symbol
Class S Shares			LAKSX
Class A Shares			LAKAX
Class I Shares			LAKEX

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The Fund has no operating history.

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This is a “blind pool” offering and thus Shareholders will not have the opportunity to evaluate the Fund’s investments before the Fund makes them.

 

 

 

 

 

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Shares are subject to substantial restrictions on transferability and resale and may not be transferred or resold except as permitted under the Fund’s Amended and Restated Declaration of Trust (the “Declaration of Trust”). See “ Periodic Repurchase Offers and Transfers of Shares—Transfers of Shares ” starting on page 133 of the Prospectus.

 

 

 

 

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

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. It is anticipated that the Fund will employ leverage as market conditions permit and at the discretion of the Adviser, but in no event will the leverage employed by the Fund exceed the limitations set forth in the 1940 Act. The 1940 Act requires that a registered investment company must comply with an asset coverage requirement of 300% of its borrowings, including amounts borrowed, measured at the time such investment company incurs the indebtedness. This requirement means that the value of such investment company’s total indebtedness may not exceed one-third the value of its total assets (including the indebtedness). See “” and “”

. This Prospectus applies to the continuous public offering of three separate classes of Shares of the Fund, designated as Class S Shares, Class A Shares and Class I Shares. The Fund has received an exemptive order from the SEC that permits the Fund to issue multiple classes of Shares with, among other things,

. Clearlake Capital RIC Management, LLC serves as the Fund’s investment adviser (the “Adviser”) and is responsible for making investment decisions for the Fund’s portfolio. The Adviser is a Delaware limited liability company that is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Adviser is wholly owned by Clearlake Capital Group, L.P. (together with its subsidiaries and affiliated entities, as the context requires, “Clearlake”).

The principal business address of the Distributor is 1290 Broadway, Suite 1000, Denver, Colorado 80203.

 

 

 

 

 

 

 

 

 

 

 

Risks of Investing in Private Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General Risks of Investing in the Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

requirements, certain ongoing asset diversification, source-of-income and annual distribution requirements. The Fund may have difficulty complying with these requirements. In particular, to the extent that the Fund holds equity investments in entities that are treated as partnerships or other pass-through entities for U.S. federal income tax purposes, it may not have control over, or receive accurate information about, the underlying income and assets of those entities that are taken into account in determining the Fund’s compliance with the aforementioned ongoing requirements. If the Fund fails to qualify as a RIC, it will become subject to corporate-level U.S. federal income tax on all of its net income, and the resulting corporate taxes could substantially reduce the Fund’s net assets, the amount of income available for distributions to Shareholders, the amount of distributions and the amount of funds available for new investments. Such a failure would have a material adverse effect on the Fund and Shareholders.

Distributor

ALPS Distributors, Inc. acts as distributor for the Fund’s Shares (the “Distributor”) and serves in that capacity on a best efforts basis, subject to various conditions.

The Distributor may retain additional selling agents or other financial intermediaries to place Shares in the Fund. Such selling agents or other financial intermediaries may impose terms and conditions on Shareholder accounts and investments in the Fund that are in addition to the terms and conditions set forth in this Prospectus. See “ Plan of Distribution—Distributor.”

Share Classes; Minimum Investments

The Fund offers three classes of Shares designated as Class S, Class A and Class I Shares. Each class of Shares has differing characteristics, particularly in terms of the sales charges that Shareholders in that class may bear, and the Distribution and Servicing Fee that each class may be charged.

The minimum initial investment in the Fund by any investor is $1,000, $1,000 and $1,000,000 with respect to Class S Shares, Class A Shares and Class I Shares, respectively. The minimum additional investment in the Fund by any Shareholder in Class S Shares, Class A Shares and Class I Shares is $100, $100 and $1,000, respectively, except for additional purchases pursuant to the dividend reinvestment plan.

The stated minimum investment for Class S Shares, Class A Shares and Class I Shares may be reduced for certain investors as described under “ Plan of Distribution—Minimum Investments .” In addition, the Fund reserves the right to accept, in its sole discretion, investments below these minimums, including, without limitation, for Trustees of the Fund and employees of Clearlake and its affiliates and vehicles controlled by such employees.

Shares are not listed on any securities exchange, and it is not anticipated that a secondary market for Shares will develop. Shares are subject to limitations on transferability, and liquidity will be provided only through periodic repurchase offers.

The minimum initial and additional investments may be reduced by the Fund, in its sole discretion, for certain investors (including, without limitation, clients of registered investment advisers and other financial intermediaries) based on a consideration of various factors, including the investor’s overall relationship with the Adviser or Clearlake, the type of distribution channels offered by the intermediary, the investor’s holdings in other funds affiliated with the Adviser or Clearlake, and such other matters as the Fund may consider relevant at the time.

In addition, the Fund may, in its sole discretion, aggregate the accounts of clients of registered investment advisers and other financial intermediaries whose clients invest in the Fund for purposes of determining satisfaction of minimum investment amounts. The Fund may also, in its sole discretion, aggregate the accounts of clients of certain registered investment advisers and other financial intermediaries across Share classes for purposes of determining satisfaction of minimum investment amounts for a specific Share class. The aggregation of accounts of clients of registered investment advisers and other financial intermediaries for purposes of determining satisfaction of minimum investment amounts for the Fund or for a specific Share class may be based on consideration of various factors, including the registered investment adviser or other financial intermediary’s overall relationship with the Adviser or Clearlake, the type of distribution channels offered by the intermediary and such other factors as the Fund may consider relevant at the time.

Purchasing Shares

Shares will be offered in a continuous offering. Shares will generally be offered for purchase on any day the New York Stock Exchange (“NYSE”) is open for business (each, a “Business Day”), except that Shares may be offered more or less frequently as determined by the Board in its sole discretion. However, for the avoidance of doubt, the Shares will not be listed on the NYSE. Fractions of Shares will be issued.

Investors purchasing Class A Shares may be charged an upfront sales load of up to 3.50% of the investor’s subscription. Although no upfront sales load will be paid with respect to Class S Shares or Class I Shares, if you buy Class S Shares through certain financial intermediaries, they may directly charge you transaction or other fees, including upfront or deferred placement fees or brokerage commissions, in such amount as they may determine. Any such fees will be in addition to an investor’s investment in the Fund and not deducted therefrom.

Once a prospective investor’s purchase order is received, a confirmation is sent to the investor. Potential investors should send subscription funds by wire transfer pursuant to instructions provided to them by the Fund.

Subscriptions are generally subject to the receipt of cleared funds on or prior to the acceptance date set by the Fund and notified to prospective investors. An investor who misses the acceptance date will have the effectiveness of his, her or its investment in the Fund delayed until the following Business Day.

A prospective investor must submit a completed investor application on or prior to the acceptance date set by the Fund. The Fund reserves the right to accept or reject, in its sole discretion, any request to purchase Shares at any time. The Fund also reserves the right to suspend or terminate offerings of Shares at any time. Unless otherwise required by applicable law, any amount received in advance of a purchase ultimately rejected by the Fund will be returned promptly to the prospective investor without the deduction of any fees or expenses.

Prospective investors who purchase Shares through financial intermediaries will be subject to the procedures of those intermediaries through which they purchase Shares, which may include charges, investment minimums, cutoff times and other restrictions in addition to, or different from, those listed herein. Information concerning any charges or services will be provided to customers by the financial intermediary through which they purchase Shares. Prospective investors purchasing shares of the Fund through financial intermediaries should acquaint themselves with their financial intermediary’s procedures and should read this Prospectus in conjunction with any materials and information provided by their financial intermediary.

Investors who purchase Shares of the Fund during the period beginning on the first date subscriptions are accepted in the Fund’s public offering and continuing until the earlier of (i) May 31, 2027 or (ii) the date on which the aggregate amount of subscriptions for Shares of the Fund following the commencement of the Fund’s public offering equals or exceeds $200 million (such amount, the “Initial Offering Limit” and such period, the “Initial Offering Period”) will receive additional Shares equal to 5% of the amount of their investment in the Fund during the Initial Offering Period. Such additional Shares will have the same rights as other Shares of the same Share class and will be issued to investors within thirty (30) Business Days after the end of the Initial Offering Period based on the NAV of the applicable Share class as of the date of issuance. Investors who subscribe for Shares on the day on which, based on aggregate subscriptions, the Initial Offering Limit is reached as of the close of business on such day, will receive additional Shares on a pro rata basis relative to the amount of their investment in

Shares on such day. Payments for any such Shares will be made from the assets of the Adviser and/or its affiliates (and not the Fund). As a result, neither the investor nor the Fund will use its own assets to purchase these additional Shares. The Adviser, in its sole discretion, may terminate or modify the program at any time before the end of the Initial Offering Period pursuant to advance notice duly given via filing a supplement to this Prospectus, it being understood that any such termination or modification would not affect the ability of investors who purchase Shares prior to the effective time of the termination or modification to receive the additional Shares. See “ Plan of Distribution—Purchasing Shares.”

Shareholders may obtain the most recently determined NAV per Share for each class of Shares by calling: 833-303-4628.

Distributions

The Fund intends to make distributions on an annual basis. However, there can be no guarantee that the Fund will make annual distributions consistently or at all. Any distributions the Fund makes will be at the discretion of our Board, considering factors such as our earnings, cash flow, capital and liquidity needs and general financial condition and the requirements of Delaware law. As a result, our distribution rates and payment frequency may vary from time to time.

Our Board’s discretion as to the payment of distributions will be directed, in substantial part, by its determination to cause us to comply with the RIC requirements. To qualify for and maintain its tax treatment as a RIC under the Code, among other requirements, the Fund intends to make distributions on an annual basis in aggregate amounts representing at least 90% of the Fund’s investment company taxable income (as defined below in “ Material U.S. Federal Income Tax Considerations—Election to be Taxed as a Regulated Investment Company ”), if any, earned during the year. Distributions may also include net capital gains, if any.

Unless a Shareholder otherwise elects, all distributions of dividends (including capital gain dividends) with respect to a class of Shares will be automatically reinvested by the Fund (net of any applicable U.S. withholding tax) in additional Shares of the corresponding class, which will be issued at the most recent available NAV per Share for such class on the date the distribution is paid.

The Fund cannot guarantee that it will make distributions. The Fund may finance its cash distributions to Shareholders from any sources of funds available to the Fund, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets (including fund investments), non-capital gains proceeds from the sale of assets (including fund investments), dividends or other distributions paid to the Fund and expense reimbursements from the Adviser. The Fund has not established limits on the amount of funds the Fund may use from available sources to make distributions. The repayment of any amounts owed to the Adviser or its affiliates will

reduce future distributions to which you would otherwise be entitled. The Fund’s distributions may exceed the Fund’s earnings, especially during the period before the Fund has substantially invested the proceeds from this offering. As a result, a portion of the distributions the Fund makes may represent a return of capital for U.S. federal tax purposes. A return of capital generally is a return of your investment rather than a return of earnings or gains derived from the Fund’s investment activities and will be made after deduction of the fees and expenses payable in connection with the offering, including any fees payable to the Adviser. See “ Distributions” and “ Material U.S. Federal Income Tax Considerations ” for more information.

Dividend Reinvestment Plan

The Fund will operate under a dividend reinvestment plan (the “DRIP”) administered by SS&C GIDS, Inc. (“SS&C”). Pursuant to the DRIP, the Fund’s income dividends or capital gains or other distributions, net of any applicable U.S. withholding tax, are reinvested in the same class of Shares of the Fund.

Shareholders automatically participate in the DRIP, unless and until an election is made to withdraw from the DRIP on behalf of such participating Shareholder. A Shareholder who does not wish to have distributions automatically reinvested may terminate participation in the DRIP at any time by written instructions to that effect to SS&C. Shareholders who elect not to participate in the DRIP will receive all distributions in cash paid to the Shareholder of record (or, if the Shares are held in street or other nominee name, then to such nominee). Such written instructions must be received by SS&C 30 days prior to the record date of the distribution or the Shareholder will receive such distribution in Shares through the DRIP. Under the DRIP, the Fund’s distributions to Shareholders are reinvested in full and fractional Shares. See “ Dividend Reinvestment Plan.”

No Redemption; Restrictions on Transfer

No Shareholder will have the right to require the Fund to redeem Shares. With very limited exceptions, Shares are not transferable, and liquidity for investments in Shares may be provided only through periodic offers by the Fund to repurchase Shares from Shareholders. See “ Periodic Repurchase Offers and Transfers of Shares .”

Periodic Repurchase Offers

As an “interval fund,” the Fund has adopted a fundamental policy to make semi-annual repurchase offers, at per-class NAV of not less than 5% nor more than 25% of the Fund’s outstanding Shares on the repurchase request deadline. For each semi-annual repurchase offer, the Fund currently expects to offer to repurchase 5% of the Fund’s outstanding Shares (in the aggregate across all share classes) at the NAV applicable to the class of Shares repurchased, which is the minimum amount permitted. If the value of Shares tendered by investors for repurchase exceeds the value the Fund intended to repurchase, the Fund may elect to repurchase less than the full number of Shares tendered. In such event, Shareholders will have their Shares repurchased on a pro rata

basis, and tendering Shareholders will not have all of their tendered Shares repurchased by the Fund. Shareholders tendering Shares for repurchase will be asked to give written notice of their intent to do so by the date specified in the notice describing the terms of the applicable repurchase offer, which date will be no more than fourteen (14) days prior to the repurchase pricing date (or the next Business Day if the fourteenth (14th) day is not a Business Day). See “ Periodic Repurchase Offers and Transfers of Shares .”

A 2% early repurchase fee payable to the Fund may be charged with respect to the repurchase of a Shareholder’s Shares at any time prior to the day immediately preceding the one-year anniversary of a Shareholder’s purchase of the Shares (on a “first in-first out” basis) (the “Early Repurchase Deduction”). The one-year holding period will be satisfied if at least one year has elapsed from (a) the issuance date of the applicable Shares to (b) the subscription date immediately following the repurchase pricing date used in the repurchase of such Shares. The Early Repurchase Deduction may be waived in certain specified circumstances and will be retained by the Fund for the benefit of remaining Shareholders.

The Early Repurchase Deduction will not apply to Shares acquired through dividend reinvestment. In addition, the Fund may waive the Early Repurchase Deduction in its sole discretion under the following circumstances: (i) with respect to repurchase requests submitted by discretionary model portfolio management programs (and similar arrangements); (ii) with respect to repurchase requests from feeder funds (or similar vehicles) primarily created to hold Shares, which are offered to non-U.S. persons, where such funds seek to avoid imposing such a deduction because of administrative or systems limitations; (iii) pursuant to an asset allocation program, wrap fee program or other investment program offered by a financial institution where investment decisions are made on a discretionary basis by investment professionals; and (iv) pursuant to an automatic non-discretionary rebalancing program. To the extent the Fund determines to waive, impose scheduled variations of, or eliminate an Early Repurchase Deduction, it will do so consistently with the requirements of Rule 22d-1 under the 1940 Act, and the Fund’s waiver of, scheduled variation in, or elimination of, the Early Repurchase Deduction will apply uniformly regardless of Share class to all Shareholders or transactions in the particular class specified. See “ Periodic Repurchase Offers and Transfers of Shares .”

Shares in the Fund provide limited liquidity, since Shareholders will not be able to redeem Shares on a daily basis. A Shareholder may not be able to tender its Shares in the Fund promptly after it has made a decision to do so. Liquidity will be provided only through semi-annual repurchase offers made by the Fund. Shares in the Fund are therefore suitable only for investors who can bear the risks associated with the limited liquidity of Shares, and Shares should be viewed as a long-term investment.

Fees and Expenses

The Fund will bear its own operating expenses (including, without limitation, its ongoing offering expenses). A more detailed discussion of the Fund’s expenses can be found below under “ Management Fee ,” “ Administrator ” and “Distribution and Servicing Fee .”

The Fund will bear certain of its organizational and initial offering costs in connection with this offering. The Fund’s initial offering costs, whether borne by the Fund or by the Adviser pursuant to the Expense Limitation Agreement, discussed below, are being capitalized and amortized over the 12-month period beginning on the date the Fund commences investment operations. The Fund’s organizational costs are expensed as incurred.

Management Fee

In consideration of the advisory services provided by the Adviser, the Fund pays the Adviser a management fee quarterly in arrears at an annual rate of 1.50% of the value of the Fund’s daily net assets (including cash and cash equivalents) calculated and accrued daily (the “Management Fee”).

For purposes of determining the Management Fee payable to the Adviser, the value of the Fund’s net assets (including cash and cash equivalents) will be calculated prior to the inclusion of the Management Fee payable to the Adviser or any distributions by the Fund, but adjusted for any purchases or repurchases of Shares of the Fund. The Management Fee is paid to the Adviser out of the Fund’s assets, and therefore decreases the net profits or increases the net losses of the Fund.

The services of all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory and management services, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser. The Fund bears all other costs and expenses of its operations and transactions as set forth in its Investment Advisory Agreement with the Adviser (the “Investment Advisory Agreement”). See “ Investment Advisory Agreement—Payment of Fund Expenses.”

Distribution and Servicing Fee

Class S and Class A Shares are subject to an ongoing distribution and shareholder servicing fee (the “Distribution and Servicing Fee”) to compensate financial industry professionals for distribution-related expenses, if applicable, and providing ongoing services in respect of Shareholders who own Class S and Class A Shares of the Fund. Under the terms of the exemptive order from the SEC that the Fund relies on to offer multiple classes of Shares, the Fund is subject to Rule 12b-1 under the 1940 Act. Accordingly, the Fund has adopted a distribution and servicing plan for its Class S Shares and Class A Shares (the “Distribution and Servicing Plan”) and will pay the Distribution and Servicing Fee with respect to its Class S and Class A Shares. The Distribution and Servicing Plan operates in a manner consistent with Rule 12b-1 under the 1940 Act.

Class S Shares and Class A Shares pay a Distribution and Servicing Fee to the Distributor equal to 0.75% and 0.25% per annum of the average daily value of the Fund’s net assets for the Class S Shares and Class A Shares, respectively, accrued daily and payable monthly. Class I Shares are not subject to a Distribution and Servicing Fee.

Expense Limitation Agreement

Pursuant to an Expense Limitation Agreement (the “Expense Limitation Agreement”) with the Fund, the Adviser has agreed on a quarterly basis to waive fees that it would otherwise be paid, and/or to assume or reimburse expenses of the Fund, including organizational and offering costs (each, an “Expense Payment”), so that the Fund’s total annualized operating expenses (excluding any Distribution and Servicing Fee) during the applicable quarter do not exceed 3.50% of the value of the Fund’s average daily net assets of each class of the Fund’s Shares. The Adviser also agreed to advance the Fund’s organizational and offering costs through the date the Fund commences investment operations and may also voluntarily make other Expense Payments on the Fund’s behalf in its sole discretion, all of which is subject to recoupment by the Adviser as described below.

Administrator

ALPS Fund Services, Inc. (the “Administrator”) will serve as the Fund’s administrator and fund accountant. See “ Administration and Accounting Services .”

Transfer Restrictions

Any Shares held by a Shareholder may be transferred only (1) by operation of law pursuant to the death, bankruptcy, insolvency, adjudicated incompetence, or dissolution of the Shareholder or (2) with the written consent of the Board or its designated agents, which consent may be withheld in its or their sole discretion. Notice of a proposed transfer of Shares must be accompanied by properly completed subscription documents in respect of the proposed transferee. In connection with any request to transfer Shares, the Fund may require the Shareholder requesting the transfer to obtain, at the Shareholder’s expense, an opinion of counsel selected by the Board or its agents as to such matters as may reasonably be requested. Each Shareholder and transferee agrees to pay all expenses, including attorneys’ and accountants’ fees, incurred by the Fund in connection with any transfer. See “Periodic Repurchase Offers and Transfers of Shares—Transfers of Shares.”

Unlisted Closed-End Structure; Limited Liquidity

Shares are not listed on any securities exchange, and it is not anticipated that a secondary market for Shares will develop. In addition, Shares are subject to limitations on transferability and liquidity will be provided only through periodic repurchase offers described below. An investment in the Fund is suitable only for Shareholders who can bear the risks associated with the limited liquidity of the Shares and should be viewed as a long-term investment. See “ Closed-End Fund Interval Fund Structure” and “ Principal Risks—General Risks of Investing in the Fund—The Fund’s Shares are illiquid .”

Taxes; RIC Status

The Fund intends to elect to be treated, and intends to operate in a manner so as to qualify for treatment in each taxable year, as a regulated investment company (“RIC”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As such, the Fund generally will not be subject to U.S. federal corporate income tax on its investment company taxable income and net capital gain, if any, that it distributes each year. It is anticipated that the Fund will principally recognize income from dividends and long-term capital gains and that dividends paid to Shareholders in respect of such income generally will be taxable to Shareholders who are U.S. individuals at the reduced rates of U.S. federal income tax that are applicable to individuals for “qualified dividends” and long-term capital gains, although it is expected that a portion of such dividends will not so qualify.

In addition, because the Fund intends to qualify as a RIC, it is expected to have certain attributes that are not generally found in traditional unregistered private equity fund of funds. These include providing simpler tax reports to Shareholders on Form 1099-DIV and the avoidance of unrelated business taxable income for benefit plan investors and other investors that are exempt from payments of U.S. federal income tax.

For a discussion of certain tax risks and considerations relating to an investment in the Fund, see “ Material U.S. Federal Income Tax Considerations .”

Tax Reports

The Fund will provide to its Shareholders (through such Shareholders’ financial intermediary), after the end of each calendar year, IRS Forms 1099-DIV detailing the amounts includible in such Shareholder’s taxable income for such year as ordinary dividend income, qualified dividend income and long-term capital gains. Dividends and other taxable distributions are taxable to the Fund’s Shareholders even if they are reinvested in additional Shares pursuant to the DRIP. See “ Distributions.”

Reports to Shareholders

The Fund will provide Shareholders with an audited annual report and an unaudited semi-annual report within 60 days after the close of the reporting period for which the report is being made, or as otherwise required by the 1940 Act. Shareholders will also receive quarterly commentary regarding the Fund’s operations and investments. See “ Fiscal Year; Reports to Shareholders.”

Fiscal and Taxable Year

The Fund’s fiscal year is the 12-month period ending on March 31. The Fund’s taxable year is the 12-month period ending on September 30. See “ Fiscal Year; Reports to Shareholders .”

Term	The Fund’s term is perpetual unless the Fund is otherwise terminated under the terms of the Declaration of Trust. See “ Certain Provisions in the Declaration of Trust—Term, Dissolution and Liquidation.”

Custodian and Transfer Agent

U.S. Bank National Association serves as the Fund’s custodian, and SS&C serves as the Fund’s transfer agent. See “ Custodian” and “Transfer Agent and Dividend Paying Agent.”

ERISA

Investors subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including employee benefit plans and individual retirement accounts, may purchase Shares. Because the Fund is registered as an investment company under the 1940 Act, the underlying assets of the Fund will not be considered to be “plan assets” subject to the fiduciary responsibility and prohibited transaction rules of ERISA. Thus, the Adviser will not be a “fiduciary” within the meaning of ERISA with respect to the assets of any “benefit plan investor” within the meaning of ERISA that becomes a Shareholder, solely as a result of the Shareholder’s investment in the Fund. See “ ERISA Considerations.”

non-diversified,

closed-end

400-8800.

Co-Investments

short-term non-investment grade

 

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CLEARLAKE PLATFORM

The Fund seeks to provide individual and institutional investors with access to private market opportunities sourced through the Clearlake Advisory Affiliates’ global platform.

Clearlake is a leading global alternative asset manager that is separately registered with the SEC as an investment advisor. Founded in 2006, Clearlake has over $185 billion of assets under management as of June 30, 2026. Clearlake offers a broad range of investment solutions across private equity, credit, infrastructure, secondaries, and other related private market strategies. Through Pathway Capital Management, a Clearlake company, the firm serves institutional and wealth investors seeking diversified access to private markets.

Pathway is separately registered with the SEC as an investment advisor. Headquartered in Santa Monica, Clearlake maintains 14 offices across the Americas, Europe, Asia, and the Middle East.

The Fund, through the Adviser, seeks to benefit from Clearlake and Pathway’s investment philosophy while serving as a source of liquidity and capital to sellers of private assets across a wide range of markets. The Fund may also consider opportunities to provide capital to private equity owners who would like to retain ownership of their private equity assets.

The Fund’s investment program is led by an experienced portfolio management team with long tenures at Clearlake and Pathway tasked with building a comprehensive portfolio from these opportunities. Clearlake and Pathway have built their businesses and reputations over 20 and 30 years, respectively, through patient, disciplined capital deployment by sourcing, negotiating and executing on opportunities across market cycles utilizing their sector-focused approach.

The Fund is a long-term investment vehicle intended for experienced investors with long-term investment horizons. From time to time, the Fund may hold higher levels of cash and/or shorter duration investments as part of its liquidity management and commitment strategy. The Fund’s performance is therefore expected to differ from that of other funds managed by Clearlake and Pathway with capital commitments and finite terms.

 

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LEVERAGE

It is anticipated that the Fund will employ leverage as market conditions permit and at the discretion of the Adviser, but in no event will the leverage employed by the Fund exceed the limitations set forth in the 1940 Act.

The 1940 Act requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time such investment company incurs the indebtedness. This requirement means that the value of such investment company’s total indebtedness may not exceed the value of its total assets (including the indebtedness).

The Fund intends to incur leverage in the form of borrowings, which may include loans from certain financial institutions and the issuance of debt securities, to pursue its objective or for liquidity—such as bridging investments pending subscriptions, meeting capital calls, satisfying repurchase requests and managing overall cashflow needs. The Fund may also, to a limited extent, use reverse repurchase agreements or similar transactions and derivatives, credit default swaps, dollar rolls or borrowings, such as through bank loans or commercial paper and/or other credit facilities. The Fund may also enter into transactions other than those noted above that may give rise to a form of leverage including, without limitation, futures and forward contracts (including foreign currency exchange contracts), total return swaps and other derivative transactions, loans of portfolio securities, short sales and when-issued, delayed delivery and forward commitment transactions.

The Fund may also incur leverage through the issuance of preferred shares (previously defined as “Preferred Shares”). Under the 1940 Act, the Fund is not permitted to issue Preferred Shares unless immediately after such issuance the value of the Fund’s total assets (minus any liabilities not representing senior securities) is at least 200% of the aggregate amount of senior securities representing indebtedness plus the liquidation value of the outstanding Preferred Shares (i.e., the liquidation value plus the amount of senior securities representing indebtedness may not exceed 50% of the Fund’s total assets, after subtracting any liabilities not representing senior securities). In determining whether to borrow money, the Fund will analyze the maturity, covenant package and rate structure of any proposed borrowings as well as the risks of such borrowings compared to its investment outlook. Any such leverage, if incurred, would be expected to increase the total capital available for investment by the Fund. The Fund may pledge and may grant a security interest in all of its assets under the terms of any debt instruments that it enters into with lenders. In addition, from time to time, the Fund’s losses on investments may result in the liquidation of other investments held by the Fund.

The amount and cost of leverage, which is often priced on a floating rate basis, may vary frequently and may increase the Fund’s volatility. Changes in NAV can be amplified with the use of leverage.

In response to changes in market conditions, such as rising short-term interest rates or increased volatility, the Adviser may take steps to reduce the negative impact of leverage on Shareholders. This may include shortening the average maturity of the portfolio, reallocating assets into short-term securities, or reducing the level of leverage by repaying outstanding borrowings. These actions are taken with the goal of maintaining the Fund’s risk profile while maximizing returns. However, the success of these strategies is dependent on the Adviser’s ability to accurately predict market movements, and there is no guarantee that such efforts will mitigate leverage risk effectively.

When market conditions are favorable and leverage is expected to benefit Shareholders, the Fund may increase leverage by entering into new credit facilities, expanding existing facilities, or issuing Preferred Shares, subject to regulatory limits. The continuously evaluates the costs and benefits of leverage, adjusting the level of leverage as necessary to optimize the portfolio’s performance while managing risk.

The Fund’s use of derivatives, such as swaps, options, and futures, may also create indirect leverage by increasing the Fund’s exposure to certain assets without requiring a direct investment. While these instruments can help manage interest rate, credit, or market risks, they also introduce additional complexities and risks. The Adviser carefully assesses these risks and integrates them into the broader risk management framework.

 

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POTENTIAL CONFLICTS OF INTEREST

Actual, potential, or apparent conflicts of may arise as a result of the relationships between the Adviser and its affiliates on the one hand and the Fund and the Shareholders on the other. As the Adviser’s business continues to evolve over time, it can be expected that the Adviser and its affiliates and the Adviser’s personnel would in the future engage in activities that result in conflicts of interest not addressed below. If any matter arises that the Adviser and its affiliates determine in their good faith judgment may constitute an actual or potential conflict of interest, the Adviser and its affiliates have the authority to take such actions as they determine in good faith to be necessary or appropriate to address the conflict and, upon taking such actions, the Adviser and its affiliates will be relieved of any liability for such conflict to the fullest extent permitted by law and will be deemed to have satisfied their fiduciary duties related thereto to the fullest extent permitted by law. There can be no assurance that the Adviser will resolve all conflicts of interest in a manner that is favorable to the Fund. The following discussion enumerates certain potential conflicts of interest, which should be carefully evaluated before making an investment in the Fund.

. The Fund or Other Accounts may have the ability to purchase interests in third-party asset managers (i.e., managers not affiliated with Clearlake), and such transactions or ownership stakes could present conflicts of interest relevant to the Fund, including, for example, if such managers currently have or in the future make investments in the Fund or Other Accounts or if the Fund or Other Accounts were to invest in or alongside a private equity fund managed by such a third-party asset manager. There can be no assurance that such conflicts of interest will not have an adverse impact on the Fund.

The Adviser and its affiliates may be entitled to receive certain other fees, subject to the requirements of the 1940 Act. The Fund’s pro rata portion of any such fees received by the Adviser or its affiliates will be distributed to the Fund based on the amount the Fund invested or committed, unless otherwise permitted by the 1940 Act. The portions of such fees allocable to participating Other Accounts will not result in an offset of the Management Fee payable by the Fund, even if such Other Accounts provide for lower or no management fees for the investors or participants therein. Similarly, the portions of such fees allocable to third-party will not result in an offset of the fees payable by the Fund. For the avoidance of doubt, compensation for Investment Managers does not offset Management Fees.

. The Adviser, Clearlake and their respective affiliates, members, partners, officers, or personnel (collectively, the “Clearlake Affiliates”), are expected to provide investment management advice and services to Other Accounts, which could also follow investment programs that are, in part or in whole substantially similar to that of the Fund. Such Other Accounts could pursue, within a specific business or geographic sector, an investment program that invests in financial instruments of a type acquired by the Fund. The Adviser and/or the Clearlake Affiliates could also provide investment management services to Other Accounts that follow investment programs that differ from the Fund, which could participate in specific investments made by the Fund. The Adviser and/or the Clearlake Affiliates are permitted to give advice and recommend financial instruments to Other Accounts that may differ from advice given to, or financial instruments recommended or bought for, the Fund, even though their investment objectives may be the same or similar. The nature and amount of compensation paid to Clearlake by the Other Accounts or an investor will, at times, differ from that paid by the Fund or other investors, even those investing in similar investments. While Clearlake allocates fees, costs and expenses among the Fund and Other Accounts according to Clearlake’s expense allocation policies and procedures and in such manner as Clearlake considers fair and reasonable, the actual allocations of fees, costs and expenses present a potential conflict of interest. Other present and future activities of the Adviser and/or the Clearlake Affiliates can give rise to additional conflicts of interest. In the event that a conflict of interest arises, the Adviser will attempt to resolve such conflicts in a fair and equitable manner over time. The Fund’s strategy differs from the strategies of certain Other Accounts, and the existence of overlapping investment opportunities does not mean that any particular opportunity will be appropriate for, or allocated to, the Fund.

 

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While the Adviser and/or the Clearlake Affiliates will seek to manage potential conflicts of interest in good faith, the portfolio strategies employed by the Adviser and/or the Clearlake Affiliates in managing their Other Accounts could conflict with the transactions and strategies employed by the Adviser in managing the Fund and may affect the prices and availability of the investments. Conversely, participation in specific investment opportunities may be appropriate, at times, for both the Fund and the Other Accounts. Allocation of identified investment opportunities among the Fund and Other Accounts presents inherent conflicts of interest where demand exceeds available supply. Shareholders should note that the conflicts inherent in making such allocation decisions may not always be resolved to the advantage of the Fund.

The formation and management of such Other Accounts could create a conflict of interest in that the time and effort of the officers and employees of the Adviser and the Clearlake Affiliates will not be devoted exclusively to the business of the Fund, but will be allocated between the business of the Fund and the management of the Other Accounts. In addition to the above, Clearlake reserves the right to engage in other investment and business activities. Clearlake personnel reserve the right to manage their own personal investments, whether or not through a formal family office or estate planning structure, to establish trusts, endowments, charitable programs, foundations or similar arrangements, and to pay or receive compensation relating to the foregoing. Such activities raise potential conflicts of interest for which the resolution may not be currently determinable. Clearlake and its personnel are permitted to market, organize, sponsor or act in other capacities (including as director, founder or manager) for additional Other Accounts which may or may not overlap with the Fund and to receive compensation (including in the form of management fees, performance-based compensation, founders’ equity or similar interests) relating thereto. To the extent an investment opportunity is received that is unsuitable for the Fund, subject to Clearlakes’ fiduciary obligations, Clearlake and its personnel reserve the right to refer such opportunity to third parties or to make personal investments in the relevant opportunity.

Certain inherent conflicts of interest arise from the fact that the Adviser and Clearlake provide investment management services to the Fund and Other Accounts. To manage allocation of investment opportunities across client accounts, Clearlake has adopted the Global Allocation Policy designed to allocate opportunities on a fair and equitable basis over time.

Clearlake and its affiliates, including the Adviser, will allocate investment and sale opportunities with their Other Accounts and the Fund in accordance with the Advisers Act, any applicable Exemptive Relief and the Global Allocation Policy. Under the Global Allocation Policy, Core Investment Opportunities of the Fund will generally be allocated to the Fund and the relevant Other Accounts in a fair and equitable manner over time, including by reference to available capital, strategy-level capacity, portfolio construction and other applicable allocation factors (including those set forth under “—” below). Available capital may take into account, among other things, cash, pending or anticipated subscriptions, repurchases or withdrawals, permitted leverage and liquidity reserves. Subject to the Advisers Act, certain Other Accounts may receive priority or other allocation rights with respect to certain other types of investments, including Primary Investments and other investments that do not fall within the Fund’s core investment strategy, subject to various conditions set forth in such Other Accounts’ respective governing agreements. Accordingly, Clearlake is under no obligation to offer such Investment Opportunities to the Fund even where they otherwise may be suitable for the Fund, and may choose to allocate all or any part of any such opportunity to Other Accounts in accordance with its Global Allocation Policy and applicable law.

In addition, as a fund registered under the 1940 Act, the Fund is subject to certain limitations relating to and joint transactions with affiliates, which in certain circumstances will limit the Fund’s ability to make investments or enter into other transactions alongside Other Accounts.

The Fund has applied for Exemptive Relief from the SEC that, if granted, would permit the Fund and other Regulated Funds to, among other things, with certain other persons, including other Regulated Funds, certain affiliates of Clearlake, Clearlake and certain Other Accounts managed and controlled

 

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by Clearlake and its affiliates, subject to certain terms and conditions. Under the terms of the Exemptive Relief, each Clearlake Adviser (and each affiliated entity that is not advised by a Clearlake Adviser) will adopt and implement Policies reasonably designed to ensure that: (i) opportunities to participate in transactions are allocated in a manner that is fair and equitable to every Regulated Fund; and (ii) the Clearlake Adviser negotiating the transaction considers the interest in the transaction of any participating Regulated Fund. If the Adviser determines that a Core Investment Opportunity is appropriate for the Fund, the investment will generally be allocated to the Fund, any other Regulated Funds and the Other Accounts participating in the investment that target similar assets pro rata based on available capital in the applicable strategy. If the Adviser determines that such investment is not appropriate for the Fund, or that the Fund should not participate, the investment will not be allocated to the Fund.

. Notwithstanding the foregoing, Clearlake and its affiliates may also consider the following factors in making any allocation determinations, and such factors may result in a different allocation of investment and/or sale opportunities: (i) relative existing and targeted exposure of the Fund and/or Other Accounts to specific industries or sectors; (ii) relative existing and targeted exposure of the Fund and/or Other Accounts to market trends; (iii) Clearlake’s assessment of the amount of a particular investment available for accumulation over time and the ability of the Fund and/or Other Accounts to participate in such accumulation effort; (iv) the appropriateness of permitted leverage and available financing at such time for the investment or for the Fund and/or Other Accounts with respect to such investment; (v) expected timing of commitment (including in the form of a binding LOI, purchase/merger agreement, or other binding commitment) and the funding of such commitment; (vi) expected investment duration (including expected time to potential restructuring/reorganization and subsequent holding period thereafter) and/or maturity profile; (vii) investment objectives and strategies and target returns for the Fund and/or Other Accounts (beyond mere suitability analysis); (viii) contractual provisions in relevant limited partnership or similar agreements; (ix) tax, legal and regulatory factors applicable to the investment or to the Fund and/or Other Accounts; (x) whether the investment opportunity is a investment and, if so, the purpose and/or circumstances of the (xi) cost and complexity of allocating an opportunity across more than one Other Account and/or the Fund; (xii) respective investment horizons of the Fund and/or Other Accounts, likelihood of future capital required and proximity to the end of their respective investment periods, terms and (if applicable); (xiii) anticipated degree of control and/or influence over the governance of an existing or prospective portfolio investment (including, but not limited to, ownership of equity securities, nature of portfolio company board representation, and other corporate governance rights); (xiv) degree of stress or distress of an existing or prospective portfolio company and likelihood that an investment that is initially in secondary market debt or otherwise will evolve into a control position due to a restructuring or otherwise; (xv) fiduciary duty considerations; and ramp-down considerations; (xvii) avoidance of odd lots or de minimis allocations that are not reasonably expected to be large enough to meaningfully affect portfolio performance; (xviii) the Fund’s and/or Other Accounts’ portfolio construction and diversification considerations, including, without limitation, exposure/concentration to a particular currency, type of instrument, industry sector, and geography; (xix) nature and role of any (xx) likelihood and type of current and future income; (xxi) confidentiality considerations; (xxii) considerations relevant to the Fund and/or any Other Accounts or investment advisory business the management of which is assumed by Clearlake in connection with its acquisition of or other business combination with such other investment advisory business; (xxiii) regulatory limitations of the Fund or one or more Other Accounts, including limitations that may prohibit or unduly burden the Fund’s or such Other Accounts’ ability to invest alongside certain Other Accounts in a given transaction or from transacting with an affiliated or potentially affiliated portfolio company; and (xxiv) such other criteria as are reasonably related to the allocation of a particular investment opportunity to the Fund or one or more Other Accounts. For the avoidance of doubt and notwithstanding anything herein to the contrary, Clearlake affiliates may from time to time be allocated for their own account a portion of certain origination opportunities that otherwise would be appropriate investment opportunities for Other Accounts.

Certain Other Accounts have investment discretion, including or rights for a specified period of time. Clearlake or its affiliates may initially allocate commitments to those Other Accounts on the assumption

 

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that they will participate in an investment opportunity, subject to their election. If such Other Account subsequently elects not to participate in the investment opportunity, Clearlake or its affiliates may reallocate the unused portion of the investment to the Fund and Other Accounts that are participating, generally on a pro rata basis based on the original allocations, provided that (i) no participating fund is allocated more than its desired hold, and (ii) Clearlake or its affiliates determines that the reallocation is fair and equitable and in the best interests of the participating funds.

Subject to the requirements of the 1940 Act and the Fund’s Exemptive Relief, the Adviser shall not have any obligation to present any investment opportunity (or portion of any investment opportunity) to the Fund if the Adviser, as applicable, determines in good faith that such opportunity (or portion thereof) should not be presented to the Fund, including for any one or a combination of the reasons specified above, such as the investment not being a Core Investment Opportunity, or if the Adviser is otherwise restricted from presenting such investment opportunity to the Fund.

. The Adviser, Clearlake and/or one or more of their respective affiliates will from time to time incur expenses for the account or for the benefit of the Fund, other Clearlake-related entities or investment vehicles and one or more existing or subsequent entities established by the Adviser, Clearlake, or any of their respective affiliates. Although attempts will be made to allocate such expenses in such a manner as the Adviser considers fair and reasonable (subject to the terms of the Investment Advisory Agreement), there can be no assurance that such fees, costs and expenses will in all cases be allocated appropriately.

. By reason of their responsibilities in connection with Investment Funds, portfolio companies or with their other activities, certain employees of the Adviser or its affiliates may acquire confidential or material information or otherwise be restricted from initiating transactions in certain securities until such time as the information becomes public or is no longer deemed material to preclude the Fund from participating in an investment. Disclosure of such information to certain Clearlake Affiliates responsible for the affairs of the Fund may be on a basis only, and the Fund may not be free to act upon any such information even though such action or disclosure would be in the interests of the Fund. Additionally, there may be circumstances in which one or more of certain Clearlake Affiliates may be precluded from providing services related to the Fund’s activities because of certain confidential information available to such Clearlake Affiliates. Therefore, the Fund may not have access to material, information in the possession of Clearlake which might be relevant to an investment decision to be made by the Fund, and the Fund may initiate a transaction or sell an investment which, if such information had been known to it, may not have been undertaken. Due to these restrictions, the Fund may not be able to initiate a transaction that it otherwise might have initiated and may not be able to sell an investment that it otherwise might have sold. Furthermore, to the extent not restricted by confidentiality requirements or applicable law, Clearlake may apply experience and information gained in providing services to portfolio companies and other investments to provide services to competing portfolio companies and investments of Clearlake or Other Accounts, which may have adverse consequences for the Fund and its investments. Furthermore, to the extent not restricted by confidentiality requirements or applicable law, Clearlake may apply experience and information gained in providing services to portfolio companies and other investments to provide services to competing portfolio companies and investments of Clearlake or Other Accounts, which may have adverse consequences for the Fund and the portfolio companies.

 From time to time, subject to the limitations of the 1940 Act, the Fund and the Other Accounts may make investments at different levels of an issuer’s capital structure or otherwise in different classes of an issuer’s securities or loans (e.g., a mezzanine or senior debt investment, minority debt, and/or equity investment). In such situations, the Fund and such Other Account could have conflicting interests (e.g., over the terms of their respective investments). This can potentially result in situations where the Fund chooses not to hedge certain risks that such Other Account does hedge (or vice versa), or the possibility that the Fund is exposed to risks of financing, or does not have the same access to financing as the Other Account (or vice versa). If the portfolio company or other entity in which the Fund has an equity investment and in which an Other Account has, for example, a mezzanine or senior debt

 

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investment becomes distressed or defaults on its obligations under the debt or mezzanine investment, Clearlake could have conflicting loyalties between its duties to the Fund and to such Other Accounts. In that regard, actions may be taken for the Other Accounts that are adverse to the Fund. Furthermore, questions can potentially arise subsequently as to whether payment obligations and covenants should be enforced, modified or waived, or whether debt should be refinanced or restructured. In troubled situations, decisions including whether to enforce claims, or whether to advocate or initiate a restructuring or liquidation inside or outside of bankruptcy, and the terms of any or restructuring may raise conflicts of interest. In addition, conflicts may arise in determining the amount of an investment, if any, to be allocated among the potential investors and the respective terms thereof. There can be no assurance that the return on the Fund’s investment will be equivalent to or better than the returns obtained by the Other Accounts participating in the transaction. Because of the different legal rights associated with debt and equity of the same portfolio company or other entity, Clearlake expects to face a potential conflict of interest in respect of the advice it gives to, and the actions it takes on behalf of the Fund versus an Other Account (e.g., the terms of debt investments, the enforcement of covenants, the terms of recapitalizations and the resolution of workouts or bankruptcies), and the action taken for the Fund investing in the equity of a portfolio company or other entity (or vice versa), particularly in the case of financial distress of a company. If the Fund has the potential to incur a loss on its investment as a result of such difficulties, Clearlake could have an incentive to cause the Fund to provide such additional financing even though doing so is not considered to be in the Fund’s best interest. Similarly, if additional equity capital is necessary to support, enhance or protect the value of an investment, the Fund has an incentive to not provide additional capital to limit their own losses, or if provided, to provide it in an aggregate amount that is less than the amount required. The Exemptive Relief may restrict the Fund’s ability to participate financings. Although Clearlake intends to consider and address conflicts of interest, there can be no assurance that such conflicts will be resolved in a manner that is most favorable to the Fund and the investors. If investments as to which an Other Account and the Fund holds an interest become financially troubled, Clearlake intends to make its decisions regarding the appropriate action to be taken with respect to that company, including the terms of any financial restructuring or in the collective best interests of the Fund and such Other Account as determined at such time. While Clearlake’s written policy on conflicts of interest will set forth certain approaches that are intended to mitigate such conflicts of interest to the extent possible, given the nature of such conflicts and legal constraints (including bankruptcy laws), there can be no assurance that any such conflict can be resolved in a manner that is beneficial to the Fund. It is possible that in a bankruptcy, insolvency or similar proceeding the Fund’s interest could be subordinated or otherwise adversely affected by virtue of the involvement and actions of an Other Account relating to its investment. Although an Other Account holding a debt investment in an issuer may recover all or part of amounts due to it, the Fund holding an equity investment in such issuer may be at risk for substantial loss. In addition, where an Other Account is a creditor of a portfolio company or other entity in which the Fund holds more junior securities, such Other Account may take actions in its own interests with respect to its rights as a creditor (e.g., with respect to breaches of covenants) that may be adverse to the interests of the Fund holding the junior securities as a subordinated debt holder. In such circumstances, Clearlake is permitted to (but is not obligated to), to the fullest extent not prohibited by applicable law, take steps to reduce the potential for conflicts between the interests of the Fund and each of the applicable Other Accounts, including causing the Fund or one or more of such Other Accounts to take certain actions that, in the absence of such conflict, it would not take (e.g., (i) causing an Other Account, to remain passive in a situation in which it is entitled to vote, which may mean that the Other Account defers to the decision or judgment of an independent, third-party investor in the same class of equity or debt securities or other financial instruments held by the Other Account, (ii) divesting itself of an asset it might otherwise have held on to, (iii) referring any such matter to a third party unaffiliated with the Adviser, (iv) investing in a particular asset or class of securities that seeks to align its interests with those of Other Accounts, (v) establishing ethical screens or information barriers to separate Clearlake investment professionals or assigning different teams of Clearlake investment professionals, in each case, who are supported by separate legal counsel and other advisers, to act independently of each other in representing different Clearlake funds and accounts that hold different classes, series or tranches of an issuer’s capital structure, or (vi) as between two different Clearlake funds, ensuring (or seeking to ensure) that the underlying investors therein own interests in the same securities or financial instruments and in the same proportions so as to preserve an alignment of interest). Any such step could have the effect of benefiting Other

 

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Accounts or Clearlake at the expense of the Fund and there can be no assurance that any of these measures will be feasible or effective in any particular situation, and it is possible that the outcome for the Fund will be less favorable than might otherwise have been the case if Clearlake had not had duties to Other Accounts. Shareholders will in no way receive any benefit from fees paid to any Other Account from a portfolio company or other entity.

Further, there can be no assurance that the Fund or any Other Account invested in the portfolio company or other entity will exit their respective investments at the same time. Clearlake and its affiliates are expected from time to time to express inconsistent views of commonly held investments or of market conditions more generally. Clearlake will seek to allocate any disposition opportunities with respect to investments owned by an Other Account and the Fund in accordance with the Exemptive Relief (which will require the Fund be given the opportunity to participate in any disposition of any security acquired in a transaction in proportion to its holdings relative to the participating Other Accounts) and on a basis that it believes is fair and equitable to each such fund taking into account all relevant facts and circumstances, including without limitation the relative ownership percentages of the Fund and such Other Account in the portfolio company or other entity and the life-cycle of such Other Account as compared to the Fund. There can be no assurance that the Fund’s return on its investments will be the same as the returns obtained by any Other Account with respect to the same investments. Given the nature of the relevant conflicts there can be no assurance that any such conflict can be resolved in a manner that is beneficial to both the Fund and such Other Account.

Subject to compliance with the requirements of the 1940 Act and applicable law, the Fund will from time to time make investments in which the Fund (directly or indirectly) acquires assets owned in whole or part (directly or indirectly) by Other Accounts and proceeds indirectly flow from the Fund to such Other Accounts. Other Accounts may similarly acquire assets indirectly from the Fund. For example, the Fund may invest in a sponsor’s “continuation vehicle” which acquires assets from an existing fund of such sponsor, and in which Other Accounts invest (or vice versa). The Fund may also acquire fund interests from a in which Other Accounts invest (or vice versa). The Adviser will not be required to solicit third-party bids or obtain a third-party valuation prior to causing the Fund or any of its Investment Funds to participate in such transactions. Any resolution to such potential conflicts of interest will take into consideration the interests of the relevant clients, the circumstances giving rise to the conflict and applicable laws.

. The investment professionals of Clearlake invest directly and indirectly in Other Accounts. As limited partners of Other Accounts, the investment professionals of Clearlake invest in every transaction made by such Other Accounts. While investments by related persons and investment professionals of Clearlake are intended to align interests of Clearlake and its related persons with those of the Other Accounts, such investments may create conflicts of interest. To address such conflicts, the investment arrangements are described and agreed upon in the applicable fund agreements and offering documents of each such Other Account. Generally, investments and disposals are made on the same economic terms for all Other Accounts, including for Clearlake’s related persons, and each investment is made pro rata among the limited partners of each Other Account and Clearlake’s related persons who are indirect limited partners, so that Clearlake’s related persons may not receive favorable terms or greater exposure to certain investments. However, Clearlake’s related persons may not bear management fees, carried interest or incentive allocation with respect to such investments; if Clearlake determines in its sole discretion to cause an Other Account to invest alongside the Fund, such Other Account may be treated as a Clearlake related person for this or other purposes.

As described herein, Clearlake engages in a broad range of business activities and invests in a broad range of businesses and assets. The Adviser takes into account Clearlake’s, its affiliates’ and/or Other Accounts’ and each of their respective portfolio companies’ respective interests (including reputational interests, financial interests, confidentiality concerns when determining whether to pursue (or how to structure) a potential portfolio investment for the Fund. As a result, it is possible that the Adviser may choose not to pursue or consummate an investment opportunity for the Fund (or may structure an investment in a manner it otherwise would not)

 

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notwithstanding that such investment may be attractive for the Fund because of the reputational, financial, confidentiality and/or other interests of Clearlake and its affiliates.

. A conflict exists for the Adviser and its affiliates in allocating purchase price deferrals to specific underlying investment funds that are purchased in a single transaction or a series of related transactions. In certain circumstances, the Fund and Other Accounts and vehicles may be allocated specific underlying investment funds within the same portfolio but with different payment schedules, and therefore Other Accounts and vehicles may benefit from longer payment schedules than the Fund.

The service providers, counterparties or their affiliates (including any lenders, brokers, attorneys, consultants, IT structure and service providers, and investment banking firms) of the Fund, the Adviser, Clearlake, or any of their affiliates may be affiliates of or investors in the Fund and/or sources of investment opportunities and or counterparties therein, or a portfolio company of the Fund, Other Account or an Investment Fund. Additionally, certain employees of Clearlake may have family members or relatives employed by such advisors and service providers, or may have an interest in such advisors and service provides. This may influence the Adviser in deciding whether to select such a service provider or have other relationships with Clearlake. Clearlake has incentives to use or to recommend products or services of one portfolio company (or an affiliate thereof) to another, which may involve fees, commissions, servicing payments or other compensation. Potential conflicts of interest arise in making such recommendations, as Clearlake has incentives to maintain goodwill between it and its former, existing and prospective portfolio companies, and as a result the products or services recommended may not necessarily be the best or lowest cost option. In most cases, the Fund will not consent, participate in the negotiations or be directly involved in such arrangements. Notwithstanding the foregoing, investment transactions for the Fund that require the use of a service provider will generally be allocated to service providers on the basis of best execution, the evaluation of which includes, among other considerations, such service provider’s provision of certain investment-related services and research that the Adviser believes to be of benefit to the Fund.

The Adviser, the Fund, and portfolio companies may engage common service providers from time to time. In such circumstances, there may be a conflict of interest between the Adviser and Clearlake, on the one hand, and the Fund and/or portfolio companies, on the other hand, in determining whether to engage such service providers, including the possibility that the Adviser will favor the engagement or continued engagement of such persons if it receives a benefit from such service providers, such as lower fees or better terms, that it would not receive absent the engagement of such service provider by the Fund and/or their portfolio companies. In certain circumstances, advisors and service providers, or their affiliates, may charge different rates or have different arrangements for specific types of services provided to Adviser or its affiliates as compared to services provided to the Fund and/or portfolio companies, which may result in more favorable rates or arrangements than those payable by the Fund and/or portfolio companies, or the Adviser or its affiliates receiving a discount on services even through the Fund, and/or portfolio companies receive a lesser, or no, discount. No such discounts will inure to the benefit of the Shareholders. For example, Clearlake, its affiliates, the Fund, the Other Accounts, and their portfolio companies may enter into agreements or other arrangements with service providers, vendors, and other similar counterparties from time to time whereby such counterparty may charge lower rates and/or provide discounts or rebates for such counterparty’s products and/or services depending on certain factors, including without limitation, volume of transactions entered into and potential transactions to be entered into with such counterparty by Clearlake, its affiliates, the Fund, the Other Accounts, and/or their portfolio companies in the aggregate. Additionally, the Fund, Other Accounts and their respective portfolio companies, and/or Clearlake itself will from time to time engage investment banks or other similar financial advisors in connection with specific projects. In most cases, the costs and expenses of these third parties will be borne (directly or indirectly) by the Fund or Other Accounts or their investors (and not Clearlake). However, one of the tangible and/or intangible benefits from these relationships includes general referral of investment opportunities, which opportunities may inure to the benefit of Other Accounts and/or Clearlake (and not necessarily the parties bearing the cost of the particular engagement that created, enhanced, or supported the underlying relationship that came to produce such opportunities in the first place).

 

It is possible that Clearlake, the Adviser, the Fund, and portfolio companies may occasionally utilize the services of entities that have, directly or indirectly, or whose affiliates have, investments in Clearlake or the entities managed by Clearlake. Clearlake generally exercises its discretion when using or recommending to a Clearlake fund or a portfolio company thereof that it contract for services with (i) a Clearlake Affiliate (which may include a portfolio company of a Clearlake fund), (ii) an entity with which Clearlake or its affiliates or current or former members of their personnel has a relationship or from which Clearlake or Clearlake Affiliates or their personnel otherwise derives financial or other benefit, including lenders, law firms or investment banks, or (iii) certain investors or their affiliates. For example, Clearlake may be presented with opportunities to receive financing and/or other services in connection with a Clearlake fund’s investments from certain Clearlake fund investors or their affiliates that are engaged in lending or related business. This discretion subjects Clearlake to conflicts of interest, because although Clearlake selects service providers that it believes are aligned with its operational strategies and will enhance portfolio company performance and, relatedly, returns of the relevant Clearlake fund, Clearlake may have an incentive to recommend the related or other person (including an investor) because of its financial or other business interest. There is a possibility that Clearlake, because of such belief or for other reasons (including whether the use of such persons could establish, recognize, strengthen, and/or cultivate relationships that have the potential to provide longer-term benefits to the relevant Clearlake fund or Clearlake), may favor such retention or continuation even if a better price and/or quality of service could be obtained from another person. Whether or not Clearlake has a relationship or receives financial or other benefit from recommending a particular service provider, there can be no assurance that no other service provider is more qualified to provide the applicable services or could provide such services at lesser cost. In certain circumstances where Clearlake commits to seek “market” or “arms-length” rates or terms, Clearlake will do so in its sole discretion, seeking rates that it has determined in its sole discretion to be reflective of the range of rates in the applicable or related markets. Consequently, Clearlake undertakes no minimum amount of benchmarking, and does not represent that any such benchmarking ultimately will be accurate, comparable or relate specifically to the assets or services to which such rates or terms relate. Where such rates or terms include hourly components, Clearlake reserves the right to rely on approximations or estimates of time spent for purposes of allocating or charging for services. Any methodology, or choice among methodologies, involves potential conflicts of interest.

. The Clearlake Advisory Affiliates’ investment professionals will devote such time and attention to the conduct of the Fund’s business as such business shall reasonably require. However, there can be no assurance, for example, that such investment professionals will devote any minimum number of hours each week to the affairs of the Fund or that they will continue to be employed by the Clearlake Advisory Affiliates. In the event that such investment professionals cease to be actively involved with the Fund, Shareholders will be required to rely on the ability of the Clearlake Advisory Affiliates to identify and retain other investment professionals to conduct the Fund’s business.

. The Shareholders and investors in Other Accounts are generally based in a wide variety of jurisdictions and take a wide variety of forms. These investors may have conflicting investment, tax, and other interests with respect to their investments in the Fund or Other Accounts. The conflicting interests of individual investors may relate or arise from, among other things, the nature of investments made by the Fund or other funds, and the structuring or the acquisition of investments. As a consequence, conflicts of interest may arise in connection with decisions made by Clearlake, including with respect to the nature or structuring of investments, that may be more beneficial for one investor than for another investor, or more beneficial to the Fund, one or more other funds than for the other investment vehicles participating in an investment, especially with respect to investors’ individual tax situations. For example, the Fund may make investments in Investment Funds which may have a negative impact on related investments made by the investors in the Fund or other funds in separate transactions. In selecting and structuring investments appropriate for the Fund and other funds, Clearlake will consider the investment and tax objectives of the Fund and other funds and the investors therein as a whole, and not the investment, tax or other objectives of any Shareholder individually.

 

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. The Fund has the authority to consent to any transfer of all or a portion of a Shareholder’s interest, including a transfer to Clearlake or any of its affiliates. Any such transaction would present a conflict in that, by virtue of its role as such, Clearlake would be expected to possess more information and more detailed information regarding the Fund and its investments and the value thereof than the relevant Shareholder.

There is no guarantee that the Fund will consider (or if it does consider, will consummate) a transfer of all or any portion of Shares from a Shareholder to Clearlake or its affiliates, or that any such transfer will be available to Shareholders generally. Shareholders should not expect that any such transfer will be available at any time.

. Portfolio companies in which the Fund or Other Accounts have invested (directly or indirectly, including through Investment Funds) may be counterparties or participants in agreements, transactions, or other arrangements with other portfolio companies of the Fund, Other Accounts or other Clearlake Affiliates that, although Clearlake determines to be consistent with the requirements of such funds’ governing agreements and applicable law, may not have otherwise been entered into but for the affiliation with Clearlake, and which may involve fees and/or servicing payments to Clearlake-affiliated entities. For example, Clearlake may, like other private equity firms, in the future cause portfolio companies to enter into agreements regarding group procurement, benefits management, data management and/or mining, technology development, purchase of title and/or other insurance policies (which may be pooled across portfolio companies and discounted due to scale), and other similar operational initiatives that may result in fees, commissions or similar payments and/or discounts being paid to the Adviser or its affiliates, or a portfolio company, including related to a portion of the savings achieved by the portfolio company. Moreover, Clearlake, the Adviser, and their affiliates are often eligible to receive favorable terms for procurement due in part to the involvement of Fund’s portfolio companies in such arrangements, and any discounted amounts will not offset the Management Fee or otherwise be shared with the relevant Clearlake funds. In addition, portfolio companies of Other Accounts may do business with, support, or have other relationships with competitors of the Fund’s portfolio companies, and in that regard prospective investors should not assume that a company related to or otherwise affiliated with Clearlake will only take actions that are beneficial to or not opposed to the interests of the Fund and its portfolio companies. Because the Fund is expected to invest primarily through Investment Funds and other investments, the Fund may have limited ability to influence whether such relationships are entered into or the terms on which they are entered into. Such relationships may give rise to conflicts of interest, including where, as noted above, Clearlake or its affiliates receive fees, commissions, discounts or other benefits from such arrangements.

Moreover, in connection with seeking financing or refinancing of portfolio companies and their assets, it may be the case that better financing terms are available when more than one portfolio company provides collateral, particularly in circumstances where the assets of each portfolio company are similar in nature. As such, rather than seeking such financing or refinancing on its own, a portfolio company of the Fund may enter into cross collateralization arrangements with another portfolio company of the Fund or portfolio companies of one or more Other Accounts. While Clearlake would expect any such financing arrangements to generally be non recourse to the Fund and Other Accounts, as a result of any cross-collateralization, the Fund could also lose its interests in otherwise performing investments due to poorly performing or investments of Other Accounts.

It is also possible that a counterparty, lender or other unaffiliated participant in a transaction or relationship with respect to a particular portfolio company requires or desires facing a group of portfolio companies, which may result in (i) any portfolio company of the Fund or a portfolio company of an Other Account being solely liable with respect to the entire obligation, and therefore being required to contribute amounts in respect of the shortfall attributable to other portfolio companies and/or (ii) any of the Fund’s portfolio companies and such Other Account’s portfolio companies being jointly and severally liable for the full amount of such applicable obligation or liable on a cross-collateralized basis on an or portfolio wide basis, in each case which may result in the Fund’s portfolio company and such Other Account’s portfolio company entering into a or other similar reimbursement agreement.

 

10

. Conflicts of interest may arise because Clearlake personnel may serve as directors of certain portfolio companies or other legal entities in which the Fund has invested (directly or indirectly, including through Investment Funds). In instances where the Fund is not the sole shareholder of the applicable portfolio company or other legal entity, in addition to any fiduciary duties that such Clearlake personnel owe to the Fund, as directors of portfolio companies or other legal entities, such Clearlake personnel owe fiduciary duties to the shareholders of the portfolio companies or other legal entities and to persons other than the Fund. In addition, such Clearlake personnel may serve as directors of, and owe fiduciary duties to the shareholders of, more than one portfolio company or issuer or other legal entity in the same industry. In general, such director positions are often important to the Fund’s investment strategy and are typically intended to have the effect of enhancing the ability of Clearlake personnel to manage investments. However, such positions may place Clearlake personnel in a position where they must make a decision that is either not in the best interests of the Fund or not in the best interests of the shareholders of the portfolio company or other legal entity. Should Clearlake personnel make a decision that is not in the best interest of the shareholders of a portfolio company, such decision could subject Clearlake, the Adviser, their affiliates, and/or the Fund to claims that they would not otherwise be subject to as an investor, including claims of breach of the duty of loyalty, securities claims, and other director-related claims. In addition, because of the potential conflicting fiduciary duties, the Adviser may be restricted in choosing investments for the Fund, which could negatively impact returns received by the Fund.

. From time to time, the Fund will with Other Accounts (including or other vehicles in which Clearlake or its personnel invest and that with Other Accounts) in investments that are suitable for both the Fund and Other Accounts, as permitted by applicable law and/or the Exemptive Relief. Even if the Fund, such Other Account, and/or or other vehicles invest in the same securities, conflicts of interest are still expected to arise. For example, it is possible that as a result of legal, tax, regulatory, accounting, political, national security or other considerations, the terms of such investment (and divestment thereof) (including with respect to price and timing) for the Fund and such Other Accounts are not the same. Additionally, the Fund and such Other Accounts and/or vehicles will generally have different investment periods and/or investment objectives (including return profiles) and Clearlake, as a result, could have conflicting goals with respect to the amount, price and timing of disposition opportunities. As such, subject to applicable law and any applicable order issued by the SEC, the Fund and/or such Other Accounts may dispose of any such shared investment at different times on different terms and/or otherwise on a rata basis. Subject to the 1940 Act and the Exemptive Relief, to the extent the Fund holds or acquires securities or instruments that are different (including with respect to their relative seniority) than those held or acquired by such Other Accounts, the Adviser, and its affiliates may be presented with decisions when the interests of the two funds are in conflict. In that regard, actions may be taken for the Other Accounts that are adverse to the Fund. In addition, it is possible that in a bankruptcy proceeding the Fund’s interest may be subordinated or otherwise adversely affected by virtue of such Other Accounts’ involvement and actions relating to its investment.

Furthermore, where, subject to the 1940 Act and the Exemptive Relief, the Fund and the Other Accounts invest in the same company at different times, the first vehicle to invest typically will bear a higher level of diligence and transaction fees, costs and expenses than later vehicle; similarly, to the extent a transaction does not proceed, the first vehicle to invest typically will bear the full amount of broken deal expenses relating to the transaction, regardless of whether other vehicles could or would have invested in the company in potential future transactions.

Additionally, for so long as any privately negotiated investment opportunity is a Core Investment Opportunity of one or more Regulated Funds, such investment opportunity shall also be offered to such Regulated Fund(s). If the aggregate targeted investment sizes of the Fund, such Other Accounts that are allocated an investment opportunity exceed the amount of such investment opportunity, then the allocation of such investment opportunity to the Fund may be less than the Fund’s target investment size. This may result in allocation to the Fund in an amount less than what it would otherwise have been if such other entities did not participate in such investment opportunity.

 

10

The Exemptive Relief will also restrict the ability of the Fund (or any Other Account) from investing in any privately negotiated investment opportunity alongside a Regulated Fund except at the same time and on the same terms, as described in the Exemptive Relief. As a result, the Fund risks being unable to make investments in different parts of the capital structure (e.g., equity investments, debt investments, hybrid securities, etc.) of the same issuer in which a Regulated Fund has invested or seeks to invest. Likewise, Regulated Funds and Other Accounts that are not Regulated Funds risk being unable to make investments in different parts of the capital structure of the same issuer in which the Fund has invested or seeks to invest.

Further, the Fund may be unable to participate in or effect certain transactions, or take certain actions in respect of certain investments, on account of applicable restrictions under the 1940 Act, related guidance from the SEC and/or the Exemptive Relief. For example, the Fund may be restricted from participating in certain transactions or taking certain actions in respect of Investment Funds or their respective portfolio companies in which certain Other Accounts managed and controlled by Clearlake and its affiliates and/or a Regulated Fund has also invested, which may include, but are not limited to:

 

 

 

The Fund may also be required to sell an investment to avoid potential violations of the 1940 Act and/or related rules thereunder or for other reasons. In such cases, the Fund’s interests in an investment may be adversely affected, including by resulting in the dilution of or decrease in the value of the Fund’s investment or in the Fund being put in a disadvantageous position with respect to the investment as compared to Other Accounts, including other Regulated Funds, or with respect to Clearlake or other affiliates of Clearlake. Whether the Fund participates or declines to participate in any such action or transaction will be made by the Adviser in its sole discretion, subject to the Adviser’s fiduciary duties and applicable law, including the 1940 Act, the rules thereunder and/or the Exemptive Relief. There is no assurance that any such determination will be resolved in favor of the Fund’s interests. The rules promulgated by the SEC under the 1940 Act, as well as any related guidance from the SEC and/or the terms of the Exemptive Relief itself, are subject to change.

Moreover, with respect to the ability of Clearlake, the Adviser and their affiliates to allocate investment opportunities, including where such opportunities are a Core Investment Opportunity of the Fund or any other Regulated Fund and the objectives and guidelines of one or more Other Accounts (which allocations are to be made on a basis that Clearlake and the Adviser believe in good faith to be fair and reasonable), Clearlake, the Adviser and their affiliates have established general guidelines and policies, which they can be expected to update from time to time, for determining how such allocations are to be made, which, among other things, set forth principles regarding what constitutes “secondary” or “primary” investments, criteria for defining “control investments” or investments, guidance regarding allocation for certain types of investments (e.g., investments that fall outside the size, scope or other idiosyncratic considerations of the various mandates) and other matters. In addition, certain Other Accounts can receive priority or other allocation rights with respect to certain investments that do not fall within the Fund’s or another Regulated Fund’s core investment strategy, subject to various conditions set forth in such Other Accounts’ respective governing agreements. The application of those guidelines and conditions could result in the Fund or Other Accounts not participating (and/or not participating to the same extent) in certain investment opportunities in which they would have otherwise participated had the related allocations been determined without regard to such guidelines and conditions and based only on the circumstances of those particular investments.

. Investment Funds (or their managers or underlying portfolio companies) in which the Fund or Other Accounts have an interest may compete with the Fund or its Investment Funds for

 

10

one or more investment opportunities. It is also possible that certain Investment Funds (or their managers or underlying portfolio companies) will engage in activities that may have adverse consequences on the Fund and/or its Investment Funds. The foregoing may give rise to conflicts of interest, and there can be no assurance that these matters will be resolved in a manner favorable to the Fund.

. The Adviser and its affiliates reserve the right to hire short-term or long-term personnel (or interns or consultants) who are relatives of or are otherwise associated with an investor, portfolio company or a service provider. Although reasonable efforts are made to mitigate any potential conflicts of interest with respect to each particular situation, there is no guarantee that the Adviser can control for all such potential conflicts of interest, and there may continue to be an ongoing appearance of a conflict of interest. For example, certain employees and other professionals of Clearlake have family members or relatives that are actively involved in the private equity industry and/or have business, personal, financial, or other relationships with companies in the private equity industry (including the investment banks, advisors and service providers described above), which gives rise to potential or actual conflicts of interest. For example, such persons might be employees, officers, directors or owners of companies or assets which are actual or potential investments of the Fund or other counterparties of the Fund and its portfolio companies and/or assets. Moreover, in certain instances, the Fund or its portfolio companies may purchase or sell companies or assets from or to, or otherwise transact with, companies that are owned by such family members or relatives or in respect of which such family members or relatives have other involvement. To the extent Clearlake determines appropriate, conflict mitigation strategies can be put in place with respect to a particular circumstance, such as internal information barriers or recusal, disclosure or other steps determined appropriate by the Adviser.

. Prospective investors should note that while the Adviser is permitted to offer opportunities in its sole discretion, it is not expected to offer with respect to all investments made by the Fund and that any opportunities offered to investors or third parties outside of the Fund are separate from the Fund’s ability to make as part of its investment strategy. The Adviser reserves the right to present opportunities to certain investors and other third-party potential at any time and with respect to any particular opportunity, at different times. Thus, one or more investors and/or other third-party potential could have a longer period of time to evaluate a opportunity relative to other potential being offered the same opportunity. Nothing herein constitutes a guarantee, prediction or projection of the availability of future opportunities. Investing in the Fund does not provide any rights, entitlements or priority to opportunities. The performance of is not aggregated with that of the Fund, including for purposes of determining the Management Fee under the Investment Advisory Agreement.

There can be circumstances where an amount that would have otherwise been invested by the Fund is instead offered to (e.g., due to a determination by the Adviser and Clearlake Advisory Affiliates that allocating such portion to is in the Fund’s best interests, for instance in order to increase diversification), which can be expected to include, without limitation Clearlake-related funds, accounts or vehicles, Clearlake affiliates or third-parties and there is no guarantee for any investor that it will be offered any opportunities. As a general matter, the Adviser, in determining the allocation of discretionary opportunities, generally expects to take into account various facts and circumstances deemed relevant by the Adviser. Such factors are likely to include, among others, whether a potential has expressed an interest in evaluating opportunities, whether a potential has a history of participating in opportunities with Clearlake, the size of the potential interest to be held in the underlying portfolio company as a result of the Fund’s investment (which may be based on the size of the potential investment in the Fund), the timing of the investor’s commitment to the Fund, the existence of accounts or vehicles formed to in investments across all or a portion of the Clearlake platform (whether or not formed in connection with the admission of an investor to the Fund), whether the potential has demonstrated a long-term and/or continuing commitment to the potential success of Clearlake, the Fund, or other funds or the overall size of a commitments to Clearlake funds, vehicles and accounts, the expected amount of negotiations required in connection with such

 

10

co-investor’s

co-investment

co-investors

co-investment

co-investments

co-investment

co-investment

co-investors

co-investment).

co-investment

co-sponsor.

Co-investment

co-invest

co-investments

co-investment

co-invest

pre-existing

 

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no less favorable to the Fund than are generally afforded to unrelated third parties in comparable transactions, and subject to compliance with the 1940 Act and applicable law. The officers, directors, members, managers, and employees of Clearlake and its affiliates (on behalf of themselves or through family investment vehicles or similar accounts that they control or as to which they are the primary beneficiary) may trade in securities for their own accounts, which may differ from those purchased or sold for the Fund, subject to restrictions and reporting requirements as may be required by law or otherwise determined from time to time by Clearlake. Clearlake personnel may also maintain or make investments in or alongside, or otherwise have exposure to, funds managed by the same sponsor that manages certain assets of Clearlake funds, such sponsors themselves and/or the same funds in which Clearlake funds are invested. Subject to legal requirements and Clearlake’s internal policies, such personnel may trade such securities in a manner inconsistent with the Clearlake funds (e.g., such personnel may sell interest in funds that the Clearlake funds are also invested in at different times and on different terms and/or at different prices than the Clearlake funds). These activities could give rise to potential conflicts of interest and there can be no assurance that such activities will not have a material adverse effect on the Fund.

Other present and future activities of the Adviser, Clearlake or their affiliates may give rise to additional conflicts of interest. For example, Clearlake has the authority to enter into other investment management businesses that could present further conflicts of interest. In the event that a conflict of interest arises, Clearlake will attempt to resolve such conflict in a fair and equitable manner.

There can be no assurance that Clearlake will identify or resolve all conflicts of interest in a manner that is favorable to the Fund.

The valuation of Investment Funds also affects the Fund’s performance and thereby affects the ability of Clearlake to raise a successor fund to the Fund or Other Accounts. As a result, from time to time there may be circumstances where Clearlake is incentivized to determine valuations that are higher than the actual fair value, as applicable, of Investment Funds.

follow-on

 

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co-investment

 

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MANAGEMENT OF THE FUND

Trustees and Officers

Adviser

The Adviser expects to enter into the Resource Sharing Agreement with the Clearlake Advisory Affiliates, pursuant to which the Clearlake Advisory Affiliates will provide the Adviser with experienced investment professionals and access to the resources of the Clearlake Advisory Affiliates so as to enable the Adviser to fulfill its obligations under the Investment Advisory Agreement. Through the Resource Sharing Agreement, the Adviser intends to capitalize on the significant deal origination, due diligence, investment structuring, execution, portfolio management and monitoring experience of the Clearlake Advisory Affiliates’ investment professionals. There can be no assurance that the Clearlake Advisory Affiliates will perform their respective obligations under the Resource Sharing Agreement. If the Clearlake Advisory Affiliates were to cease performing their respective obligations under the Resource Sharing Agreement, there is no guarantee that the Adviser would be able to fulfill its obligation under the Investment Advisory Agreement. The Resource Sharing Agreement may be terminated by either party on sixty (60) days’ notice, and such termination may have a material adverse consequence on the Fund’s operations. The Fund is not a party to the Resource Sharing Agreement and accordingly is not responsible for paying any compensation thereunder.

Portfolio Management

Pete Veravanich, Mitchell Clemente and Derrek Ransford, the Fund’s primary portfolio managers, are primarily responsible for the day-to-day management of the Fund’s portfolio and will manage the Fund’s portfolio with a team of investment professionals that they will lead.

 

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Prior to joining Pathway, Mr. Clemente was a vice president in Greenhill & Co.’s capital advisory group, where he focused on secondary transaction sourcing and execution. Prior to joining Greenhill, Mr. Clemente was a financial analyst with Houlihan Lokey, Inc. He received a BS in finance and international business from New York University’s Leonard N. Stern School of Business.

Prior to joining Pathway, Mr. Ransford worked for two years at Deloitte & Touche as an auditor and at Arthur Andersen for one year as a financial analyst in the Financial Valuations Group. Mr. Ransford received a BA in business economics, with an emphasis in accounting, from the University of California, Santa Barbara. He is a CFA charterholder and a certified public accountant (inactive).

Further information regarding the portfolio managers, including other accounts managed, compensation, ownership of Shares, and possible conflicts of interest, is available in the SAI.

Control Persons and Principal Owners of Shares

Shareholders who beneficially own more than 25% of the outstanding voting securities of the Fund could be deemed to be a “control person” of the Fund for purposes of the 1940 Act. As of November 2, 2026, the Fund had not commenced investment operations and the only Shares of the Fund were owned by the Adviser.

 

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INVESTMENT ADVISORY AGREEMENT

Investment Advisory Agreement

Under the Fund’s Investment Advisory Agreement with the Adviser, subject to the supervision and direction of the Board, the Adviser is delegated the responsibility of managing the Fund’s portfolio in accordance with the Fund’s stated investment objective and policies, making investment decisions for the Fund and causing the Fund to purchase and sell assets.

The Investment Advisory Agreement will continue in effect, unless otherwise terminated, until two years from its effective date and then will continue from year to year provided such continuance is specifically approved at least annually (a) by the Board or by a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act) and (b) in either event, by a majority of the Independent Trustees with such Independent Trustees casting votes in person at a meeting called for such purpose. The Investment Advisory Agreement provides that the Adviser may render services to others. The Investment Advisory Agreement is terminable without penalty on not more than 60 days’ nor less than 30 days’ written notice by the Fund when authorized either by a vote of holders of shares representing a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act) or by a vote of a majority of the Fund’s trustees, or by the Adviser on not less than 90 days’ written notice, and will automatically terminate in the event of its assignment. The Fund’s Investment Advisory Agreement provides that neither the Adviser nor its personnel or affiliates shall be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution of security transactions for the Fund, except for willful misfeasance, bad faith or gross negligence or reckless disregard of its or their obligations and duties.

A discussion regarding the basis for the approval by the Board of the Investment Advisory Agreement will be available in the Fund’s initial shareholder report once it commences operations, which is currently expected to be the shareholder report for the Fund’s fiscal year ended March 31, 2027.

Management Fee

In consideration of the management services provided by the Adviser, the Fund pays the Adviser a Management Fee quarterly in arrears at an annual rate of 1.50% of the value of the Fund’s daily net assets (including cash and cash equivalents) calculated and accrued daily. For purposes of determining the Management Fee payable to the Adviser, the value of the Fund’s net assets (including cash and cash equivalents) will be calculated prior to the inclusion of the Management Fee payable to the Adviser or any distributions made by the Fund, but adjusted for any purchases or repurchases of Shares of the Fund. The Management Fee is paid to the Adviser out of the Fund’s assets, and therefore decreases the net profits or increases the net losses of the Fund.

Expense Limitation Agreement

Pursuant to an Expense Limitation Agreement (the “Expense Limitation Agreement”) with the Fund, the Adviser has agreed on a quarterly basis to waive fees that it would otherwise be paid, and/or to assume or reimburse expenses of the Fund, including organizational and offering costs (each, an “Expense Payment”), so that the Fund’s total annualized operating expenses (excluding any Distribution and Servicing Fee) during the applicable quarter do not exceed 3.50% of the value of the Fund’s average daily net assets of each class of the Fund’s Shares. The Adviser also agreed to advance the Fund’s organizational and offering costs through the date the Fund commences investment operations and may also voluntarily make other Expense Payments on the Fund’s behalf in its sole discretion, all of which is subject to recoupment by the Adviser as described below.

Following the time at which the Fund has received at least $200 million in net offering proceeds from the sale of Shares to third-party investors (the “Reimbursement Threshold”), the Fund has agreed to repay the Adviser in the amount of any Expense Payment for each class of Shares, provided the repayments do not cause

 

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the Fund’s total annualized operating expenses (net of any Expense Payments received by the Fund during such fiscal year and excluding any Distribution and Servicing Fee) during the applicable quarter for that class of Shares to exceed (i) the expense limitation in place at the time the Expense Payment was made by the Adviser, or (ii) the expense limitation in place at the time the Fund repays the Adviser, whichever is lower. The Adviser is permitted to recapture the amount of any Expense Payment within thirty-six months after the date the applicable Expense Payment was made by the Adviser. The Adviser may, in its sole discretion, waive its right to reimbursement for all or a portion of any Expense Payment for any applicable quarter after the Reimbursement Threshold has been met by providing written notice to the Fund in advance of such quarter, in which case such waived amount will remain unreimbursed Expense Payments reimbursable in future quarters pursuant to the terms of the Expense Limitation Agreement. The Expense Limitation Agreement will have an initial term ending one year from the date the Fund commences investment operations or the effective date of the Fund’s Prospectus, whichever is later, and may be extended for additional one-year periods with the consent of the Adviser and the Fund. The Expense Limitation Agreement may not be terminated during its initial term.

Payment of Fund Expenses

Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to the Fund, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. The Fund will bear all other costs and expenses of the Fund’s operations, administration and transactions, including, without limitation, those relating to:

 

 

 

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From time to time, the Adviser or its affiliates may pay third-party providers of goods or services. The Fund will reimburse the Adviser or such affiliates thereof for any such amounts paid on the Fund’s behalf. From time to time, the Adviser may defer or waive fees and/or rights to be reimbursed for expenses.

All of the foregoing expenses will ultimately be borne by the Fund’s Shareholders.

Costs and expenses of the Adviser that are eligible for reimbursement by the Fund will be reasonably allocated to the Fund on the basis of time spent, assets under management, usage rates, proportionate holdings, a combination thereof or other reasonable methods determined by the Adviser.

 

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CALCULATION OF NET ASSET VALUE

The Fund calculates its NAV as of the close of the regular trading session on the New York Stock Exchange (the “NYSE”) (normally 4:00 p.m., Eastern Time) on each Business Day that the NYSE is open for trading (which excludes the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day), in accordance with the procedures described below or as may be determined from time to time in accordance with policies approved by the Board (each, a “Determination Date”). In determining the Fund’s NAV, the Adviser values the Fund’s investments as of the relevant Determination Date. The NAV of the Fund equals, unless otherwise noted, the value of the total assets of the Fund (including the NAV of each class of Shares, including interest accrued but not yet received), less all of its liabilities (including accrued fees and expenses, dividends payable and any borrowings of the Fund), each determined as of the relevant Determination Date. The NAV per Share for each class of Shares is determined by dividing the value of total assets attributable to the class minus liabilities attributable to the class by the total number of Shares outstanding of the class as of the Determination Date.

The Class S Shares’ NAV plus the Class A Shares’ NAV plus the Class I Shares’ NAV equals the total value of the net assets of the Fund. The NAVs of each class of Shares are calculated separately based on the fees and expenses applicable to each class. Because of differing class fees and expenses, the per share NAV of the classes will vary over time.

Rule 2a-5

within 45-60

Generally, Investment Managers value investments at their market price if market quotations are readily available. In the absence of observable market prices, Investment Managers value investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist. The Investment Managers’ determination of fair value is then based on the best information available in the

 

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circumstances and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for nonperformance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies or certain debt positions. Market quotations will not be readily available for most of the Fund’s investments.

The actual realized returns on the Investment Managers’ unrealized investments will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which the Investment Managers’ valuations are based. Neither the Fund nor the Adviser has oversight or control over the implementation of the Investment Managers’ valuation process.

In reviewing the valuations provided by Investment Managers, the Valuation Policy requires the consideration of all relevant information reasonably available at the time the Adviser values the Fund’s portfolio. The Adviser will consider such information and may conclude in certain circumstances that the information provided by the Investment Manager does not represent the fair value of a particular Private Asset. In accordance with the Valuation Policy, the Adviser will consider whether it is appropriate, in light of all relevant circumstances, to value such interests based on the NAV reported or expected to be reported by the relevant Investment Manager, or whether to adjust such value to reflect a premium or discount to such NAV.

For example, Investment Managers may value investments in portfolio companies and direct private equity investments at cost. The Valuation Policy provides that, where cost is determined to best approximate the fair value of the particular security under consideration, the Adviser may approve such valuations. In other cases, the Adviser may be aware of sales of similar securities to third parties at materially different prices, or of other circumstances indicating that cost may not approximate fair value (which could include situations where there are no sales to third parties). In such cases, the Fund’s investment will be revalued in a manner that the Adviser, in accordance with the Valuation Policy, determines in good faith best approximates fair value. The Board is responsible for ensuring that the Valuation Policy is fair to the Fund and consistent with applicable regulatory guidelines.

Notwithstanding the above, Investment Managers unaffiliated with the Fund may adopt a variety of valuation bases and provide differing levels of information concerning Private Assets, and there will generally be no liquid markets for such investments. Consequently, there are inherent difficulties in determining the fair value that cannot be eliminated. Neither the Board nor the Adviser will be able to confirm independently the accuracy of valuations provided by any Investment Managers (which are generally unaudited).

To enhance the Fund’s liquidity, particularly in times of possible net outflows through the repurchase of Shares, the Adviser may from time to time determine to sell certain of the Fund’s assets in the secondary market, which could potentially result in the assets, or a portion thereof, being sold at a discounted value. If the Fund sells a portion of an asset at a discounted value, the retained portion, if not expected to be sold, would generally not be marked down to the discounted price.

To the extent the Fund holds securities or other instruments that are not investments in Private Assets, the Adviser will generally value such assets as described below. Securities traded or dealt in upon one or more securities exchanges (whether domestic or foreign) for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid and ask prices on the primary exchange. Securities primarily traded in the National Association of Securities Dealers’ Automated Quotation System (“Nasdaq”) National Market System for which market quotations are readily available shall be valued using the Nasdaq Official Closing Price.

 

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In cases where a fair valuation of securities is applied, the Fund’s NAV will reflect certain portfolio securities’ fair value rather than their market price. Fair value pricing involves subjective judgments, and it is possible that the fair value determined for a security is materially different than the value that could be realized upon the sale of that security. This fair value may also vary from valuations determined by other funds using their own fair valuation policies. The fair value prices can differ from market prices when they become available or when a price becomes available.

The Adviser may use independent pricing services to assist in calculating the value of the Fund’s securities. In addition, market prices for foreign securities are not determined at the same time of day as the NAV for the Fund. In computing the NAV, the Adviser values foreign securities held by the Fund at the latest closing price on the exchange in which they are traded immediately prior to closing of the NYSE. Prices of foreign securities quoted in foreign currencies are translated into U.S. dollars at current rates. If events materially affecting the value of a security in the Fund’s portfolio, particularly foreign securities, occur after the close of trading on a foreign market but before the Adviser prices the Fund’s Shares, the security will be valued at fair value. For example, if trading in a portfolio security is halted and does not resume before the Adviser calculates the Fund’s NAV, the Adviser may need to price the security using the Fund’s fair value pricing guidelines.

more open-end management

those open-end

As a result of investments by the Fund or other investment vehicles accessed by the Fund, if any, in foreign securities or other instruments denominated in currencies other than the U.S. dollar, the NAV of the Fund’s Shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of these instruments denominated in currencies other than the U.S. dollar may be affected significantly on a day that the NYSE is closed, and an investor is not able to purchase, submit for repurchase or exchange Shares.

The Adviser or its affiliates act as investment advisers to other clients that may invest in securities for which no public market price exists. Valuation determinations by the Adviser or its affiliates for other clients may result in different values than those ascribed to the same security owned by the Fund. Consequently, the fees charged to the Fund may be different than those charged to other clients, since the method of calculating the fees takes the value of all assets, including assets carried at different valuations, into consideration.

Expenses of the Fund, including the Management Fee and Administration Fee (as defined below) are accrued on a daily basis and taken into account for the purpose of determining the Fund’s NAV on a Determination Date.

Prospective investors should be aware that situations involving uncertainties as to the value of portfolio positions could have an adverse effect on the Fund’s NAV if the judgments of the Adviser or the Investment Managers regarding appropriate valuations, should prove incorrect.

 

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PLAN OF DISTRIBUTION

Common Shares

The Fund currently offers three separate classes of Shares designated as Class S Shares, Class A Shares and Class I Shares. The Fund has received an exemptive order from the SEC that permits it to offer multiple classes of Shares, each of which is subject to different fees and expenses. The Fund may in the future register and include other classes of Shares in the offering.

Shares of each class of the Fund represent an equal pro rata interest in the Fund and, generally, have identical voting, distribution, liquidation, and other rights, preferences, powers, restrictions, limitations, qualifications and terms and conditions, except that: (a) each class has a different designation; (b) each class of Shares bears any class-specific expenses; and (c) each class shall have separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class, and shall have exclusive voting rights on any matter submitted to shareholders that relates solely to that class.

Class I Shares are generally available for purchase in this offering only (i) through fee-based programs, also known as wrap accounts, that provide access to Class I Shares, (ii) by institutional accounts as defined by FINRA Rule 4512(c), (iii) through bank-sponsored collective trusts and bank-sponsored common trusts, (iv) by retirement plans (including a trustee or custodian under any deferred compensation or pension or profit sharing plan or payroll deduction IRA established for the benefit of the employees of any company), foundations or endowments, (v) through certain financial intermediaries that are not otherwise registered with or as a broker-dealer and that direct clients to trade with a broker-dealer that offers Class I Shares, (vi) through investment advisers registered under the Investment Advisers Act of 1940 or applicable state law that are also registered with or as a broker-dealer, whose broker-dealer does not receive any compensation from the Fund or from the Distributor, (vii) by the Fund’s officers and Trustees and their immediate family members, as well as officers and employees of the Adviser, Clearlake or other affiliates and their immediate family members, (viii) by participating broker dealers and their affiliates, including their officers, directors, employees, and registered representatives, as well as the immediate family members of such persons, as defined by FINRA Rule 5130, (ix) through bank trust departments or any other organization or person authorized to act as a fiduciary for its clients or customers and (x) by other categories of investors that the Fund names in an amendment or supplement to this Prospectus. Class S and Class A Shares are primarily offered by certain Selling Agents which have agreements with the Distributor to sell Class S and Class A Shares, but may be made available through other financial firms, including banks and trust companies and to specified benefit plans and other retirement accounts.

Distributor

ALPS Distributors, Inc., with its principal place of business at 1290 Broadway, Suite 1000, Denver, Colorado 80203, acts as the distributor of the Fund’s Shares, pursuant to a distribution agreement with the Fund (the “Distribution Agreement”), on a best efforts basis, subject to various conditions. Neither the Distributor nor any other party is obligated to purchase any Shares from the Fund. There is no minimum aggregate number of Shares required to be purchased. Pursuant to the Distribution Agreement, the Distributor shall pay its own costs and expenses connected with the offering of Shares. The Distribution Agreement also provides that the Fund will indemnify the Distributor and its affiliates and certain other persons against certain liabilities.

Under the Distribution Agreement, the Distributor’s responsibilities include, but are not limited to, selling Shares of the Fund upon the terms set forth in this Prospectus. The Distributor also may enter into agreements with brokers, dealers and other financial intermediaries (“Selling Agents”) for the sale and servicing of the Shares. Selling Agents may impose terms and conditions on investor accounts and investments in the Fund that are in addition to the terms and conditions set forth in this prospectus. Any terms and conditions imposed by a Selling Agent, or operational limitations applicable to such parties, may affect or limit a Shareholder’s ability to purchase the Shares or tender the Shares for repurchase, or otherwise transact business with the Fund. Investors

 

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purchasing Class A Shares may be charged an upfront sales load of up to 3.50% of the investor’s subscription. Class S Shares and Class I Shares are not subject to an upfront sales load; however, investors in Class S Shares may be required to pay transaction or other fees, including upfront or deferred placement fees or brokerage commissions on purchases or sales of the Shares to their Selling Agents. Investors should consult with their Selling Agents about any transaction or other fees or charges their Selling Agents might impose on each class of Shares in addition to any fees imposed by the Fund. See “—” and “—” below.

After the initial term of two years, the Distribution Agreement will continue in effect with respect to the Fund for successive periods, provided that each such continuance is specifically approved by a majority of the entire Board cast in person at a meeting called for that purpose or by a majority of the outstanding voting securities of the Fund and, in either case, also by a majority of the Independent Trustees.

Minimum Investments

The following investment minimums apply for purchases of the Shares:

 

The Fund reserves the right to accept, in its sole discretion, investments below these minimums, including, without limitation, for Trustees of the Fund and employees of Clearlake and its affiliates and vehicles controlled by such employees. The minimum initial and additional investments may be reduced by the Fund, in its sole discretion, for certain investors (including, without limitation, clients of registered investment advisers and other financial intermediaries) based on a consideration of various factors, including the investor’s overall relationship with the Adviser or Clearlake, the type of distribution channels offered by the intermediary, the investor’s holdings in other funds affiliated with the Adviser or Clearlake, and such other matters as the Fund may consider relevant at the time.

In addition, the Fund may, in its sole discretion, aggregate the accounts of clients of registered investment advisers and other financial intermediaries whose clients invest in the Fund for purposes of determining satisfaction of minimum investment amounts. The Fund may also, in its sole discretion, aggregate the accounts of clients of certain registered investment advisers and other financial intermediaries across Share classes for purposes of determining satisfaction of minimum investment amounts for a specific Share class. The aggregation of accounts of clients of registered investment advisers and other financial intermediaries for purposes of determining satisfaction of minimum investment amounts for the Fund or for a specific Share class may be based on consideration of various factors, including the registered investment adviser or other financial intermediary’s overall relationship with the Adviser or Clearlake, the type of distribution channels offered by the intermediary and such other factors as the Fund may consider relevant at the time.

Share Class Considerations

The Fund offers 3 classes of Shares: Class S Shares, Class A Shares and Class I Shares. Each class of Shares represents an investment in the same portfolio of investments, but each class has its own expense structure and arrangements for shareholder services or distribution, which allows investors, with the assistance of their Selling Agent, to choose the class that best fits their situation and eligibility requirements.

When selecting a share class, investors should consider the following:

 

 

 

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Each investor’s financial considerations are different. Investors should speak with their Selling Agent to help them decide which Share class is best for them. Not all Selling Agents offer all classes of Shares. In addition, Selling Agents may vary the actual sales load charged, if applicable, as well as impose additional fees and charges on each class of Shares. If an investor’s Selling Agent offers more than one class of Shares, they should carefully consider which class of Shares to purchase.

Intra-Fund Share Class Conversions

Subject to the conditions set forth in this paragraph, Shares of one class of the Fund may be converted into (i.e., reclassified as) Shares of a different class of the Fund at the request of a Shareholder’s financial intermediary. To qualify for a conversion, the Shareholder must satisfy the conditions for investing in the class into which the conversion is sought (as described in the Fund’s Prospectus and the SAI). No sales charge will be imposed on the conversion of Shares. The financial intermediary making the conversion request must submit the request in writing. In addition, the financial intermediary or other responsible party must process and report the transaction as a conversion. The value of the Shares received during a conversion will be based on the relative NAV of the Shares being converted and the Shares received as a result of the conversion. It generally is expected that conversions will not result in taxable gain or loss.

Class I Shares

Class I Shares will be sold at the then-current NAV per Class I Share and are not subject to any upfront sales load or a Distribution and Servicing Fee. Because the Class I Shares are sold at the prevailing NAV per Class I Share without an upfront sales load, the entire amount of an investor’s purchase is invested immediately (subject to any transaction fee charged by a selling agent or other financial intermediary).

Class S Shares

Class S Shares will be sold at the then-current NAV per Class S Share. No upfront sales load will be paid with respect to Class S Shares; however, if an investor buys Class S Shares through certain Selling Agents, they may directly charge the investor transaction or other fees, including upfront or deferred placement fees or brokerage commissions, in such amount as they may determine.

Class S Shares pay to the Distributor a Distribution and Servicing Fee that accrues at an annual rate equal to 0.75% of the applicable class’s average daily net assets. See “.”

Class A Shares

Class A Shares will be sold at the then-current NAV per Class A Share plus any applicable sales load. Investors purchasing Class A Shares may pay an upfront sales load based on the amount of the investor’s subscription. The sales load payable by each investor depends upon the amount investor’s subscription in the Fund up to a maximum of 3.50%.

 

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The following upfront sales loads apply to your purchases of Class A Shares of the Fund:

 

Class A Shares pay to the Distributor a Distribution and Servicing Fee that accrues at an annual rate equal to 0.25% of the applicable class’s average daily net assets. See “.”

If you are eligible to purchase all three classes of Shares, then you should consider that Class I Shares have no upfront sales charges and do not bear any Distribution and Servicing Fee. The Distribution and Servicing Fee is applicable to Class S and Class A Shares and will reduce the NAV or distributions of such classes of Shares. If you are eligible to purchase Class S and Class A Shares but not Class I Shares, then you should consider that Class S Shares have no upfront sales charges but have a higher annual Distribution and Servicing Fee than Class A Shares (and financial intermediaries may directly charge you transaction or other fees, including upfront or deferred placement fees or brokerage commissions, in such amount as they may determine for Class S Shares) while Class A Shares have upfront sales charges but a lower annual Distribution and Servicing Fee than Class S Shares. Investors should also inquire with their Selling Agent about what additional fees may be charged with respect to the Share class under consideration or with respect to the type of account in which the Shares will be held.

Distribution and Servicing Plan

The Fund has adopted a Distribution and Servicing Plan for its Class S Shares and Class A Shares to pay to the Distributor a Distribution and Servicing Fee to compensate financial industry professionals for distribution-related expenses, if applicable, and providing ongoing services in respect of Shareholders who own such Shares. These activities include marketing and other activities primarily intended to result in the sale of Class S Shares and Class A Shares and activities related to administration and servicing of Class S Shares and Class A Shares (including and other administrative services, as well as Shareholder liaison services such as responding to inquiries from Shareholders and providing Shareholders with information about their investments in the Fund). The Distribution and Servicing Plan operates in a manner consistent with under the 1940 Act, which regulates the manner in which an investment company may directly or indirectly bear the expenses of distributing its shares. Although the Fund is not an open-end investment company, it has undertaken to comply with the terms of Rule as required by its exemptive relief, permitting the Fund to, among other things, issue multiple classes of Shares.

Under the Distribution and Servicing Plan, Class S Shares and Class A Shares pay a Distribution and Servicing Fee to the Distributor equal to 0.75% and 0.25% per annum of the average daily value of the Fund’s net assets for the Class S Shares and Class A Shares, respectively, accrued daily and payable monthly. The Distribution and Servicing Fee will be paid out of the relevant class’s assets and decreases the net profits or increases the net losses of the Fund solely with respect to such class. Because the Distribution and Servicing Fee will be paid out of the Fund’s assets on an basis, over time these fees will increase the cost of a Shareholder’s investment and may cost the Shareholder more than paying other types of sales charges, if applicable. Up to 0.25% per annum of the Distribution and Servicing Fee may qualify as a “service fee” under FINRA rules and therefore will not be limited by FINRA rules which limit distribution fees as a percentage of total new gross sales. “Service fees” are defined for purposes of FINRA rules to mean fees paid for providing Shareholder services or the maintenance of Shareholder accounts. FINRA rules limit service fees to 0.25% of a fund’s average annual net assets. A portion of the Distribution and Servicing Fee may also be used to pay for

 

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agency, and certain other administrative services that are not required to be paid pursuant to a “service fee” under FINRA rules. The remainder is for distribution support and related services.

Class I Shares are not subject to a Distribution and Servicing Fee.

In addition, the Fund may pay the Distributor or any other entity engaged in distribution services for the Fund, or reimburse the Adviser or an affiliate thereof to the extent the Adviser or such affiliate pays the Distributor or any such other entity on behalf of the Fund, (i) certain annual base fees, asset-based fees and other fees for additional services and expenses that in the aggregate do not exceed 0.02% of the Fund’s annual net assets and (ii) an amount not to exceed $50,000 per year for other distribution and distribution-related services.

Purchasing Shares

The following section provides basic information about how to purchase Shares of the Fund.

The Distributor acts as the distributor of the Shares of the Fund on a best efforts basis, subject to various conditions, pursuant to the terms of the Distribution Agreement. The Distributor is not obligated to sell any specific amount of Shares of the Fund. The Shares will be continuously offered through the Distributor. As discussed below, the Fund may authorize one or more Selling Agents to receive orders on its behalf. Shares will be sold at a public offering price equal to the then-current NAV of the applicable class plus any applicable upfront sales load for Class A Shares.

The Fund will have the sole right to accept orders to purchase Shares and reserves the right to reject any order in whole or in part. The offering may be terminated by the Fund or the Distributor at any time.

No market currently exists for the Fund’s Shares. The Shares are not listed for trading on any securities exchange. There is currently no secondary market for the Fund’s Shares and the Fund does not anticipate that a secondary market will develop for its Shares. Neither the Adviser, the Distributor nor the Selling Agents intend to make a market in the Fund’s Shares.

Investors who purchase Shares of the Fund during the period beginning on the first date subscriptions are accepted in the Fund’s public offering and continuing until the earlier of (i) May 31, 2027 or (ii) the date on which the aggregate amount of subscriptions for Shares of the Fund following the commencement of the Fund’s public offering equals or exceeds $200 million (such amount, the “Initial Offering Limit” and such period, the “Initial Offering Period”) will receive additional Shares equal to 5% of the amount of their investment in the Fund during the Initial Offering Period. Such additional Shares will have the same rights as other Shares of the same Share class and will be issued to investors within thirty (30) Business Days after the end of the Initial Offering Period based on the NAV of the applicable Share class as of the date of issuance. Investors who subscribe for Shares on the day on which, based on aggregate subscriptions, the Initial Offering Limit is reached as of the close of business on such day, will receive additional Shares on a pro rata basis relative to the amount of their investment in Shares on such day. Payments for any such Shares will be made from the assets of the Adviser and/or its affiliates (and not the Fund). As a result, neither the investor nor the Fund will use its own assets to purchase these additional Shares. The Adviser may be deemed to be an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act in connection with the purchase of such Shares. The Adviser, in its sole discretion, may terminate or modify the program at any time before the end of the Initial Offering Period pursuant to advance notice duly given via filing a supplement to this Prospectus, it being understood that any such termination or modification would not affect the ability of investors who purchase Shares prior to the effective time of the termination or modification to receive the additional Shares.

The availability of additional Shares during the Initial Offering Period may create an incentive for investors to contribute additional amounts to the Fund. Because the Adviser’s management fee is based on a percentage of the value of the Fund’s net assets, these Shares purchased for investors by the Adviser and/or its affiliates will

 

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result in increased net revenue to the Adviser if the increase in fee income due to the increased asset base offsets the costs associated with contributing the proceeds to purchase these additional Shares. Investors who receive Shares paid for by the Adviser or its affiliates will effectively have a lower aggregate purchase price for their investment in the Fund. This may affect the return expectations of such investors and their overall investment economics and tax burden. For financial advice relating to an investment in the Shares, including an investment during the Initial Offering Period, contact your own investment professional.

Acceptance and Timing of Purchase Orders

A purchase order received in good order by the Fund or a financial intermediary prior to the close of the NYSE, on a day the Fund is open for business, together with payment will be effected at that day’s NAV plus any applicable upfront sales load for Class A Shares. An order received after the close of the NYSE will be priced based on the Fund’s NAV next computed after it is received by the relevant financial intermediary. The definition of “good order” may vary among financial intermediaries. The Fund is “open for business” on each day the NYSE is open for trading, which excludes the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. If the NYSE is closed due to weather or other extenuating circumstances on a day it would typically be open for business, the Fund reserves the right to treat such day as a Business Day and accept purchase orders in accordance with applicable law. The Fund reserves the right to close if the primary trading markets of its portfolio instruments are closed and the Fund’s management believes that there is not an adequate market to meet purchase requests. On any Business Day when the Securities Industry and Financial Markets Association recommends that the securities markets close trading early, the Fund may close trading early. Purchase orders will be accepted only on days which the Fund is open for business. For shares purchased through the Fund’s transfer agent, order instructions must be received in good order prior to the close of regular trading on the NYSE in order to receive the current day’s NAV. Instructions must include the name and signature of an appropriate person designated on the account application, account name, account number, name of the Fund and dollar amount. Payments received without order instructions could result in a processing delay or a return of wire. Failure to send the accompanying payment on the same day may result in the cancellation of the order.

Investors may buy shares of the Fund through Selling Agents that have made arrangements with the Fund and are authorized to buy and sell shares of the Fund. Orders will be priced at the appropriate price next computed after it is received by a Selling Agent or the Selling Agent’s authorized designee. The Fund will be deemed to have received a purchase order when a Selling Agent or, if applicable, a Selling Agent’s authorized designee, receives the request in good order. A purchase order from the client of a Selling Agent is not received in “good order” by such Selling Agent unless and until a confirmation of such order is passed back from the Distributor, the Fund, or their delegate to the broker who submitted the order, which may not occur until the Business Day immediately following the Business Day on which the purchase order was submitted by the client to such Selling Agent or at another time determined by the Fund or the Selling Agent. A Selling Agent may hold shares in an omnibus account in the Selling Agent’s name or the Selling Agent may maintain individual ownership records. Selling Agents may charge fees for the services they provide in connection with processing a Shareholder’s transaction order or maintaining an investor’s account with them. Investors should check with their Selling Agent to determine if it is subject to these arrangements. Selling Agents are responsible for placing orders correctly and promptly with the Fund, forwarding payment promptly.

Selling Agents and other financial intermediaries also may impose terms and conditions on investor accounts and investments in the Fund that are in addition to the terms and conditions set forth in this Prospectus (including requirements as to the timing of a subscription and required documentation). Such terms and conditions are not imposed by the Fund, the Distributor or any other service provider of the Fund. Any terms and conditions imposed by a Selling Agent or other financial intermediary, or operational limitations applicable to such parties, may affect or limit a stockholder’s ability to purchase Shares, or otherwise transact business with

 

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the Fund. Investors should direct any questions regarding terms and conditions applicable to their accounts or relevant operational limitations to their Selling Agent or other financial intermediary. The Fund and the Distributor each reserves the right, in its sole discretion, to accept or reject any order for purchase of Fund Shares. The sale of Shares may be suspended during any period in which the NYSE is closed other than weekends or holidays, or if permitted by the rules of the SEC, when trading on the NYSE is restricted or during an emergency which makes it impracticable for the Fund to dispose of its securities or to determine fairly the value of its net assets, or during any other period as permitted by the SEC for the protection of investors. Shares purchased by a fiduciary or custodial account will be registered in the name of the fiduciary account and not in the name of the beneficiary. If a Shareholder places an order to buy Shares and their payment is not received and collected, their purchase may be canceled and they could be liable for any losses or fees the Fund has incurred

Payments to Financial Intermediaries

The Fund may also pay fees to financial intermediaries for agency, and other Shareholder services associated with Shareholders whose Shares are held in, as applicable, omnibus accounts, other group accounts or accounts traded through registered securities clearing agents.

The Adviser and/or its affiliates, in the Adviser’s discretion and from its own resources, may make payments to selected affiliated or unaffiliated third parties (including, without limitation, parties who have entered into selling agreements with the Distributor or the Adviser and/or its affiliates) from time to time in connection with the distribution of Shares and/or the servicing of Shareholders and/or the Fund (“Additional Compensation”). In return for the Additional Compensation, the Fund may receive certain marketing advantages including but not limited to access to a broker’s or dealer’s registered representatives, placement on a list of investment options offered by a broker or dealer, or the ability to assist in training and educating the broker’s or dealer’s registered representatives. The Additional Compensation may differ among brokers or dealers in amount or in the manner of calculation. Payments of Additional Compensation may be fixed dollar amounts or, based on the aggregate value of outstanding Shares held by Shareholders introduced by the broker or dealer, or determined in some other manner. The receipt of Additional Compensation by a selling broker or dealer may create potential conflicts of interest between an investor and its broker or dealer who is recommending the Fund over other potential investments.

In addition, Clearlake has engaged Vigilant Distributors, LLC, a registered broker-dealer, under which certain of Clearlake’s employees have or will serve as a registered representative and engage in marketing and/or selling activities with respect to the Shares.

The Fund’s Shares may be available through Selling Agents that have entered into Shareholder servicing arrangements with respect to the Fund.

These Selling Agents provide varying investment products, programs, platforms and accounts, through which investors may purchase Shares. Shareholder servicing arrangements typically include processing orders for shares, generating account and confirmation maintenance, tax reporting, collecting and posting distributions to investor accounts and disbursing cash dividends as well as other investment or administrative services required for the particular Selling Agent’s products, programs, platform and accounts. These Selling Agents may impose additional or different conditions than the Fund on purchases of Shares. They may also independently establish and charge their customers or program participants transaction fees, account fees and other amounts in connection with purchases of Shares in addition to any fees imposed by the Fund. These additional fees may vary and over time could increase the cost of an investment in the Fund and lower investment returns. Each Selling Agent is responsible for transmitting to its customers and program participants a schedule of any such fees and information regarding any additional or different conditions regarding purchases. Shareholders who are customers of these Selling Agents or participants in programs serviced by them should contact their Selling Agent for information regarding these fees and conditions.

 

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The Adviser and/or its affiliates may make payments to Selling Agents for the Shareholder services provided. These payments are made out of the Adviser’s own resources and not Fund assets. The actual services provided by these Selling Agents, and the payments made for such services, vary from firm to firm. The payments may be based on a fixed dollar amount for each account and position maintained by the Selling Agent and/or a percentage of the value of shares held by investors through the firm.

These payments may be material to Selling Agents relative to other compensation paid by the Fund, the Adviser and/or its affiliates and may be in addition to other fees and payments, such as distribution and/or service agency expenses, revenue sharing or “shelf space” fees and event support, compensation (described below). Also, the payments may vary from amounts paid to the Fund’s transfer agent for providing similar services to other accounts. The Adviser and/or its affiliates do not control these Selling Agents’ provision of the services for which they are receiving payments.

Some or all of the servicing fees described above are paid or “reallowed” to the Selling Agent, including the Selling Agents through which Shareholders purchase their Shares.

The Adviser and/or its affiliates may from time to time make payments and provide other incentives to selected Selling Agents as compensation for services such as providing the Fund with “shelf space” or a higher profile for the Selling Agents’ financial advisors and their customers, placing the Fund on the Selling Agents’ preferred or recommended fund list, granting the Adviser access to the Selling Agents’ financial advisors and furnishing marketing support and other specified services. These payments may be significant to the Selling Agents.

A number of factors will be considered in determining the amount of these payments to Selling Agents. On some occasions, such payments may be conditioned upon levels of sales, including the sale of a specified minimum dollar amount of the shares of the Fund, other funds sponsored by the Adviser and/or a particular class of shares, during a specified period of time. The Adviser and/or its affiliates may also make payments to one or more Selling Agents based upon factors such as the amount of assets a Selling Agent’s clients have invested in the Fund and the quality of the Selling Agent’s relationship with the Adviser and/or its affiliates.

To the extent the additional payments described above are made, such additional payments would be made from the Adviser’s and/or its affiliates’ own assets (and sometimes, therefore referred to as “revenue sharing”) pursuant to agreements with Selling Agents and would not change the price paid by investors for the purchase of the Fund’s Shares or the amount the Fund will receive as proceeds from such sales. These payments may be made to Selling Agents (as selected by the Adviser) that have sold significant amounts of Shares of the Fund.

The Adviser and/or its affiliates, and their respective employees and representatives may make payments or reimburse Selling Agents for sponsorship and/or attendance at conferences, seminars or informational meetings (“event support”), provide Selling Agents or their personnel with occasional tickets to events or other entertainment, meals, and small gifts compensation”) and make financial contributions pertaining to sales incentives and contests, each to the extent permitted by applicable law, rules and regulations.

In addition, wholesaler representatives of the Adviser and its affiliates visit Selling Agents on a regular basis to market and educate financial advisors and other personnel about the Fund. These payments, reimbursements and activities may provide additional access to financial advisors at these Selling Agents, which may increase purchases and/or reduce repurchases of Fund Shares.

The Adviser and/or its affiliates also may pay Selling Agents for certain services including technology, operations, tax, audit or data consulting services, and may pay such Selling Agents for the Adviser’s attendance at investment forums sponsored by such Selling Agents or for various studies, surveys, or access to databases.

 

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If investment advisers, distributors or affiliates of funds make payments and provide other incentives in differing amounts, Selling Agents and their financial advisors may have financial incentives for recommending a particular fund over other funds. In addition, depending on the arrangements in place at any particular time, a Selling Agent and its financial advisors may also have a financial incentive for recommending a particular share class over other share classes, to the extent applicable. A Shareholder who holds Shares through a Selling Agent should consult with the Shareholder’s financial advisor and review carefully any disclosure by the Selling Agent as to its compensation received by the financial advisor.

Although the Fund may use Selling Agents that sell Shares to effect transactions for its portfolio, the Fund and the Adviser will not consider the sale of Shares as a factor when choosing Selling Agents to effect those transactions.

Request for Multiple Copies of Shareholder Documents

To reduce expenses, it is intended that only one copy of the Fund’s prospectus and each annual and report, when available, will be mailed to those addresses shared by two or more accounts. Shareholders will receive the additional copy within 30 days after receipt of their request by the Fund. Alternatively, if a Shareholder’s shares are held through a financial institution, please contact the financial institution.

 

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FUND INTERVAL FUND STRUCTURE

The Fund is a management investment company (commonly referred to as a fund) that is operated as an interval fund. funds differ from funds (which are generally referred to as mutual funds) in that funds do not redeem their shares at the request of the Shareholder. This means that if Shareholders wish to sell their shares of a fund they must trade them on the stock exchange (if the fund’s shares are listed on an exchange) like any other stock at the prevailing market price at that time. In a mutual fund, if the Shareholder wishes to sell shares of the fund, the mutual fund will redeem or buy back the shares at NAV.

Also, mutual funds generally offer new shares on a continuous basis to new investors and funds generally do not. The continuous inflows and outflows of assets in a mutual fund can make it difficult to manage the Fund’s investments. By comparison, funds are generally able to stay more fully invested in securities that are consistent with their investment objectives and also have greater flexibility to make certain types of investments and to use certain investment strategies, such as financial leverage and investments in illiquid securities.

Unlike traditional listed funds which list their common shares for trading on a securities exchange, the Shares of the Fund are not listed on any securities exchange. Notwithstanding that the Fund is structured as an “interval fund” and conducts periodic repurchase offers, investors should not expect to be able to sell their Shares when and/or in the amount desired, regardless of how the Fund performs. The Fund is designed for long-term investors and an investment in the Shares, unlike an investment in a traditional listed fund, should be considered illiquid. Investors should consider that they may not have access to the money they invest. An investment in the Shares is not suitable for investors who need access to the money they invest.

Although the Fund’s Shareholders will have no right to redeem their Shares, the Fund conducts periodic repurchase offers as described below under “.” The Fund may also, from time to time, consider taking other corporate actions that the Board determines to be in the best interest of the Fund and its Shareholders. Depending on the circumstances, economic and market conditions, and the availability of suitable options and alternatives, these actions could include, for example, a sale of all or substantially all of the Fund’s assets either on a complete portfolio basis or individually followed by a liquidation, a merger of the Fund with another investment company, or converting the Fund into an fund. The Fund would consider a variety of factors in determining whether to pursue a corporate action such as any of the foregoing, including Shareholder feedback, the composition of its portfolio, portfolio performance, its financial condition, internal management considerations, existing economic and market conditions, the nature of available options and sales and repurchase trends with respect to the Shares. There can be no assurance that any such corporate action, even if considered, will be pursued or determined to be in the best interests of the Fund and its Shareholders. In addition, certain of these corporate actions would require the approval of the Fund’s Shareholders.

 

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PERIODIC REPURCHASE OFFERS AND TRANSFERS OF SHARES

No Right of Redemption

No Shareholder will have the right to require the Fund to redeem its Shares. No public market exists for the Shares, and none is expected to develop. Consequently, investors will not be able to liquidate their investment other than as a result of repurchases of Shares by the Fund, as described below.

Repurchase Offers

The Fund is an “interval fund,” a type of fund which, in order to provide liquidity to Shareholders, has adopted a fundamental investment policy to make semi-annual offers to repurchase between 5% and 25% of its outstanding Shares at NAV, pursuant to Rule under the 1940 Act, reduced by any applicable repurchase fee. Such policy may not be changed without the vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the 1940 Act).

Semi-annually, the Fund will offer to repurchase at NAV, less any repurchase fee (not to exceed 2% of the proceeds), no less than 5% and no more than 25% of the outstanding Shares of the Fund, unless such offer is suspended or postponed in accordance with regulatory requirements (as discussed below). Shareholders will be notified in writing of each semi-annual repurchase offer and the date the repurchase offer ends (the “Repurchase Request Deadline”). The NAV per share of repurchased Shares will be determined as of the close of regular trading on the NYSE on a day to be determined but no later than the 14th day after the Repurchase Request Deadline, or the next Business Day if the 14th day is not a Business Day (each a “Repurchase Pricing Date”).

Determination of Repurchase Offer Amount

The Board, in its sole discretion, will determine the number of Shares that the Fund will offer to repurchase (the “Repurchase Offer Amount”) for a given Repurchase Request Deadline. The Repurchase Offer Amount, however, will not be less than 5% and no more than 25% of the total number of Shares outstanding on the Repurchase Request Deadline. For each semi-annual repurchase offer, the Fund currently expects to offer to repurchase 5% of the Fund’s outstanding Shares (in the aggregate across all Share classes) at the NAV applicable to the class of Shares repurchased, which is the minimum amount permitted.

Notice to Shareholders

No less than 21 calendar days and no more than 42 calendar days before each Repurchase Request Deadline, the Fund will send to each Shareholder of record and to each beneficial owner of the shares that are the subject of the repurchase offer a notification (“Shareholder Notification”). The Shareholder Notification will contain information Shareholders should consider in deciding whether to tender their Shares for repurchase. The Shareholder Notification also will include the procedures on how to tender Shares for repurchase or withdraw or modify such tenders before the Repurchase Request Deadline, state the Repurchase Offer Amount and identify the dates of the Repurchase Request Deadline, the scheduled Repurchase Pricing Date, and the date by which the Fund will pay to Shareholders the repurchase proceeds (the “Repurchase Payment Deadline”). The Shareholder Notification also will set forth the NAV that has been computed no more than seven days before the date of notification, and how Shareholders may ascertain the NAV after the notification date. If a Shareholder fails to submit a repurchase request in good order by the Repurchase Request Deadline, the Shareholder will be unable to liquidate Shares until a subsequent repurchase offer, and will have to resubmit a repurchase request in the next repurchase offer. Shareholders may withdraw or change a repurchase request with a proper instruction submitted in good form at any point before the Repurchase Request Deadline.

Repurchase Price

The repurchase price of the Shares will be the Fund’s NAV of the applicable class as of the close of regular trading on the NYSE on the Repurchase Pricing Date.

 

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The Fund’s NAV can fluctuate daily, and the current NAV may differ from the NAV on the Repurchase Pricing Date. The notice of the repurchase offer also will provide information concerning the NAV, such as the NAV as of a recent date or a sampling of recent NAVs, and a toll-free number for information regarding the repurchase offer.

Repurchase Amounts and Payment of Proceeds

Shares tendered for repurchase by Shareholders prior to any Repurchase Request Deadline will be repurchased subject to the aggregate Repurchase Offer Amount established for that Repurchase Request Deadline. Payment pursuant to the repurchase offer will be made by check to the Shareholder’s address of record, or credited directly to a predetermined bank account on the date the payment is to be made, which will be no more than seven calendar days after the Repurchase Pricing Date. The Board may establish other policies for repurchases of Shares that are consistent with the 1940 Act, regulations thereunder and other pertinent laws.

There is no minimum number of Shares that must be tendered before the Fund will honor repurchase requests. If Shareholders tender for repurchase more than the Repurchase Offer Amount for a given repurchase offer, the Fund may, but is not required to, repurchase an additional number of Shares not to exceed 2% of the outstanding Shares of the Fund on the Repurchase Request Deadline. If the Fund determines not to repurchase more than the Repurchase Offer Amount, or if Shareholders tender Shares in an amount exceeding the Repurchase Offer Amount plus 2% of the outstanding Shares on the Repurchase Request Deadline, the Fund will repurchase the Shares on a pro rata basis, provided, that the Fund may accept all Shares tendered by persons who own, in the aggregate, fewer than 100 Shares and who tender all of their Shares, before prorating Shares tendered by others. Affiliates of the Fund may own Shares and determine to participate in the Fund’s repurchase offers, which may contribute to a repurchase offer being oversubscribed and the Fund effecting repurchases on a pro rata basis.

If any Shares tendered are not repurchased because of proration, Shareholders will have to wait until the next repurchase offer and resubmit a new repurchase request, and such repurchase request will not be given any priority over other Shareholders’ requests. Thus, there is a risk that the Fund may not purchase all of the Shares a Shareholder wishes to have repurchased in a given repurchase offer or in any subsequent repurchase offer. In anticipation of the possibility of proration, some Shareholders may tender more Shares than they wish to have repurchased in a particular repurchase period, increasing the likelihood of proration.

If a Shareholder’s Shares are accepted for repurchase, upon payment for such repurchased Shares, such Shares will no longer be considered outstanding and such shares will cease to have any voting rights. Shares tendered pursuant to a repurchase offer will earn dividends declared to Shareholders of record only through the date on which payment for repurchased Shares is made.

A Shareholder who tenders some but not all of its Shares for repurchase will be required to maintain a minimum account balance of 100 Shares. Such minimum ownership requirement may be waived by the Board, in its sole discretion. If such requirement is not waived by the Board, the Fund may redeem all of the Shareholder’s Shares. To the extent a Shareholder seeks to tender all of the Shares they own and the Fund repurchases less than the full amount of Shares that the Shareholder requests to have repurchased, the Shareholder may maintain a balance of less than 100 Shares following such Share repurchase.

Suspension or Postponement of a Repurchase Offer

The Fund may suspend or postpone a repurchase offer only: (i) if making or effecting the repurchase offer would cause the Fund to lose its status as a regulated investment company under the Code; (ii) for any period during which the NYSE or any market in which the securities owned by the Fund are principally traded is closed, other than customary weekend and holiday closings, or during which trading in such market is restricted; (iii) for any period during which an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable, or during which it is not reasonably practicable for the Fund fairly to determine the value of its net assets; or (iv) for such other periods as the SEC may by order permit for the protection of Fund

 

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Shareholders. The Fund or your financial intermediary will send you a notice if there is a suspension or postponement of a repurchase offer and if a repurchase offer is renewed after a suspension or postponement.

Liquidity Requirements

From the time that the notification is sent to Shareholders until the Repurchase Pricing Date, the Fund will ensure that a percentage of its net assets equal to at least 100% of the Repurchase Offer Amount consists of assets: (i) that can be sold or disposed of in the ordinary course of business at approximately the price at which the Fund has valued the investment within the time period between the Repurchase Request Deadline and the Repurchase Payment Deadline; or (ii) that mature by the next Repurchase Payment Deadline.

The Fund intends to finance repurchase offers with cash on hand, cash raised through borrowings, or the liquidation of portfolio securities. If the Fund is required to sell its more liquid, higher quality portfolio securities to purchase Shares that are tendered, remaining common Shareholders will be subject to increased risk and increased Fund expenses as a percentage of net assets. See “ .”

Early Repurchase Deduction

The Fund may impose a 2% Early Repurchase Deduction on Shares repurchased within one year. The holding period will be satisfied if at least one year has elapsed from (a) the issuance date of the applicable Shares to (b) the subscription date immediately following the Repurchase Pricing Date used in the repurchase of such Shares. Shareholders who are exchanging a class of the Fund’s Shares for an equivalent aggregate NAV of another class of the Fund’s Shares will not be subject to, and will not be treated as repurchases for the calculation of, the 5% semi-annual calculation on repurchases and will not be subject to the Early Repurchase Deduction. The Early Repurchase Deduction will be retained by the Fund for the benefit of remaining Shareholders.

The Fund may, from time to time, waive the Early Repurchase Deduction in the following circumstances: (i) with respect to repurchase requests submitted by discretionary model portfolio management programs (and similar arrangements); (ii) with respect to repurchase requests from feeder funds (or similar vehicles) primarily created to hold Shares, which are offered to non-U.S. persons, where such funds seek to avoid imposing such a deduction because of administrative or systems limitations; (iii) pursuant to an asset allocation program, wrap fee program or other investment program offered by a financial institution where investment decisions are made on a discretionary basis by investment professionals; and (iv) pursuant to an automatic non-discretionary rebalancing program. To the extent the Fund determines to waive, impose scheduled variations of, or eliminate an Early Repurchase Deduction, it will do so consistently with the requirements of Rule 22d-1 under the 1940 Act, and the Fund’s waiver of, scheduled variation in, or elimination of, the Early Repurchase Deduction will apply uniformly regardless of Share class to all Shareholders or transactions in the particular class specified.

Transfers of Shares

Any Shares held by a Shareholder may be transferred only (1) by operation of law pursuant to the death, bankruptcy, insolvency, adjudicated incompetence, or dissolution of the Shareholder or (2) with the written consent of the Board or its designated agents, which consent may be withheld in its or their sole discretion. Notice of a proposed transfer of Shares must be accompanied by properly completed subscription documents in respect of the proposed transferee. In connection with any request to transfer Shares, the Fund may require the Shareholder requesting the transfer to obtain, at the Shareholder’s expense, an opinion of counsel selected by the Board or its agents as to such matters as may reasonably be requested. Each Shareholder and transferee agrees to pay all expenses, including attorneys’ and accountants’ fees, incurred by the Fund in connection with any transfer.

 

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Any person becoming entitled to any Shares in consequence of operation of law pursuant to the death, bankruptcy, insolvency, adjudicated incompetence, or dissolution of the Shareholder, shall be recorded on the applicable register of Shares as the holder of such Shares upon production of the proper evidence thereof to the Trustees or a transfer agent of the Fund, but until such record is made, the Shareholder of record shall be deemed to be the holder of such for all purposes hereof, and neither the Trustees nor any transfer agent or registrar nor any officer or agent of the Fund shall be affected by any notice of such death, bankruptcy or incompetence, or other operation of law.

Redemption of Senior Securities; Tax Considerations; Fund Expenses

The Fund may not purchase Shares to the extent such purchases would result in the asset coverage with respect to any indebtedness or preferred equity being reduced below the asset coverage requirement set forth in the 1940 Act. Accordingly, in order to purchase all Shares tendered, the Fund may have to repay or redeem all or part of any then outstanding indebtedness or preferred equity to maintain the required asset coverage.

The repurchase of tendered Shares by the Fund is generally a taxable event to common Shareholders. See “.”

The Fund pays all costs and expenses associated with the making of any periodic repurchase offer. Selected securities dealers or other financial intermediaries may charge a processing fee to confirm a repurchase of Shares pursuant to a periodic repurchase offer.

 

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ERISA CONSIDERATIONS

Employee benefit plans and other plans subject to ERISA or the Code, including corporate savings and 401(k) plans, IRAs and Keogh Plans (each, an “ERISA Plan”) may purchase Shares. ERISA imposes certain general and specific responsibilities on persons who are fiduciaries with respect to an ERISA Plan, including prudence, diversification, prohibited transactions and other standards. Because the Fund is registered as an investment company under the 1940 Act, the underlying assets of the Fund will not be considered to be “plan assets” of any ERISA Plan investing in the Fund for purposes of the fiduciary responsibility and prohibited transaction rules under Title I of ERISA or Section 4975 of the Code. Thus, none of the Fund or the Adviser will be a fiduciary within the meaning of ERISA or Section 4975 of the Code with respect to the assets of any ERISA Plan that becomes a Shareholder, solely as a result of the ERISA Plan’s investment in the Fund.

The provisions of ERISA are subject to extensive and continuing administrative and judicial interpretation and review. The discussion of ERISA contained herein is, of necessity, general and may be affected by future publication of regulations and rulings. Potential investors should consult their legal advisers regarding the consequences under ERISA of an investment in the Fund through an ERISA Plan.

 

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DISTRIBUTIONS

The Fund intends to pay distributions on an annual basis. However, there can be no guarantee that the Fund will pay annual distributions consistently or at all. Any distributions the Fund makes will be at the discretion of our Board, considering factors such as our earnings, cash flow, capital and liquidity needs and general financial condition and the requirements of Delaware law. As a result, our distribution rates and payment frequency may vary from time to time.

Our Board’s discretion as to the payment of distributions will be directed, in substantial part, by its determination to cause us to comply with the RIC requirements. To qualify for and maintain its tax treatment as a RIC under the Code, among other requirements, the Fund intends to distribute at least 90% of its investment company income to its Shareholders. For any distribution, the Fund will calculate each Shareholder’s specific distribution amount for the period using record and declaration dates. From time to time, the Fund may also pay special interim distributions in the form of cash or Shares at the discretion of the Board.

The Fund cannot guarantee that it will make distributions. The Fund may finance its cash distributions to Shareholders from any sources of funds available to the Fund, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets (including fund investments), gains proceeds from the sale of assets (including fund investments), dividends or other distributions paid to the Fund on account of preferred and common equity investments by the Fund in Investment Funds and/or and expense reimbursements from the Adviser. The Fund has not established limits on the amount of funds the Fund may use from available sources to make distributions. The repayment of any amounts owed to the Adviser or its affiliates will reduce future distributions to which you would otherwise be entitled.

Each year a statement on IRS Form (or successor form), identifying the character (e.g., as ordinary dividend income, qualified dividend income or long-term capital gain) of the distributions, will be mailed to Shareholders. The Fund’s distributions may exceed the Fund’s earnings, especially during the period before the Fund has substantially invested the proceeds from this offering. As a result, a portion of the distributions the Fund makes may represent a return of capital for U.S. federal tax purposes. A return of capital generally is a return of your investment rather than a return of earnings or gains derived from the Fund’s investment activities and will be made after deduction of the fees and expenses payable in connection with the offering, including any fees payable to the Adviser. See “” for more information.

Shareholders will automatically have all distributions reinvested in Shares of the Fund issued by the Fund in accordance with the Fund’s dividend reinvestment plan unless an election is made to receive cash. See “.”

 

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