Filed Pursuant to Rule 424(b)(3)
Registration No. 333-253295
CNL STRATEGIC CAPITAL, LLC
SUPPLEMENT NO. 3 DATED MAY 24, 2024
TO THE PROSPECTUS DATED APRIL 22, 2024
We are providing this Supplement No. 3 to you in order to supplement our prospectus dated April 22, 2024 (as supplemented to date, the “Prospectus”). This supplement provides information that shall be deemed part of, and must be read in conjunction with, the Prospectus. Capitalized terms used in this supplement have the same meanings in the Prospectus unless otherwise stated herein. The terms “we,” “our,” “us” and “Company” refer to CNL Strategic Capital, LLC.
Before investing in our shares, you should read the entire Prospectus and this supplement, and consider carefully our investment objectives, risks, fees and expenses. You should also carefully consider the information disclosed in the section of the Prospectus captioned “Risk Factors” before you decide to invest in our shares.
The purpose of this supplement is to disclose the following:
| ● | the adjusted per share public offering price for each class of our shares; |
| ● | information about our distributions; |
| ● | the Company’s net asset value for the month ended April 30, 2024; |
| ● | certain return information for all outstanding classes of shares; and |
| ● | an update to Our Portfolio. |
Public Offering Price Adjustment
On May 24, 2024, the board of directors (the “Board”) approved the new per share public offering price for each share class in this offering. The new public offering prices will be effective as of May 31, 2024 and will be used for the Company’s next monthly closing for subscriptions on May 31, 2024. As of the date of this supplement, all references throughout the Prospectus to the per share public offering price for each share class available in this offering are hereby updated to reflect the new per share public offering prices stated in the table below. The purchase price for Class A, Class T, Class D, and Class I shares purchased under our distribution reinvestment plan will be equal to the net asset value per share for each share class as of April 30, 2024. The following table provides the new public offering prices and applicable upfront selling commissions and dealer manager fees for each share class available in this offering:
Class A | Class T | Class D | Class I | |
| Public Offering Price, Per Share | $37.08 | $35.71 | $33.67 | $34.44 |
| Selling Commissions, Per Share | $2.22 | $1.07 | ||
| Dealer Manager Fees, Per Share | $0.93 | $0.63 |
We have also posted this information on our website at www.cnlstrategiccapital.com. A subscriber may also obtain this information by calling us by telephone at (866) 650-0650.
Declaration of Distributions
The following table supplements the section entitled “Distribution Policy” which begins on page 54 of this Prospectus. On May 24, 2024, the Board declared cash distributions on the outstanding shares of all classes of our common shares based on a monthly record date, as set forth below:
Distribution Record Date | Distribution Payment Date | Declared Distribution Per Share for Each Share Class | ||||||||||||
| Class FA | Class A | Class T | Class D | Class I | Class S | |||||||||
| June 26, 2024 | June 27, 2024 | $0.104167 | $0.104167 | $0.083333 | $0.093750 | $0.104167 | $0.104167 | |||||||
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Determination of Net Asset Value for Outstanding Shares for the month ended April 30, 2024
On May 24, 2024, the Board determined the Company’s net asset value per share for each share class in a manner consistent with the Company’s valuation policy, as described under “Determination of Net Asset Value” in this Prospectus. This table provides the Company’s aggregate net asset value and net asset value per share for its Class FA, Class A, Class T, Class D, Class I, and Class S shares as of April 30, 2024 (in thousands, except per share data):
| Month Ended April 30, 2024 | Class FA | Class A |
Class T |
Class D | Class I |
Class S | Total | |||||||
| Net Asset Value | $152,923 | $205,092 | $87,241 | $94,103 | $446,896 | $66,104 | $1,052,359 | |||||||
| Number of Outstanding Shares | 4,107 | 6,044 | 2,565 | 2,795 | 12,975 | 1,746 | 30,232 | |||||||
| Net Asset Value, Per Share | $37.24 | $33.93 | $34.01 | $33.67 | $34.44 | $37.85 | ||||||||
| Net Asset Value, Per Share Prior Month | $37.20 | $33.94 | $33.99 | $33.68 | $34.44 | $37.80 | ||||||||
| Increase/Decrease in Net Asset Value, Per Share from Prior Month | $0.04 | ($0.01) | $0.02 | ($0.01) | – | $0.05 |
The change in the Company’s net asset value per share for each applicable share class for the month ended April 30, 2024 was primarily driven by the increases in the fair value of eight out of fourteen of the Company’s portfolio company investments. The fair value of six of the Company’s portfolio company investments decreased during the same period. As of April 30, 2024, the Company had total assets of approximately $1.069 billion.
Return Information
The following table illustrates year-to-date (“YTD”), trailing 12 months (“1-Year Return”), 3-Year Return, 5-Year Return, Average Annual Return (“AAR”) Since Inception, and cumulative total returns through April 30, 2024 (“Cumulative Total Return”), with and without upfront sales load, as applicable:
| YTD Return(1) | 1-Year Return(2) | 3-Year Return(3) | 5-Year Return(4) | AAR Since Inception(5) | Cumulative Total Return(5) | Cumulative Return Period | ||||||||
| Class FA (no sales load) | 2.6% | 8.7% | 29.8% | 68.6% | 14.4% | 89.6% | February 7, 2018 – April 30, 2024 | |||||||
| Class FA (with sales load) | -4.0% | 1.7% | 21.4% | 57.7% | 12.4% | 77.3% | February 7, 2018 – April 30, 2024 | |||||||
| Class A (no sales load) | 2.3% | 7.6% | 25.6% | 57.6% | 12.5% | 75.9% | April 10, 2018 – April 30, 2024 | |||||||
| Class A (with sales load) | -6.4% | -1.5% | 15.0% | 44.2% | 10.1% | 60.9% | April 10, 2018 – April 30, 2024 | |||||||
| Class I | 2.4% | 7.7% | 25.9% | 58.7% | 12.9% | 77.9% | April 10, 2018 – April 30, 2024 | |||||||
| Class T (no sales load) | 2.1% | 7.1% | 23.7% | 50.9% | 11.0% | 65.5% | May 25, 2018 – April 30, 2024 | |||||||
| Class T (with sales load) | -2.7% | 2.0% | 17.8% | 43.8% | 9.7% | 57.6% | May 25, 2018 – April 30, 2024 | |||||||
| Class D | 2.2% | 7.6% | 25.7% | 55.2% | 11.5% | 67.2% | June 26, 2018 – April 30, 2024 | |||||||
| Class S (no sales load) | 2.8% | 9.1% | 32.2% | N/A | 14.8% | 60.3% | March 31, 2020 – April 30, 2024 | |||||||
| Class S (with sales load) | -0.8% | 5.3% | 27.6% | N/A | 13.4% | 54.7% | March 31, 2020 – April 30, 2024 |
(1) For the period from January 1, 2024 through April 30, 2024.
(2) For the period from May 1, 2023 through April 30, 2024.
(3) For the period from May 1, 2021 through April 30, 2024.
(4) For the period from May 1, 2019 through April 30, 2024.
(5) For the period from the date the first share was issued for each respective share class through April 30, 2024. The AAR Since Inception is calculated by taking the Cumulative Total Return and dividing it by the return period.
Total return is calculated for each share class as the change in the net asset value for such share class during the period and assuming all distributions are reinvested. The Company’s performance changes over time and currently may be different than that shown above. Past performance is no guarantee of future results. For details regarding applicable sales load, please see the “Plan of Distribution” section in the Company’s Prospectus. Class I and Class D shares have no upfront sales load.
2
For the four month period ended April 30, 2024, sources of declared distributions on a GAAP basis were as follows:
Four Months Ended April 30, 2024 | ||||||||
Amount (in 000s) | % of Total Distributions Declared | |||||||
| Net investment income1 | $ | 6,213 | 52.6 | % | ||||
| Distributions in excess of net investment income2 | 5,606 | 47.4 | % | |||||
| Total distributions declared | $ | 11,819 | 100.0 | % | ||||
Cash distributions net of distributions reinvested during the period presented were funded from the following sources:
Four Months Ended April 30, 2024 | ||||||||
Amount (in 000s) | % of Cash Distributions Net of Distributions Reinvested | |||||||
| Net investment income before expense support (reimbursement) | $ | 5,600 | 88.2 | % | ||||
| Expense support (reimbursement) | 613 | 9.7 | % | |||||
| Net investment income | $ | 6,213 | 97.9 | % | ||||
| Cash distributions net of distributions reinvested in excess of net investment income2 | 132 | 2.1 | % | |||||
| Cash distributions net of distributions reinvested3 | $ | 6,345 | 100.0 | % | ||||
1 Net investment income includes expense support due from the Manager and Sub-Manager of $613 for the four months ended April 30, 2024.
2 Consists of distributions made from offering proceeds for the period presented.
3 For the four months ended April 30, 2024, excludes $5,474 of distributions reinvested pursuant to our distribution reinvestment plan.
For the years ended December 31, 2023, 2022, 2021, 2020, 2019, and 2018 distributions were paid from multiple sources and these sources included net investment income before expense support of 76.9%, 76.3%, 65.2%, 42.3%, 61.7% and 85.2%, reimbursable expense support of 0.0%, 0.0%, 0.0%, 33.2%, 23.5% and 11.1%, and offering proceeds of 23.1%, 23.7%, 34.8%, 24.5%, 14.8% and 3.7%, respectively. The Company will be required to repay expense support to the Manager and Sub-Manager in future periods which may reduce future income available for distributions, however as of the date of this supplement, management believes that reimbursement of all expense support is not probable under the terms of the Expense Support and Conditional Reimbursement Agreement. We have also posted this information on our website at www.cnlstrategiccapital.com. A subscriber may also obtain this information by calling us by telephone at (866) 650-0650. The calculation of the Company’s net asset value is a calculation of fair value of the Company’s assets less the Company’s outstanding liabilities.
Our Portfolio
The following disclosure is added as a new paragraph in the sub-section entitled “Growth Opportunities” under the section “Blue Ridge ESOP Associates” contained within the “Our Portfolio” section, which appears on page 100 of the Prospectus.
Blue Ridge ESOP Associates
Blue Ridge ESOP Associates acquired TSC 401K in May 2024. TSC 401K is a premier third-party administration firm that offers expert retirement plan consulting, design, and administration solutions for businesses and their financial advisors. We believe the acquisition further demonstrates Blue Ridge management’s initiative to extend its geographic footprint and offer its services and technical expertise to a broader customer base.
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