UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number811-23319
OFI Carlyle Private Credit Fund
(Exact name of registrant as specified in charter)
6803 S. Tucson Way
Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip Code)
Joseph Benedetti, Esq.
OC Private Capital, LLC
225 Liberty Street
New York, New York 10281-1008
(Name and address of agent for service)
Registrant’s telephone number, including area code: (303)768-3200
Date of fiscal year end: December 31
Date of reporting period: December 31, 2018
Item 1. Reports to Stockholders.
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940 (17 CFR270.30e-1).
Annual Report | 12/31/2018 |
Class | Ticker | Inception Date | Class Since Inception Return | 50% Bloomberg US Corporate HighYield Bond / 50% S&P/LSTA Leveraged Loan Return2 |
I Share | OCPIX | 9/4/2018 | -1.54% | -3.42% |
A Share | OCPAX | 6/4/2018 | -1.69% | -1.85% |
A Share with 3.5% Sales Load1 | OCPAX | 6/4/2018 | -5.10% | -1.85% |
Y Share | OCPYX | 9/4/2018 | -1.58% | -3.42% |
L Share | OCPLX | 9/4/2018 | -1.67% | -3.42% |
L Share with 3.5% Sales Load1 | OCPLX | 9/4/2018 | -5.09% | -3.42% |
2. The benchmark is an equal weighting of 50%/50%. The S&P/LSTA Leveraged Loan Index is a market value-weighted index designed to measure the performance of the U.S. leveraged loan market based upon market weightings, spreads and interest payments. New issues are added to the index if they qualify according to the following criteria: loan facilities must be senior secured; minimum initial term of one year; US dollar denominated; minimum initial spread of LIBOR + 125 basis points; $50M initially funded loans. The Bloomberg Barclays US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on Barclays EM country definition, are excluded. Indices are unmanaged, include reinvested income and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the return of any investment. Past performance does not guarantee future results.
Top Ten Industries | |
Media | 23.4% |
Professional Services | 22.8 |
Software | 13.9 |
Aerospace & Defense | 12.9 |
Collateralized Loan Obligations | 12.9 |
Health Care Equipment & Supplies | 8.1 |
Air Freight & Logistics | 7.5 |
Energy Equipment & Services | 5.9 |
Electric Utilities | 5.7 |
Wireless Telecommunication Services | 5.6 |
Top Ten Holdings | |
Urban One, Inc., Term Loan | 13.5% |
Analogic Corporation, Term Loan, Unitranche | 7.3 |
Gruden Acquisition, Inc., Term Loan | 5.8 |
Moxie Patriot LLC, Term Loan, Tranche B1 | 5.7 |
DTI Holdco, Inc., Term Loan, Tranche B | 5.4 |
IQOR US, Inc., Term Loan, Tranche B | 5.2 |
Sapphire Telecom, Inc., Term Loan | 4.9 |
Avenu Holdings LLC, Term Loan | 4.4 |
Brave Parent Holdings, Inc., Term Loan | 4.2 |
IQOR US, Inc., Term Loan, Tranche A1 | 3.9 |
Investments | Interest Rate | Maturity Date | Par/ Principal Amount | Fair Value |
Corporate Loans (129.1%)1 | ||||
First Lien Debt (81.6%) | ||||
Aerospace & Defense (4.2%) | ||||
Allied Universal Holdco LLC, Term Loan2,3,4 | LIBOR12 + 375, 6.272% | 7/28/2022 | $1,833,964 | $1,745,017 |
Constellis Holdings LLC, Term Loan2,3,4 | LIBOR12 + 500, 7.522% | 4/21/2024 | 1,984,887 | 1,905,491 |
3,650,508 | ||||
Air Freight & Logistics (1.7%) | ||||
Trump Card LLC | ||||
Term Loan, Tranche A2,3,4,5 | LIBOR4 + 500, 7.803% | 4/21/2022 | 1,411,459 | 1,383,797 |
Revolver5,6 | 0.500% | 4/21/2022 | 95,307 | 93,439 |
1,477,236 | ||||
Electric Utilities (5.7%) | ||||
Moxie Patriot LLC, Term Loan, Tranche B12,3,4 | LIBOR4 + 575, 8.553% | 12/19/2020 | 4,961,929 | 4,868,918 |
Energy Equipment & Services (4.8%) | ||||
McDermott Technology Americas, Inc., Term Loan4,7 | LIBOR12 + 500, 7.522% | 5/10/2025 | 2,000,000 | 1,872,500 |
NES Global Talent Finance US LLC, Term Loan, Tranche B2,3,4 | LIBOR4 + 550, 8.027% | 5/11/2023 | 2,228,398 | 2,233,969 |
4,106,469 | ||||
Health Care Equipment & Supplies (8.0%) | ||||
Analogic Corporation | ||||
Term Loan, Unitranche2,3,4,5 | LIBOR12 + 600, 8.522% | 6/22/2024 | 6,479,517 | 6,254,004 |
Revolver5,6 | 0.500% | 6/22/2023 | 618,643 | 597,112 |
6,851,116 | ||||
Health Care Providers & Services (2.2%) | ||||
Global Medical Response, Inc., Term Loan, Tranche B22,3,4 | LIBOR12 + 425, 6.754% | 3/14/2025 | 1,994,962 | 1,863,863 |
Internet Software & Services (1.3%) | ||||
Internap Corporation, Term Loan4 | LIBOR12 + 575, 8.190% | 4/6/2022 | 1,179,848 | 1,144,453 |
IT Services (3.6%) | ||||
Evergreen Services Group LLC, Term Loan2,3,4,5 | LIBOR12 + 600, 8.522% | 6/6/2023 | 1,140,684 | 1,116,508 |
GI Revelation Acquisition LLC, Term Loan2,3,4 | LIBOR12 + 500, 7.522% | 4/16/2025 | 1,994,988 | 1,967,556 |
3,084,064 | ||||
Media (9.9%) | ||||
Altice France S.A., Term Loan, Tranche B132,3,4 | LIBOR12 + 400, 6.455% | 8/14/2026 | 2,000,000 | 1,894,580 |
Investments | Interest Rate | Maturity Date | Par/ Principal Amount | Fair Value |
Media (Continued) | ||||
Northland Cable Television, Inc. | ||||
Term Loan2,3,4,5 | LIBOR12 + 575, 8.100% | 10/1/2025 | $3,245,756 | $3,133,985 |
Revolver5,6 | 0.500% | 10/1/2024 | 255,350 | 246,557 |
Radio One, Inc., Term Loan, Tranche B2,3,4 | LIBOR12 + 400, 6.530% | 4/18/2023 | 234,899 | 226,384 |
Urban One Entertainment SPV LLC, Term Loan8 | 7.00% + 4.000% PIK | 12/31/2022 | 3,103,789 | 3,041,713 |
8,543,219 | ||||
Pharmaceuticals (2.2%) | ||||
Schenectady International Group, Inc., Term Loan2,3,4 | LIBOR4 + 475, 7.186% | 10/15/2025 | 2,000,000 | 1,930,000 |
Professional Services (22.8%) | ||||
Alorica, Inc., Term Loan, Tranche A14,7 | LIBOR12 + 375, 6.272% | 6/30/2021 | 3,316,550 | 3,283,385 |
Avenu Holdings LLC, Term Loan2,3,4,5 | LIBOR4 + 525, 7.869% | 9/28/2023 | 3,905,653 | 3,791,088 |
DTI Holdco, Inc., Term Loan, Tranche B2,3,4 | LIBOR4 + 475, 7.277% | 9/30/2023 | 4,961,889 | 4,654,872 |
IQOR US, Inc. | ||||
Term Loan, Tranche B2,3,4 | LIBOR4 + 500, 7.398% | 4/1/2021 | 4,961,140 | 4,489,832 |
Term Loan, Tranche A12,3,4,5 | LIBOR6 + 550, 7.897% | 4/1/2021 | 3,500,000 | 3,365,379 |
19,584,556 | ||||
Semiconductors & Semiconductor Equipment (2.0%) | ||||
Bright Bidco B.V. | ||||
Term Loan, Tranche B2,3,4 | LIBOR12 + 350, 6.022% | 6/30/2024 | 646,251 | 548,101 |
Term Loan, Tranche B2,3,4 | LIBOR4 + 350, 6.303% | 6/30/2024 | 1,348,724 | 1,143,887 |
1,691,988 | ||||
Software (7.6%) | ||||
Chemical Computing Group | ||||
Term Loan, Tranche A2,3,4,5 | LIBOR12 + 550, 8.022% | 8/30/2023 | 2,369,133 | 2,305,397 |
Revolver5,6 | 0.500% | 8/30/2023 | 135,379 | 131,737 |
Exela Intermediate LLC | ||||
Term Loan2,3,4 | LIBOR4 + 650, 9.295% | 7/12/2023 | 6,369 | 6,308 |
Term Loan2,3,4 | LIBOR2 + 650, 9.378% | 7/12/2023 | 980,892 | 971,490 |
iCIMS, Inc. | ||||
Term Loan4,5 | LIBOR12 + 650, 8.940% | 9/12/2024 | 3,003,755 | 2,921,650 |
Revolver5,6 | 0.500% | 9/12/2024 | 187,735 | 182,603 |
6,519,185 | ||||
Wireless Telecommunication Services (5.6%) | ||||
Sapphire Telecom, Inc. | ||||
Term Loan2,3,4,5 | LIBOR4 + 525, 7.895% | 11/20/2025 | 4,329,835 | 4,169,242 |
Revolver5,6 | 0.500% | 11/20/2023 | 679,190 | 653,999 |
4,823,241 | ||||
Total First Lien Debt (Cost $72,461,220) | 70,138,816 |
Investments | Interest Rate | Maturity Date | Par/ Principal Amount | Fair Value |
Second Lien Debt (34.0%) | ||||
Aerospace & Defense (8.7%) | ||||
Amynta Agency Borrower, Inc., Term Loan4 | LIBOR12 + 850, 11.022% | 3/2/2026 | $1,500,000 | $1,485,000 |
Jazz Acquisition, Inc., Term Loan2,3,4 | LIBOR4 + 675, 9.553% | 6/19/2022 | 3,250,000 | 3,038,750 |
WP CPP Holdings LLC, Term Loan2,3,4 | LIBOR4 + 775, 10.280% | 4/30/2026 | 3,000,000 | 2,953,125 |
7,476,875 | ||||
Air Freight & Logistics (5.8%) | ||||
Gruden Acquisition, Inc., Term Loan4 | LIBOR4 + 850, 11.303% | 8/18/2023 | 5,000,000 | 5,012,500 |
Capital Markerts (2.9%) | ||||
Aretec Group, Inc., Term Loan2,3,4 | LIBOR12 + 825, 10.772% | 10/1/2026 | 2,500,000 | 2,487,500 |
Chemicals (1.9%) | ||||
Vantage Specialty Chemicals, Inc., Term Loan2,3,4 | LIBOR4 + 825, 10.777% | 10/27/2025 | 1,662,357 | 1,631,878 |
Energy Equipment & Services (1.1%) | ||||
Comet Acquisition, Inc., Term Loan2,3,4,5 | LIBOR4 + 750, 10.277% | 10/26/2026 | 1,000,000 | 968,777 |
Food Products (3.8%) | ||||
Ultimate Baked Goods Midco LLC, Term Loan2,3,4,5 | LIBOR12 + 800, 10.522% | 8/9/2026 | 3,333,333 | 3,233,913 |
Insurance (3.5%) | ||||
Asurion LLC, Term Loan2,3,4 | LIBOR12 + 650, 9.022% | 8/4/2025 | 3,000,000 | 2,975,640 |
Software (6.3%) | ||||
Brave Parent Holdings, Inc., Term Loan4,5 | LIBOR12 + 750, 10.023% | 4/17/2026 | 3,812,317 | 3,614,568 |
Dynatrace LLC, Term Loan2,3,4 | LIBOR12 + 700, 9.522% | 8/21/2026 | 1,823,529 | 1,802,249 |
5,416,817 | ||||
Total Second Lien Debt (Cost $29,596,372) | 29,203,900 | |||
Unsecured (13.5%) | ||||
Media (13.5%) | ||||
Urban One, Inc., Term Loan (Cost $11,663,637) | 12.875% | 12/31/2022 | 11,900,000 | 11,662,000 |
Total Corporate Loans (Cost $113,721,229) | 111,004,716 | |||
Collateralized Loan Obligations (12.9%)1 | ||||
Barings CLO Ltd., Series 2017-1A, Class F4,9 | LIBOR4 + 745, 9.895% | 7/18/2029 | 2,500,000 | 2,259,140 |
CIFC Funding Ltd., Series 2014-2RA, Class B22,3,4,9 | LIBOR4 + 569, 8.177% | 4/24/2030 | 3,500,000 | 3,129,154 |
Dryden 41 Senior Loan Fund, Series 2015-41A, Class ER2,3,4,9 | LIBOR4 + 530, 7.736% | 4/15/2031 | 1,265,000 | 1,110,958 |
Long Point Park CLO Ltd., Series 2017-1A, Class D22,3,4,9 | LIBOR4 + 560, 8.049% | 1/17/2030 | 3,000,000 | 2,709,750 |
Symphony CLO XVI Ltd., Series 2015-16A, Class ER2,3,4,9 | LIBOR4 + 610, 8.45% | 10/15/2031 | 2,000,000 | 1,847,366 |
Total Collateralized Loan Obligations (Cost $12,126,188) | 11,056,368 |
Shares | FairValue | |||
Common Stock (0.1%)1 | ||||
Health Care Equipment & Supplies (0.1%) | ||||
ANLG Holdings, LLC5,10 | 64,683 | $66,062 | ||
Professional Services (0.0%) | ||||
Avenu Holdings LLC5,10 | 21,552 | 20,095 | ||
Total Common Stock (Cost $86,235) | 86,157 | |||
Total Investments, at Value (Cost $125,933,652) | 142.1% | 122,147,241 | ||
Net Other Assets (Liabilities) | (42.1)% | (36,198,956) | ||
Net Assets | 100.0% | $85,948,285 |
Footnotes to Consolidated Statement of Investments |
1. All of the Fund's Senior Loans and Collateralized Loan Obligations, Common Stocks, Corporate Bonds issued as 144A, Private Asset Backed Debt, Real Estate Debt and Warrants, if applicable, which as of December 31, 2018 represented 142.1% of the Fund's net assets or 95.6% of the Fund's total assets, are subject to legal restrictions on sales. |
2. All or a portion of the security position has been segregated for collateral to cover borrowings. See Note 9 of the accompanying Notes. |
3. All or a portion of this security is owned by the Subsidiary. See Note 2 of the accompanying Consolidated Notes. |
4. Represents the interest rate for a variable or increasing rate security, determined as [Reference Rate + Basis-point spread]. Stated interest rate represents the "all-in" rate as of December 31, 2018. |
5. The value of this security was determined using significant unobservable inputs. See Note 3 of the accompanying Consolidated Notes. |
6. Security is an unfunded loan commitment. See Note 9 of the accompanying Consolidated Notes. |
7. All or a portion of the security position will settle, after period end, in the ordinary course on a settlement date beyond the period expected by loan market participants and is subject to delayed compensation. The rate shown is the contractual interest rate. See Note 4 of the accompanying Consolidated Notes. |
8. Interest is paid-in-kind (PIK), when applicable. |
9. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities amount to $11,056,368 or 12.90% of the Fund's net assets at period end. |
10. Non-income producing security. |
Definitions | |
LIBOR12 | London Interbank Offered Rate-Monthly |
LIBOR4 | London Interbank Offered Rate-Quarterly |
LIBOR6 | London Interbank Offered Rate-Semi-Annually |
SPV | Special Purpose Vehicle |
Assets | |
Investments, at value (cost $125,933,652)—see accompanying consolidated statement of investments | $122,147,241 |
Cash | 1,129,545 |
Receivables and other assets: | |
Investments sold | 2,803,083 |
Interest | 859,634 |
Adviser reimbursement | 599,506 |
Deferred offering costs | 163,634 |
Other | 72,158 |
Total assets | 127,774,801 |
Liabilities | |
Payables and other liabilities: | |
Payable for borrowings | 30,600,000 |
Investments purchased | 7,803,122 |
Income distribution payable | 2,473,419 |
Management fees | 487,797 |
Interest payable on borrowings | 121,758 |
Shareholder communications | 61,870 |
Trustees' compensation and expenses | 32,697 |
Transfer agent fees | 10,599 |
Distribution and shareholder service plan fees | 7 |
Other | 235,247 |
Total liabilities | 41,826,516 |
Net Assets | $85,948,285 |
Composition of Net Assets | |
Par value of shares of beneficial interest | 8,976 |
Additional paid-in capital | 89,773,735 |
Accumulated deficit | (3,834,426) |
Net Assets | $85,948,285 |
Net Asset Value per Share | |
Class A Shares: | |
Net asset value and redemption price per share (based on net assets of $9,580 and 999 shares of beneficial interest outstanding) | $9.59 |
Maximum offering price per share (net asset value plus sales charge of 3.50% of offering price) | $9.94 |
Class I Shares: | |
Net asset value and redemption price per share (based on net assets of $85,824,673 and 8,963,179 shares of beneficial interest outstanding) | $9.58 |
Class L Shares: | |
Net asset value and redemption price per share (based on net assets of $9,580 and 999 shares of beneficial interest outstanding) | $9.59 |
Maximum offering price per share (net asset value plus sales charge of 3.50% of offering price) | $9.94 |
Class Y Shares: | |
Net asset value and redemption price per share (based on net assets of $104,452 and 10,920 shares of beneficial interest outstanding) | $9.57 |
Investment Income | |
Interest | $3,704,360 |
Other income | 210,000 |
Total investment income | 3,914,360 |
Expenses | |
Management fees | 618,394 |
Incentive fees | 378,299 |
Distribution and service plan fees: | |
Class A1 | 108,256 |
Class L2 | 16 |
Class Y2 | 46 |
Transfer and shareholder servicing agent fees: | |
Class A1 | 32,792 |
Class I2 | 26,083 |
Class L2 | 3 |
Class Y2 | 5 |
Shareholder communications: | |
Class A1 | 16,399 |
Class I2 | 44,584 |
Class L2 | 5 |
Class Y2 | 41 |
Interest expense and fees on borrowings | 199,959 |
Legal, auditing and other professional fees | 1,072,995 |
Custodian fees and expenses | 133,000 |
Trustees' compensation and expenses | 95,391 |
Other expenses | 138,773 |
Total expenses | 2,865,041 |
Less waivers and reimbursements of expenses | (1,328,545) |
Net expenses | 1,536,496 |
Net Investment Income | 2,377,864 |
Realized and Unrealized Gain (Loss) | |
Net realized loss on investment transactions | (60,778) |
Net change in unrealized appreciation/depreciation in investment transactions | (3,786,411) |
Net Decrease in Net Assets Resulting from Operations | $(1,469,325) |
1. For the period from June 4, 2018 (commencement of operations) to December 31, 2018. |
2. For the period from September 4, 2018 (inception of offering) to December 31, 2018. |
Period Ended December 31, 20181 | |
Operations | |
Net investment income | $2,377,864 |
Net realized loss | (60,778) |
Net change in unrealized appreciation/depreciation | (3,786,411) |
Net decrease in net assets resulting from operations | (1,469,325) |
Dividends and/or Distributions to Shareholders | |
Class A1 | (241) |
Class I2 | (2,469,848) |
Class L2 | (253) |
Class Y2 | (3,077) |
Total Dividends and/or Distributions to Shareholders | (2,473,419) |
Beneficial Interest Transactions | |
Net increase (decrease) in net assets resulting from beneficial interest: | |
Class A1 | (113,868) |
Class I2 | 89,784,897 |
Class L2 | 10,000 |
Class Y2 | 110,000 |
Net increase in Beneficial Interest Transactions | 89,791,029 |
Net Assets | |
Total increase | 85,848,285 |
Beginning of period | 100,0003 |
End of period | $85,948,285 |
1. For the period from June 4, 2018 (commencement of operations) to December 31, 2018. |
2. For the period from September 4, 2018 (inception of offering) to December 31, 2018. |
3. Reflects the value of OppenheimerFunds, Inc.'s seed capital invested on May 7, 2018. |
Cash Flows from Operating Activities | |
Net decrease in net assets from operations | $(1,469,325) |
Adjustments to reconcile net decrease in net assets from operations to net cash used in operating activities: | |
Purchase of investment securities | (131,234,114) |
Proceeds from disposition of investment securities | 5,292,544 |
Premium amortization | 9,341 |
Discount accretion | (62,201) |
Net realized loss on investment transactions | 60,778 |
Net change in unrealized appreciation/depreciation on investment transactions | 3,786,411 |
Change in assets: | |
Increase in other assets | (72,158) |
Increase in interest receivable | (859,634) |
Increase in receivable for securities sold | (2,803,083) |
Increase in adviser reimbursement | (599,506) |
Increase in deferred offering costs | (163,634) |
Change in liabilities: | |
Increase in other liabilities | 949,975 |
Increase in payable for securities purchased | 7,803,122 |
Net cash used in operating activities | (119,361,484) |
Cash Flows from Financing Activities | |
Proceeds from borrowings | 64,600,000 |
Payments on borrowings | (34,000,000) |
Proceeds from shares sold | 149,994,926 |
Payments on shares redeemed | (60,203,897) |
Net cash provided by financing activities | 120,391,029 |
Net increase in cash | 1,029,545 |
Cash, beginning balance | 100,000 |
Cash, ending balance | $1,129,545 |
Supplemental disclosure of cash flow information: | |
Noncash financing activities not included herein consist of reinvestment of dividends and distributions of $2,473,419 | |
Cash paid for interest on borrowings—$78,201 |
Class A | Period Ended December 31, 20181 |
Per Share Operating Data | |
Net asset value, beginning of period | $10.00 |
Income (loss) from investment operations: | |
Net investment income2 | 0.20 |
Net realized and unrealized loss | (0.37) |
Total from investment operations | (0.17) |
Dividends and/or distributions to shareholders: | |
Dividends from net investment income | (0.24) |
Total Dividends and/or distributions to shareholders: | (0.24) |
Net asset value, end of period | $9.59 |
Total Return, at Net Asset Value | (1.69)% |
Ratios/Supplemental Data | |
Net assets, end of period (in thousands) | $10 |
Average net assets (in thousands) | $22,478 |
Ratios to average net assets:3 | |
Net investment income | 3.60% |
Expenses, before waivers and reimbursements of expenses, excluding specific expenses listed below | 6.53% |
Interest and fees from borrowings | 0.41% |
Deal and incentive fees | 0.00%4 |
Total expenses | 6.94% |
Expenses after waivers and reimbursements of expenses5 | 3.50% |
Portfolio turnover rate | 6% |
1.For the period from June 4, 2018 (commencement of operations) to December 31, 2018. |
2.Per share amounts calculated based on the average shares outstanding during the period. |
3.Annualized for periods less than one full year. |
4.Less than 0.005%. |
5.Expenses after waivers and reimbursements of expenses, excluding interest and fees from borrowings, distribution and shareholder service fees, and deal and incentive fees, was 2.25% of net assets on an annualized basis. |
Class I | Period Ended December 31, 20181 |
Per Share Operating Data | |
Net asset value, beginning of period | $10.00 |
Income (loss) from investment operations: | |
Net investment income2 | 0.22 |
Net realized and unrealized loss | (0.36) |
Total from investment operations | (0.14) |
Dividends and/or distributions to shareholders: | |
Dividends from net investment income | (0.28) |
Total Dividends and/or distributions to shareholders: | (0.28) |
Net asset value, end of period | $9.58 |
Total Return, at Net Asset Value | (1.54)% |
Ratios/Supplemental Data | |
Net assets, end of period (in thousands) | $85,825 |
Average net assets (in thousands) | $84,627 |
Ratios to average net assets:3 | |
Net investment income | 6.76% |
Expenses, before waivers and reimbursements of expenses, excluding specific expenses listed below | 5.16% |
Interest and fees from borrowings | 0.51% |
Deal and incentive fees | 1.25% |
Total expenses | 6.92% |
Expenses after waivers and reimbursements of expenses4 | 3.83% |
Portfolio turnover rate | 6% |
1.For the period from September 4, 2018 (inception of offering) to December 31, 2018. |
2.Per share amounts calculated based on the average shares outstanding during the period. |
3.Annualized for periods less than one full year. |
4.Expenses after waivers and reimbursements of expenses, excluding interest and fees from borrowings, distribution and shareholder service fees, and deal and incentive fees, was 2.07% of net assets on an annualized basis. |
Class L | Period Ended December 31, 20181 |
Per Share Operating Data | |
Net asset value, beginning of period | $10.00 |
Income (loss) from investment operations: | |
Net investment income2 | 0.21 |
Net realized and unrealized loss | (0.37) |
Total from investment operations | (0.16) |
Dividends and/or distributions to shareholders: | |
Dividends from net investment income | (0.25) |
Total Dividends and/or distributions to shareholders: | (0.25) |
Net asset value, end of period | $9.59 |
Total Return, at Net Asset Value | (1.67)% |
Ratios/Supplemental Data | |
Net assets, end of period (in thousands) | $10 |
Average net assets (in thousands) | $10 |
Ratios to average net assets:3 | |
Net investment income | 6.41% |
Expenses, before waivers and reimbursements of expenses, excluding specific expenses listed below | 120.46% |
Interest and fees from borrowings | 0.51% |
Deal and incentive fees | 1.18% |
Total expenses | 122.15% |
Expenses after waivers and reimbursements of expenses4 | 4.20% |
Portfolio turnover rate | 6% |
1.For the period from September 4, 2018 (inception of offering) to December 31, 2018. |
2.Per share amounts calculated based on the average shares outstanding during the period. |
3.Annualized for periods less than one full year. |
4.Expenses after waivers and reimbursements of expenses, excluding interest and fees from borrowings, distribution and shareholder service fees, and deal and incentive fees, was 2.00% of net assets on an annualized basis. |
Class Y | Period Ended December 31, 20181 |
Per Share Operating Data | |
Net asset value, beginning of period | $10.00 |
Income (loss) from investment operations: | |
Net investment income2 | 0.22 |
Net realized and unrealized loss | (0.37) |
Total from investment operations | (0.15) |
Dividends and/or distributions to shareholders: | |
Dividends from net investment income | (0.28) |
Total Dividends and/or distributions to shareholders: | (0.28) |
Net asset value, end of period | $9.57 |
Total Return, at Net Asset Value | (1.58)% |
Ratios/Supplemental Data | |
Net assets, end of period (in thousands) | $104 |
Average net assets (in thousands) | $59 |
Ratios to average net assets:3 | |
Net investment income | 6.42% |
Expenses, before waivers and reimbursements of expenses, excluding specific expenses listed below | 25.58% |
Interest and fees from borrowings | 0.68% |
Deal and incentive fees | 2.25% |
Total expenses | 28.51% |
Expenses after waivers and reimbursements of expenses4 | 5.17% |
Portfolio turnover rate | 6% |
1.For the period from September 4, 2018 (inception of offering) to December 31, 2018. |
2.Per share amounts calculated based on the average shares outstanding during the period. |
3.Annualized for periods less than one full year. |
4.Expenses after waivers and reimbursements of expenses, excluding interest and fees from borrowings, distribution and shareholder service fees, and deal and incentive fees, was 2.00% of net assets on an annualized basis. |
Total market value of investments | $90,159,066 |
Net assets | $55,542,195 |
Net income (loss) | $2,330,323 |
Net realized gain (loss) | $1,204 |
Net change in unrealized appreciation/depreciation | $(3,421,444) |
Total Distributable Earnings | Accumulated Loss Carryforward | Net Unrealized Depreciation Based on cost of Securities and Other Investments for Federal Income Tax Purposes |
$16,627 | $60,778 | $(3,790,274) |
Reduction to Paid-in Capital | Increase to Accumulated Loss |
$108,318 | $108,318 |
Period Ended December 31, 2018 | |
Distributions paid from: | |
Dividends to shareholders | $2,473,419 |
Federal tax cost of securities | $125,937,515 |
Gross unrealized appreciation | $32,723 |
Gross unrealized depreciation | (3,822,997) |
Net unrealized depreciation | $(3,790,274) |
Level 1— Unadjusted Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Value | |
Assets Table Investments, at Value: | ||||
Corporate Loans | $— | $72,840,961 | $38,163,755 | $111,004,716 |
Collateralized Loan Obligations | — | 11,056,368 | — | 11,056,368 |
Common Stock | — | — | 86,157 | 86,157 |
Total Assets | $— | $83,897,329 | $38,249,912 | $122,147,241 |
Value as of June 4, 2018 | Realized gain (loss) | Change in unrealized appreciation/ depreciation | Accretion/ (amortization) of premium/ discount | |
Assets Table Investments, at Value: | ||||
Corporate Loans | $— | $775 | $(655,278) | $36,107 |
Common Stock | — | — | (78) | — |
Total Assets | $— | $775 | $(655,356) | $36,107 |
Purchases | Sales | Transfers into Level 3 | Transfers out of Level 3 | Value as of December 31, 2018 | |
Assets Table Investments, at Value: | |||||
Corporate Loans | $38,837,285 | $(55,134) | $— | $— | $38,163,755 |
Common Stock | 86,235 | — | — | — | 86,157 |
Total Assets | $38,923,520 | $(55,134) | $— | $— | $38,249,912 |
Value as of December 31, 2018 | Valuation Technique | Unobservable Input | Range of Unobservable Inputs | ||
Assets Table Investments, at Value: | |||||
Corporate Loans | 38,163,755 | Discounted Cashflow | Discount Rate, Enterprise Value Multiple, Leverage Multiple | 7.6% - 12.8%, 7.5x - 16.0x, 2.3x - 6.9x | |
Common Stock | 86,157 | Market Approach | Enterprise Value Multiple | 8.0x - 9.0x |
Period Ended December 31, 2018 | ||
Shares | Amount | |
Class A1,2 | ||
Sold | 6,008,013 | $60,090,029 |
Repurchased | (6,017,014) | (60,203,897) |
Net decrease | (9,001) | $(113,868) |
Class I3 | ||
Sold | 8,963,179 | $89,784,897 |
Net increase | 8,963,179 | $89,784,897 |
Class L3 | ||
Sold | 999 | $10,000 |
Net increase | 999 | $10,000 |
Class Y3 | ||
Sold | 10,920 | $110,000 |
Net increase | 10,920 | $110,000 |
1. For the period from June 4, 2018 (commencement of operations) to December 31, 2018. |
2. The Fund sold 10,000 Class A shares at a value of $100,000 to OFI upon seeding of the Fund on May 7, 2018. These amounts are not reflected in the table above. |
3. For the period from September 4, 2018 (inception of offering) to December 31, 2018. |
Purchases | Sales | |
Investment securities | $131,234,114 | $5,292,544 |
Average Outstanding Loan Balance Under the Facility | $5,882,888 |
Average Interest Rate of Outstanding Loan Balance (including the effect of commitment fees) | 6.5435% |
Pay Date | Net Income | Net Profit from Sale | Other Capital Sources |
1/17/19 | 96.1% | 0.0% | 3.9% |
Name, address(1) age | Position(s) Held with the Trust | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | |||||
Interested Trustee(2) | ||||||||||
Kamal Bhatia (1972) | Trustee | Indefinite Length – Since Inception | Senior Vice President, OppenheimerFunds. Distributor, Inc. | 1 | None | |||||
Independent Trustees | ||||||||||
Mark Garbin (1951) | Trustee | Indefinite Length – Since Inception | Managing Principal, Coherent Capital Management LLC (since 2008) | 1 | Independent Trustee of Two Roads Shared Trust (since 2012), Forethought Variable Insurance Trust (since 2013), Northern Lights Fund Trust (since 2013), Northern Lights Variable Trust (since 2013) and Altegris KKR Master Commitments Fund (since 2014) and Independent Director of Oak Hill Advisors Mortgage Strategies Fund (offshore), Ltd. (2015-2017) | |||||
Sanjeev Handa (1961) | Trustee | Indefinite Length – Since Inception | Managing Member, Old Orchard Lane, LLC (since 2014). | 1 | None |
Name, address(1) age | Position(s) Held with the Trust | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | |||||
Joan McCabe (1955) | Trustee | Indefinite Length – Since Inception | CEO/Founder, Lipotriad LLC (since 2015); and Managing Partner, Brynwood Partners (2000-2014) | 1 | None |
(1) | The address of each Trustee is care of the Secretary of the Fund at 225 Liberty Street, New York, NY 10281-1008. |
(2) | “Interested person,” as defined in the 1940 Act, of the Fund. Mr. Bhatia is an interested person of the Fund due to his affiliation with the Adviser. |
Name, address(1) and age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | |||
Kamal Bhatia (1972) | President and Principal Executive Officer | Indefinite Length – Since Inception | Senior Vice President, OppenheimerFunds Distributor, Inc. (since 2011); Chairman and Chief Executive Officer, OC Private Capital, LLC (since 2017) | |||
Julie Burley (1981) | Vice President and Treasurer; Principal Financial Officer and Principal Accounting Officer | Indefinite Length – Since Inception | Vice President, OFI Global Asset Management, Inc. (since 2013); Senior Manager, Deloitte & Touche LLP (2010-2013) |
Name, address(1) and age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | |||
Brian Petersen (1970) | Interim Vice President and Treasurer; Interim Principal Financial Officer and Principal Accounting Officer | Indefinite Length – Since September 2018 | Senior Vice President of OFI Global Asset Management, Inc. (since January 2017); Vice President of OFI Global Asset Management, Inc. (January 2013-January 2017); Vice President of OppenheimerFunds, Inc. (February 2007-December 2012); Assistant Vice President of OppenheimerFunds, Inc. (August 2002-2007) | |||
Joseph Benedetti (1965) | Vice President and Secretary; Chief Legal Officer | Indefinite Length – Since Inception | Senior Vice President and Managing Counsel, OFI Global Asset Management, Inc. (since 2017); Secretary, OFI Global Trust Company (since 2017); Assistant Secretary, OC Private Capital, LLC (since 2017); Managing Director, Morgan Stanley Investment Management Inc. (2005-2017) | |||
Stephen Volpe (1980) | Vice President and Chief Compliance Officer | Indefinite Length – Since Inception | Chief Compliance Officer, OC Private Capital, LLC (since 2017); Vice President, OFI Global Asset Management, Inc. (since 2015); Executive Director, Morgan Stanley Investment Management Inc. (2004-2015) | |||
Jennifer Foxson (1969) | Vice President and Chief Business Officer | Indefinite Length – Since Inception | Senior Vice President and Assistant Secretary, OFI Global Asset Management, Inc. (since 2018); Senior Vice President, OppenheimerFunds Distributor, Inc. (2014-2017); Secretary, OppenheimerFunds Distributor, Inc. (2017); Assistant Secretary, Oppenheimer Acquisition Corp. (since 2017); Secretary, OFI SteelPath, Inc. (since 2017); Secretary, OFI Global Institutional, Inc. Secretary, HarbourView Asset Management Corporation (since 2017); Assistant Secretary, OFI Global Trust Company (since 2017); Secretary, Seattle Northwest Asset Management LLC (since 2017); Secretary, Oppenheimer Real Asset Management, Inc. (since 2017); Secretary, OFI Private Investments Inc. (since 2017); Secretary, Shareholder Services, Inc. (since 2017); Secretary, Trinity Investment Management Corporation (Since July 2017); Secretary, OFI Advisors, LLC (since 2017); Secretary, Index Management Solutions, LLC (since July 2017); Secretary, OC Private Capital, LLC (since 2017) |
Name, address(1) and age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | |||
Andrew M. Peters (1977) | Chief Risk Officer | Indefinite Length – Since Inception | Chief Risk Officer, OC Private Capital, LLC (since 2018); Vice President, OFI Global Asset Management, Inc. (since 2018); Risk Manager, Avenue Capital (2010-2017) | |||
Christina Zervoudakis (1981) | Vice President and Assistant Secretary | Indefinite Length – Since Inception | Vice President, OFI Global Asset Management, Inc. (since 2017); Assistant Secretary, OC Private Capital, LLC (since 2017); Assistant Secretary, OFI Global Trust Company (since 2017); Executive Director, Morgan Stanley Investment Management Inc. (2013-2017) | |||
Jan Miller (1963) | Vice President and Assistant Treasurer | Indefinite Length – Since Inception | Treasurer, OFI Global Trust Company (since 2018); Vice President, OFI Global Asset Management, Inc. (since 2014); Assistant Vice President, OFI Global Asset Management, Inc. (2013-2014); Assistant Vice President, OppenheimerFunds, Inc. (November 2004- December 2012) | |||
Eric Hall (1978) | Vice President and Assistant Treasurer | Indefinite Length – Since Inception | Assistant Vice President, OFI Global Asset Management, Inc. (since 2015); Vice President and Director of Fund Administration, State Street Corp. (2014-2015); Assitant Vice President and Director of Fund Administration, State Street Corp. (2009-2014) | |||
James A. Kennedy (1958) | Vice President and Assistant Treasurer | Indefinite Length – Since Inception | Senior Vice President, OFI Global Asset Management, Inc. (since January 2013); Senior Vice President, OppenheimerFunds, Inc. (September 2006-December 2012) |
(1) | The address of each officer is care of the Secretary of the Fund at 225 Liberty Street, New York, NY 10281-1008. |
Adviser | OC Private Capital, LLC |
Sub-Adviser | Carlyle Global Credit Investment Management L.L.C. |
Distributor | OppenheimerFunds Distributor, Inc. |
Transfer and Shareholder Servicing Agent | OFI Global Asset Management, Inc. |
Sub-Transfer Agent | DST Systems, Inc. |
Independent Registered Public Accounting Firm | Ernst & Young LLP |
Legal Counsel | Dechert LLP |
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Item 3. Audit Committee Financial Expert.
The Board of Trustees of the registrant has determined that Sanjeev Handa, the Chairman of the Board’s Audit Committee, is the audit committee financial expert and that Mr. Handa is “independent” for purposes of this Item 3.
Item 4. Principal Accountant Fees and Services.
(a)-(d) | The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the last fiscal year. The registrant commenced operations on June 4,2018. Therefore, the following information is provided for the year ending December 31, 2018. | |
“Audit services” refer to performing an audit of the registrant’s annual financial statements or services that are normally provided by accountant in connection with statutory and regulatory filings or engagements for that year. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for review of federal tax forms and other tax compliance, tax advice, and tax planning. “Other services” refer to professional services rendered by the principal accountant for certain review of the registrant’s registration statement. |
FYE 12/31/2018 | ||||
Audit Fees | $ | 150,000 | ||
Audit-Related Fees | $ | 11,500 | ||
Tax Fees | $ | 0 | ||
All Other Fees | $ | 0 |
(e)(1) | During its regularly scheduled periodic meetings, the registrant’s audit committee willpre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. | |
The audit committee has delegatedpre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees suchpre-approved are presented to the audit committee at its next regularly scheduled meeting. | ||
Under applicable laws,pre-approval ofnon-audit services may be waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to its principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement asnon-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. |
(e)(2) | The percentage of fees billed by Ernst & Young, LLP. applicable tonon-audit services pursuant to waiver ofpre-approval requirement were as follows: |
FYE 12/31/2018 | ||||
Audit-Related Fees | 0 | % | ||
Tax Fees | 0 | % | ||
All Other Fees | 0 | % |
(f) | All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant. |
(g) | The following table indicates the aggregatenon-audit fees billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the registrant’s adviser that provides ongoing services to the registrant for the last year. |
FYE 12/31/2018 | ||||
Registrant | $ | 11,500 | ||
Registrant’s Investment Adviser | $ | 0 |
(h) | The registrant’s audit committee of the board of Trustees has considered whether the provision ofnon-audit services that were rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were notpre-approved pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X is compatible with maintaining the principal accountant’s independence. No such services were rendered. |
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
a) Not applicable. The complete schedule of investments is included in Item 1 of this FormN-CSR.
b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures forClosed-End Management Investment Companies.
The Fund has delegated its proxy voting responsibility to theSub-Adviser. The proxy voting policies and procedures of theSub-Adviser are set forth below. The guidelines are reviewed periodically by theSub-Adviser and the Independent Trustees and, accordingly, are subject to change.
It is the policy of the Fund to delegate the responsibility for voting proxies relating to portfolio securities held by the Fund to the Fund’sSub-Adviser as a part of theSub-Adviser’s general management of the Fund’s portfolio, subject to the continuing oversight of the Board. The Board has delegated such responsibility to theSub-Adviser, and directs theSub-Adviser to vote proxies relating to portfolio securities held by the Fund consistent with the proxy voting policies and procedures. TheSub-Adviser may retain one or more vendors to review, monitor and recommend how to vote proxies in a manner consistent with the proxy voting policies and procedures, to ensure that such proxies are voted on a timely basis and to provide reporting and/or record retention services in connection with proxy voting for the Fund.
The right to vote a proxy with respect to portfolio securities held by the Fund is an asset of the Fund. TheSub-Adviser, to which authority to vote on behalf of the Fund is delegated, acts as a fiduciary of the Fund and must vote proxies in a manner consistent with the best interest of the Fund and its Shareholders. In discharging this fiduciary duty, theSub-Adviser must maintain and adhere to its policies and procedures for addressing conflicts of interest and must vote proxies in a manner substantially consistent with its policies, procedures and guidelines, as presented to the Board.
The Fund shall file an annual report of each proxy voted with respect to portfolio securities of the Fund during the twelve-month period ended June 30 on FormN-PX not later than August 31 of each year.
Item 8. Portfolio Managers ofClosed-End Management Investment Companies.
(a)(1)
Name | Start Date | Bio | ||
Justin Plouffe Portfolio Manager | June 5, 2018 | Justin Plouffe is a Managing Director and the Deputy Chief Investment Officer of Carlyle Global Credit. He is a Director of the Adviser and a voting member of the PAAC. Mr. Plouffe focuses on investing in Carlyle’s structured credit and opportunistic credit strategies, as well as capital formation and management of the overall credit platform. Since joining Carlyle in 2007, he has overseen CLO new issuance, led acquisitions of corporate credit management platforms, served as a portfolio manager for structured credit investments, developed proprietary portfolio management analytics and negotiated a wide variety of financing facilities. Prior to joining Carlyle, Mr. Plouffe was an attorney at Ropes & Gray LLP. He has also served as a clerk on the U.S. Court of Appeals for the First Circuit and as a legislative assistant to a U.S. Congressman. Mr. Plouffe received his undergraduate degree from Princeton University and his J.D. from Columbia Law School, where he was an editor of The Columbia Law Review. He is a CFA charterholder, holds Series 7, 24, 57, 63, 79 and 99 licenses, and is associated with TCG Securities, L.L.C., theSEC-registered broker/dealer affiliate of The Carlyle Group. |
Linda Pace Portfolio Manager | June 5, 2018 | Linda Pace is a Managing Director of Carlyle and the Global Head of Loans & Structured Credit. She is a voting member of the PAAC. Previously, she was responsible for portfolio management for Carlyle High Yield Partners, deploying capital into the U.S. market in cash and synthetic form. Prior to joining Carlyle, Ms. Pace spent 10 years withBHF-Bank AG, where she wasco-head of the bank’s Syndicated Loan group in New York. She invested in leveraged loans on behalf of the bank’s $2 billionon-balance sheet portfolio, as well as their $400 million Collateralized Loan Obligation funds. Prior to that, Ms. Pace worked at Société Générale as a Corporate Credit Analyst. Ms. Pace received her undergraduate degree in French from Douglass College and her M.B.A in finance from New York University. |
(a)(2)
The portfolio managers primarily responsible for theday-to-day management of the Fund also manage other registered investment companies, other pooled investment vehicles and other accounts, as indicated below. The following table identifies, as of December 31, 2018: (i) the number of other registered investment companies, other pooled investment vehicles and other accounts managed by each portfolio manager; (ii) the total assets of such companies, vehicles and accounts; and (iii) the number and total assets of such companies, vehicles and accounts that are subject to an advisory fee based on performance.
Number Accounts | Assets of Accounts (in billions) | Number of Accounts | Assets (in billions) | |||||||||||||||||
Justin Plouffe | ||||||||||||||||||||
| Registered Investment Companies | | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||
| Other Pooled Investment Vehicles | | 1 | $ | 0.85 | 1 | $ | 0.85 | ||||||||||||
| Other Accounts | | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||
Linda Pace | ||||||||||||||||||||
| Registered Investment Companies | | 0 | $ | 0 | 0 | $ | 0 | ||||||||||||
| Other Pooled Investment Vehicles | | 31 | $ | 16.75 | 31 | $ | 16.75 | ||||||||||||
| Other Accounts | | 1 | $ | 0. 09 | 1 | $ | 0. 09 |
(a)(2)(iv)
The Fund’s executive officers and Trustees, and the employees of the Advisers, serve or may serve as officers, trustees or principals of entities that operate in the same or a related line of business as the Fund or of otherOFI- or Carlyle-advised funds (“Other Managed Funds”). As a result, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of the Fund or its Shareholders. Moreover, notwithstanding the difference in principal investment objectives between the Fund and the Other Managed Funds, such other funds, including potential new pooled investment vehicles or managed accounts not yet established (whether managed or sponsored by affiliates or the Advisers), have, and may from time to time have, overlapping investment objectives with the Fund and, accordingly, invest in, whether principally or secondarily, asset classes similar to those targeted by the Fund. To the extent the Other Managed Funds have overlapping investment objectives, the scope of opportunities otherwise available to the Fund may be adversely affected and/or reduced. Additionally, certain employees of the Advisers and their management may face conflicts in their time management and commitments as well as in the allocation of investment opportunities to Other Managed Funds.
The results of the Fund’s investment activities may differ significantly from the results achieved by the Other Managed Funds. It is possible that one or more of such funds will achieve investment results that are substantially more or less favorable than the results achieved by the Fund. Moreover, it is possible that the Fund will sustain losses during periods in which one or more affiliates achieve significant profits on their trading for proprietary or other accounts. The opposite result is also possible. The investment activities of one or more Adviser affiliates for their proprietary accounts and accounts under their management may also limit the investment opportunities for the Fund in certain markets.
The Advisers, their affiliates and their clients may pursue or enforce rights with respect to an issuer in which the Fund has invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability, liquidity and terms of the Fund’s investments may be negatively impacted by the activities of the Advisers and their affiliates or their clients, and transactions for the Fund may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case.
The Advisers may enter into transactions and invest in securities, instruments and currencies on behalf of the Fund in which customers of its affiliates, to the extent permitted by applicable law, serve as the counterparty, principal or issuer. In such cases, such party’s interests in the transaction could be adverse to the interests of the Fund, and such party may have no incentive to assure that the Fund obtains the best possible prices or terms in connection with the transaction. In addition, the purchase, holding and sale of such investments by the Fund may enhance the profitability of the Advisers or their affiliates. One or more affiliates may also create, write or issue derivatives for their customers, the underlying securities, currencies or instruments of which may be those in which the Fund invests or which may be based on the performance of the Fund. The Fund may, subject to applicable law, purchase investments that are the subject of an underwriting or other distribution by one or more Adviser affiliates and may also enter into transactions with other clients of an affiliate where such other clients have interests adverse to those of the Fund.
The Fund will be required to establish business relationships with its counterparties based on the Fund’s own credit standing. Neither the Advisers nor any of their affiliates will have any obligation to allow its credit to be used in connection with the Fund’s establishment of its business relationships, nor is it expected that the Fund’s counterparties will rely on the credit of the Advisers or their affiliates in evaluating the Fund’s creditworthiness.
The Advisers are paid a fee based on a percentage of the Fund’s Net Assets. Certain of the Other Managed Funds pay the Advisers or their affiliates different performance-based compensation, which could create an incentive for the Advisers or affiliate to favor such investment fund or account over the Fund.
By reason of the various activities of the Advisers and their affiliates, the Advisers and such affiliates may acquire confidential or materialnon-public information or otherwise be restricted from purchasing certain potential Fund investments that otherwise might have been purchased or be restricted from selling certain Fund investments that might otherwise have been sold at the time.
The Advisers have adopted policies and procedures designed to prevent conflicts of interest from influencing proxy voting decisions made on behalf of advisory clients, including the Fund, and to help ensure that such decisions are made in accordance with its fiduciary obligations to clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting decisions may have the effect of favoring the interests of other clients, provided that the Advisers believe such voting decisions to be in accordance with its fiduciary obligations.
(a)(3)
Portfolio managers are compensated with an annual salary and a discretionaryyear-end annual bonus, the amount of which is based on a multitude of quantitative and qualitative factors and are benchmarked against peers and local markets. Depending on seniority within the firm, portfolio managers also may be eligible to receive performance fees from private funds that they manage that vest over time. Performance fees can make up a significant portion of a portfolio manager’s overall compensation, and primarily are based on the investment performance of the private funds managed by the portfolio manager. This compensation structure aligns a portfolio manager’s and investors’ long-term interests and helps theSub-Adviser retain talented investment personnel. Portfolio managers also may receive discretionary compensation through awards under theSub-Adviser’s equity incentive plan.
(a)(4)
The following table shows the dollar range of equity securities in the Fund beneficially owned by each of the portfolio managers as of December 31, 2018.
Name | Aggregate Dollar Range of Equity Securities in the Fund(1) | |
Justin Plouffe | None | |
Linda Pace | None | |
(1) | Dollar ranges are as follows: None, $1–$10,000, $10,001–$50,000, $50,001–$100,000, $100,001–$500,000, $500,001–$1,000,000 or Over $1,000,000. |
Item 9. Purchases of Equity Securities byClosed-End Management Investment Company and Affiliated Purchasers.
No purchases were made during the reporting period by or on behalf of the Fund or any “affiliated purchaser,” as defined in Rule10b-18(a)(3) under the Exchange Act (17 CFR240.10b-18(a)(3)), of shares or other units of any class of the Fund’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).
Item 10. Submission of Matters to a Vote of Security Holders.
For the period covered by this FormN-CSR filing, there have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.
Item 11. Controls and Procedures.
(a) | Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in rule30a-3(c) under the Investment Company Act of 1940 (17 CFR270.30a-3(c)) as of 12/31/2018, the registrant’s principal executive officer and principal financial officer found the registrant’s disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule30a-3(d) under the Act) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that materially affected, or were reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Exhibits
(a)(1) | Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing exhibit. Filed herewith. |
(2) | A separate certification for each principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. |
(3) | Not applicable. |
(4) | Not applicable. |
(b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
OFI Carlyle Private Credit Fund |
/s/ Kamal Bhatia |
By: Kamal Bhatia |
Principal Executive Officer |
Date: 2/19/19 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
/s/ Kamal Bhatia |
By: Kamal Bhatia |
Principal Executive Officer |
Date: 2/19/19 |
/s/ Brian Petersen |
By: Brian Petersen |
Principal Financial Officer |
Date: 2/19/19 |