UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-23792
First Trust Private Credit Fund |
(Exact name of registrant as specified in charter)
c/o UMB Fund Services, Inc.
235 West Galena Street
Milwaukee, WI 53212
(Address of principal executive offices) (Zip code) |
Ann Maurer
235 West Galena Street
Milwaukee, WI 53212
(Name and address of agent for service) |
registrant's telephone number, including area code: (414) 299-2270
Date of fiscal year end: March 31
Date of reporting period: March 31, 2024
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
ITEM 1.(a) REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
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MANAGEMENT DISCUSSION OF FUND PERFORMANCE
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| Michael D. Peck, CFA | | | Brian R. Murphy | |
| Chief Executive Officer, Co-Chief Investment Officer | | | Co-Chief Investment Officer | |
| mpeck@firsttrustcapital.com | | | bmurphy@firsttrustcapital.com | |
FUND PERFORMANCE
March 31, 2024 (Unaudited)
| | Average Annual Total Returns as of March 31, 2024 | | | | 1 Year | | | | Since Inception (Annualized) | | |
| | First Trust Private Credit Fund – Class I (Inception Date May 9, 2022) | | | | 13.77% | | | | 8.90% | | |
| | First Trust Private Credit Fund – Class A (Commencement of operations June 6, 2023) | | | | N/A | | | | 10.59%* | | |
| | Bloomberg U.S. Aggregate Bond Index | | | | 1.70% | | | | 0.93% | | |
| | iBoxx USD Liquid High Yield Index TR | | | | 10.33% | | | | 6.35% | | |
FUND PERFORMANCE — Continued
March 31, 2024 (Unaudited)
| | | | |
First Trust Private Credit Fund
June 3, 2024
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | ASSET-BACKED SECURITIES – 5.4% | | |||||||||
| | $ | 2,000,000 | | | | Broadway 1 Junior Mortgage Class JNR, 13.312% (1-Month Term SOFR+800 basis points), 4/12/20312,3,4 | | | | $ | 2,000,000 | | |
| | | 3,000,000 | | | | Deutsche Bank AG Series 2021-1X, Class CLN, 14.076% (3-Month Term SOFR+876 basis points), 2/21/20294 | | | | | 2,932,500 | | |
| | | 3,500,0005 | | | | Ducati Series 2024-1, 12.935%, 6/20/20306 | | | | | 3,776,028 | | |
| | | | | | | TOTAL ASSET-BACKED SECURITIES (Cost $8,764,282) | | | | | 8,708,528 | | |
| | | | | | | BANK LOANS – 33.0% | | ||||||
| | | 297,750 | | | | Accordion Partners 11.591%, 8/29/20294 | | | | | 297,750 | | |
| | | 349,500 | | | | 11.889%, 8/29/20294 | | | | | 349,500 | | |
| | | 1,443,609 | | | | AIS Holdco, LLC 10.313% (3-Month Term SOFR+500 basis points), 8/15/20252,3 | | | | | 1,412,932 | | |
| | | 635,000 | | | | Alegeus Technologies Holding Corp. 13.749%, 9/4/20264 | | | | | 635,000 | | |
| | | 829,124 | | | | Arcline FM Holdings, LLC 10.880% (3-Month Term SOFR+475 basis points), 6/23/20282,3 | | | | | 830,679 | | |
| | | 432,046 | | | | Athos Merger Sub, LLC 10.605% (1-Month Term SOFR+500 basis points), 7/31/20262,3 | | | | | 422,865 | | |
| | | 359,229 | | | | 13.855%, 7/31/20273,4 | | | | | 347,230 | | |
| | | 1,000,000 | | | | Black Rifle Coffee Company, LLC 13.869%, 8/10/20284 | | | | | 980,000 | | |
| | | 1,992,301 | | | | Cardinal Parent, Inc. 9.998% (3-Month Term SOFR+450 basis points), 11/12/20272,3 | | | | | 1,885,215 | | |
| | | 2,750,000 | | | | CIRE Alto OpCo, LLC 10.800%, 11/29/20244 | | | | | 2,750,000 | | |
| | | 4,000,000 | | | | Cooper Mach 10.820%, 12/13/20274 | | | | | 3,960,000 | | |
| | | 990,000 | | | | CPC/Cirtec Holdings, Inc. 11.598%, 1/30/20294 | | | | | 991,980 | | |
| | | 92,827 | | | | Dentive Capital, LLC 12.320%, 12/23/20284 | | | | | 91,202 | | |
| | | 278,629 | | | | 12.348%, 12/23/20284 | | | | | 273,753 | | |
| | | 468,482 | | | | Fingerpaint Group 12.198%, DDTL, 12/20/20264 | | | | | 460,893 | | |
| | | 601,071 | | | | 12.198%, 12/20/20264 | | | | | 591,334 | | |
| | | 496,203 | | | | Florida Food Products, LLC 10.441% (1-Month Term SOFR+500 basis points), 10/18/20282,3 | | | | | 440,794 | | |
| | | 1,544,449 | | | | Florida Marine 15.241%, 3/17/20284 | | | | | 1,567,616 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | | | | BANK LOANS (Continued) | | ||||||
| | $ | 75,000 | | | | Fortis Payment Systems, LLC 11.150%, 2/13/20264 | | | | $ | 73,500 | | |
| | | 1,500,000 | | | | 11.165%, 2/13/20264 | | | | | 1,470,000 | | |
| | | 2,640,631 | | | | Global IID Parent, LLC 10.152% (1-Month Term SOFR+450 basis points), 12/16/20282,3 | | | | | 2,550,960 | | |
| | | 243,366 | | | | H.W. Lochner, LLC 12.230%, 7/2/20274 | | | | | 239,399 | | |
| | | 1,460,195 | | | | IDC Infusion Services 11.852%, 7/7/20284 | | | | | 1,439,898 | | |
| | | 129,870 | | | | 11.889%, 7/7/20284 | | | | | 128,065 | | |
| | | 1,086,153 | | | | Ivanti Software, Inc. 9.839% (3-Month Term SOFR+425 basis points), 12/1/20272,3 | | | | | 1,019,627 | | |
| | | 496,937 | | | | Monroe Capital Corp. 11.310%, 12/20/20284 | | | | | 486,999 | | |
| | | 495,000 | | | | 11.310%, 12/20/20284 | | | | | 485,100 | | |
| | | 498,744 | | | | Neptune Bidco US, Inc. 10.173% (1-Month Term SOFR+475 basis points), 10/11/20283,7 | | | | | 458,133 | | |
| | | 1,989,987 | | | | 10.423% (1-Month Term SOFR+500 basis points), 4/11/20292,3 | | | | | 1,839,375 | | |
| | | 1,566,808 | | | | Orthopaedic (ITC) Buyer, LLC 11.948%, 7/31/20284 | | | | | 1,560,855 | | |
| | | 1,463,966 | | | | PhyNet Dermatology, LLC 11.988%, 10/20/20294 | | | | | 1,447,569 | | |
| | | 1,275,162 | | | | Project Castle, Inc. 10.830% (3-Month Term SOFR+550 basis points), 6/1/20292,3 | | | | | 1,161,462 | | |
| | | 2,802,659 | | | | Project Leopard Holdings, Inc. 10.663% (3-Month Term SOFR+525 basis points), 7/20/20292,3 | | | | | 2,600,167 | | |
| | | 4,750,000 | | | | RHF VI Funding, LLC 11.750%, 11/19/20244 | | | | | 4,750,000 | | |
| | | 982,770 | | | | Riskonnect, Inc. 10.998%, 12/7/20284 | | | | | 972,943 | | |
| | | 638,975 | | | | Royal Palm I 12.340%, 10/24/2033*,4 | | | | | 638,975 | | |
| | | 43,616 | | | | Royal Palm II 13.340%, 10/24/2028*,4 | | | | | 43,616 | | |
| | | 251,400 | | | | Shryne Group, Inc. 17.000% Cash, 1.000% PIK, 5/26/20264,8 | | | | | 252,657 | | |
| | | 981,200 | | | | South Florida ENT Associates 12.490%, 12/31/20254 | | | | | 963,146 | | |
| | | 545,572 | | | | Steward Health Care System, LLC 16.180%, 6/30/20244 | | | | | 545,572 | | |
| | | 2,066,056 | | | | 21.250%, 12/31/20274,8 | | | | | 1,962,753 | | |
| | | 220,374 | | | | Stronghold Digital Mining, Inc. 15.328%, 10/25/20254 | | | | | 215,966 | | |
| | | 1,356,897 | | | | Synamedia Americas Holdings, Inc. 13.080%, 12/5/20284 | | | | | 1,319,582 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | | | | BANK LOANS (Continued) | | ||||||
| | $ | 265,891 | | | | TA/WEG Holdings, LLC 10.840%, 10/2/20274 | | | | $ | 265,891 | | |
| | | 605,539 | | | | 10.840%, 10/4/20274 | | | | | 605,539 | | |
| | | 880,212 | | | | Tank Holding Corp. 11.176%, 3/31/2028 | | | | | 871,551 | | |
| | | 3,852 | | | | 11.080%, 3/31/2028 | | | | | 3,739 | | |
| | | 134,410 | | | | 11.330%, 3/31/2028 | | | | | 133,066 | | |
| | | 693,000 | | | | 11.426%, 3/31/2028 | | | | | 686,070 | | |
| | | 156,886 | | | | Taoglas Group Holdings Limited 12.620%, 2/28/20294 | | | | | 148,006 | | |
| | | 777,159 | | | | 12.598%, 2/28/20294 | | | | | 733,171 | | |
| | | 858,568 | | | | TCW Fenix Topco, LLC 11.810%, 3/28/20294 | | | | | 832,554 | | |
| | | 2,500,000 | | | | USN OPCO, LLC 11.212%, 12/21/20264 | | | | | 2,475,000 | | |
| | | | | | | TOTAL BANK LOANS (Cost $52,984,346) | | | | | 53,669,649 | | |
| Number of Shares | | | | | | | | | | | |||
| | | | CLOSED-END FUNDS – 1.8% | | |||||||||
| | | 176,976 | | | | Palmer Square Capital BDC, Inc.9 | | | | | 2,882,939 | | |
| | | | | | | TOTAL CLOSED-END FUNDS (Cost $2,900,005) | | | | | 2,882,939 | | |
| Principal Amount1 | | | | | | | | | | | |||
| | | | COLLATERALIZED LOAN OBLIGATIONS – 28.5% | | |||||||||
| | | 500,000 | | | | Antares Loan Funding CLO 0.000%, 2/17/2032*,4 | | | | | 558,191 | | |
| | | 500,000 | | | | Apidos CLO Ltd. Series 2017-28A, Class C, 8.079% (3-Month Term SOFR+276 basis points), 1/20/20312,3,10 | | | | | 489,815 | | |
| | | 60,527 | | | | Ares Capital Corp. Series 2023-1, 0.000%, 7/11/2033*,4 | | | | | 64,923 | | |
| | | 500,000 | | | | Ares CLO Ltd. Series 2016-40A, Class CRR, 8.376% (3-Month Term SOFR+306 basis points), 1/15/20292,3,10 | | | | | 498,995 | | |
| | | 500,000 | | | | Assurant CLO Ltd. Series 2017-1A, Class ER, 12.779% (3-Month Term SOFR+746 basis points), 10/20/20342,3,10 | | | | | 470,299 | | |
| | | 750,000 | | | | Barings CLO Ltd. Series 2018-3A, Class E, 11.329% (3-Month Term SOFR+601 basis points), 7/20/20292,3,10 | | | | | 742,497 | | |
| | | 500,000 | | | | Series 2018-4A, Class D, 8.476% (3-Month Term SOFR+316 basis points), 10/15/20302,3,10 | | | | | 499,242 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | COLLATERALIZED LOAN OBLIGATIONS (Continued) | | |||||||||
| | $ | 250,000 | | | | Benefit Street Partners CLO Ltd. Series 2015-8A, Class DR, 11.179% (3-Month Term SOFR+586 basis points), 1/20/20312,3,10 | | | | $ | 236,040 | | |
| | | 250,000 | | | | Carlyle Global Market Strategies CLO Ltd. Series 2014-4RA, Class C, 8.476% (3-Month Term SOFR+316 basis points), 7/15/20302,3,10 | | | | | 244,660 | | |
| | | 1,000,000 | | | | Series 2014-2RA, Class C, 8.369% (3-Month Term SOFR+306 basis points), 5/15/20312,3,10 | | | | | 992,502 | | |
| | | 625,000 | | | | Series 2014-3RA, Class C, 8.531% (3-Month Term SOFR+321 basis points), 7/27/20312,3,10 | | | | | 614,616 | | |
| | | 250,000 | | | | Carlyle Global Market Strategies Ltd. Series 2014-1A, Class DR, 8.178% (3-Month Term SOFR+286 basis points), 4/17/20312,3,10 | | | | | 243,451 | | |
| | | 500,000 | | | | Carlyle U.S. CLO Ltd. Series 2017-4A, Class C, 8.376% (3-Month Term SOFR+306 basis points), 1/15/20302,3,10 | | | | | 496,250 | | |
| | | 500,000 | | | | Cedar Funding XVII CLO Ltd. Series 2023-17A, Class E, 13.478% (3-Month Term SOFR+816 basis points), 7/20/20362,3,4,10 | | | | | 513,499 | | |
| | | 500,000 | | | | CIFC Funding Ltd. Series 2017-3A, Class C, 9.229% (3-Month Term SOFR+391 basis points), 7/20/20302,3,10 | | | | | 498,921 | | |
| | | 500,000 | | | | Series 2017-4A, Class D, 11.680% (3-Month Term SOFR+636 basis points), 10/24/20302,3,10 | | | | | 498,161 | | |
| | | 250,000 | | | | Series 2018-2A, Class C, 8.429% (3-Month Term SOFR+311 basis points), 4/20/20312,3,10 | | | | | 249,471 | | |
| | | 875,000 | | | | Series 2018-2A, Class D, 11.429% (3-Month Term SOFR+611 basis points), 4/20/20312,3,10 | | | | | 878,253 | | |
| | | 500,000 | | | | Series 2013-3RA, Class D, 11.480% (3-Month Term SOFR+616 basis points), 4/24/20312,3,10 | | | | | 497,789 | | |
| | | 500,000 | | | | Clear Creek CLO Series 2015-1A, Class DR, 8.529% (3-Month Term SOFR+321 basis points), 10/20/20302,3,10 | | | | | 499,477 | | |
| | | 500,000 | | | | Dryden Senior Loan Fund Series 2013-30A, Class DR, 8.169% (3-Month Term SOFR+286 basis points), 11/15/20282,3,10 | | | | | 494,028 | | |
| | | 500,000 | | | | Series 2022-106A, Class D, 11.014% (3-Month Term SOFR+570 basis points), 10/15/20352,3,10 | | | | | 509,567 | | |
| | | 500,000 | | | | Elmwood CLO Ltd. Series 2022-1A, 11.668% (3-Month Term SOFR+635 basis points), 4/20/20352,3,10 | | | | | 507,041 | | |
| | | 500,000 | | | | Galaxy CLO Ltd. Series 2018-25A, Class D, 8.686% (3-Month Term SOFR+336 basis points), 10/25/20312,3,10 | | | | | 499,226 | | |
| | | 500,000 | | | | Series 2018-26A, 11.437% (3-Month Term SOFR+611 basis points), 11/22/20312,3,10 | | | | | 501,146 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | COLLATERALIZED LOAN OBLIGATIONS (Continued) | | |||||||||
| | $ | 500,000 | | | | Generate CLO Ltd. Series 2023-12A, Class E, 13.718% (3-Month Term SOFR+840 basis points), 7/20/20362,3,10 | | | | $ | 513,472 | | |
| | | 500,000 | | | | Gilbert Park CLO Ltd. Series 2017-1A, Class D, 8.526% (3-Month Term SOFR+321 basis points), 10/15/20302,3,10 | | | | | 499,455 | | |
| | | 500,000 | | | | HPS Loan Management Ltd. Series 8A-2016, Class DR, 8.479% (3-Month Term SOFR+316 basis points), 7/20/20302,3,10 | | | | | 497,414 | | |
| | | 500,000 | | | | Invesco U.S. CLO Ltd. Series 2023-3A, Class E, 13.579% (3-Month Term SOFR+816 basis points), 7/15/20362,3,10 | | | | | 513,233 | | |
| | | 1,500,000 | | | | Kohlberg CLO 0.000%, 12/28/20334 | | | | | 1,548,319 | | |
| | | 500,000 | | | | Magnetite CLO Ltd. Series 2018-20A, Class E, 10.929% (3-Month Term SOFR+561 basis points), 4/20/20312,3,10 | | | | | 503,081 | | |
| | | 3,000,000 | | | | MCF CLO Ltd. Series 2018-1A, Class SUB, 0.000%, 7/18/20302,7,10 | | | | | 2,479,407 | | |
| | | 1,926,983 | | | | Mount Logan Funding LP Series 2018-1A, Class SUBR, 0.000%, 1/22/20332,7,9,10 | | | | | 1,414,872 | | |
| | | 935,000 | | | | Neuberger Berman CLO XXII Ltd. Series 2016-22A, Class DR, 8.678% (3-Month Term SOFR+336 basis points), 10/17/2030*,2,3,10 | | | | | 937,070 | | |
| | | 500,000 | | | | Neuberger Berman Loan Advisers CLO Ltd. Series 2018-28A, Class D, 8.429% (3-Month Term SOFR+311 basis points), 4/20/20302,3,10 | | | | | 497,686 | | |
| | | 500,000 | | | | Newark BSL CLO Ltd. Series 2017-1A, Class CR, 8.736% (3-Month Term SOFR+341 basis points), 7/25/20302,3,10 | | | | | 496,457 | | |
| | | 500,000 | | | | OCP CLO Ltd. 8.778% (3-Month Term SOFR+346 basis points), 10/17/20302,3,10 | | | | | 497,760 | | |
| | | 500,000 | | | | Series 2019-17A, Class ER, 12.079% (3-Month Term SOFR+676 basis points), 7/20/20322,3,10 | | | | | 505,505 | | |
| | | 500,000 | | | | Octagon Investment Partners 33 Ltd. Series 2017-1A, Class C, 8.329% (3-Month Term SOFR+301 basis points), 1/20/20312,3,10 | | | | | 486,843 | | |
| | | 800,000 | | | | OSD CLO Ltd. Series 2023-27A, Class E, 13.564% (3-Month Term SOFR+825 basis points), 4/16/20352,3,10 | | | | | 803,846 | | |
| | | 500,000 | | | | OZLM Ltd. Series 2018-22A, Class C, 8.228% (3-Month Term SOFR+291 basis points), 1/17/20312,3,10 | | | | | 494,471 | | |
| | | 500,000 | | | | Series 2018-20A, Class C, 8.529% (3-Month Term SOFR+321 basis points), 4/20/20312,3,10 | | | | | 494,454 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | COLLATERALIZED LOAN OBLIGATIONS (Continued) | | |||||||||
| | $ | 600,0005 | | | | Palmer Square European Loan Funding Series 2023-1A, Class SUB, 0.000%, 11/15/2032*,2,6,7,9,10 | | | | $ | 611,954 | | |
| | | 300,0005 | | | | Series 2023-1X, Class E, 10.431% (3-Month Euribor+653 basis points), 11/15/20322,3,6,9 | | | | | 324,818 | | |
| | | 900,0005 | | | | Series 2023-2X, Class SUB, 0.000%, 1/15/2033*,2,6,7,9 | | | | | 848,015 | | |
| | | 1,000,0005 | | | | Series 2023-3X, Class SUB, 0.000%, 5/15/2033*,2,6,7,9 | | | | | 1,087,522 | | |
| | | 2,500,0005 | | | | Series 2024-1X, Class SUB, 0.000%, 8/15/2033*,2,4,6,7 | | | | | 2,697,163 | | |
| | | 1,050,0005 | | | | Series 2023-1X, Class SUB, 0.000%, 7/15/2036*,2,6,7,9 | | | | | 1,013,942 | | |
| | | 1,450,0005 | | | | Series 2023-2X, Class SUB, 0.000%, 10/15/2036*,2,6,7,9 | | | | | 1,568,528 | | |
| | | 825,000 | | | | Palmer Square Loan Funding Ltd. Series 2023-1A, Class SUB, 0.000%, 7/20/2031*,2,7,9,10 | | | | | 889,160 | | |
| | | 750,000 | | | | Series 2023-1A, Class D, 13.318% (3-Month Term SOFR+800 basis points), 7/20/20312,3,9,10 | | | | | 753,582 | | |
| | | 450,000 | | | | Series 2022-4A, Class SUB, 0.000%, 7/24/2031*,2,7,9,10 | | | | | 430,974 | | |
| | | 300,000 | | | | Series 2022-4A, Class D, 12.609% (3-Month Term SOFR+729 basis points), 7/24/20312,3,9,10 | | | | | 299,072 | | |
| | | 500,000 | | | | Series 2023-2A, Class SUB, 0.000%, 1/25/2032*,2,7,9,10 | | | | | 511,018 | | |
| | | 1,250,000 | | | | Series 2023-4A, Class SUB, 0.000%, 10/20/2033*,2,7,9,10 | | | | | 1,262,225 | | |
| | | 500,000 | | | | Series 2023-2A, Class SUB, 0.000%, 4/20/2036*,2,7,9,10 | | | | | 461,574 | | |
| | | 500,000 | | | | Series 2023-3A, Class SUB, 0.000%, 1/20/2037*,2,7,9,10 | | | | | 502,791 | | |
| | | 1,540,000 | | | | Series 2024-1A, Class SUB, 0.000%, 4/15/2037*,2,7,10 | | | | | 1,504,918 | | |
| | | 500,000 | | | | Post CLO Ltd. Series 2024-1A, Class E, 12.072% (3-Month Term SOFR+680 basis points), 4/20/20372,3,10 | | | | | 495,676 | | |
| | | 500,000 | | | | Regatta Funding Ltd. Series 2018-3A, Class E, 11.536% (3-Month Term SOFR+621 basis points), 10/25/20312,3,10 | | | | | 487,792 | | |
| | | 500,000 | | | | RR Ltd. Series 2018-5A, Class C, 8.676% (3-Month Term SOFR+336 basis points), 10/15/20312,3,10 | | | | | 501,117 | | |
| | | 500,000 | | | | Sound Point CLO Ltd. Series 2017-3A, Class C, 8.579% (3-Month Term SOFR+326 basis points), 10/20/20302,3,10 | | | | | 491,235 | | |
| | | 500,000 | | | | Stewart Park CLO Ltd. Series 2015-1A, Class ER, 10.856% (3-Month Term SOFR+554 basis points), 1/15/20302,3,10 | | | | | 469,770 | | |
| | | 375,000 | | | | TCI-Flatiron CLO Ltd. Series 2018-1A, Class ER, 11.731% (3-Month Term SOFR+641 basis points), 1/29/20322,3,10 | | | | | 376,545 | | |
| | | 500,000 | | | | THL Credit Wind River CLO Ltd. Series 2018-2A, Class D, 8.576% (3-Month Term SOFR+326 basis points), 7/15/20302,3,10 | | | | | 476,113 | | |
| | | 500,000 | | | | Voya CLO Ltd. Series 2017-1A, Class C, 8.908% (3-Month Term SOFR+359 basis points), 4/17/20302,3,10 | | | | | 497,545 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
| Principal Amount1 | | | | | | Value | | ||||||
| | | | COLLATERALIZED LOAN OBLIGATIONS (Continued) | | |||||||||
| | $ | 500,000 | | | | Series 2013-1A, Class CR, 8.526% (3-Month Term SOFR+321 basis points), 10/15/20302,3,10 | | | | $ | 489,805 | | |
| | | 750,000 | | | | Series 2014-1A, Class CR2, 8.360% (3-Month Term SOFR+306 basis points), 4/18/20312,3,10 | | | | | 721,561 | | |
| | | 250,000 | | | | Series 2018-2A, Class D, 8.326% (3-Month Term SOFR+301 basis points), 7/15/20312,3,10 | | | | | 243,546 | | |
| | | 400,000 | | | | Series 2016-3A, Class CR, 8.810% (3-Month Term SOFR+351 basis points), 10/18/20312,3,10 | | | | | 389,940 | | |
| | | 500,000 | | | | Series 2019-2A, Class D, 9.279% (3-Month Term SOFR+396 basis points), 7/20/20322,3,10 | | | | | 496,815 | | |
| | | | | | | TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $45,213,104) | | | | | 46,386,121 | | |
|
| Number of Shares | | | | | | | | | | | | |||||
| | | | | | | | | |||||||||
| | | | PRIVATE INVESTMENT FUNDS – 13.9% | | | | | |||||||||
| | | N/A11 | | | | DSC Meridian Credit Opportunities Onshore4 | | | | | 5,416,679 | | | | ||
| | | 2,750,000 | | | | IFRG Investor III LP4 | | | | | 2,805,000 | | | | ||
| | | N/A11 | | | | Linden Investors LP4 | | | | | 2,437,709 | | | | ||
| | | N/A11 | | | | Old Orchard Credit Fund LP4 | | | | | 3,377,429 | | | | ||
| | | N/A11 | | | | Seer Capital Regulatory Capital Relief Fund | | | | | 3,000,000 | | | | ||
| | | N/A11 | | | | TCW Direct Lending VIII, LLC | | | | | 3,006,701 | | | | ||
| | | N/A11 | | | | Whitehawk IV-Plus Onshore Fund LP | | | | | 2,309,844 | | | | ||
| | | N/A11 | | | | Wynwood BN, LLC | | | | | 305,300 | | | | ||
| | | | | | | TOTAL PRIVATE INVESTMENT FUNDS (Cost $22,026,743) | | | | | 22,658,662 | | | | ||
| | | | | | | SHORT-TERM INVESTMENTS – 16.5% | | | ||||||||
| | | 26,872,732 | | | | Morgan Stanley Institutional Liquidity Fund – Government Portfolio – Institutional Class, 5.21%12 | | | | | 26,872,732 | | | | ||
| | | | | | | TOTAL SHORT-TERM INVESTMENTS (Cost $26,872,732) | | | | | 26,872,732 | | | | ||
| | | | | | | TOTAL INVESTMENTS – 99.1% (Cost $158,761,212) | | | | | 161,178,631 | | | | ||
| | | | | | | Assets in Excess of Other Liabilities – 0.9% | | | | | 1,509,968 | | | | ||
| | | | | | | TOTAL NET ASSETS – 100.0% | | | | $ | 162,688,599 | | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
Securities With Restrictions On Redemptions | | | Redemptions Permitted | | | Redemption Notice Period | | | Cost | | | Fair Value | | | Original Acquisition Date | | ||||||
DSC Meridan Credit Opportunities Onshorea | | | Quarterlyb | | | 65 Days | | | | $ | 5,000,000 | | | | | $ | 5,416,679 | | | | 5/1/2023 | |
IFRG Investor III LPa | | | Not permitted | | | N/A | | | | | 2,750,000 | | | | | | 2,805,000 | | | | 7/28/2023 | |
Linden Investors LPa | | | Quarterlyb | | | 65 Days | | | | | 2,250,000 | | | | | | 2,437,709 | | | | 5/1/2023 | |
Old Orchard Credit Fund LPa | | | Quarterlyb | | | 65 Days | | | | | 3,250,000 | | | | | | 3,377,429 | | | | 5/31/2023 | |
Palmer Square Capital BDC, Inc. | | | Not permitted | | | N/A | | | | | 400,000 | | | | | | 407,250 | | | | 2/1/2023 | |
Seer Capital Regulatory Capital Relief Funda | | | Not permitted | | | N/A | | | | | 3,000,000 | | | | | | 3,000,000 | | | | 3/7/2023 | |
TCW Direct Lending VIII LLCa | | | Not permitted | | | N/A | | | | | 3,194,335 | | | | | | 3,006,701 | | | | 8/9/2023 | |
WhiteHawk IV-Plus Onshore Fund, L.P.a | | | Not permitted | | | N/A | | | | | 2,282,408 | | | | | | 2,309,844 | | | | 6/29/2023 | |
Wynwood BN, LLCa | | | Not permitted | | | N/A | | | | | 300,000 | | | | | | 305,300 | | | | 1/26/2023 | |
Totals | | | | | | | | | | $ | 22,426,743 | | | | | $ | 22,065,912 | | | | | |
Sale Contracts | | | Counterparty | | | Currency Exchange | | | Settlement Date | | | Currency Amount Sold | | | Value At Settlement Date | | | Value At March 31, 2024 | | | Unrealized Appreciation/ (Depreciation) | | |||||||||||||||
EUR | | | BNP Paribas | | | EUR per USD | | | | | 4/5/2024 | | | | | | (2,500,000) | | | | | $ | (2,708,750) | | | | | $ | (2,698,016) | | | | | $ | 10,734 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 4/22/2024 | | | | | | (40,000) | | | | | | (43,968) | | | | | | (43,198) | | | | | | 770 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 4/22/2024 | | | | | | (50,000) | | | | | | (53,890) | | | | | | (53,997) | | | | | | (107) | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 5/15/2024 | | | | | | (3,500,000) | | | | | | (3,806,250) | | | | | | (3,783,309) | | | | | | 22,941 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 5/22/2024 | | | | | | (80,000) | | | | | | (87,760) | | | | | | (86,499) | | | | | | 1,261 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 7/22/2024 | | | | | | (50,000) | | | | | | (55,198) | | | | | | (54,215) | | | | | | 983 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 7/22/2024 | | | | | | (60,000) | | | | | | (64,932) | | | | | | (65,059) | | | | | | (127) | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 8/22/2024 | | | | | | (60,000) | | | | | | (66,000) | | | | | | (65,147) | | | | | | 853 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 10/22/2024 | | | | | | (20,000) | | | | | | (22,210) | | | | | | (21,784) | | | | | | 426 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 10/22/2024 | | | | | | (50,000) | | | | | | (54,325) | | | | | | (54,460) | | | | | | (135) | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 10/24/2024 | | | | | | (40,000) | | | | | | (44,156) | | | | | | (43,572) | | | | | | 584 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 11/22/2024 | | | | | | (80,000) | | | | | | (88,355) | | | | | | (87,259) | | | | | | 1,096 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 1/22/2025 | | | | | | (110,000) | | | | | | (121,054) | | | | | | (120,321) | | | | | | 733 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 2/21/2025 | | | | | | (50,000) | | | | | | (55,340) | | | | | | (54,767) | | | | | | 573 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 4/22/2025 | | | | | | (110,000) | | | | | | (121,551) | | | | | | (120,818) | | | | | | 733 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 5/22/2025 | | | | | | (498,000) | | | | | | (554,248) | | | | | | (547,737) | | | | | | 6,511 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 7/22/2025 | | | | | | (90,000) | | | | | | (99,658) | | | | | | (99,269) | | | | | | 389 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 8/22/2025 | | | | | | (30,000) | | | | | | (33,420) | | | | | | (33,138) | | | | | | 282 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 10/22/2025 | | | | | | (708,000) | | | | | | (791,782) | | | | | | (784,274) | | | | | | 7,508 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 11/21/2025 | | | | | | (30,000) | | | | | | (33,465) | | | | | | (33,279) | | | | | | 186 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 1/22/2026 | | | | | | (80,000) | | | | | | (89,070) | | | | | | (89,001) | | | | | | 69 | | |
CONSOLIDATED SCHEDULE OF INVESTMENTS — Continued
As of March 31, 2024
Sale Contracts | | | Counterparty | | | Currency Exchange | | | Settlement Date | | | Currency Amount Sold | | | Value At Settlement Date | | | Value At March 31, 2024 | | | Unrealized Appreciation/ (Depreciation) | | |||||||||||||||
EUR | | | BNP Paribas | | | EUR per USD | | | | | 2/20/2026 | | | | | | (680,000) | | | | | $ | (760,920) | | | | | $ | (757,537) | | | | | $ | 3,383 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 4/22/2026 | | | | | | (50,000) | | | | | | (55,855) | | | | | | (55,861) | | | | | | (6) | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 6/18/2026 | | | | | | (944,000) | | | | | | (1,062,000) | | | | | | (1,057,499) | | | | | | 4,501 | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 7/22/2026 | | | | | | (50,000) | | | | | | (55,800) | | | | | | (56,102) | | | | | | (302) | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 10/22/2026 | | | | | | (50,000) | | | | | | (55,975) | | | | | | (56,347) | | | | | | (372) | | |
EUR | | | BNP Paribas | | | EUR per USD | | | | | 11/6/2026 | | | | | | (1,408,000) | | | | | | (1,576,960) | | | | | | (1,587,859) | | | | | | (10,899) | | |
TOTAL FORWARD FOREIGN CURRECY EXCHANGE CONTRACTS | | | | | | | | | | $ | (12,562,892) | | | | | $ | (12,510,324) | | | | | $ | 52,568 | | | ||||||||||||
|
CONSOLIDATED SUMMARY OF INVESTMENTS
As of March 31, 2024
Security Type/Sector | | | Percent of Total Net Assets | | |||
Asset-Backed Securities | | | | | 5.4% | | |
Bank Loans | | | | | 33.0% | | |
Closed-End Funds | | | | | 1.8% | | |
Collateralized Loan Obligations | | | | | 28.5% | | |
Private Investment Funds | | | | | 13.9% | | |
Short-Term Investments | | | | | 16.5% | | |
Total Investments | | | | | 99.1% | | |
Other assets in Excess of Liabilities | | | | | 0.9% | | |
Total Net Assets | | | | | 100.0% | | |
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
As of March 31, 2024
| Assets: | | | | | ||||||
| Investments in securities, at fair value | | | | | | | | | ||
| Unaffiliated investments (cost $139,499,365) | | | | $ | 142,113,565 | | | | ||
| Affiliated investments (cost $19,261,847) | | | | | 19,065,066 | | | | ||
| Forward foreign currency exchange contracts | | | | | 64,516 | | | | ||
| Cash | | | | | 999,221 | | | | ||
| Receivables: | | | | | | | | | ||
| Investment securities sold | | | | | 840,538 | | | | ||
| Interest and dividends | | | | | 1,251,335 | | | | ||
| Fund shares sold | | | | | 648,809 | | | | ||
| Due from Investment Adviser | | | | | 14,041 | | | | ||
| Prepaid expenses | | | | | 27,034 | | | | ||
| Total assets | | | | | 165,024,125 | | | | ||
| Liabilities: | | | | | | | | | ||
| Forward foreign currency exchange contracts | | | | | 11,948 | | | | ||
| Payables: | | | | | | | | | ||
| Investment securities purchased | | | | | 496,831 | | | | ||
| Fund shares redeemed | | | | | 1,651,876 | | | | ||
| Audit fee | | | | | 56,981 | | | | ||
| Legal fees | | | | | 25,258 | | | | ||
| Distribution fees – Class A (Note 3) | | | | | 1 | | | | ||
| Distribution fees – Class I (Note 3) | | | | | 20,879 | | | | ||
| Deferred tax liability | | | | | 16,868 | | | | ||
| Shareholder reporting fees | | | | | 14,194 | | | | ||
| Fund services expense | | | | | 13,928 | | | | ||
| Chief Compliance Officer fees | | | | | 2,852 | | | | ||
| Trustees’ fees and expenses | | | | | 192 | | | | ||
| Accrued other expenses | | | | | 23,718 | | | | ||
| Total liabilities | | | | | 2,335,526 | | | | ||
| Net Assets | | | | $ | 162,688,599 | | | |
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES — Continued
As of March 31, 2024
| Components of Net Assets | | | | | | | |
| Paid-in Capital (par value of $0.01 per share with an unlimited number of shares authorized) | | | | $ | 159,564,528 | | |
| Total accumulated earnings | | | | | 3,124,071 | | |
| Net Assets | | | | $ | 162,688,599 | | |
| Maximum Offering Price per Share | | | | | | | |
| Class A Shares: | | | | | | | |
| Net assets applicable to shares outstanding | | | | $ | 1,106 | | |
| Shares of beneficial interest issued and outstanding | | | | | 105.82 | | |
| Net asset value, offering and redemption price per share | | | | $ | 10.45 | | |
| Maximum sales charge (4.50% of offering price)* | | | | $ | 0.49 | | |
| Maximum offer price to public | | | | $ | 10.94 | | |
| Class I Shares: | | | | | | | |
| Net assets applicable to shares outstanding | | | | $ | 162,687,493 | | |
| Shares of beneficial interest issued and outstanding | | | | | 15,567,629 | | |
| Net asset value, offering and redemption price per share | | | | $ | 10.45 | | |
CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended March 31, 2024
| Investment Income: | | | | | | | |
| Dividends | | | | $ | 537,951 | | |
| Interest | | | | | 6,453,527 | | |
| Interest from affiliated issuers | | | | | 1,344,983 | | |
| Total investment income | | | | | 8,336,461 | | |
| Expenses: | | | | | | | |
| Investment Adviser fees | | | | | 1,099,464 | | |
| Legal fees | | | | | 168,250 | | |
| Audit fee | | | | | 95,000 | | |
| Distribution fees – Class I (Note 3) | | | | | 86,683 | | |
| Distribution fees – Class A (Note 3) | | | | | 1 | | |
| Fund services expense | | | | | 71,516 | | |
| Trustees’ fees and expenses | | | | | 70,692 | | |
| Shareholder reporting fees | | | | | 46,772 | | |
| Registration fees | | | | | 40,298 | | |
| Chief Compliance Officer fees | | | | | 35,926 | | |
| Tax services | | | | | 12,931 | | |
| Offering costs (Note 2) | | | | | 12,084 | | |
| Miscellaneous | | | | | 45,798 | | |
| Total expenses | | | | | 1,785,415 | | |
| Investment Adviser Fee waived | | | | | (530,751) | | |
| Net expenses | | | | | 1,254,664 | | |
| Net investment income | | | | | 7,081,797 | | |
| Realized and Unrealized Gain (Loss): | | | | | | | |
| Net realized gain (loss) on: | | | | | | | |
| Investments in unaffiliated issuers | | | | | 258,142 | | |
| Foreign currency transactions | | | | | 55,560 | | |
| Forward contracts | | | | | (82,531) | | |
| Net realized gain (loss) | | | | | 231,171 | | |
| Net change in unrealized appreciation/depreciation on: | | | | | | | |
| Investments in unaffiliated issuers | | | | | 2,590,646 | | |
| Investments in affiliated issuers | | | | | (202,513) | | |
| Forward contracts | | | | | (38,790) | | |
| Foreign currency transactions | | | | | (1,023) | | |
| Net change in unrealized appreciation/depreciation | | | | | 2,348,320 | | |
| Net realized and unrealized gain (loss) on investments, foreign currency and forward contracts | | | | | 2,579,491 | | |
| Net Increase in Net Assets from Operations | | | | $ | 9,661,288 | | |
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
| | | For the Year or Period Ended March 31, 2024 | | | For the Period May 9, 20221 Through March 31, 2023 | | ||||||
Increase (Decrease) in Net Assets From: | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | |
Net investment income | | | | $ | 7,081,797 | | | | | $ | 650,961 | | |
Net realized gain (loss) on investments, foreign currency and forward contracts | | | | | 231,171 | | | | | | 95,393 | | |
Net change in unrealized appreciation/depreciation on investments and forward contracts | | | | | 2,348,320 | | | | | | 126,696 | | |
Net increase in net assets resulting from operations | | | | | 9,661,288 | | | | | | 873,050 | | |
Distributions to Shareholders: | | | | | | | | | | | | | |
Distributions: | | | | | | | | | | | | | |
Class A2 | | | | | (76) | | | | | | — | | |
Class I | | | | | (6,980,305) | | | | | | (478,831) | | |
Total distributions to shareholders | | | | | (6,980,381) | | | | | | (478,831) | | |
Capital Transactions: | | | | | | | | | | | | | |
Net proceeds from shares sold: | | | | | | | | | | | | | |
Class A2 | | | | | 1,000 | | | | | | — | | |
Class I | | | | | 133,242,086 | | | | | | 30,494,159 | | |
Reinvestment of distributions: | | | | | | | | | | | | | |
Class A2 | | | | | 76 | | | | | | — | | |
Class I | | | | | 212,152 | | | | | | 21,172 | | |
Cost of shares redeemed: | | | | | | | | | | | | | |
Class I | | | | | (4,457,172) | | | | | | — | | |
Net increase in net assets from capital transactions | | | | | 128,998,142 | | | | | | 30,515,331 | | |
Total increase in net assets | | | | | 131,679,049 | | | | | | 30,909,550 | | |
Net Assets: | | | | | | | | | | | | | |
Beginning of period | | | | | 31,009,550 | | | | | | 100,0003 | | |
End of period | | | | $ | 162,688,599 | | | | | $ | 31,009,550 | | |
Capital Share Transactions: | | | | | | | | | | | | | |
Shares sold: | | | | | | | | | | | | | |
Class A2 | | | | | 99 | | | | | | — | | |
Class I | | | | | 12,898,799 | | | | | | 3,075,478 | | |
Shares reinvested: | | | | | | | | | | | | | |
Class A2 | | | | | 7 | | | | | | — | | |
Class I | | | | | 20,783 | | | | | | 2,134 | | |
Shares redeemed: | | | | | | | | | | | | | |
Class I | | | | | (429,565) | | | | | | — | | |
Net increase in capital share transactions | | | | | 12,490,123 | | | | | | 3,077,612 | | |
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended March 31, 2024
| Increase (Decrease) in Cash | | | | | | | |
| Cash flows provided by (used for) operating activities: | | | | | | | |
| Net increase in net assets resulting from operations | | | | $ | 9,661,288 | | |
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities: | | | | | | | |
| Purchases of long-term portfolio investments | | | | | (114,174,171) | | |
| Sales of long-term portfolio investments | | | | | 4,714,710 | | |
| Purchase/Sales of short-term investments, net | | | | | (19,023,414) | | |
| Increase in interest and dividends | | | | | (1,005,943) | | |
| Decrease in due from Investment Adviser | | | | | 191,286 | | |
| Increase in fund shares sold | | | | | (493,851) | | |
| Decrease in deferred offering costs (Note 2) | | | | | 11,754 | | |
| Increase in prepaid expenses | | | | | (7,650) | | |
| Increase in fund shares redeemed | | | | | 1,651,876 | | |
| Increase in audit fee | | | | | 39,481 | | |
| Increase in legal fees | | | | | 15,258 | | |
| Increase in distribution fees – Class A (Note 3) | | | | | 1 | | |
| Increase in distribution fees – Class I (Note 3) | | | | | 9,764 | | |
| Increase in deferred tax liability | | | | | 12,930 | | |
| Increase in shareholder reporting fees | | | | | 14,194 | | |
| Increase in fund services expense | | | | | 10,628 | | |
| Increase in Chief Compliance Officer fees | | | | | 2,852 | | |
| Decrease in trustees’ fees and expenses | | | | | (708) | | |
| Increase in accrued other expenses | | | | | 18,663 | | |
| Net amortization on investments | | | | | (217,705) | | |
| Net realized (gain) loss on investments, foreign currency and forward contracts | | | | | (231,171) | | |
| Net change in unrealized (appreciation) depreciation on investments and forward contracts | | | | | (2,348,320) | | |
| Net cash provided by (used for) operating activities | | | | | (121,148,248) | | |
| Cash flows provided by (used for) financing activities: | | | | | | | |
| Proceeds from shares sold | | | | | 133,243,086 | | |
| Dividends paid to shareholders, net of reinvestments | | | | | (6,768,153) | | |
| Cost of shares redeemed | | | | | (4,457,172) | | |
| Net cash provided by (used for) financing activities | | | | | 122,017,761 | | |
| Net increase in cash | | | | | 869,513 | | |
| Cash: | | | | | | | |
| Beginning of period | | | | | 129,708 | | |
| End of period | | | | $ | 999,221 | | |
CONSOLIDATED FINANCIAL HIGHLIGHTS
Class A
For a capital share outstanding throughout the period.
| | | For the Period June 6, 2023* Through March 31, 2024 | | |||
Net asset value, beginning of period | | | | $ | 10.00 | | |
Income from Investment Operations: | | | | | | | |
Net investment income1 | | | | | 0.85 | | |
Net realized and unrealized gain (loss) on investments | | | | | 0.35 | | |
Total income from investment operations | | | | | 1.20 | | |
Less Distributions: | | | | | | | |
From net investment income | | | | | (0.72) | | |
From net realized gain | | | | | (0.03) | | |
Total distributions | | | | | (0.75) | | |
Net asset value, end of period | | | | $ | 10.45 | | |
Total return2,3 | | | | | 10.59% | | |
Ratios and Supplemental Data: | | | | | | | |
Net assets, end of period (in thousands) | | | | | 1 | | |
Ratio of expenses to average net assets: | | | | | | | |
Before fees waived and expenses absorbed4 | | | | | 2.30% | | |
After fees waived and expenses absorbed4 | | | | | 2.30% | | |
Ratio of net investment income (loss) to average net assets: | | | | | | | |
Before fees waived and expenses absorbed4 | | | | | 10.06% | | |
After fees waived and expenses absorbed4 | | | | | 10.06% | | |
Portfolio turnover rate3 | | | | | 25% | | |
CONSOLIDATED FINANCIAL HIGHLIGHTS
Class I
For a capital share outstanding throughout each period.
| | | For the Year Ended March 31, 2024 | | | For the Period May 9, 2022* Through March 31, 2023 | | ||||||
Net asset value, beginning of period | | | | $ | 10.08 | | | | | $ | 10.00 | | |
Income from Investment Operations: | | | | | | | | | | | | | |
Net investment income1 | | | | | 0.96 | | | | | | 0.54 | | |
Net realized and unrealized gain (loss) on investments | | | | | 0.35 | | | | | | (0.20) | | |
Total from investment operations | | | | | 1.31 | | | | | | 0.34 | | |
Less Distributions: | | | | | | | | | | | | | |
From net investment income | | | | | (0.91) | | | | | | (0.25) | | |
From net realized gain | | | | | (0.03) | | | | | | (0.01) | | |
Total distributions | | | | | (0.94) | | | | | | (0.26) | | |
Net asset value, end of period | | | | $ | 10.45 | | | | | $ | 10.08 | | |
Total return2 | | | | | 13.77% | | | | | | 3.37%3 | | |
Ratios and Supplemental Data: | | | | | | | | | | | | | |
Net assets, end of period (in thousands) | | | | $ | 162,687 | | | | | $ | 31,010 | | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | |
Before fees waived and expenses absorbed | | | | | 2.35% | | | | | | 5.46%4 | | |
After fees waived and expenses absorbed | | | | | 1.65% | | | | | | 1.65%4 | | |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | |
Before fees waived and expenses absorbed | | | | | 8.61% | | | | | | 2.22%4 | | |
After fees waived and expenses absorbed | | | | | 9.31% | | | | | | 6.03%4 | | |
Portfolio turnover rate | | | | | 25% | | | | | | 46%3 | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
| 2026 | | | | $ | 411,518 | | |
| 2027 | | | | | 530,751 | | |
| Total | | | | $ | 942,269 | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
| Cost of investments | | | | $ | 159,082,097 | | |
| Gross unrealized appreciation | | | | $ | 2,969,378 | | |
| Gross unrealized depreciation | | | | | (871,499) | | |
| Net unrealized appreciation on investments | | | | $ | 2,097,879 | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
| Increase (Decrease) | | |||
| Paid-in Capital | | | Total Distributable Earnings | |
| $(6,782) | | | $6,782 | |
| Undistributed ordinary income | | | | $ | 1,001,164 | | |
| Undistributed long-term capital gains | | | | | 29,932 | | |
| Accumulated capital and other losses | | | | | — | | |
| Net unrealized appreciation on investments | | | | | 2,097,879 | | |
| Other temporary differences | | | | | (4,904) | | |
| Total accumulated earnings | | | | $ | 3,124,071 | | |
Distribution paid from: | | | 2024 | | | 2023 | | ||||||
Ordinary income | | | | $ | 6,940,804 | | | | | $ | 478,831 | | |
Net long-term capital gains | | | | | 39,577 | | | | | | — | | |
Total taxable distributions | | | | $ | 6,980,381 | | | | | $ | 478,831 | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
| | | | Repurchase Offer | | | Repurchase Offer | | | Repurchase Offer | | | Repurchase Offer | |
| Commencement Date | | | May 31, 2023 | | | August 30, 2023 | | | November 29, 2023 | | | February 27, 2024 | |
| Repurchase Request Date | | | June 30, 2023 | | | September 29, 2023 | | | December 29, 2023 | | | March 28, 2024 | |
| Repurchase Pricing Date | | | June 30, 2023 | | | September 29, 2023 | | | December 29, 2023 | | | March 28, 2024 | |
| Net Asset Value as of Repurchase Pricing Date | | | | | | | | | | | | | |
| Class A Shares | | | $— | | | $10.36 | | | $10.35 | | | $10.45 | |
| Class I Shares | | | $10.21 | | | $10.38 | | | $10.33 | | | $10.45 | |
| Amount Repurchased | | | | | | | | | | | | | |
| Class A Shares | | | $0 | | | $0 | | | $0 | | | $0 | |
| Class I Shares | | | $441,075 | | | $1,241,160 | | | $1,123,061 | | | $1,651,876 | |
| Percentage of Outstanding Shares Repurchased | | | | | | | | | | | | | |
| Class A Shares | | | —% | | | —% | | | —% | | | —% | |
| Class I Shares | | | .93% | | | 1.85% | | | 1.16% | | | 1.01% | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Investments | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset-Backed Securities | | | | $ | — | | | | | $ | 3,776,028 | | | | | $ | 4,932,500 | | | | | $ | 8,708,528 | | |
Bank Loans | | | | | — | | | | | | 16,316,636 | | | | | | 37,353,014 | | | | | | 53,669,650 | | |
Closed-End Fund | | | | | 2,882,939 | | | | | | — | | | | | | — | | | | | | 2,882,939 | | |
Collateralized Loan Obligations | | | | | — | | | | | | 41,517,526 | | | | | | 4,868,595 | | | | | | 46,386,121 | | |
Private Investment Funds | | | | | — | | | | | | — | | | | | | 14,036,817 | | | | | | 14,036,817 | | |
Short-Term Investments | | | | | 26,872,732 | | | | | | — | | | | | | — | | | | | | 26,872,732 | | |
Subtotal | | | | $ | 29,755,671 | | | | | $ | 61,610,190 | | | | | $ | 61,190,926 | | | | | $ | 152,556,787 | | |
Private Investments Funds | | | | | | | | | | | | | | | | | | | | | | | 8,621,845 | | |
Total Investments | | | | | | | | | | | | | | | | | | | | | | $ | 161,178,632 | | |
| | | Asset-Backed Securities | | | Bank Loans | | | Collateralized Loan Obligations | | | Private Investment Funds | | | Warrants | | |||||||||||||||
Balance as of March 31, 2023 | | | | $ | 1,460,912 | | | | | $ | 8,648,194 | | | | | $ | — | | | | | $ | — | | | | | $ | 9,132 | | |
Transfers into Level 3 | | | | | — | | | | | | 348,452 | | | | | | 1,460,912 | | | | | | — | | | | | | — | | |
Transfers out of Level 3 | | | | | (1,460,912) | | | | | | — | | | | | | (950,005) | | | | | | — | | | | | | — | | |
Total gains or losses for the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Included in earnings (or changes in net assets) | | | | | (364) | | | | | | (106,773) | | | | | | 85,959 | | | | | | 8,786,817 | | | | | | — | | |
Included in other comprehensive income | | | | | 364 | | | | | | 46,967 | | | | | | — | | | | | | — | | | | | | (2,793) | | |
Net purchases | | | | | 4,932,500 | | | | | | 32,869,955 | | | | | | 4,333,324 | | | | | | 5,250,000 | | | | | | — | | |
Net sales | | | | | — | | | | | | (4,453,781) | | | | | | (61,595) | | | | | | — | | | | | | (6,339) | | |
Balance as of March 31, 2024 | | | | $ | 4,932,500 | | | | | $ | 37,353,014 | | | | | $ | 4,868,595 | | | | | $ | 14,036,817 | | | | | $ | — | | |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period | | | | $ | (364) | | | | | $ | 126,740 | | | | | $ | 85,959 | | | | | $ | 786,817 | | | | | $ | — | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
Investments | | | Fair Value | | | Valuation Technique | | | Unobservable Inputs | | | Range of Input | | |||
Asset Backed Securities | | | | | 4,932,500 | | | | Recent Transaction Price | | | Recent Transaction Price | | | N/A | |
Bank Loans | | | | | 4,978,992 | | | | Discounted Cash Flow | | | Discount Rates | | | 13.80% – 18.20% | |
| | | | | 12,875,307 | | | | Income approach | | | Market Yield/Discount Rate | | | 6.88% – 14.07% | |
| | | | | 10,604,569 | | | | Recent Transaction Price | | | Book Value Multiple | | | N/A | |
| | | | | 8,894,147 | | | | Yield Analysis | | | Market Yield | | | 9.91% – 13.71% | |
Collateralized Loan Obligations | | | | | 2,171,432 | | | | Market Approach | | | Expected yield | | | 12.78% – 23.03% | |
| | | | | 2,697,163 | | | | Recent Transaction Price | | | Recent Transaction Price | | | N/A | |
Private Investment Funds | | | | | 11,231,817 | | | | Adjusted Net Asset Value | | | Reported net asset/fair value adjustments | | | N/A | |
| | | | | 2,805,000 | | | | Enterprise Valuation | | | EV Multiple | | | 6.2x | |
Name of Issuer | | | Value Beginning of Period | | | Purchases | | | Sales Proceeds | | | Net Realized Gain (Loss) | | | Amortization | | | Change in Unrealized Appreciation (Depreciation) | | | Value End of Period | | |||||||||||||||||||||
CLOSED-END FUNDS | | ||||||||||||||||||||||||||||||||||||||||||
Palmer Square Capital BDC, Inc. | | | | | 407,750 | | | | | | 2,500,005 | | | | | | — | | | | | | — | | | | | | — | | | | | | (24,816) | | | | | | 2,882,939 | | |
COLLATERALIZED LOAN OBLIGATIONS | | ||||||||||||||||||||||||||||||||||||||||||
Mount Logan Funding LP | | | | | 255,598 | | | | | | 1,272,893 | | | | | | — | | | | | | — | | | | | | (3,333) | | | | | | (110,286) | | | | | | 1,414,872 | | |
Palmer Square European Loan Funding | | | | | 650,689 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (38,735) | | | | | | 611,954 | | |
Palmer Square European Loan Funding | | | | | 299,317 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,559 | | | | | | 23,942 | | | | | | 324,818 | | |
Palmer Square European Loan Funding | | | | | — | | | | | | 1,078,378 | | | | | | — | | | | | | — | | | | | | — | | | | | | (64,436) | | | | | | 1,013,942 | | |
Palmer Square European Loan Funding | | | | | — | | | | | | 1,001,781 | | | | | | — | | | | | | — | | | | | | — | | | | | | (153,766) | | | | | | 848,015 | | |
Palmer Square European Loan Funding | | | | | — | | | | | | 1,531,475 | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,053 | | | | | | 1,568,528 | | |
Palmer Square European Loan Funding | | | | | — | | | | | | 1,063,700 | | | | | | — | | | | | | — | | | | | | — | | | | | | 23,821 | | | | | | 1,087,521 | | |
Palmer Square European Loan Funding | | | | | — | | | | | | 2,711,203 | | | | | | — | | | | | | — | | | | | | — | | | | | | (14,040) | | | | | | 2,697,163 | | |
Palmer Square Loan Funding Ltd. | | | | | 279,302 | | | | | | — | | | | | | — | | | | | | — | | | | | | 819 | | | | | | 18,951 | | | | | | 299,072 | | |
Palmer Square Loan Funding Ltd. | | | | | 441,809 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (10,835) | | | | | | 430,974 | | |
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | (38,426) | | | | | | 461,574 | | |
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 825,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 64,160 | | | | | | 889,160 | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
Name of Issuer | | | Value Beginning of Period | | | Purchases | | | Sales Proceeds | | | Net Realized Gain (Loss) | | | Amortization | | | Change in Unrealized Appreciation (Depreciation) | | | Value End of Period | | |||||||||||||||||||||
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 735,000 | | | | | | — | | | | | | — | | | | | | 788 | | | | | | 17,794 | | | | | | 753,582 | | |
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 1,250,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,225 | | | | | | 1,262,225 | | |
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,018 | | | | | | 511,018 | | |
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,791 | | | | | | 502,791 | | |
Palmer Square Loan Funding Ltd. | | | | | — | | | | | | 1,463,000 | | | | | | — | | | | | | — | | | | | | 845 | | | | | | 41,073 | | | | | | 1,504,918 | | |
Total | | | | $ | 2,334,466 | | | | | $ | 16,932,434 | | | | | | — | | | | | | — | | | | | $ | 679 | | | | | $ | (202,513) | | | | | $ | 19,065,066 | | |
|
| | | Derivatives not designated as hedging instruments | | |||||||||
| | | Foreign Exchange Contracts | | | Total | | ||||||
Assets: | | | | | | | | | | | | | |
Forward foreign currency exchange contracts | | | | $ | 64,516 | | | | | $ | 64,516 | | |
| | | | $ | 64,516 | | | | | $ | 64,516 | | |
| | | Foreign Exchange Contracts | | | Total | | ||||||
Liabilities | | | | | | | | | | | | | |
Forward foreign currency exchange contracts | | | | $ | 11,948 | | | | | $ | 11,948 | | |
| | | | $ | 11,948 | | | | | $ | 11,948 | | |
| | | Derivatives not designated as hedging instruments | | |||||||||
| | | Foreign Exchange Contracts | | | Total | | ||||||
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives | | | | | | | | | | | | | |
Forward contracts | | | | $ | (38,790) | | | | | $ | (38,790) | | |
| | | | $ | (38,790) | | | | | $ | (38,790) | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
Derivatives not designated as hedging instruments | | | | | | | | | | | | | |
Forward contracts | | | Foreign exchange contracts | | | Notional amount | | | | $ | (5,096,708) | | |
| | | Unfunded Commitment | | |||
Accordion Partners | | | | $ | 30,500 | | |
BCP Special Opportunities Offshore Feeder III LP | | | | | 3,000,000 | | |
CW Co-Invest: Ares 2023-1 Sub | | | | | 439,473 | | |
Dentive Capital, LLC | | | | | 45,464 | | |
ENT MSO, LLC | | | | | 422,196 | | |
Fortis Payment Systems, LLC | | | | | 425,000 | | |
IDC Infusion Services | | | | | 402,597 | | |
Orthopaedic (ITC) Buyer, LLC | | | | | 425,532 | | |
PhyNet Dermatology, LLC | | | | | 1,532,365 | | |
RHF VI Funding, LLC | | | | | 250,000 | | |
Riskonnect Parent, LLC | | | | | 4,000,000 | | |
Royal Palm I | | | | | 405,501 | | |
Royal Palm II | | | | | 81,100 | | |
TA/WEG Holdings, LLC | | | | | 2,847,536 | | |
Tank Holding Corp. | | | | | 180,409 | | |
Taoglas Group Holdings Limited | | | | | 58,106 | | |
TCW Direct Lending VIII LLC | | | | | 8,938,833 | | |
TCW Fenix B-1 | | | | | 59,389 | | |
TCW Fenix B-2 | | | | | 332,043 | | |
Whitehawk IV Plus | | | | | 731,421 | | |
| | | | $ | 24,607,465 | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
March 31, 2024
FUND INFORMATION
March 31, 2024 (Unaudited)
FUND INFORMATION — Continued
March 31, 2024 (Unaudited)
FUND INFORMATION — Continued
March 31, 2024 (Unaudited)
| | NAME, ADDRESS AND YEAR OF BIRTH | | | | POSITION(S) HELD WITH THE FUND | | | | LENGTH OF TIME SERVED | | | | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS | | | | NUMBER OF PORTFOLIOS IN FUND COMPLEX* OVERSEEN BY TRUSTEE | | | | OTHER DIRECTORSHIPS HELD BY TRUSTEES | | |
| | David G. Lee Year of Birth: 1952 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Chairman and Trustee | | | | Since Inception | | | | Retired (since 2012); President and Director, Client Opinions, Inc. (2003 – 2012); Chief Operating Officer, Brandywine Global Investment Management (1998 – 2002). | | | | 17 | | | | None | | |
| | Robert Seyferth Year of Birth: 1952 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Trustee | | | | Since Inception | | | | Retired (since 2009); Chief Procurement Officer/Senior Managing Director, Bear Stearns/JP Morgan Chase (1993 – 2009). | | | | 17 | | | | None | | |
| | Gary E. Shugrue Year of Birth: 1954 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Trustee | | | | Since Inception | | | | Retired (since 2023); Managing Director, Veritable LP (investment advisory firm) (2016 – 2023); Founder/President, Ascendant Capital Partners, LP (private equity firm) (2001 – 2015). | | | | 17 | | | | Trustee, Quaker Investment Trust (2 portfolios) (registered investment company). | | |
FUND INFORMATION — Continued
March 31, 2024 (Unaudited)
| | NAME, ADDRESS AND YEAR OF BIRTH | | | | POSITION(S) HELD WITH THE FUND | | | | LENGTH OF TIME SERVED | | | | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS | | | | NUMBER OF PORTFOLIOS IN FUND COMPLEX* OVERSEEN BY TRUSTEE | | | | OTHER DIRECTORSHIPS HELD BY TRUSTEES | | |
| | Terrance P. Gallagher** Year of Birth: 1958 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Trustee | | | | Since Inception | | | | Executive Vice President, Trust Platform Director, UMB Fund Services, Inc. (2024 to Present); President and Trustee, Investment Managers Series Trust II (registered investment company) (2013 – Present); Executive Vice President and Director of Fund Accounting, Administration and Tax; UMB Fund Services, Inc. (2007 – 2023). | | | | 17 | | | | Trustee, Investment Managers Series Trust II (33 portfolios) (registered investment company). | | |
| | Michael Peck Year of Birth: 1980 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | President | | | | Since Inception | | | | Chief Executive Officer and Co-CIO, First Trust Capital Management L.P. (formerly, Vivaldi Asset Management, LLC) (2012 – Present) President and Co-CIO, Vivaldi Capital Management LP (2012 – March 2024); Portfolio Manager, Coe Capital Management (2010 – 2012); Senior Financial Analyst and Risk Manager, the Bond Companies (2006 – 2008). | | | | N/A | | | | N/A | | |
| | Chad Eisenberg Year of Birth: 1982 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Treasurer | | | | Since Inception | | | | Chief Operating Officer, First Trust Capital Management L.P. (formerly, Vivaldi Asset Management, LLC) (2012 – Present); Chief Operating Officer, Vivaldi Capital Management LP (2012 – March 2024); Director, Coe Capital Management LLC (2010 – 2011). | | | | N/A | | | | N/A | | |
FUND INFORMATION — Continued
March 31, 2024 (Unaudited)
| | NAME, ADDRESS AND YEAR OF BIRTH | | | | POSITION(S) HELD WITH THE FUND | | | | LENGTH OF TIME SERVED | | | | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS | | | | NUMBER OF PORTFOLIOS IN FUND COMPLEX* OVERSEEN BY TRUSTEE | | | | OTHER DIRECTORSHIPS HELD BY TRUSTEES | | |
| | Bernadette Murphy Year of Birth: 1964 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Chief Compliance Officer | | | | Since Inception | | | | Director, Vigilant Compliance, LLC (investment management solutions firm) (2018 – Present). | | | | N/A | | | | N/A | | |
| | Ann Maurer Year of Birth: 1972 c/o UMB Fund Services, Inc. 235 W. Galena St. Milwaukee, WI 53212 | | | | Secretary | | | | Since Inception | | | | Senior Vice President, Client Services (2017 – Present). | | | | N/A | | | | N/A | | |
FUND INFORMATION — Continued
March 31, 2024 (Unaudited)
| | | | TICKER | | | CUSIP | | ||||||
| First Trust Private Credit Fund – Class I Shares | | | | | FTPCX | | | | | | 33741K209 | | |
| First Trust Private Credit Fund – Class A Shares | | | | | FTCAX | | | | | | 33741K200 | | |
235 West Galena Street
Milwaukee, WI 53212
Toll Free: (877) 779-1999
(b) Not applicable.
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, 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, regardless of whether these individuals are employed by the registrant or a third party.
(b) The registrant’s code of ethics are written standards that are reasonably designed to deter wrongdoing and to promote: (1) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant; (3) Compliance with applicable governmental laws, rules, and regulations; (4) The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and (5) Accountability for adherence to the code.
(c) There have been no amendments, during the period covered by this report, to a provision of the 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, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description.
(d) The registrant has not granted any waivers, during the period covered by this report, including an implicit waiver, from a provision of the 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, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions.
(e) The registrant does not intend to satisfy the disclosure requirement under paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from, a provision of its 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 and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item by posting such information on its Internet website.
(f) The registrant has included with this filing, pursuant to Item 13(a)(1), a copy of its 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, as an exhibit to its annual report on this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's board of trustees has determined that Mr. David G. Lee and Mr. Robert Seyferth are qualified to serve as the audit committee financial experts serving on its audit committee and that they are "independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
(a) The aggregate fees billed for the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements are $60,600 for 2023 and $58,100 for 2024.
Audit-Related Fees
(b) The aggregate fees billed for the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 for 2023 and $0 for 2024.
Tax Fees
(c) The aggregate fees billed for the last two fiscal years for professional services rendered by the principal accountant for the review and preparation of tax returns are $0 for 2023 and $0 for 2024.
All Other Fees
(d) The aggregate fees billed for the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2023 and $0 for 2024.
(e)(1) The Registrant's Audit Committee must pre-approve the audit and non-audit services of the Auditors prior to the Auditor's engagement.
(e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) 0%
(c) 0%
(d) 0%
(f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the fiscal year ended March 31, 2024 that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than fifty percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2023 and $0 for 2024.
(h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another 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 not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence.
(i) Not applicable.
(j) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) | Not applicable. |
(b) | Not applicable. |
ITEM 6. SCHEDULE OF INVESTMENTS.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1(a) of this form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
First Trust Capital Management L.P.
PROXY POLICY AND PROCEDURE
INTRODUCTION
First Trust Capital Management L.P. (“FTCM”) acts as either the advisor or sub-advisor to a number of registered investment companies (the “Funds”). In accord with Rule 206(4)-6 of the Investment Advisers Act of 1940, as amended, FTCM has adopted the following policies and procedures to provide information on FTCM’s proxy policy generally as well as on procedures for each of the Funds specifically (the “Proxy Policy and Procedure”). These policies and procedures apply only to FTCM. Investment managers engaged as sub-advisors for one of the Funds are required to vote proxies in accord with their own policies and procedures and any applicable management agreements.
GENERAL GUIDELINES
FTCM’s Proxy Policy and Procedure is designed to ensure that proxies are voted in a manner (i) reasonably believed to be in the best interests of the Funds and their shareholders1 and (ii) not affected by any material conflict of interest. FTCM considers shareholders’ best economic interests over the long term (i.e., addresses the common interest of all shareholders over time). Although shareholders may have differing political or social interests or values, their economic interest is generally uniform.
FTCM has adopted voting guidelines to assist in making voting decisions on common issues. The guidelines are designed to address those securities in which the Funds generally invest and may be revised in FTCM’s discretion. Any non-routine matters not addressed by the proxy voting guidelines are addressed on a case-by-case basis, considering all relevant facts and circumstances at the time of the vote, particularly where such matters have a potential for major economic impact on the issuer’s structure or operations. In making voting determinations, FTCM typically will rely on the individual portfolio managers who invest in and track particular companies as they are the most knowledgeable about, and best suited to make decisions regarding, particular proxy matters. In addition, FTCM may conduct research internally and/or use the resources of an independent research consultant. FTCM may also consider other materials such as studies of corporate governance and/or analyses of shareholder and management proposals by a certain sector of companies and may engage in dialogue with an issuer’s management.
FTCM acknowledges its responsibility to identify material conflicts of interest related to voting proxies. FTCM’s employees are required to disclose to the Chief Compliance Officer any personal conflicts, such as officer or director positions held by them, their spouses or close relatives, in any publicly traded company. Conflicts based on business relationships with FTCM, any affiliate or any person associated with FTCM, will be considered only to the extent that FTCM has actual knowledge of such relationships. FTCM then takes appropriate steps to address identified conflicts. Typically, in those instances when a proxy vote may present a conflict between the interests of the Fund, on the one hand, and FTCM’s interests or the interests of a person affiliated with FTCM on the other, FTCM will abstain from making a voting decision and will document the decision and reasoning for doing so.
1 Actions taken in accord with the best interests of the Funds and their shareholders are those which align most closely with the Funds’ stated investment objectives and strategies.
First Trust Capital Management | 225 W. Wacker Drive | 21st Floor | Chicago, IL 60606 | P: 773.828.6700 | F: 847.386.2910
In some cases, the cost of voting a proxy may outweigh the expected benefits. For example, casting a vote on a foreign security may involve additional costs such as hiring a translator or traveling to the foreign country to vote the security in person. In such situations, FTCM may abstain from voting a proxy if the effect on shareholders’ economic interests or the value of the portfolio holding is indeterminable or insignificant.
In certain cases, securities on loan as part of a securities lending program may not be voted. Nothing in the proxy voting policies shall obligate FTCM to exercise voting rights with respect to a portfolio security if it is prohibited by the terms of the security or by applicable law or otherwise.
FTCM will not discuss with members of the public how they intend to vote on any particular proxy proposal.
SPECIAL CONSIDERATIONS
The Funds are subject to the restrictions of Sections 12(d)(1)(A)(i) and (B)(i) of the Investment Company Act of 1940 (the “Act”). Generally, these provisions require that any fund and any entity controlled by that fund (including ETFs that are registered investment companies) may not (i) own, in the aggregate, more than three percent (3%) of the total outstanding voting securities of any registered open-end or closed-end investment company, including money market funds2; (ii) invest more than 5% of its total assets in any one investment company; or (iii) invest more than 10% of its total assets in the securities of other investment companies. Section 12(d)(1)(F) of the Act provides that the Section 12(d)(1) limitations do not apply to the securities acquired by a fund if (x) immediately after the purchase or acquisition of not more than 3% of the total outstanding stock of such registered investment company is owned by the fund and all affiliated persons of the fund, and (y) the fund is not proposing to offer or sell any security issued by it through a principal underwriter or otherwise at a public or offering price which includes a sales load of more than one and a half percent (1.5%). In the event that one of Funds relies upon Section 12(d)(1)(F), FTCM, acting on behalf of the Fund, will, when voting with respect to any investment company owned by the Fund, comply with either of the following voting restrictions:
● | Seek instruction from the Fund’s shareholders with regard to the voting of all proxies and vote in accordance with such instructions, or |
● | Vote the shares held by the Fund in the same proportion as the vote of all other holders of such security. |
In addition to Section 12(d)(1)(F), Rule 12d1-4 under the Act states that a registered investment company (“Acquiring Fund”) may purchase or otherwise acquire the securities issued by another registered investment company (the “Acquired Fund”) in excess of the limits of Section 12(d)(1) and an Acquired Fund may sell or otherwise dispose of the securities issued by the Acquiring Fund in excess of the limits of Section 12(d)(1) if certain conditions are met. One of the conditions is that if the Acquiring Fund and its advisory group (as defined by Rule 12d1-4), in aggregate (A) hold more than 25% of the outstanding voting securities of an Acquired Fund that is a registered open-end management investment company or registered unit investment trust as a result of a decrease in the outstanding voting securities of an Acquired Fund, or (B) hold more than 10% of the outstanding voting securities of an Acquired Fund that is a registered closed-end management investment company or business development company, each of those holders will vote its securities in the same proportion as the vote of all other holders of such securities. When relying on Rule 12d1-4, the Fund will comply with such voting restrictions as required by Rule 12d1-4 and any applicable provision in the respective Fund of Funds Agreement with the Acquired Fund.
2 The three percent (3%) limit is measured at the time of investment.
First Trust Capital Management | 225 W. Wacker Drive | 21st Floor | Chicago, IL 60606 | P: 773.828.6700 | F: 847.386.2910
ISS ProxyEdge
FTCM has a contractual relationship with Institutional Shareholder Services Inc. (“ISS”) through which ISS provides certain proxy management services to FTCM’s portfolio management teams. Specifically, ISS (i) provides access to the ISS ProxyExchange web-based voting and research platform to access vote recommendations, research reports, execute vote instructions and run reports relevant to Subscriber’s proxy voting environment; (ii) implements and maps FTCM’s designated proxy voting policies to applicable accounts and generates vote recommendations based on the application of such policies; and (iii) monitors FTCM’s incoming ballots, performs ballot-to-account reconciliations with FTCM and its third party providers to help ensure that ISS is receiving all ballots for which FTCM has voting rights.
ISS provides two options for how proxy ballots are executed:
1. | Implied Consent: ISS executes ballots on FTCM’s behalf based on policy guidelines chosen at the time FTCM entered into the relationship with ISS. |
2. | Mandatory Signoff: ISS is not permitted to mark or process any ballot on FTCM’s behalf without first receiving FTCM’s specific voting instructions via ProxyExchange. |
FTCM has opted for Option 1. Implied Consent and in so doing has chosen to allow ISS to vote proxies on its behalf “with management’s recommendations.” FTCM has the option, however, to change its vote from the “with management’s recommendations” default at any point prior to the voting deadline if the portfolio managers following the subject company determine it is in the best interests of the Funds and their shareholders to do so. In those instances when the subject company’s management has not provided a voting recommendation, FTCM will either vote based on its own determination of what would align most closely with the best interests of the Funds and their shareholders or will opt to allow ISS to submit an “abstain” vote on its behalf. In addition, in those limited instances when share blocking3 may apply, FTCM has instructed ISS not to cast a vote on FTCM’s behalf unless FTCM provides specific instructions via ProxyExchange.
FUND-SPECIFIC POLICIES AND PROCEDURES
Infinity Core Alternative Fund, Destiny Alternative Fund LLC, Destiny Alternative Fund (TEI) LLC, First Trust Private Assets Fund, and First Trust Hedged Strategies Fund (collectively, the “Funds of Funds”) are “fund of funds” that invest primarily in general or limited partnerships, funds, corporations, trusts or other investment vehicles (collectively, “Investment Funds”). While it is unlikely that the Funds of Funds will receive notices or proxies from Investment Funds (or in connection with any other portfolio securities), to the extent that the Funds of Funds do receive such notices or proxies and the Funds of Funds have voting interests in such Investment Funds, the responsibility for decisions regarding proxy voting for securities held by the Funds of Funds lies with FTCM as their advisor. FTCM will vote such proxies in accordance with the proxy policies and procedures noted above.
The Funds of Funds are required to file Form N-PX with its complete proxy voting record for the twelve (12) months ended June 30th, no later than August 31st of each year. The Funds of Funds Form N-PX filings will be available: (i) without charge, upon request, by calling 1.877.779.1999 or (ii) by visiting the SEC’s website at www.sec.gov.
3 Proxy voting in certain countries requires share blocking. Shareholders wishing to vote their proxies must deposit their shares shortly before the meeting date with a designated depositary. During this blocking period, any shares held by the designated depositary cannot be sold until the meeting has taken place and the shares have been returned to FTCM’s custodian banks. FTCM generally opts not to participate in share blocking proxies given these restrictions on their ability to trade.
First Trust Capital Management | 225 W. Wacker Drive | 21st Floor | Chicago, IL 60606 | P: 773.828.6700 | F: 847.386.2910
All Other Funds
With the exception of the First Trust Merger Arbitrage Fund and First Trust Merger Arbitrage ETF, Infinity Core Alternative Fund, Destiny Alternative Fund LLC, Destiny Alternative Fund (TEI) LLC, First Trust Private Assets Fund, and First Trust Hedged Strategies Fund, the Funds for which FTCM is presently either an advisor or a sub-advisor are managed by multiple internal and external portfolio management teams. As noted above, the policies and procedures outlined within this Proxy Policy and Procedure apply to those securities being held in that portion of the Funds’ portfolios managed by a FTCM portfolio manager only (including Infinity Core Alternative Fund).
Each Fund will be required to file Form N-PX annually, with its complete proxy voting record for the twelve (12) months ended June 30th, no later than August 31st of each year. The Fund’s Form N-PX filing will be available: (i) without charge, upon request, from the Fund’s administrator or (ii) by visiting the SEC’s website at www.sec.gov.
First Trust Capital Management | 225 W. Wacker Drive | 21st Floor | Chicago, IL 60606 | P: 773.828.6700 | F: 847.386.2910
Palmer Square Capital Management LLC
Proxy Voting Guidelines
In accordance with Rule 30b1-4 under the Investment Company Act of 1940 and Rule 206(4)-6 and 204-2 under of the Investment Advisers Act of 1940, Palmer Square Capital Management LLC (“Palmer Square”) is providing all clients with a summary of its proxy voting procedures.
● | Upon opening an account with Palmer Square, clients are given the option to delegate proxy-voting discretion to Palmer Square by completing the appropriate documents. Palmer Square will only exercise proxy-voting discretion over client shares in the instances where clients give Palmer Square discretionary authority to vote on their behalf. |
● | It is Palmer Square’s policy to vote client shares primarily in conformity with Glass Lewis & Co. recommendations, in order to mitigate conflicts of interest that can arise between Palmer Square and its clients. Glass Lewis & Co. and Palmer Square retain a record of all recommendations. |
● | Glass Lewis & Co. is an independent third party that issues recommendations based upon its own internal guidelines. |
● | Palmer Square conducts a review at least annually of Glass Lewis & Co to assess the firm’s capacity and competency to serve as a proxy advisor. |
● | Palmer Square will vote client shares inconsistent with Glass Lewis & Co. recommendations if Palmer Square believes that doing so is in the best interest of its clients. |
● | In situations where Palmer Square identifies a material conflict of interest in the voting of proxies due to business or personal relationships that Palmer Square maintains with persons having an interest in the outcome of certain votes, Palmer Square will take appropriate steps to ensure that its proxy voting decisions are made in the best interest of its clients. |
● | Palmer Square votes client shares via ProxyEdge, an electronic voting platform provided by Broadridge Financial Solutions, Inc. Additionally, ProxyEdge retains a record of proxy votes for each client. |
● | Annually, Palmer Square will file Form N-PX with the SEC, which will contain each fund’s complete proxy voting record. |
● | Palmer Square’s Compliance Team will periodically review all proxy votes to ensure consistency with its procedures. |
● | Upon request, clients can receive a copy of Palmer Square’s proxy voting procedures and Glass Lewis & Co.’s proxy voting guidelines. |
● | These procedures are currently in effect but could be amended in the future |
If you have any questions or would like a copy of Palmer Square’s proxy voting procedures, Glass Lewis & Co.’s proxy voting guidelines and/or a record of how your shares were voted, please contact Palmer Square’s Chief Compliance Officer at 816-994-3200.
Mount Logan Management, LLC
Proxy Voting Policy and Procedures
Mount Logan Management LLC (“MLM”) has established written policies and procedures setting forth the principles and procedures by which MLM votes or gives consent with respect to securities owned by the Fund (“Votes”). The guiding principle by which MLM votes all Votes is to vote in the best interests of the Fund by maximizing the economic value of the Fund’s holdings, taking into account the Fund’s investment horizon, the contractual obligations under the relevant Governing Documents, and all other relevant facts and circumstances at the time of the vote. MLM does not permit voting decisions to be influenced in any manner that is contrary to, or dilutive of, this guiding principle.
It is MLM’s general policy to vote or give consent on all matters presented to security holders in any Vote. However, MLM reserves the right to abstain on any particular Vote or otherwise withhold its vote or consent on any matter if, in the judgment of the Chief Compliance Officer (“CCO”) or the relevant investment professional, the costs associated with voting such Vote outweigh the benefits to the Fund or if the circumstances make such an abstention or withholding otherwise advisable and in the best interests of the Fund.
The Fund generally cannot direct MLM’s Vote.
All voting decisions initially are the responsibility of MLM’s investment professionals, unless there is a material conflict of interest, in which case they should raise it with the CCO. In most cases, MLM investment professionals will make the decision as to the appropriate vote for any particular Vote. In making such decision, they may rely on any of the information and/or research available to them. In the event of a material conflict of interest, if the investment professional and the CCO are unable to arrive at an agreement as to how to vote, then the CCO may consult with MLM’s Board as to the appropriate vote, who will then review the issues and arrive at a decision based on the overriding principle of seeking the maximization of the economic value of the Fund’s holdings.
All MLM investment professionals are expected to perform their tasks relating to the voting of Votes in accordance with the principles set forth above, according the first priority to the best interest of the Fund. The CCO will use his or her best judgment to address any such conflict of interest and ensure that it is resolved in accordance with his or her independent assessment of the best interests of the Fund.
Where the CCO deems appropriate in his or her sole discretion, unaffiliated third parties may be used to help resolve conflicts. In this regard, the CCO shall have the power to retain independent fiduciaries, consultants, or professionals to assist with voting decisions and/or to delegate voting or consent powers to such fiduciaries, consultants or professionals.
Copies of relevant proxy logs, identifying how proxies were voted in connection with the Fund and copies of proxy voting policies are available to any client or prospective client by contacting compliance@bcpartners.com or upon written request to: Mount Logan Management, LLC, Attn: Chief Compliance Officer, 650 Madison Avenue, 23rd Floor, New York, New York 10022.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a)(1) Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio Manager(s) or Management Team Members
The following table provides biographical information about the members of First Trust Capital Management L.P. (the “Investment Manager”), Mount Logan Management, LLC and Palmer Square Capital Management LLC (the "Sub-Advisers"), who are primarily responsible for the day-to-day management of First Trust Private Credit Fund’s portfolio as of March 31, 2024:
Name of Portfolio Management Team Member | Title | Length of Time of Service to the Fund | Business Experience During the Past 5 Years | Role of Portfolio Management Team Member |
Michael Peck | Chief Executive Officer & Co-Chief Investment Officer | Since Inception | Chief Executive Officer and Co-CIO, First Trust Capital Management L.P. (formerly, Vivaldi Asset Management, LLC) (2012 - Present); President and Co-CIO, Vivaldi Capital Management LP (formerly, Vivaldi Capital Management, LLC) (2012 – March 2024) | Portfolio Management |
Brian Murphy | Co-Chief Investment Officer | Since Inception | Co-Chief Investment Officer and Portfolio Manager, First Trust Capital Management L.P. (formerly, Vivaldi Asset Management, LLC) (2014 - Present), Portfolio Manager, Vivaldi Capital Management LP (formerly, Vivaldi Capital Management, LLC) (2014 – March 2024) | Portfolio Management |
Ted Goldthorpe | Chief Executive Officer | Since October 2022 | Chief Executive Officer and Chairman of Mount Logan Capital Inc. | Portfolio Management |
Matthias Ederer | Co-President | Since October 2022 | Co-President of Mount Logan Management LLC | Portfolio Management |
Henry Wang | Co-President | Since October 2022 | Co-President of Mount Logan Management LLC | Portfolio Management |
Angie K. Long | Chief Investment Officer | Since February 2023 | Chief Investment Officer, Palmer Square Capital Management since 2011 | Portfolio Management |
Christopher D. Long | Chief Executive Officer | Since February 2023 | Chief Executive Officer, Palmer Square Capital Management since 2009 | Portfolio Management |
Taylor R. Moore | Managing Director, Portfolio Manager, Head of Structured Credit Trading | Since February 2023 | Managing Director, Portfolio Manager, Head of Structured Credit Trading at Palmer Square Capital Management since 2018, joined Palmer Square in 2013. | Portfolio Management |
(a)(2) Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest
The following table provides best available information about portfolios and accounts, other than First Trust Private Credit Fund, for which the members of the Investment Committee of the Investment Manager and Sub-Advisers are primarily responsible for the day-to-day portfolio management as of March 31, 2024:
Name of Portfolio Management Team Member | Number of Accounts and Total Value of Assets for Which Advisory Fee is Performance-Based: | Number of Other Accounts Managed and Total Value of Assets by Account Type for Which There is No Performance-Based Fee: | ||||
Name | Registered investment companies | Other pooled investment vehicles | Other accounts | Registered investment companies | Other pooled investment vehicles | Other accounts |
Michael Peck | 1 account/ $15.57M | 22 accounts / $261.80M | 0 accounts | 6 accounts / $2,054.17M | 7 accounts / $85.25M | 0 accounts |
Brian Murphy | 1 account / $15.57M | 22 accounts / $261.80M | 0 accounts | 6 accounts / $2,054.17M | 14 accounts / $118.02M | 0 accounts |
Ted Goldthorpe | 5 accounts / $1.3B | 8 accounts / $4.5B | 7 accounts / $1.3B | 0 accounts | 2 accounts / $27M | 1 account / $63M |
Matthias Ederer | 5 accounts / $1.3B | 8 accounts / $4.5B | 7 accounts / $1.3B | 0 accounts | 2 accounts / $27M | 1 account / $63M |
Henry Wang | 5 accounts / $1.3B | 8 accounts / $4.5B | 7 accounts / $1.3B | 0 accounts | 2 accounts / $27M | 1 account / $63M |
Angie K. Long | 0 accounts | 57 accounts / $23.9B | 0 accounts | 5 accounts/ 1.5B | 63 accounts / $25.8B | 60 accounts / $2.4B |
Christopher D. Long | 0 accounts | 57 accounts / $23.9B | 0 accounts | 4 accounts/ 1.4B | 63 accounts $25.8B | 84 accounts / $2.4B |
Taylor R. Moore | 0 accounts | 0 accounts | 0 accounts | 3 accounts/ 518M | 0 accounts | 0 accounts |
Conflicts of Interest
The Investment Manager and Portfolio Managers may manage multiple funds and/or other accounts, and as a result may be presented with one or more of the following actual or potential conflicts:
The management of multiple funds and/or other accounts may result in the Investment Manager or a Portfolio Manager devoting unequal time and attention to the management of each fund and/or other account. The Investment Manager seeks to manage such competing interests for the time and attention of a Portfolio Manager by having the Portfolio Manager focus on a particular investment discipline. Most other accounts managed by a Portfolio Manager are managed using the same investment models that are used in connection with the management of the Fund.
If the Investment Manager or a Portfolio Manager identifies a limited investment opportunity which may be suitable for more than one fund or other account, a fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible funds and other accounts. To deal with these situations, the Investment Manager and Sub-Advisers have adopted procedures for allocating portfolio transactions across multiple accounts.
The Investment Manager has adopted certain compliance procedures which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
(a)(3) Compensation Structure of Portfolio Manager
Portfolio Manager Compensation
The below information is provided as of March 31, 2024.
Mr. Peck and Mr. Murphy receive base salaries and bonuses, neither of which is based on performance, and are eligible to avail themselves of life insurance, medical and dental benefits offered to all employees of the Investment Manager and to participate in the Investment Manager’s 401(k) plan. In addition, they are members of VFT Holdings LP and receive compensation based on the overall profitability of the firm and its affiliates.
Each Mount Logan portfolio manager is compensated based on the success of various fund and business platforms. As part of this compensation, the portfolio manager receives a carried interest from the Mount Logan activities that is distributed based on factors such as seniority, longevity and performance, including successful deal sourcing and execution. Each portfolio manager's compensation would increase if the Fund's performance (and net asset value) increased due to each portfolio manager's indirect interest in the Mount Logan, but such compensation is not tied to any specific metric.
The Palmer Square portfolio managers receive a fixed base salary and a discretionary bonus. Each portfolio manager is an equity owner Palmer Square and shares in its profits. The portfolio managers' compensation arrangements are not determined on the basis of specific funds or accounts managed.
(a)(4) The following is listing of the dollar range of shares beneficially owned by each Portfolio Management Team Member as of March 31, 2024:
Name of Portfolio Management Team Member: | Dollar Range of Shares Beneficially Owned by Portfolio Management Team Member: |
Michael Peck | $0 - $10,000 |
Brian Murphy | $0 - $10,000 |
Ted Goldthorpe | None |
Matthias Ederer | None |
Henry Wang | None |
Angie K. Long | None |
Christopher D. Long | None |
Taylor R. Moore | None |
(b) Not Applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT COMPANIES.
(a) | Not applicable. |
(b) | Not applicable. |
ITEM 13. EXHIBITS.
(a)(3) Not applicable.
(a)(4) Not applicable.
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.
(registrant) First Trust Private Credit Fund | ||
By (Signature and Title)* | /s/ Michael Peck | |
Michael Peck, President | ||
(Principal Executive Officer) | ||
Date | June 7, 2024 |
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 dates indicated.
By (Signature and Title)* | /s/ Michael Peck | |
Michael Peck, President | ||
(Principal Executive Officer) | ||
Date | June 7, 2024 | |
By (Signature and Title)* | /s/ Chad Eisenberg | |
Chad Eisenberg, Treasurer | ||
(Principal Financial Officer) | ||
Date | June 7, 2024 |
* Print the name and title of each signing officer under his or her signature.