Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements included in the 2025 Annual Report. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in "Part I, Item 1A. Risk Factors" in the 2025 Annual Report.

Overview

The Company was formed as a Delaware limited liability company on June 20, 2024. The Company has a limited operating history and was formed as a holding company that seeks to acquire, own and control Joint Ventures and portfolio companies globally. The Company operates its business in a manner so that it is not an "investment company" under the Investment Company Act. We commenced commercial operations on July 1, 2025, upon the sale of Investor Shares to third-party investors.

We own and control Joint Ventures that, directly or indirectly, own majority and/or primarily controlling stakes in portfolio companies, and to a lesser extent, Joint Ventures that own influential yet non-majority stakes in portfolio companies. We anticipate owning and controlling portfolio companies through Joint Ventures organized in the geographies and sectors where EQT is active, currently including North America, Europe and Asia Pacific, and in sectors such as healthcare, technology and business services. The geographies and sectors in which EQT is active (and in which the Company may therefore acquire portfolio companies) may evolve over time. Over time, we expect to own a portfolio that consists primarily of controlled portfolio companies that generate attractive risk-adjusted returns. We intend to continue to fund these acquisitions using proceeds raised from the continuous offering of our securities and distributions from existing portfolio companies, and eventually by opportunistically recycling capital generated from dispositions of portfolio companies.

We are sponsored by EQT and aim to leverage its global expertise and platform. We have appointed the Manager to assist us with certain management, administrative and advisory services related to identifying, acquiring, owning and managing portfolio companies through Joint Ventures that we control. The past performance of any EQT Vehicle and the acquisitions that they have made provide no assurance of future returns or results of the Company's acquisitions and there can be no assurance that the Company will achieve the same or similar performance to any EQT Vehicle.

We expect that we will continue to own nearly all of our portfolio companies through Joint Ventures alongside one or more EQT Vehicles whose interests are generally aligned with ours, such that a joint acquisition strategy arising from our combined resources provides the Company with opportunities to accumulate a larger share of, and more control over, any potential acquisition. We plan to own all or substantially all of our Joint Venture interests and other interests in portfolio companies directly or indirectly through one or more wholly-owned operating subsidiaries (each, an "Operating Subsidiary"). In turn, we expect our Operating Subsidiaries to hold our interests in portfolio companies and Joint Ventures through one or more corporations, limited liability companies or limited partnerships. We expect that most of our Joint Ventures will own a majority of, and/or have primary control over, the underlying portfolio company. Our relative economic interests in such Joint Ventures will vary from acquisition to acquisition.

We expect that over the long term, Joint Ventures and portfolio companies will make up approximately 80% of our assets and that the balance of our assets, approximately 20%, will consist of cash and cash equivalents, U.S. Treasury securities, U.S. government agency securities, municipal securities, other sovereign debt, investment grade credit and other investments including high-yield credit, asset-backed securities, mortgage-backed securities, collateralized loan obligations, leveraged loans and/or debt of companies or assets (collectively, the "Liquidity Portfolio"). We expect to hold a portion of our assets in the Liquidity Portfolio in order to provide us with income, to facilitate capital deployment and to provide a potential source of liquidity, including to meet share repurchase requests under our share repurchase plan, pursuant to which shareholders may request that the Company repurchase all or a portion of their shares, subject to the terms and limitations contained in such plan (the "Share Repurchase Plan"). These types of liquid assets may exceed 20% of our assets at any given time due to new subscriptions, shareholder participation in our share repurchase program, distributions from, or dispositions of, portfolio companies or for other reasons as our Manager determines. See "Item 1A. Risk Factors-Risks Related to Our Business-We have significant liquidity requirements, and adverse market and economic conditions may adversely affect our sources of liquidity, which could materially and adversely affect our business operations." in the 2025 Annual Report.

We may also opportunistically acquire a limited amount of indirect exposure to commingled funds, which may include existing and newly formed funds and certain "continuation vehicles." The Company may invest into vehicles managed by an affiliate of EQT or it may invest into vehicles managed by third parties, through secondary transactions with existing shareholders or limited partners but also through direct subscription with the sponsor(s) of such vehicles. Our acquisition strategy may also include debt of portfolio companies that we control and other debt, equity, equity-like, preferred and/or structured equity securities. While none of these approaches are principal to the Company's business strategy, we believe that in certain circumstances, such investments may complement the Joint

Venture strategy as a ready source of capital deployment at efficient prices and may otherwise help the Company achieve its objective of generating attractive risk-adjusted returns for shareholders. To the extent we pursue any of the foregoing approaches, we expect to do so in a manner so that we are not an "investment company" under the Investment Company Act.

No market currently exists for our Shares. We do not intend to list our Shares for trading on any securities exchange or any other trading market in the near future. There is currently no secondary market for our Shares and we do not anticipate that a secondary market will develop for our Shares. Neither the Manager nor the Dealer-Manager intends to make a market for the Shares.

Recent Developments

On April 1, 2026, the Company sold Investor Shares to third-party investors for cash for aggregate consideration of approximately $61,470,873. On May 1, 2026, the Company sold Investor Shares to third-party investors for cash for aggregate consideration of approximately $28,872,415.

Additionally, see Note 11. Subsequent Events to the consolidated financial statements for additional information on acquisitions subsequent to March 31, 2026.

Macroeconomic Environment

To date, 2026 has been marked by continued uncertainty in global markets, driven by investor concerns over inflation, elevated interest rates, ongoing political and regulatory uncertainty, including potential shifts in U.S. trade policy and the imposition of new tariffs, as well as geopolitical instability stemming from the ongoing conflicts in Ukraine, the Middle East and Central and South America. In particular, the escalation of the conflict involving Iran, Israel and the U.S. has contributed to significant disruptions in global energy markets, which has led to an increase in oil and natural gas prices and volatility in the financial markets.

Further contributing to economic uncertainty, the current U.S. presidential administration has implemented significant changes to U.S. trade policy, the size of the federal government, tax policy and the enforcement of various regulations. These policy shifts could introduce additional market instability and reduce investor confidence. For example, the U.S. government has announced tariffs on goods imported from various countries to the United States. Countries subject to such tariffs have imposed, or may in the future, impose reciprocal or retaliatory tariffs and other trade measures. We are actively monitoring these developments and analyzing the potential impacts on our business, the businesses of our portfolio companies and the broader economic environment. In light of these developments, there can be no assurances that political and regulatory conditions will not worsen and/or adversely affect the Company's fundraising activities and deployment of funds, its portfolio companies or the respective financial performance of the Company and its portfolio companies.

Operating Results Highlights

During the three months ended March 31, 2026, we raised aggregate subscription proceeds of $187,351,702 related to Investor Shares. These subscription proceeds were used, in part, to acquire our interests in four portfolio companies totaling $128,357,506 for the three months ended March 31, 2026.

The details of total returns on Investor Shares are shown in the following table:

Portfolio Companies

As of March 31, 2026, the Company's portfolio consists of 20 portfolio companies, with an aggregate fair value of $739,268,456 million. The Company's portfolio companies were as follows:

During April and May 2026, the Company acquired interests in the following portfolio companies:

Results of Operations

From June 20, 2024 (date of formation) through June 30, 2025, we had not commenced our principal operations and were focused on our formation and the registration statement for the Company. Our Form 10 registration statement automatically became effective on October 29, 2024.

We commenced commercial operations on July 1, 2025, upon the sale of Investor Shares to third-party investors. We are dependent upon the proceeds from our continuous Private Offering in order to conduct our business. We intend to continue to acquire portfolio companies with the capital received from our continuous Private Offering and any indebtedness that we may incur in connection with such activities.

Investment Income

We generate income primarily from our long-term ownership and control of Joint Ventures and portfolio companies and, to a lesser extent, investments in our Liquidity Portfolio, which may consist of dividend income, interest income, and net realized gains or losses and net change in unrealized appreciation or depreciation.

For the three months ended March 31, 2026, the Company generated $641,869 of interest income.

Expenses

For the three months ended March 31, 2026, the Company incurred $4.3 million in total operating expenses.

For the three months ended March 31, 2026, the Manager agreed to reimburse expenses of $1.6 million incurred by the Company pursuant to the Expense Limitation Agreement. The amount is subject to recoupment within a five-year period.

Going forward, we expect our primary expenses to be the payment of the Performance Allocation to EQT Group as well as other capital and operating expenses.

Management Fee

Pursuant to the Management Agreement, the Manager is entitled to receive a management fee from the Company (the "Management Fee") as described under Note 5. Related Party Transactions to the consolidated financial statements.

In addition to the fees paid to the Manager, we pay all other costs and expenses of our operations, including compensation of any of our employees and non-investment professional employees of the Manager or EQT, directors, custodial expenses, leveraging expenses, transfer agent expenses, legal fees, expenses of independent auditors, expenses of our periodic repurchases, expenses of preparing, printing and distributing offering documents, shareholder reports, notices, proxy statements and reports to governmental agencies and taxes, if any. See "Company Expenses" below and "Item 13. Certain Relationships and Related Transactions, and Director Independence-Potential Conflicts of Interest" in the 2025 Annual Report. The Management Fee is offset by certain fees and expenses. See "Item 13. Certain Relationships and Related Transactions, and Director Independence-Management Fee Offset" in the 2025 Annual Report.

For the three months ended March 31, 2026, the Company incurred a Management Fee of $348,356.

Performance Allocation

EQT AB Group will be allocated a performance allocation (the "Performance Allocation") as described under Note 5. Related Party Transactions to the consolidated financial statements.

For the three months ended March 31, 2026, the Company did not incur a Performance Allocation Fee.

Servicing Fees

EQT Partners BD, LLC will be paid servicing fees as described under Note 5. Related Party Transactions to the consolidated financial statements.

For the three months ended March 31, 2026, the Company incurred Servicing Fees of $807,764. Shareholder servicing fees apply only to Class D Shares, Class S Shares, Class J1 Shares, Class J2 Shares, Class A-D Shares, Class A-S Shares, Class A-J1 Shares and Class A-J2 Shares. For purposes of Transactional Net Asset Value, the Company recognizes shareholder servicing fees as a reduction to Transactional Net Asset Value on a monthly basis as such fees are accrued. For purposes of GAAP Net Asset Value, the Company accrues the cost of the shareholder servicing fees for the estimated life of the shares as an offering cost at the time the Company sells shares in the applicable share classes. See "-Reconciliation of Transactional Net Asset Value to GAAP Net Asset Value."

Organizational and Offering Expenses

The Company reimburses the Manager or its affiliates for organization and offering costs incurred prior to the commencement of operations of the Company subject to reimbursement and potential recoupment pursuant to the Expense Limitation Agreement discussed herein (including legal, accounting, audit, printing, mailing, subscription processing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of the Company), to the extent necessary so that, for any fiscal year, the Company's annual Specified Expenses (as defined below) do not exceed 0.75% of the Company's net assets as of the end of each calendar month.

"Specified Expenses" is defined to include all expenses incurred in the business of the Company, including organizational and offering costs, with the exception of (i) the Management Fee, (ii) the Performance Allocation, (iii) the Servicing Fee, (iv) the Distribution Fee, (v) portfolio company level expenses, (vi) brokerage costs or other investment-related out-of-pocket expenses, including with respect to unconsummated transactions, in each case, accrued on or after the Initial Offering, (vii) dividend/interest payments (including any dividend payments, interest expenses, commitment fees, or other expenses related to any leverage incurred by the Company), (viii) taxes, (ix) ordinary corporate operating expenses (including costs and expenses related to hiring, retaining, and compensating employees, officers and directors of the Company) accrued on or after the Initial Offering, (x) certain insurance costs and (xi) extraordinary expenses (as determined in the sole discretion of the Manager).

During the three months ended March 31, 2026, we incurred organization costs of $0 and incurred offering costs of $585,639. For the period from June 20, 2024 (date of formation) to March 31, 2025, the Company incurred organization costs of $102,936. The organization costs relate to legal, accounting, and other corporate services. As of March 31, 2026, the cumulative offering costs incurred by the Company was $2,342,557, and $585,639 were deferred and recorded as deferred offering costs in the accompanying Consolidated Statements of Assets and Liabilities.

Expense Limitation and Reimbursement Agreement

Under the Expense Limitation and Reimbursement Agreement, the Manager has agreed to forgo an amount of its monthly Management Fee and/or pay, absorb or reimburse certain expenses of the Company as described under Note 5. Related Party Transactions to the consolidated financial statements.

Company Expenses

The Company bears all fees, costs, expenses and liabilities, together with any relevant taxes, if any, incurred by the Company or fairly allocable to the Company, including relating to the Company's: (i) operation, management, maintenance and administration; (ii) acquisition-related activities (including researching, sourcing, negotiating, acquiring, holding and disposing of actual and potential portfolio companies and other assets); and (iii) to the extent applicable, termination and winding-up, including in each case its attributable share (directly or indirectly) of any such fees, costs, expenses liabilities and taxes (if any) related to the Company, any aggregator and any other holding vehicles or similar holding structures utilized from time to time (directly or indirectly) by the Company in connection with one or more acquisitions or assets.

For the avoidance of doubt, Company Expenses may include any of the fees, costs, expenses and other liabilities incurred in connection with services provided, or other activities engaged in, by EQT and its affiliates, in addition to third parties. In determining the amount of Company Expenses that may be fairly allocable to the Company and to any EQT Vehicles that may participate in Joint Ventures with the Company, the Manager and its affiliates will take into account such factors as they deem appropriate, including, for example, committed or available capital of the Company and EQT Vehicles, the amount of capital historically held or remaining in a particular holding or similar holdings, the aggregate NAV of the Company and EQT Vehicles and the percentage of similar acquisitions in which the Company or EQT Vehicles have historically participated. The Company reimburses the Manager or its affiliates for certain expenses that are incurred prior to the commencement of operations of the Company, including allocable compensation and overhead of EQT personnel involved in the formation and establishment of the Company and its subsidiaries.

In respect of any acquisitions made by the Company alongside EQT Vehicles or other third parties, fees, costs, expenses or liabilities of, or attributable to, the Company may be temporarily borne by members of EQT AB Group, such EQT Vehicles and/or such third parties. In such circumstances, the Company will be required to reimburse such fees, costs, expenses or liabilities and may bear an arm's-length cost of funding or interest rate on such amounts.

Net Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation) on Investments, Foreign Currency Translation and Foreign Currency Forward Contracts

Net realized gain and loss and net unrealized appreciation and depreciation from our investments and foreign currency translation of assets and liabilities denominated in foreign currencies are reported separately on the Consolidated Statements of Operations. We measure realized gain and loss as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in investments values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when appreciation or depreciation is realized.

For the three months ended March 31, 2026, the Company did not dispose of any interests in portfolio companies and did not recognize any realized gain or loss. The Company incurred realized loss on foreign currency transactions of $385,329.

For the three months ended March 31, 2026, total net change in unrealized appreciation on investments and foreign currency translation increased by $1,744,505.

Provision for Income Taxes

The Company intends to operate so that it will qualify to be treated as a partnership for U.S. federal income tax purposes under the Internal Revenue Code and not a publicly traded partnership taxable as a corporation. The Company operates, in part, through subsidiaries that may be treated as corporations for U.S. and non-U.S. tax purposes and therefore may be subject to current and deferred U.S. federal, state and/or local income taxes at the subsidiary level, resulting in a provision for income taxes. For the three months ended March 31, 2026, provision for income taxes was $0.

Changes in Net Assets from Operations

For the three months ended March 31, 2026, net increase in net assets resulting from operations was $656,853.

Investment Company Accounting Considerations

Since the Company's consolidated financial statements are prepared using the specialized accounting principles of ASC 946, our Manager produces an estimate of the fair market value of each of our portfolio companies monthly. When valuing our portfolio companies, net operating earnings generated at the portfolio company level are included in our valuation models. While the valuation models take into account all revenue, distributions from each of our portfolio companies may be more or less than that included in our valuation models each period due to various cash flow considerations. As an example, since many of our portfolio companies are held in tax partnership structures, or in related entities with bank-financed portfolio company level debt, the Company may be contractually limited in its ability to make dividend distributions from portfolio companies to the Company. Since portfolio companies are not consolidated with the Company under ASC 946, in many cases the net income from operations earned by a portfolio company may not be distributed to the Company in its entirety, and thus may not be reflected in the net increase in net assets resulting from operations. While this non-distributed income is included in the calculation of fair market value and net change in unrealized appreciation or depreciation on investments, it is not included in net investment income or loss on the Consolidated Statements of Operations.

Transactional Net Asset Value

The Company calculates net asset value per Share in accordance with valuation policies and procedures that have been approved by the Board. The Company's transactional net asset value ("Transactional Net Asset Value") is the price at which the Company sells and repurchases its Shares. The Company's GAAP net asset value ("GAAP Net Asset Value") is the Company's net asset value determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The following table provides a breakdown of the major components of the Company's Transactional Net Asset Value as of March 31, 2026 ($ in thousands, except shares):

The following table provides a breakdown of our total Transactional Net Asset Value and our Transactional Net Asset Value per share by class as of March 31, 2026 ($ in thousands, except shares and per share data):

Reconciliation of Transactional Net Asset Value to GAAP Net Asset Value

The following table reconciles the Company's GAAP Net Asset Value to Transactional Net Asset Value ($ in thousands):

Valuation Methodologies and Significant Inputs

The following table presents additional information about valuation methodologies and significant inputs used for portfolio company holdings that are valued at fair value as of March 31, 2026.

Liquidity and Capital Resources

We expect to generate cash primarily from (i) the net proceeds of our Private Offering, (ii) any financing arrangements we may enter into in the future and (iii) any future offerings of our equity or debt securities. We believe that cash provided by such means will be sufficient to satisfy our anticipated cash requirements for the next twelve months and foreseeable future.

Our primary use of cash will be for (i) acquisition of portfolio companies, (ii) the cost of operations (including the Management Fee and Performance Allocation), (iii) debt service of any borrowings, and (iv) periodic repurchases, including pursuant to our Share Repurchase Plan.

As of March 31, 2026, the Company had $66,328,977 in cash and cash equivalents, which primarily includes $66,308,700 of investment in money market funds.

As of March 31, 2026, we had not declared or paid any distributions.

Cash Flows

Cash used in operating activities

Net cash flow used in operating activities was $143,842,150 for the three months ended March 31, 2026 and is primarily the result of funding the acquisitions of portfolio companies.

Cash provided by financing activities

Net cash flow provided by financing activities was $187,351,703 for the three months ended March 31, 2026, which primarily reflects the proceeds from the sale of Investor Shares pursuant to our Private Offering.

Since inception on July 1, 2025, through March 31, 2026, the Company has sold approximately $746,238,713 of Investor Shares for cash as part of the Private Offering.

As of July 1, 2025, we commenced commercial activities. On August 28, 2024, the Company received an initial capital contribution of $1,000 in cash as consideration for the issuance of 40 Class Q Shares to EQT AB Group. Additionally, on June 30, 2025, the Company issued 40 Class H Shares to the EQT Partners Inc. for aggregate consideration of $1,000. The Company may issue Class E Shares to EQT in connection with the Company's acquisition of assets in the future.

Contractual Obligations

See Note 8. Commitments and Contingencies above for our contractual obligations and commitments with payments due subsequent to March 31, 2026.

Critical Accounting Estimates

Below is a discussion of the accounting policies that management believes are critical to understanding our historical and future performance. We consider these policies critical because they involve significant judgments and assumptions and require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results. Our accounting policies have been established to conform with GAAP. The preparation of the consolidated financial statements in accordance with GAAP requires management to use judgments in the application of such policies. These judgments will affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our consolidated financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Valuation of Portfolio Companies

The Company's portfolio companies are valued at fair value in accordance with GAAP, including ASC 820, Fair Value Measurement. ASC 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There is no single standard for determining fair values of holdings that do not have a readily available market price and, in many cases, such fair values may be best expressed as a range of fair values from which a single estimate may be derived in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each acquisition while employing a valuation process that is consistently followed. Determinations of fair value involve subjective judgments and estimates.

When making fair value determinations for portfolio companies that do not have readily available market prices, the Manager considers industry-accepted valuation methodologies, such as: (i) an income approach, (ii) a market approach, (iii) milestone valuation analysis and (iv) last round of financing analysis. A blend of approaches may be relied upon in arriving at an estimate of fair value, though there may be instances where it is more appropriate to utilize one approach. The Manager also considers a range of additional factors that it deems relevant, including a potential sale of a portfolio company, macro and local market conditions, industry information and the portfolio company's historical and projected financial data.

Portfolio companies will generally be valued at transaction price initially, however, to the extent the Manager does not believe a portfolio company's transaction price reflects the current market value, the Manager will adjust such valuation. When making fair value determinations for portfolio companies, the Manager will generally update the prior month-end valuations by assessing whether any factors exist that require an adjustment to the most recent valuation. The Manager values portfolio companies using the valuation methodology it deems most appropriate and consistent with widely recognized valuation methodologies and market conditions. See "Item 1A. Risk Factors-Risks Related to an Investment in Our Shares-Valuations of our portfolio companies are estimates of fair value and may not necessarily correspond to realizable value." in the 2025 Annual Report.

Given the nature of the Company's portfolio companies, valuations may be difficult to carry out. The Company is expected to hold securities and financial instruments that do not have readily available market quotes and there may be a relative scarcity of market comparables on which to base the value of the Company's assets. With regards to assets for which a market value is not readily available, the Manager has engaged a qualified valuation firm to provide positive assurance regarding the reasonableness of such valuations as of the relevant measurement date. The Manager has substantial discretion in determining the value of the Company's assets.

Because assets are valued as of a specified valuation date, events occurring subsequent to that date will not be reflected in the Company's valuations. However, if information indicating a condition that existed at the valuation date becomes available subsequent to the valuation date and before financial information is publicly released, it will be evaluated to determine whether it would have a material impact requiring adjustment of the final valuation. Any valuations contained in this Quarterly Report on Form 10-Q may not necessarily accurately reflect the fair value of such portfolio companies as at the time of a shareholder's subscription for or acquisition of Shares.

There can be no assurance that portfolio companies will ultimately be realized for amounts equal to, or greater than, these valuations, or that the past performance information based on such valuations will accurately reflect the realization value of such portfolio companies. The actual realized returns generated by unrealized acquisitions will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from assumptions used in prior periods. Valuations are subject to determinations, judgments and opinions, and other third parties or shareholders may disagree with such valuations. Please also refer to "Item 1A. Risk Factors" in the 2025 Annual Report for further information.

Valuations of unrealized acquisitions of the Company can affect the amount of Management Fee and Performance Allocation payable by the Company. To the extent that a valuation is incorrect, this may result in excessive or not sufficient Management Fee and Performance Allocation being borne by the Company. Accordingly, the Manager therefore has a conflict of interest as it is responsible for determining the valuation of the Company's unrealized acquisitions.

For purposes of calculating the Company's transactional net asset value (the "Transactional NAV"), which is used to determine the price at which the Company sells and repurchases its shares, (i) contingent tax liabilities of certain special purpose vehicles that are not expected to be recognized due to the expected structure of the divestment of the associated underlying portfolio company may not be recognized as a reduction to Transactional NAV as of the relevant valuation date (although actual tax liabilities of those same special purpose vehicles may be taken into account in determining the fair value of the associated underlying portfolio company) and (ii) the Company recognizes shareholder servicing fees and distribution fees as a reduction to Transactional NAV on a monthly basis as such fee is accrued. Under GAAP, the Company accrues the cost of the shareholder servicing fees and distribution fees for the estimated life of the relevant Company shares as an offering cost at the time the Company sells such shares.

At least annually, the Manager reviews the appropriateness of the Company's valuation policies and procedures and will recommend any proposed changes to the Board. From time to time, the Board and the Manager may adopt changes to the valuation policies and procedures if they determine that such changes are likely to result in a more accurate reflection of estimated fair value.

Hedging Activities

The Company may, but is not obligated to, engage in hedging transactions for the purpose of efficient portfolio management. The Manager may review the Company's hedging policy from time to time depending on movements and projected movements of relevant currencies and interest rates and the availability of cost-effective hedging instruments for the Company at the relevant time.

With respect to any potential financings, general increases in interest rates over time may cause the interest expense associated with our borrowings to increase and the value of our fixed income investments to decline. We may seek to stabilize our financing costs as well as any potential decline in our assets by entering into derivatives, swaps or other financial products in an attempt to hedge our interest rate risk.

The Company may enter into foreign currency forward contracts to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated securities or to facilitate settlement of foreign currency denominated acquisition transactions. A foreign currency forward contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market monthly and the change in value is recorded by the Company as an unrealized gain or loss. When a foreign currency forward contract is closed, through either delivery or offset by entering into another foreign currency forward contract, the Company may recognize a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was closed. Foreign currency forward contracts involve elements of market risk in excess of the amounts reflected on the Company's consolidated financial statements. The Company's primary risk related to hedging is the risk of an unfavorable change in the foreign exchange rate underlying the foreign currency forward contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

By using derivative instruments, the Company may be exposed to the counterparty's credit risk-the risk that derivative counterparties may not perform in accordance with the contractual provisions offset by the value of any collateral received. The Company's exposure to credit risk associated with counterparty non-performance is expected to be limited to collateral posted and the unrealized gains inherent in such transactions that are recognized in the Company's consolidated financial statements. As appropriate, the Company expects to minimize counterparty credit risk through credit monitoring procedures and managing margin and collateral requirements.

As of March 31, 2026, the Company has not entered into any hedging activities.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Related Party Transactions

See Note 5. Related Party Transactions for a description of certain transactions and relationships with related parties.