Ares Core Infrastructure Fund

03/05/2026 | Press release | Distributed by Public on 03/05/2026 16:12

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The information contained in this section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Annual Report. In addition, some of the statements in this Annual Report (including in the following discussion) constitute forward-looking statements, which relate to future events or the future performance or financial condition of Ares Core Infrastructure Fund (together with its consolidated subsidiaries, where applicable, the "Fund," "we," "us," or "our"). The forward-looking statements contained in this Annual Report involve a number of risks and uncertainties, including statements concerning:
•our, or our portfolio companies', future business, operations, operating results or prospects;
•the return or impact of current and future investments;
•the impact of a protracted decline in the liquidity of credit markets on our business;
•changes in the general economy, including those caused by tariffs and trade disputes with other countries, changes in inflation and risk of recession;
•fluctuations in global interest rates;
•the impact of changes in laws or regulations (including the interpretation thereof), including tax laws, governing our operations or the operations of our portfolio companies or the operations of our competitors;
•the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
•our ability to recover unrealized losses;
•our ability to deploy any capital raised in our continuous private offering of securities (the "Private Offering");
•market conditions and our ability to access different debt markets and additional debt and equity capital and our ability to manage our capital resources effectively;
•our contractual arrangements and relationships with third parties;
•political and regulatory conditions that contribute to uncertainty and market volatility including the impact of any prolonged U.S. government shutdown as well as the legislative, regulatory, trade, immigration and other policies associated with the current U.S. presidential administration;
•the impact of supply chain constraints on our portfolio companies and the global economy;
•uncertainty surrounding global financial stability;
•ongoing conflicts in the Middle East and the Russia-Ukraine war, including the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest;
•the financial condition of our current and prospective portfolio companies and their ability to achieve their objectives;
•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;
•the impact of global health crises on our or our portfolio companies' business and the U.S. and global economy;
•our ability to anticipate and identify evolving market expectations with respect to environmental, social and governance matters, including the environmental impacts of our portfolio companies' supply chain and operations;
•our ability to successfully complete and integrate any acquisitions;
•the outcome and impact of any litigation or regulatory proceedings;
•the adequacy of our cash resources and working capital;
•the timing, form and amount of any distributions;
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the ability of our Adviser (as defined below) to locate suitable investments for us and to monitor and administer our investments.
We use words such as "anticipates," "believes," "expects," "intends," "project," "estimates," "will," "should," "could," "would," "may" and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Risk Factors," and elsewhere in this Annual Report on Form 10-K (the "Annual Report").
We have based the forward-looking statements included in this Annual Report on information available to us on the filing date of this Annual Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Overview
We are an externally managed, closed-end management investment company, formed as a Delaware statutory trust formed on May 7, 2024; we have elected to be regulated as a BDC under the 1940 Act. Prior to the BDC Election, we conducted our investment activities and operations pursuant to the exclusions from the definition of an "investment company" in Section 3(c)(7) of the 1940 Act. We commenced operations on August 28, 2024 in connection with the initial closing of our Private Offering.
We elected to be treated as an association taxable as a corporation for U.S. federal income tax purposes. Accordingly, we are subject to U.S. federal income tax on its net income (regardless of whether such income is U.S. source) at the rates applicable to corporations without deduction for any distributions to the investors.
In addition, we commenced holding monthly closings for our Private Offering, in connection with which we issue Shares to our investors for immediate cash investment in reliance on exemptions from the registration requirements of the 1933 Act. We reserve the right to conduct additional offerings of securities in the future in addition to the Private Offering. In addition, although we intend to issue Shares on a monthly basis, we also retain the right, if determined by us in our sole discretion, to accept subscriptions and issue Shares, in amounts to be determined by us, more or less frequently to one or more investors for regulatory, tax or other reasons.
Subject to the overall supervision of the Board, we are externally managed by our Adviser, pursuant to the Investment Advisory Agreement. Our Adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. Our Adviser is registered as an investment adviser with the SEC. Our Administrator provides certain administrative and other services necessary for us to operate.
As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in "qualifying assets," including securities and indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the 1940 Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the 1940 Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the 1940 Act. In addition, our Adviser and certain of our affiliates have received the Co-Investment Exemptive Order from the SEC permits us and other BDCs and registered closed-end management investment companies managed by Ares Management and its affiliates to co-invest in portfolio companies with each other and with affiliated investment entities (the "Co-Investment Exemptive Order"). As required by the Co-Investment Exemptive Order, we have adopted, and our Board has approved, policies and procedures reasonably designed to ensure compliance with the terms of the Co-Investment Exemptive Order, and our Adviser and our Chief Compliance Officer will provide reporting to our Board. Co-investments made under the Co-Investment Exemptive Order are subject to compliance with certain conditions and other requirements, which could limit our ability to participate in a co-investment transaction. As a result of investments permitted by the Co-Investment Exemptive Order, there could be significant overlap in our investment portfolio and the investment portfolio of affiliated Ares Management entities that can rely on the Co-Investment Exemptive Order and have an investment objective similar to ours. We may also otherwise co-
invest with funds managed by Ares Management or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our Adviser's allocation policy.
See "Item 1. Business-Overview" for more information on our investment objectives.
Trends Affecting Our Business
Infrastructure investment opportunities in the Core Infrastructure Sector continue to be supported by demand catalysts. Growing AI adoption and digitalization is driving accelerated demand for digital infrastructure such as data centers and the corresponding power infrastructure needed to power them. Re-industrialization and electrification are further fueling power demand growth, and the resurgence in power demand growth has supported elevated contract prices for power generation resources and continued deployment of power generation assets. This dynamic has also benefited existing generation assets, which have generally increased in value. The deployment of new power generation assets is increasingly focused on reliable, baseload generation such as thermal generation and nuclear as part of an "all-of-the-above" power solution. Renewable energy assets continue to represent the majority of new generation supply additions and renewable energy transaction volumes have remained strong.
Portfolio and Investment Activity
Our investment activity is presented below ($ in thousands):
For the year ended December 31, 2025
For the period from May 7, 2024 (inception) to December 31, 2024
New investment commitments:
Common equity $ 2,398,357 $ -
Other equity - 347,854
First lien senior secured loans 786,256 -
Treasuries 198,357 -
Senior subordinated loans 322,500 -
Total new investment commitments $ 3,705,470 $ 347,854
Amount of investments funded:(1)
Common equity $ 2,054,112 $ -
Other equity - 347,854
First lien senior secured loans 315,913 -
Treasuries 198,357 -
Senior subordinated loans 93,087 -
Total amount of investments funded $ 2,661,469 $ 347,854
Principal amount of investments sold or repaid:
Common equity $ (4,417) $ -
Other equity (6,536) (323)
First lien senior secured loans (49,846) -
Treasuries (198,357) -
Senior subordinated loans - -
Total principal amount of investment sold or repaid $ (259,156) $ (323)
(1)The amount of investments funded in the table excludes purchases of investments during the respective period that had not settled as of the end of the period.
Our investments consisted of the following ($ in thousands):
As of December 31,
2025 2024
Total Underlying Projects(7)
Cost Fair Value Cost Fair Value
Denali Equity Holdings, LLC (1)
15 $ 340,995 $ 354,399 $ 347,531 $ 339,136
Aspen Equity Holdings, LLC (2)
4 431,267 479,667 - -
Tango Equity Holdings, LLC (3)
5 492,623 526,684 - -
Meade Pipeline Co LLC (4)
1 202,888 214,956 - -
Redwood Meade Midstream MPC, LLC (4)
1 35,459 37,589 - -
Pioneer JV Holdings LLC(5)
6 731,872 753,613 - -
Sierra Equity Holdings LLC(6)
1 155,587 155,587 - -
Senior subordinated loans N/A 90,449 89,618 - -
First lien senior secured loans N/A 507,515 508,273 - -
Total $ 2,988,655 $ 3,120,386 $ 347,531 $ 339,136
(1)The underlying 2.6 gigawatt portfolio consists of 15 projects in operation across Electric Reliability Council of Texas, Midcontinent Independent System Operator, PJM and Southwest Power Pool, of which 53% is solar, 25% wind and 22% co-located battery storage capacity.
(2)The underlying 0.9 gigawatt portfolio consists of 4 projects in the Electric Reliability Council of Texas and the Midcontinent Independent System Operator, of which 83% is solar and 17% is co-located battery storage capacity.
(3)The underlying 0.5 gigawatt portfolio consists of 5 projects across the Pennsylvania-New Jersey-Maryland Interconnection and the Southwest Power Pool regions, of which 100% is solar capacity.
(4)Represents common equity investment in an entity holding a ~40% interest in the Central Penn Line, a fully contracted natural gas pipeline transporting gas from Northeast to Southeastern Pennsylvania via the Transco system. The pipeline spans 178 miles and has a total capacity of 3,380 MMcf/d, with ~1,332 MMcf/d net to Meade, under long-term triple net leases through 2042. Redwood Meade Midstream MPC, LLC is a holding company that structurally owns a minority interest in Meade Pipeline Co LLC.
(5)The underlying 1.0 gigawatt portfolio consists of 6 projects in operation across the Midcontinent Independent System Operator, Electric Reliability Council of Texas, and Western Electricity Coordinating Council, of which 79% is solar and 21% wind capacity.
(6)The project is a 270 MW wind project in the Electric Reliability Council of Texas.
(7)Represents the number of infrastructure projects undertaken by each entity in which we have an equity investment.
Components of our Results of Operations
Revenues
We generate revenue in the form of interest income, from bank interest or interest from loans, and distribution income, by investing primarily in Core Infrastructure Assets, including investments in the power generation (such as renewable energy and thermal power plants), renewable natural gas, liquified natural gas, transportation, telecommunications, digital infrastructure (such as data centers, fiber optic cables and cell phone towers), midstream and energy infrastructure, regulated utilities, social infrastructure (such as water treatment and management, waste management and recycling) and environmental services (such as carbon capture and storage, soil and air remediation and climate change mitigation) sectors.
Expenses
The services of all investment professionals of our Adviser and its staff, when and to the extent engaged in providing investment advisory services to us and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by our Adviser. Under the Investment Advisory Agreement, we bear all other costs and expenses of our operations and transactions. See "Note 3. Agreements and Organizational Documents" to our consolidated financial statements for more information on fees and expenses.
From time to time, our Adviser, our Administrator or their affiliates may pay third-party providers of goods or services. We will reimburse our Adviser, our Administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, our Adviser or our Administrator may defer or waive fees and/or rights to be reimbursed for expenses.
Expense Support and Conditional Reimbursement Agreement
We have entered into an amended and restated expense support and conditional reimbursement agreement (the "Expense Support and Conditional Reimbursement Agreement"), with our Adviser, pursuant to which our Adviser may elect to pay certain of the Fund's expenses on the Fund's behalf. The Adviser has agreed to advance a portion of the Fund's organization, initial offering and operational expense, which includes the Fund's organization and initial offering expenses incurred in connection with the Private Offering through the date of the BDC Election. See "Note 3. Agreements and Organizational Documents" and "Note 7. Commitments and Contingencies" to our consolidated financial statements for more information on the Expense Support and Conditional Reimbursement Agreement.
Results of Operations
Operating results for the year ended December 31, 2025 and for the period from May 7, 2024 (inception) to December 31, 2024 were as follows ($ in thousands):
For the year ended December 31, 2025
For the period from May 7, 2024 (inception) to December 31, 2024
Total income $ 75,705 $ 12,390
Net expenses 59,688 5,151
Net investment income before income taxes 16,017 7,239
Income tax benefit / (expense) 5,854 (1,904)
Net investment income 21,871 5,335
Net realized and unrealized gains on investments and derivatives 95,898 1,195
Net increase in stockholders' equity resulting from operations $ 117,769 $ 6,530
Net income can vary substantially from period to period due to various factors, including but not limited to the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation.
Income
For the year ended December 31, 2025
For the period from May 7, 2024 (inception) to December 31, 2024
Income:
Distribution income $ 55,119 $ 12,072
Interest income 20,240 318
Other income 346 -
Total income $ 75,705 $ 12,390
For the year ended December 31, 2025, distribution income was $55.1 million, an increase of $43.0 million from $12.1 million for the comparable period in 2024 due to the increase in the portfolio of cash yielding investments. For the year ended December 31, 2025, interest income was $20.2 million, an increase of $19.9 million from $0.3 million in the comparable period in 2024 due to the increase in the average bank balances and building a liquid credit portfolio in 2025.
For the year ended December 31, 2025, we received $66.1 million of distributions from investments, of which $11.0 million was classified as a return of capital.
Operating Expenses
For the year ended December 31, 2025
For the period from May 7, 2024 (inception) to December 31, 2024
Expenses:
Interest expense $ 30,369 $ 4,913
Management fees 13,452 653
Income based fee 3,810 752
Capital gains incentive fee 11,195 149
Administration fees 3,567 829
Offering expense 3,974 620
Organizational expenses 37 1,510
Other operating expenses 4,594 904
Total expenses 70,998 10,330
Less: Expense support (11,147) (3,774)
Less: Management fee waiver (163) (653)
Less: Incentive fee waiver - (752)
Net expenses 59,688 5,151
Net investment income before income taxes 16,017 7,239
Income tax benefit / (expense) 5,854 (1,904)
Net investment income $ 21,871 $ 5,335
For the year ended December 31, 2025, interest expense was $30.4 million, an increase of $25.5 million from $4.9 million for the comparable period in 2024 due to the addition of the Aspen Credit Agreement, ACI Portfolio Aggregator Credit Agreement, Tango Credit Agreement, BNP Funding Facility and Pioneer Credit Agreement during 2025.
For the year ended December 31, 2025, management fees were $13.5 million, an increase of $12.8 million from $0.7 million for the comparable period in 2024 due to the increase in equity, mainly driven by Shareholder capital contributed during the current period.
For the year ended December 31, 2025, the capital gains incentive fee accrued in accordance with GAAP was $11.2 million, an increase of $11.1 million from $0.1 million for the comparable period in 2024 primarily due to the net unrealized gains on investments in the current period. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our Investment Advisory Agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of December 31, 2025, there was $11.3 million of capital gains incentive fee accrued in accordance with GAAP. As of December 31, 2025, there was no capital gains incentive fee actually payable under our Investment Advisory Agreement. See Note 3 to our consolidated financial statements for the year ended December 31, 2025, for more information on the base management fee, income-based fee and capital gains incentive fee.
Realized and Unrealized Gains / (Losses) on Investments and Derivatives
For the year ended December 31, 2025
For the period from May 7, 2024 (inception) to December 31, 2024
Realized and unrealized gains / (losses) on investment and derivatives:
Net realized gains / (losses):
Investments $ (103) $ -
Derivatives 2,251 -
Net realized gains 2,148 -
Net unrealized gains / (losses):
Investments 140,126 (8,395)
Derivatives (6,506) 9,590
Income tax expense (39,870) -
Net unrealized gains 93,750 1,195
Net realized and unrealized gains on investments and derivatives $ 95,898 $ 1,195
For the year ended December 31, 2025, unrealized gains on investments were $140.1 million, an increase of $148.5 million from a loss of $8.4 million for the comparable period in 2024 due to the net increase in fair value of the portfolio's investments. For the year ended December 31, 2025, unrealized losses on derivatives were $6.5 million, a decrease of $16.1 million from a gain of $9.6 million for the comparable period in 2024 due to the fluctuations in market interest rates which impacted the value of the interest rate swaps. For the year ended December 31, 2025, income tax expense was $39.9 million, an increase from $0 for the comparable period in 2024 primarily due to the net unrealized gains on investments in the current period.
Financial Condition, Liquidity and Capital Resources
Our current liquidity and capital resources are generated primarily from the proceeds received from the sale of our Shares pursuant to our Private Offering at a price per Share equal to the then-current NAV per Share and cash flows from our operations. Further, we expect to generate additional liquidity and capital resources from the net proceeds of the Private Offering and, any future offerings of our debt or equity securities, and any financing arrangements we may enter into in the future. We believe we have sufficient liquidity to operate our business, with $296.5 million of immediate liquidity as of December 31, 2025, comprised of cash and cash equivalents. In addition to our immediate liquidity, as of December 31, 2025, we had approximately $496.2 million available for borrowing through our credit arrangements which are subject to various draw covenants.
Our primary uses of cash and cash equivalents are for (i) investments in portfolio companies and other investments, (ii) the cost of operations (including paying our Adviser and our Administrator), (iii) cost of any borrowings or other financing arrangements, if any and (iv) cash distributions to the holders of our Shares.
In accordance with the 1940 Act, we may borrow amounts such that our asset coverage calculated pursuant to the 1940 Act, is at least 150% (or 200% if certain requirements under the 1940 Act are not met) immediately after such borrowing (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). As of December 31, 2025, we had $1,063.2 million in total aggregate principal debt outstanding, $3,455.0 million of Total Assets, $297,235 million of liabilities (other than indebtedness) and our asset coverage ratio was 297%.
We have commenced a Share repurchase program, pursuant to which we intend to offer to repurchase, at the discretion of our Board, up to 5% of our Shares outstanding in each quarter. We may from time to time seek to retire or repurchase our Shares through cash purchases, as well as retire, cancel or purchase any of our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into new debt facilities, increase the size of existing facilities or issue debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of our Shares or outstanding debt, or incurrence or issuance of additional debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
Equity Capital Activities
We hold monthly closings for our Private Offering, in connection with which we will issue Shares to investors for immediate cash investment. Each of our closings in connection with the Private Offering will be conducted in reliance on exemptions from the registration requirements of the 1933 Act, including the exemption provided by Section 4(a)(2) of the 1933 Act and Regulation D promulgated thereunder, and other exemptions from the registration requirements of the 1933 Act. We reserve the right to conduct additional offerings of securities in the future in addition to the Private Offering. In addition, although we intend to issue Shares on a monthly basis, we also retain the right, if determined in our sole discretion, to accept subscriptions and issue Shares, in amounts to be determined by us, more or less frequently to one or more investors for regulatory, tax or other reasons.
The following table summarizes transactions in Shares during the year ended December 31, 2025:
Year ended December 31, 2025
Shares (1)
Amount
Class I
Shares sold 75,514,899 $ 1,883,018
Distributions reinvested 1,015,872 25,313
Repurchases (940,379) (23,441)
Net increase 75,590,392 $ 1,884,890
Class S
Shares sold 1,786,191 $ 44,561
Distributions reinvested 4,316 108
Repurchases - -
Net increase 1,790,507 $ 44,669
Class D
Shares sold 26,114 $ 650
Distributions reinvested 131 3
Repurchases - -
Net increase 26,245 $ 653
(1) As of December 31, 2025, there have been no Class N Shares sold.
NAV Per Share and Offering Price
We determine NAV for our Shares as of the last day of each calendar month. Share issuances related to monthly subscriptions are effective the first business day of each month. The following table summarizes each month-end NAV per Share for the year ended December 31, 2025:
NAV Per Share
Class I Class S Class D
January 31, 2025 $ 25.0625 $ - $ -
February 28, 2025 24.9241 - -
March 31, 2025 24.9275 - -
April 30, 2025 24.8195 - -
May 31, 2025 24.9464 - -
June 30, 2025 24.9490 - -
July 31, 2025 24.8587 - -
August 31, 2025 24.8316 - -
September 30, 2025 24.9088 - -
October 31, 2025 24.7974 24.7974 -
November 30, 2025 25.0404 25.0404 25.0404
December 31, 2025 25.0447 25.0447 25.0447
Distributions
We have declared distributions each month beginning December 2024 and, to the extent that we have excess cash flows, we intend to continue making monthly distributions to our Shareholders. Distributions to our Shareholders are recorded on the record date. All distributions will be paid at the sole discretion of the Board and will depend on our earnings, financial condition, tax considerations, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time.
The following tables present our distributions that were declared and payable for the year ended December 31, 2025 ($ in thousands, except per Share amount):
Class I
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
January 16, 2025 January 31, 2025 February 21, 2025 $ 0.22500 $ 1,414
January 16, 2025 February 28, 2025 March 25, 2025 0.22500 4,809
January 16, 2025 March 31, 2025 April 23, 2025 0.22500 5,132
March 13, 2025 April 30, 2025 May 22, 2025 0.21060 5,526
March 13, 2025 May 30, 2025 June 25, 2025 0.21020 6,078
March 13, 2025 June 30, 2025 July 23, 2025 0.20790 6,792
May 14, 2025 July 31, 2025 August 22, 2025 0.21100 9,988
May 14, 2025 August 29, 2025 September 24, 2025 0.21100 10,944
May 14, 2025 September 30, 2025 October 23, 2025 0.21100 12,276
August 08, 2025 October 31, 2025 November 21, 2025 0.20830 13,675
August 08, 2025 November 28, 2025 December 24, 2025 0.20830 15,658
August 08, 2025 December 31, 2025 January 23, 2026 0.20830 17,042
$ 2.56160 $ 109,334
Class S
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
August 08, 2025 October 31, 2025 November 21, 2025 $ 0.19032 $ 24
August 08, 2025 November 28, 2025 December 24, 2025 0.19098 142
August 08, 2025 December 31, 2025 January 23, 2026 0.19022 340
$ 0.57152 $ 506
Class D
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
August 08, 2025 October 31, 2025 November 21, 2025 $ - $ -
August 08, 2025 November 28, 2025 December 24, 2025 0.20320 3
August 08, 2025 December 31, 2025 January 23, 2026 0.20298 6
$ 0.40618 $ 9
Distribution Reinvestment Plan
We have adopted a distribution reinvestment plan, pursuant to which we reinvest cash distributions declared by us on behalf of our Shareholders unless such Shareholders elect for their distributions not to be automatically reinvested. As a result, if the Board authorizes, and we declare, a cash distribution, then our Shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional Shares, rather than receiving the cash distribution. Distributions on fractional Shares will be credited to each participating Shareholder's account. The purchase price for Shares issued under our distribution reinvestment plan will be equal to the most recent available NAV per Share for such Shares at the time the distribution is payable.
Share Repurchase Program
We have commenced a Share Repurchase Program pursuant to which we intend to offer to repurchase, at the discretion of our Board, up to 5% of our Shares outstanding (either by number of Shares or aggregate NAV) as of the close of the previous calendar quarter. We may from time to time seek to retire or repurchase our Shares through cash purchases, as well as retire, cancel or purchase any of our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material.
In accordance with the Share Repurchase Program, Shares repurchased in our tender offer completed during the year ended December 31, 2025 were repurchased using a purchase price equal to the NAV per Share as of the last calendar day of the applicable month designated by the Board, except that we deducted 2.00% from such NAV for Shares that were not outstanding for at least one year.
We adopted a plan pursuant to Rule 18f-3 under the Investment Company Act so that we may issue multiple classes of Shares (the "Multiple Class Plan"), which provides that the Early Repurchase Deduction holding period ends on the one-year anniversary of the subscription closing date and the Early Repurchase Deduction will not apply to Shares acquired through our distribution reinvestment plan. The Early Repurchase Deduction may be waived in the case of repurchase requests: (i) arising from the death or qualified disability of the holder; (ii) due to trade or operational errors; (iii) submitted by discretionary model portfolio management programs (and similar arrangements); (iv) from feeder funds (or similar vehicles) primarily created to hold our Shares, which are offered to non-U.S. persons, where such funds seek to avoid imposing such a deduction because of administrative or systems limitations; and (v) in the event that a Shareholder's Shares are repurchased because the Shareholder has failed to maintain a minimum account balance. The Early Repurchase Deduction is retained by us for the benefit of remaining Shareholders.
The following table presents the Share repurchases completed during the year ended December 31, 2025 (dollar amounts in thousands except per Share amounts):
Repurchase Pricing Date Total Number of Shares Repurchased
Percentage of Outstanding Shares Repurchased(1)
Repurchase Request Deadline Purchase Price Per Share
Amount Repurchased (All Classes) (2)
Maximum number of shares that may yet be purchased under the repurchase program (3)
August 31, 2025 469,801 0.99 % September 19, 2025 $ 24.8316 $ 11,662 -
November 30, 2025 470,578 0.72 % December 19, 2025 $ 25.0404 $ 11,779 -
(1) Percentage is based on total Shares outstanding as of the close of business on the last calendar day of the month preceding the applicable repurchase pricing date.
(2) Amount shown net of the Early Repurchase Deduction.
(3) All repurchase requests were satisfied in full.
Credit Agreements
The following table summarizes the average outstanding amount and rate for each of our credit agreements for the year ended December 31, 2025 and for the period from May 7, 2024 (inception) to December 31, 2024:
For the year ended December 31, 2025
For the period from May 7, 2024 (inception) to December 31, 2024
Maturity Date Average Outstanding Amount Average Rate Average Outstanding Amount Average Rate
Denali Credit Agreement September 2029 $ 210,736 6.28 % $ 99,583 6.82 %
Aspen Credit Agreement March 2030 46,351 5.93 % - - %
ACI Portfolio Aggregator Credit Agreement April 2027 5,041 6.61 % - - %
Tango Credit Agreement July 2030 79,468 5.68 % - - %
BNP Funding Facility March 2028 4,863 4.95 % - - %
Pioneer Credit Agreement October 2030 55,726 5.54 % - - %
Total $ 402,185 6.01 % $ 99,583 6.82 %
Denali Credit Agreement
Our indirect and direct wholly-owned subsidiaries ACI Denali Member, LLC and ACI Denali Holdings, LLC (together, "ACI Denali"), and Ares Denali Member, LLC (together with ACI Denali, the "Denali Co-Borrowers"), an affiliated entity managed by an affiliate of the Adviser, are party to a Credit Agreement (the "Denali Credit Agreement"), dated as of September 11, 2024, with MUFG Bank, LTD, as Administrative Agent ("MUFG"), and BNP Paribas, as Collateral Agent, the lenders from time to time party to the Denali Credit Agreement and certain other signatories thereto. The Denali Credit Agreement is related to ACI Denali's investment in a portfolio company and ACI Denali's portion includes a $208.0 million term loan (the "Denali Term Loan"), of which $208.0 million was drawn as of December 31, 2025, and a $10.2 million debt service letters of credit facility ("Denali DSR LC Facility"). The remaining portion of the Denali Credit Agreement and Denali DSR LC Facility are with Ares Denali Member, LLC. Outstanding borrowings under the Denali Term Loan bear interest annually at the Daily Compounded Secured Overnight Financing Rate ("SOFR") plus 2.00%, with a 0.125% step-up after three years. ACI Denali will make interest payments quarterly, which payments began in February 2025. The Denali DSR LC Facility is to provide letters of credit ("Denali LC") or loans for draws under such Denali LC to support contractual obligations related to the minimum debt service reserve amount under the Denali Credit Agreement. Denali LC fees are payable quarterly in arrears, at an amount equal to 0.5% multiplied by the stated amount of the Denali LC.
The Denali Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of the Denali Co-Borrowers, and (b) all tangible and intangible assets of the Denali Co-Borrowers. Under the Denali Credit Agreement, the Denali Co-Borrowers have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Denali Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of the Denali Co-Borrowers, the Denali Credit Agreement is non-recourse to any upstream affiliate of the Denali Co-Borrowers, including to us.
Aspen Credit Agreement
On March 14, 2025, Ares Aspen Member LLC as borrower (the "Aspen Borrower") and Ares Aspen Holdings LLC as pledgor (the "Aspen Pledgor"), each our wholly-owned subsidiary, entered into a Credit Agreement (the "Aspen Credit Agreement") with MUFG, as Administrative Agent, and BNP Paribas, as Collateral Agent, the lenders from time to time party to the Aspen Credit Agreement and certain other signatories thereto. The Aspen Credit Agreement is related to the Aspen Borrower's investment in one of our portfolio companies and includes a $224.5 million term loan (the "Aspen Term Loan"), of which $224.5 million was drawn as of December 31, 2025, and a $15.6 million debt service letters of credit facility ("Aspen DSR LC Facility"). Outstanding borrowings under the Aspen Term Loan bear interest annually at the SOFR plus 1.75%, with a 0.125% step-up after three years, and outstanding undrawn commitments under the Aspen Term Loan have a commitment fee of 0.60% annually. The Aspen Borrower will make interest payments quarterly, which payments began in August 2025. The Aspen DSR LC Facility provides letters of credit ("Aspen LC") or loans for draws under such Aspen LC to support contractual obligations related to the minimum debt service reserve amount under the Aspen Credit Agreement. Aspen LC fees are payable quarterly in arrears, at an amount equal to 1.75% multiplied by the stated amount of the Aspen LC, with a 0.125% step-up after three years.
The Aspen Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of the Aspen Borrower, and (b) all tangible and intangible assets of the Aspen Borrower. Under the Aspen Credit Agreement, the Aspen Borrower and the Aspen Pledgor, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Aspen Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of the Aspen Borrower, the Aspen Credit Agreement is non-recourse to any upstream affiliate of the Aspen Borrower, including to us.
ACI Portfolio Aggregator Credit Agreement
On April 14, 2025, our wholly owned subsidiary ACI Portfolio Aggregator SPV LLC, a Delaware limited liability company (the "ACI Portfolio Aggregator"), entered into a Revolving Credit Agreement (the "ACI Portfolio Aggregator Credit Agreement") by and among ACI Portfolio Aggregator, as the borrower, NatWest Markets Plc ("NatWest"), as administrative agent, and the lenders from time to time party thereto. The ACI Portfolio Aggregator Credit Agreement provides a revolving line of credit in an aggregate principal amount of $50.0 million. There were $20.0 million in borrowings drawn on the ACI Portfolio Aggregator Credit Agreement as of December 31, 2025.
Borrowings under the ACI Portfolio Aggregator Credit Agreement may take the form of base rate loans or SOFR loans, at the option of the ACI Portfolio Aggregator. Base rate loans will bear interest at a rate per annum equal to (a) the Base Rate (as defined in the ACI Portfolio Aggregator Credit Agreement), which is subject to a floor of 0.00% per annum, plus (b) an applicable margin of 1.60% per annum. SOFR loans will bear interest at a rate per annum equal to (a) Term SOFR (as defined in the ACI Portfolio Aggregator Credit Agreement) for a period of one, three or six months (as selected by ACI Portfolio Aggregator), subject to a floor of 0.00% per annum, plus (b) an applicable margin of 2.60% per annum. The $20.0 million amount outstanding was drawn as a SOFR loan.
The ACI Portfolio Aggregator Credit Agreement contains various representations and warranties, affirmative covenants, and negative covenants, which are typical for this type of revolving facility.
All obligations under the ACI Portfolio Aggregator Credit Agreement and the other loan documents are secured by a first priority perfected lien on, and security interest in, (i) all membership interests of ACI Portfolio Aggregator owned by us, including all proceeds thereof, and (ii) a certain collateral account of ACI Portfolio Aggregator, and all sums or other property now or at any time hereafter on deposit therein, subject to certain exceptions. Other than with respect to the pledge of the equity
interests of the ACI Portfolio Aggregator, the ACI Portfolio Aggregator Credit Agreement is otherwise non-recourse to any upstream affiliate of ACI Portfolio Aggregator, including to us.
Tango Credit Agreement
On July 28, 2025, ACI Tango Member, LLC, as borrower ("ACI Tango"), and ACI Tango Holdings, LLC, as pledgor ("ACI Tango Holdings"), each our wholly-owned subsidiary, entered into a Credit Agreement (the "Tango Credit Agreement") with Canadian Imperial Bank of Commerce, New York Branch, as Administrative Agent ("CIBC"), U.S. Bank National Association, as Collateral Agent, the lenders from time to time party to the Tango Credit Agreement and certain other signatories thereto. The Tango Credit Agreement is related to ACI Tango's investment in one of our portfolio companies and includes a $334.8 million delayed draw term loan (the "Tango Term Loan Facility"), of which $184.8 million was drawn as of December 31, 2025, and a $18.8 million debt service letters of credit facility ("Tango DSR LC Facility"). Borrowings under the Tango Credit Agreement may take the form of Base Rate Loans (as defined in the Tango Credit Agreement) or SOFR loans, at the option of ACI Tango. Outstanding borrowings under the Tango Term Loan Facility bear interest annually at (i) for SOFR loans, the SOFR plus 1.50%, and (ii) for the Base Rate Loans, a fluctuating rate determined by reference to the Adjusted Base Rate (as defined in the Tango Credit Agreement) plus 0.50%, each with a 0.125% step-up after three years. The $184.8 million amount outstanding was drawn as a SOFR loan. Outstanding undrawn commitments under the Tango Term Loan Facility have a commitment fee of 0.50% annually. ACI Tango will make interest payments quarterly, which began in November 2025. The Tango DSR LC Facility provides letters of credit ("LC") or loans for draws under such LC to support contractual obligations related to the minimum debt service reserve amount under the Tango Credit Agreement. LC fees are payable quarterly in arrears, at an amount equal to 1.50% multiplied by the stated amount of the LC, with a 0.125% step-up after three years.
The Tango Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of ACI Tango, (b) all of the equity interests of Tango Holdings, LLC owned by ACI Tango and (c) all tangible and intangible assets of ACI Tango and the equity interests of ACI Tango owned by the ACI Tango Holdings. Under the Tango Credit Agreement, ACI Tango and ACI Tango Holdings, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Tango Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of ACI Tango, the Tango Credit Agreement is non-recourse to any upstream affiliate of ACI Tango, including to us.
BNP Funding Facility and Contribution Agreement
On September 23, 2025, we entered into a Revolving Credit and Security Agreement (the "BNP Funding Facility") with ACI Liquid Aggregator SPV, LLC, our wholly owned subsidiary, as borrower (the "BNP Borrower"), us, as equityholder and servicer, the lenders from time to time party thereto, BNP Paribas, as administrative agent, and U.S. Bank Trust Company, National Association, as collateral agent, that (i) provides a facility amount of $200 million and (ii) has a reinvestment period ending on September 23, 2027. In addition, on September 23, 2025, the Fund, as transferor, and the BNP Borrower, as transferee, entered into a Contribution Agreement, pursuant to which we will transfer to the BNP Borrower certain originated or acquired loans and related assets (collectively, the "BNP Loans") from time to time.
The obligations of the BNP Borrower under the BNP Funding Facility are secured by substantially all assets held by the BNP Borrower, including the BNP Loans. The interest rate charged on the BNP Funding Facility is based on SOFR plus an applicable margin of 1.25%. In addition, the BNP Borrower is required to pay, among other fees, a commitment fee of up to 0.50% per annum on any excess unused portion of the BNP Funding Facility and, subject to certain exceptions, a one-time facility reduction fee if the BNP Funding Facility is terminated or there are certain reductions in commitments under the BNP Funding Facility, which facility reduction fee would be equal to the cumulative amount of the commitment fee that would have otherwise been payable from the date of any such termination or reduction through the end of the reinvestment period. Under the BNP Funding Facility, we and the BNP Borrower, as applicable, have made representations and warranties regarding our and their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The BNP Funding Facility includes usual and customary events of default for facilities of this nature. There were$200.0 million inborrowings drawn on the BNP Funding Facility as of December 31, 2025.
Proceeds from the BNP Funding Facility must be used to acquire collateral loans during the reinvestment period, fund revolving collateral loans, pay certain fees and expenses and make permitted distributions. Other than with respect to the pledge of the equity interests of the BNP Borrower, the BNP Funding Facility is non-recourse to any upstream affiliates of the BNP Borrower, including to us.
Pioneer Credit Agreement
On October 3, 2025, ACI Pioneer Member, LLC as borrower (the "Pioneer Borrower") and ACI Pioneer Holdings, LLC as pledgor (the "Pioneer Pledgor"), each our wholly-owned subsidiary, entered into a credit agreement (the "Pioneer Credit Agreement") with Natixis, New York Branch as administrative agent and collateral agent ("Natixis") and Société Générale as coordinating lead arranger and bookrunner (together with Natixis in the same roles). The Pioneer Credit Agreement is related to Pioneer Borrower's investment in one of our portfolio investments and includes a $542.2 million delayed draw term loan facility (the "Pioneer Term Loan"), of which $226.0 million was drawn as of December 31, 2025, and a $23.5 million debt service reserve letter of credit facility (the "Pioneer DSR LC Facility").
Borrowings under the Pioneer Term Loan bear interest annually at a rate equal to daily compounded SOFR plus 1.50% per annum, with a step up of 0.125% after three years and outstanding undrawn commitments under the Pioneer Term Loan facility have a commitment fee of 0.50% annually on the average daily unused amount. The Pioneer Borrower will make interest payments quarterly beginning in January 2026, and ending on the maturity date in accordance with an amortization schedule attached to the Pioneer Credit Agreement.
The Pioneer DSR LC Facility provides letters of credit or loans for draws under such LC to support contractual obligations related to the minimum debt service reserve amount under the Pioneer Credit Agreement. An LC commitment fee is due in respect of unused LC commitments in an amount of 0.50% multiplied by the average unused daily LC commitments. LC fees follow the applicable margin of the Pioneer Term Loan, payable quarterly in arrears, at an amount equal to 1.50% annually multiplied by the stated amount of the LC, with a 0.125% step up after three years.
The Pioneer Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of the Pioneer Borrower, (b) all of the equity interests of Pioneer JV Holdings, LLC, one of our portfolio investments, owned by the Pioneer Borrower and (c) all tangible and intangible assets of the Pioneer Borrower and the equity interests of the Pioneer Borrower owned by the Pioneer Pledgor. Under the Pioneer Credit Agreement, the Pioneer Borrower and the Pioneer Pledgor, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Pioneer Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of the Pioneer Borrower, the Pioneer Credit Agreement is non-recourse to any upstream affiliate of the Pioneer Borrower, including to us.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. The critical accounting estimates should be read in conjunction with the risk factors elsewhere in this Annual Report. See "Note 2. Significant Accounting Policies" to our consolidated financial statements for more information on our critical accounting policies.
Investments
We value our investments in accordance with Section 2(a)(41) of the 1940 Act and Rule 2a-5 thereunder, which sets forth requirements for determining fair value in good faith. Pursuant to Rule 2a-5 of the 1940 Act, the Board has designated the Adviser as its "Valuation Designee" to perform fair value determinations for investments held by us without readily available market quotations, subject to the oversight by our Board. Investments for which market quotations are readily available will typically be valued at such market quotations. In order to validate market quotations, the Valuation Designee, will review a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity investments that are not publicly traded or whose market prices are not readily available will be valued at fair value as determined in good faith by the Adviser, as our Valuation Designee, subject to the Board's oversight, based on, among other things, the input of the Fund's independent third-party valuation firm that has been engaged to support the valuation of such portfolio investments by providing positive assurance monthly and an independent valuation at least semiannually (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. However, we may use these independent valuation firms to review the value of our investments more frequently, including in connection with the occurrence of significant events or changes in value affecting a particular investment.
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized.
Pursuant to Rule 2a-5 under the 1940 Act, the Board designated the Adviser as our Valuation Designee to perform fair value determinations for investments held by us without readily available market quotations, subject to the oversight of the Board. All investments are recorded at fair value.
Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Valuation Designee looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Valuation Designee, subject to the oversight of our Board, based on, among other things, the input of our independent third-party valuation providers ("IVPs") that have been engaged to support the valuation of such portfolio investments. However, the Valuation Designee may use these independent valuation firms to review the value of our investments more frequently, including in connection with the occurrence of significant events or changes in value affecting a particular investment.
Investments in our portfolio that do not have readily available market quotations (i.e., substantially all of our investments) are valued at fair value as determined in good faith by our Valuation Designee, as described herein. As part of the valuation process for investments that do not have readily available market prices, the Valuation Designee may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent sale occurs, the Valuation Designee considers the pricing indicated by the external event to corroborate its valuation.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market quotations, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.
The Valuation Designee, subject to the oversight of the Board, undertakes a multi-step valuation process each quarter, as described below:
•Our quarterly valuation process begins with a preliminary valuation being prepared by the investment professionals responsible for the portfolio investment in conjunction with our portfolio management team and valuation team.
•Preliminary valuations are reviewed and discussed by the valuation committee of the Valuation Designee.
•The Valuation Designee will provide all relevant information related to the portfolio investments for the IVP to independently provide positive assurance on the valuation approach and inputs (monthly), provide positive assurance on the valuation of all positions (quarterly), and estimate a range of fair values (at least semiannually) for each investment:
◦Monthly, the IVP reviews and analyzes the data provided by the Valuation Designee, including the reasonableness of the valuation approach, as well as the mathematical accuracy and the appropriateness and supportability of inputs and assumptions, and provides positive assurance on the valuation approach and inputs;
◦Quarterly, the IVP reviews and analyzes the information provided by the Valuation Designee, along with relevant market and economic data, and provides positive assurance on the valuation of all positions;
◦At least semiannually, the IVP independently determines a range of fair values for each of the portfolio investments; and
◦the IVP provides a report for all investments reviewed to the Valuation Designee containing the IVP's conclusions from the positive assurance procedures or the independent range of value analysis, whichever is applicable for the period.
•The valuation committee of the Valuation Designee determines the fair value of each investment in our portfolio without a readily available market quotation in good faith based on, among other things, the input of the IVPs, where applicable.
When the Valuation Designee determines the fair value of each investment as of the last day of a month that is not also the last day of a calendar quarter, the Valuation Designee intends to update the value of securities with reliable market quotations to the most recent market quotation. For securities without reliable market quotations, the Valuation Designee will generally update the value of such assets using the same set of information that was used in performing the most recent quarterly valuation. Should the Valuation Designee determine that a significant observable change has occurred since the most recent quarter end with respect to the investment (which determination may be as a result of a material event at a portfolio company, material change in public equity valuations, secondary market transaction in the securities of an investment, comparable transactions, or otherwise), the Valuation Designee will determine whether to determine the fair value for each relevant investment using data that has been updated for the impact of the significant observable change.
Fair Value of Financial Instruments
We follow ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASC 825-10"), which provides funds the option to report selected financial assets and liabilities at fair value. ASC 825-10 also establishes presentation and disclosure requirements designed to facilitate comparisons between funds that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of our choice to use fair value on its
earnings. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet. We have not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value.
Investments held by us are valued in accordance with Section 2(a)(41) of the 1940 Act and Rule 2a-5 thereunder and the provisions of ASC 820-10, Fair Value Measurements and Disclosures ("ASC 820-10"), which among other matters, requires enhanced disclosures about investments that are measured and reported at fair value. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires us to assume that the portfolio investment is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820-10, we have considered its principal market as the market in which we exit our portfolio investments with the greatest volume and level of activity. ASC 820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below:
•Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.
•Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
In addition to using the above inputs in investment valuations, the Valuation Designee continues to employ the net asset valuation policy and procedures that have been reviewed by the Board and are consistent with the provisions of Rule 2a-5 under the 1940 Act and ASC 820-10. Consistent with its valuation policies and procedures, the Valuation Designee will evaluate the source of inputs, including any markets in which our investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. Where there may not be a readily available market value for some of the investments in our portfolio, the fair value of a portion of our investments may be determined using unobservable inputs.
Our portfolio investments classified as Level 3 are typically valued using an analysis of the enterprise value ("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The primary technique for determining EV uses a discounted cash flow analysis whereby future expected cash flows of the portfolio company are discounted to determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions).
See "Note 8. Fair Value of Financial Instruments" to our consolidated financial statements for more information on our valuation process.
Recent Developments
January and February Capital Raise
In our monthly closing for January 2026, we issued and sold 11,395,800 Shares (consisting of 9,860,864 Class I Shares and 1,534,936 Class S Shares at an offering price of $25.0447 per Share for each class), and received approximately $285.4 million as payment for such Shares.
In our monthly closing for February 2026, we issued and sold 16,131,764 Shares (consisting of 14,804,765 Class I Shares and 1,326,999 Class S Shares at an offering price of $25.0263 per Share for each class) and received approximately $403.7 million as payment for such Shares.
March Capital Raise
In our monthly closing for March 2026, we agreed to sell Shares, including Class I Shares and Class S Shares for an aggregate purchase price of $354.2 million. The purchase price per Share will equal our NAV per Share of such class as of the
last calendar day of February 2026, which is generally expected to be available within 20 business days after March 1, 2026. No underwriting discounts or commissions have been or will be paid in connection with the sale of such Shares. Although we do not charge investors an Upfront Sales Load with respect to its Shares, if Class D Shares, Class N Shares or Class S Shares are purchased through certain selling agents, Shareholders may be charged an Upfront Sales Load or transaction or other fees, including brokerage commissions, in such amount as such selling agents may determine, provided that such charges are subject to a 2.0% cap on NAV for Class D Shares, a 2.0% cap on NAV for Class N Shares and a 3.5% cap on NAV for Class S Shares. No Upfront Sales Loads may be charged on Class I Shares. To the extent any such Upfront Sales Load or other fees are received by the Placement Agent, such amounts will be reallowed to the applicable selling agent. The issuance of the Shares is exempt from the registration requirements of the 1933 Act pursuant to Section 4(a)(2) thereof, by Rule 506(b) of Regulation D promulgated thereunder and/or Regulation S promulgated thereunder.
Distributions
On November 7, 2025, we announced the declaration of regular monthly gross distributions for January, February and March 2026 and on March 5, 2026, we announced the declaration of regular monthly distributions for April, May, and June 2026, in each case for its Class I Shares, Class S Shares, Class D Shares and Class N Shares in the amounts per Share set forth below:
Gross Distribution Per Common Share
Record Date
Payment Date(1)
Class I Class S Class D Class N
January 30, 2026 February 23, 2026 $ 0.20830 $ 0.20830 $ 0.20830 $ 0.20830
February 27, 2026 March 25, 2026 0.20830 0.20830 0.20830 0.20830
March 31, 2026 April 23, 2026 0.20830 0.20830 0.20830 0.20830
April 30, 2026 May 21, 2026 0.20830 0.20830 0.20830 0.20830
May 29, 2026 June 24, 2026 0.20830 0.20830 0.20830 0.20830
June 30, 2026 July 23, 2026 0.20830 0.20830 0.20830 0.20830
(1)The distributions on our Shares will be paid on or about the payment dates set above.
These distributions will be paid in cash or reinvested in the Shares for Shareholders participating in our distribution reinvestment plan. The net distributions to be received by Shareholders of the Class D Shares, Class N Shares and Class S Shares will be equal to the gross distribution in the table above, less specific shareholder servicing and/or distribution fees applicable to such class as of their respective record dates. Class I Shares have no shareholder servicing and/or distribution fees. As of March 2, 2026, there are no Class N Shares outstanding.
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