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INVESTMENTS (Tables)
 9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Investments
As of September 30, 2024 and December 31, 2023, investments consisted of the following:

 As of
September 30, 2024December 31, 2023
Amortized Cost(1)Fair ValueAmortized Cost(1)Fair Value
First lien senior secured loans(2)$13,927 $13,684 $10,313 $10,081 
Second lien senior secured loans2,859 2,755 3,980 3,753 
Subordinated certificates of the SDLP(3)1,231 1,159 1,316 1,288 
Senior subordinated loans1,443 1,414 1,150 1,096 
Preferred equity2,666 2,685 2,457 2,460 
Ivy Hill Asset Management, L.P.(4)1,729 1,954 1,763 1,987 
Other equity1,718 2,267 1,689 2,209 
Total$25,573 $25,918 $22,668 $22,874 
________________________________________

(1)The amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest or dividends.
    
(2)First lien senior secured loans include certain loans that the Company classifies as “unitranche” loans. The total amortized cost and fair value of the loans that the Company classified as “unitranche” loans were $8,137 and $8,020 respectively, as of September 30, 2024, and $5,786 and $5,667, respectively, as of December 31, 2023.

(3)The proceeds from these certificates were applied to co-investments with Varagon Capital Partners (“Varagon”) and its clients to fund first lien senior secured loans to 19 and 22 different borrowers as of September 30, 2024 and December 31, 2023, respectively.

(4)Includes the Company’s subordinated loan and equity investments in IHAM (as defined below), as applicable.
  
The Company uses GICS for classifying the industry groupings of its portfolio companies. The industrial and geographic compositions of the Company’s portfolio at fair value as of September 30, 2024 and December 31, 2023 were as follows:

 As of
September 30, 2024December 31, 2023
Industry
Software and Services25.4 %23.2 %
Health Care Services12.8 12.1 
Commercial and Professional Services10.7 9.8 
Financial Services(1)10.0 11.5 
Insurance Services5.8 5.1 
Consumer Services4.8 4.3 
Investment Funds and Vehicles(2)4.7 5.8 
Power Generation3.5 4.2 
Retailing and Distribution3.3 2.5 
Media and Entertainment3.2 2.8 
Capital Goods2.8 2.4 
Consumer Durables and Apparel2.2 3.1 
Consumer Staples Distribution and Retail2.0 1.8 
Energy1.5 2.2 
Pharmaceuticals, Biotechnology and Life Sciences1.4 1.5 
Other5.9 7.7 
Total100.0 %100.0 %
________________________________________

(1)Includes the Company’s investment in IHAM.

(2)Includes the Company’s investment in the SDLP (as defined below), which had made first lien senior secured loans to 19 and 22 different borrowers as of September 30, 2024 and December 31, 2023, respectively. The portfolio companies in the SDLP are in industries similar to the companies in the Company’s portfolio.

 As of
September 30, 2024December 31, 2023
Geographic Region
West(1)24.2 %24.3 %
Midwest24.1 24.7 
Southeast18.4 18.5 
Mid-Atlantic14.7 13.3 
Northeast(2)12.3 13.2 
International6.3 6.0 
Total100.0 %100.0 %
________________________________________

(1)Includes the Company’s investment in the SDLP, which represented 4.5% and 5.6% of the total investment portfolio at fair value as of September 30, 2024 and December 31, 2023, respectively.

(2)Includes the Company’s investment in IHAM, which represented 7.5% and 8.7% of the total investment portfolio at fair value as of September 30, 2024 and December 31, 2023, respectively.
The amortized cost and fair value of the Company’s investment in IHAM as of September 30, 2024 and December 31, 2023 were as follows:
As of
September 30, 2024December 31, 2023
Amortized CostFair ValueAmortized CostFair Value
Subordinated loan(1)
$28 $28 $62 $62 
Equity
1,701 1,926 1,701 1,925 
Total investment in IHAM$1,729 $1,954 $1,763 $1,987 
_______________________________________________________________________________

(1)The Company has provided a commitment to fund up to $500 to IHAM, of which the availability is solely at the Company’s discretion.
Below is a summary of the SDLP’s portfolio.
As of
September 30, 2024December 31, 2023
Total first lien senior secured loans(1)(2)$4,889 $5,431 
Largest loan to a single borrower(1)$367 $370 
Total of five largest loans to borrowers(1)$1,686 $1,650 
Number of borrowers in the SDLP19 22 
Commitments to fund delayed draw loans(3)$291 $260 
___________________________________________________________________________

(1)At principal amount.
(2)First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of September 30, 2024 and December 31, 2023, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $4,181 and $4,558, respectively.

(3)As discussed above, these commitments have been approved by the investment committee of the SDLP.

Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of the SDLP, in conformity with GAAP, as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023 are presented below:

As of
September 30, 2024December 31, 2023
Selected Balance Sheet Information:
Investments at fair value (amortized cost of $4,724 and $5,267, respectively)
$4,581 $5,129 
Other assets169 192 
Total assets$4,750 $5,321 
Senior notes$3,319 $3,705 
Intermediate funding notes125 139 
Other liabilities130 136 
Total liabilities3,574 3,980 
Subordinated certificates and members’ capital1,176 1,341 
Total liabilities and members’ capital$4,750 $5,321 

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Selected Statement of Operations Information:
Total investment income$137 $145 $420 $421 
Interest expense74 76 228 217 
Other expenses5 7 13 19 
Total expenses79 83 241 236 
Net investment income58 62 179 185 
Net realized and unrealized (losses) gains on investments(25)6 (97)(79)
Net increase in members’ capital resulting from operations$33 $68 $82 $106 
Schedule of Dividend and Interest Income
The interest income and dividend income that the Company earned from IHAM for the three and nine months ended September 30, 2024 and 2023 were as follows:

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Interest income
$1 $5 $2 $28 
Dividend income
$69 $62 $204 $179 
The interest income from the Company’s investment in the SDLP Certificates and capital structuring service fees and other income earned for the three and nine months ended September 30, 2024 and 2023 were as follows:

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Interest income
$43 $43 $131 $129 
Capital structuring service fees and other income
$4 $1 $9 $8 
Schedule of Funded Capital and Unfunded Capital Commitments of the SDLP
The yields at amortized cost and fair value of the Company’s investments in IHAM as of September 30, 2024 and December 31, 2023 were as follows:
 As of
September 30, 2024December 31, 2023
 Amortized CostFair ValueAmortized CostFair Value
Subordinated loan
11.3 %11.3 %12.0 %12.0 %
Equity(1)
16.2 %14.3 %15.1 %13.3 %
_______________________________________________________________________________

(1)Represents the yield on the Company’s equity investment in IHAM, which is computed as (a) the annualized amount of the dividend received by the Company related to the Company’s equity investment in IHAM during the most recent
quarter end, divided by (b) the amortized cost or fair value of the Company’s equity investment in IHAM, as applicable.
Below is a summary of the funded capital and unfunded capital commitments of the SDLP.
 As of
September 30, 2024December 31, 2023
Total capital funded to the SDLP(1)$4,900 $5,361 
Total capital funded to the SDLP by the Company(1)$1,274 $1,328 
Total unfunded capital commitments to the SDLP(2)$291 $260 
Total unfunded capital commitments to the SDLP by the Company(2)$68 $60 
___________________________________________________________________________
(1)At principal amount.

(2)These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met.
The amortized cost and fair value of the SDLP Certificates held by the Company and the Company’s yield on its investment in the SDLP Certificates at amortized cost and fair value as of September 30, 2024 and December 31, 2023 were as follows:

As of
September 30, 2024December 31, 2023
Amortized CostFair ValueAmortized CostFair Value
Investment in the SDLP Certificates$1,231 $1,159 $1,316 $1,288 
Yield on the investment in the SDLP Certificates12.9 %13.7 %13.6 %13.9 %
Schedule of Selected Financial Information
Selected Financial Information

Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of IHAM, in conformity with GAAP, as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023 are presented below.

In conformity with GAAP, IHAM is required to consolidate entities in which IHAM has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model, which include certain of the IHAM Vehicles (the “Consolidated IHAM Vehicles”). As such, for GAAP purposes only, IHAM consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that it concludes are variable interest entities in which IHAM has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which IHAM is deemed to be the primary beneficiary.

When IHAM consolidates an IHAM Vehicle for GAAP purposes only, IHAM reflects the assets, liabilities, revenues and expenses of the Consolidated IHAM Vehicles on a gross basis, including the economic interests held by third-party investors in the Consolidated IHAM Vehicles as debt obligations, subordinated notes or non-controlling interests, in the consolidated IHAM financials below. All of the revenues earned by IHAM as the investment manager of the Consolidated IHAM Vehicles are eliminated in GAAP consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the GAAP consolidation of an IHAM Vehicle does not impact the net income or loss attributable to IHAM. As a result, the Company believes an assessment of IHAM's business and the impact to the Company’s investment in IHAM is best viewed on a stand-alone basis as reflected in the first column in the tables below.
As of September 30, 2024
IHAMConsolidated IHAM Vehicles(1)EliminationsConsolidated
Selected Balance Sheet Information:
Assets
Investments at fair value(2)$2,249 $8,421 $(2,212)$8,458 
Cash and cash equivalents4 831 — 835 
Other assets72 126 (57)141 
Total assets$2,325 $9,378 $(2,269)$9,434 
Liabilities
Debt$453 $6,696 $— $7,149 
Subordinated note from ARCC28 — — 28 
Subordinated notes(3)— 1,242 (927)315 
Other liabilities11 151 (14)148 
Total liabilities492 8,089 (941)7,640 
Equity
Contributed capital1,701 — — 1,701 
Accumulated earnings188 — — 188 
Net unrealized losses on investments and foreign currency transactions(4)(56)— — (56)
Non-controlling interests in Consolidated IHAM Vehicles(5)
— 1,289 (1,328)(39)
Total equity1,833 1,289 (1,328)1,794 
Total liabilities and equity$2,325 $9,378 $(2,269)$9,434 

As of December 31, 2023
IHAMConsolidated IHAM Vehicles(1)EliminationsConsolidated
Selected Balance Sheet Information:
Assets
Investments at fair value(2)$2,274 $9,392 $(2,265)$9,401 
Cash and cash equivalents9 707 — 716 
Other assets70 100 (68)102 
Total assets$2,353 $10,199 $(2,333)$10,219 
Liabilities
Debt$462 $7,459 $— $7,921 
Subordinated note from ARCC62 — — 62 
Subordinated notes(3)— 1,280 (992)288 
Other liabilities17 189 (16)190 
Total liabilities541 8,928 (1,008)8,461 
Equity
Contributed capital1,701 — — 1,701 
Accumulated earnings126 — — 126 
Net unrealized losses on investments and foreign currency transactions(4)(15)— — (15)
Non-controlling interests in Consolidated IHAM Vehicles(5)
— 1,271 (1,325)(54)
Total equity1,812 1,271 (1,325)1,758 
Total liabilities and equity$2,353 $10,199 $(2,333)$10,219 
________________________________________
(1)Consolidated for GAAP purposes only.

(2)The determination of such fair value is determined in accordance with IHAM’s valuation process (separate and apart from the Company’s valuation process described elsewhere herein). The amortized cost of IHAM’s total investments as of September 30, 2024 and December 31, 2023 was $2,304 and $2,288, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of September 30, 2024 and December 31, 2023 was $8,597 and $9,619, respectively.

(3)Subordinated notes generally represent the most junior capital in certain of the Consolidated IHAM Vehicles and effectively represent equity in such vehicles.

(4)As of September 30, 2024 and December 31, 2023, net unrealized losses of $53 and $13, respectively, have been eliminated upon consolidation and the elimination is included in “non-controlling interests in Consolidated IHAM Vehicles” in the selected balance sheet information.

(5)Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $139 and $221 as of September 30, 2024 and December 31, 2023, respectively.

For the Three Months Ended September 30, 2024
IHAMConsolidated IHAM Vehicles(1)EliminationsConsolidated
Selected Statement of Operations Information:
Revenues
Investment income$77 $251 $(75)$253 
Management fees and other income13 2 (12)3 
Total revenues90 253 (87)256 
Expenses
Interest expense10 139 — 149 
Distributions to subordinated notes— 49 (37)12 
Management fees and other expenses4 14 (12)6 
Total expenses14 202 (49)167 
Net operating income76 51 (38)89 
Net realized losses on investments and foreign currency (2)(39)2 (39)
Net unrealized (losses) gains on investments, foreign currency and other transactions(8)41 10 43 
Total net realized and unrealized (losses) gains on investments, foreign currency and other transactions(10)2 12 4 
Net income66 53 (26)93 
Less: Net income attributable to non-controlling interests in Consolidated IHAM Vehicles— 53 (26)27 
Net income attributable to Ivy Hill Asset Management, L.P.$66 $— $— $66 
For the Nine Months Ended September 30, 2024
IHAMConsolidated IHAM Vehicles(1)EliminationsConsolidated
Selected Statement of Operations Information:
Revenues
Investment income$263 $784 $(257)$790 
Management fees and other income41 8 (38)11 
Total revenues304 792 (295)801 
Expenses
Interest expense30 432 — 462 
Distributions to subordinated notes— 154 (114)40 
Management fees and other expenses11 47 (38)20 
Total expenses41 633 (152)522 
Net operating income263 159 (143)279 
Net realized gains (losses) on investments and foreign currency3 (113)(7)(117)
Net realized loss on extinguishment of debt— (1)— (1)
Net unrealized (losses) gains on investments, foreign currency and other transactions(41)88 40 87 
Total net realized and unrealized losses on investments, foreign currency and other transactions (38)(26)33 (31)
Net income225 133 (110)248 
Less: Net income attributable to non-controlling interests in Consolidated IHAM Vehicles— 133 (110)23 
Net income attributable to Ivy Hill Asset Management, L.P.$225 $— $— $225 

For the Three Months Ended September 30, 2023
IHAMConsolidated IHAM Vehicles(1)EliminationsConsolidated
Selected Statement of Operations Information:
Revenues
Investment income$87 $285 $(87)$285 
Management fees and other income15 3 (14)4 
Total revenues102 288 (101)289 
Expenses
Interest expense15 152 — 167 
Distributions to subordinated notes— 52 (40)12 
Management fees and other expenses3 19 (14)8 
Total expenses18 223 (54)187 
Net operating income84 65 (47)102 
Net realized losses on investments and other transactions(7)(16)8 (15)
Net unrealized gains on investments and other transactions2 46 (4)44 
Total net realized and unrealized (losses) gains on investments and other transactions(5)30 4 29 
Net income79 95 (43)131 
Less: Net income attributable to non-controlling interests in Consolidated IHAM Vehicles— 95 (43)52 
Net income attributable to Ivy Hill Asset Management, L.P.$79 $— $— $79 
For the Nine Months Ended September 30, 2023
IHAMConsolidated IHAM Vehicles(1)EliminationsConsolidated
Selected Statement of Operations Information:
Revenues
Investment income$253 $813 $(251)$815 
Management fees and other income42 6 (40)8 
Total revenues295 819 (291)823 
Expenses
Interest expense50 424 — 474 
Distributions to subordinated notes— 141 (110)31 
Management fees and other expenses11 55 (40)26 
Total expenses61 620 (150)531 
Net operating income234 199 (141)292 
Net realized losses on investments and other transactions(17)(26)8 (35)
Net unrealized gains on investments and other transactions19 76 (23)72 
Total net realized and unrealized gains on investments and other transactions2 50 (15)37 
Net income236 249 (156)329 
Less: Net income attributable to non-controlling interests in Consolidated IHAM Vehicles— 249 (156)93 
Net income attributable to Ivy Hill Asset Management, L.P.$236 $— $— $236 
____________________________________

(1)Consolidated for GAAP purposes only.