N-CSR 1 tm245364d1_ncsr.htm N-CSR

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-23165

 

 

 

CION ARES DIVERSIFIED CREDIT FUND

 

(Exact name of registrant as specified in charter)

 

100 PARK AVENUE

25TH FLOOR

NEW YORK, NEW YORK 10017

 

(Address of principal executive offices)(Zip code)

 

Eric A. Pinero

100 Park Avenue, 25th Floor

New York, New York 10017

(Name and Address of Agent for Service)

  Copy to:  

Michael A. Reisner

Mark Gatto

CION Ares Diversified Credit Fund

100 Park Avenue, 25th Floor

New York, New York 10017

  

P. Jay Spinola

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

     

 

Registrant’s telephone number, including area code: (646) 845-2577

 

Date of fiscal year end: December 31

 

Date of reporting period: January 1, 2023 – December 31, 2023

 

 

 

 

 

Item 1. Report to Stockholders.

 

(a)

 

 

 

CION Ares Diversified Credit Fund

ANNUAL REPORT

DECEMBER 31, 2023

CION Ares Diversified Credit Fund

Contents

Letter to Shareholders

    

2

    

Fund Profile & Financial Data

    

5

    

Performance Summary

    

7

    

Consolidated Schedule of Investments

    

8

    

Consolidated Statement of Assets and Liabilities

    

118

    

Consolidated Statement of Operations

    

120

    

Consolidated Statements of Changes in Net Assets

    

121

    

Consolidated Statement of Cash Flows

    

123

    

Financial Highlights

    

124

    

Notes to Consolidated Financial Statements

    

145

    

Report of Independent Registered Public Accounting Firm

    

172

    

Proxy & Portfolio Information

    

173

    

Dividend Reinvestment Plan

    

174

    

Corporate Information

    

176

    

Privacy Notice

    

177

    

Trustees and Executive Officers

    

178

    

 

  

Annual Report 2023

CION Ares Diversified Credit Fund

Letter to Shareholders

December 31, 2023

Fellow Shareholders,

We are pleased to present the annual report for the CION Ares Diversified Credit Fund (the "Fund" or "CADC"), for the period ending December 31, 2023. The Fund has continued to experience steady asset growth, with total managed assets reaching approximately $4.5 billion as of December 31, 2023. The Fund returned +13.79%1​ over the period, benefitting from elevated base rates, stable credit fundamentals within the portfolio and tactical asset allocation. The Fund continues to maintain a defensive and diversified investment posture. As of period-end, the Fund had over 600 investments, spread across 24 unique industries. Secured debt instruments accounted for 86%2​ of the Fund and 72%3​ of the Fund was deployed in investments directly originated by investment groups within the Ares Management Corporation ("Ares") platform. Further, the Fund's distribution rate was increased three times in 2023 as elevated interest rates served as a tailwind for the portfolio, concluding the year at a distribution rate of 9.23%4​. The Fund's relative value strategy across liquid and illiquid credit enabled the portfolio to capitalize on market opportunities across global credit markets over the period, while maintaining steady distributions of income and preserving shareholder capital.

Investment Philosophy and Process

The Fund employs a dynamic asset allocation framework that seeks to offer enhanced yield and downside risk mitigation, while enabling the Fund's investment advisor, CION Ares Management, LLC ("CION Ares Management," "CAM" or the "Advisor") and the Fund's investment sub-advisor, Ares Capital Management II LLC (the "Sub-Advisor"), an affiliate of Ares, to respond to changing market conditions. We believe that the Fund's differentiated, diversified portfolio of directly originated and liquid investments can provide superior risk-adjusted returns for our shareholders. Active management across a broad spectrum of credit asset classes, including direct lending in the United States and Europe, high yield bonds, leveraged loans, structured credit, real estate debt, and other credit instruments provides the opportunity to generate attractive risk-adjusted returns by capturing the best relative value.

The Fund's investment process is rigorous and incorporates both top-down and bottom-up factors. The Advisor leverages the resources of the Sub-Advisor to conduct ongoing proprietary analysis at the asset-class level that compares current market conditions with historical and industry-level precedents to examine the rate environment, correlation to public markets, and local/regional risks. This information is brought before the Advisor's allocation committee, where senior members overseeing each of the underlying asset classes share their observations with the Fund's portfolio managers.

Investment Environment

Despite a mixed outlook entering the year, markets generated positive returns in 2023 due to resilient economic data, stable corporate fundamentals, and a pause in the Federal Reserve's (the "Fed") interest rate hiking cycle. Economic growth in the U.S. was positive throughout the year as tight labor conditions supported consumer health, offsetting concerns that the runoff of pandemic era stimulus would weigh on sentiment. Inflation decelerated from 6.5% to 3.4%5​ as the impacts of the Fed's aggressive hiking cycle began to filter through to the economy. Against this backdrop, the Fed shifted to a less aggressive stance in 2023, though rates remained elevated and ended the year at over 5%6​. The migration to a slightly more dovish stance was a tailwind for asset prices, particularly during the fourth quarter, as investors reacted positively to the idea of peak rates and the possibility of rate cuts in 2024. Due to these factors, as well as stable corporate earnings, optimism that the Fed has engineered a "soft landing" of the economy took hold.

From a performance perspective, tighter monetary conditions and resilient economic data drove strong returns across equity and credit markets. Public equities returned +26.26%7​ for the year due to better-than-expected corporate earnings, artificial intelligence fervor and expectations of a soft landing of the global economy. Within credit, the rate environment and sound corporate fundamentals lead to a solid backdrop for investors. Specific to leveraged credit, high yield bonds and syndicated loans returned +13.46%8​ and +13.04%9​, respectively due to elevated yields and a strong bid for risk assets towards year-end. Reflective of investor sentiment, lower credit quality outperformed in both markets, and both credit sectors materially outperformed traditional fixed income, which returned +5.53%10​.

The shifting interest rate environment impacted market dynamics throughout the period. Despite new issuance in the syndicated loan and high yield bond markets being down 14% and 29%, respectively through the first seven months of the

Annual Report 2023
2

CION Ares Diversified Credit Fund

Letter to Shareholders (continued)

December 31, 2023

year, supply finished the year higher relative to 2022 as a less aggressive Fed encouraged companies and private equity sponsors to tap the capital markets for refinancings and new deal activity closer to year-end11​. Similar dynamics unfolded in private credit markets, though were less dramatic as companies and sponsors turned to non-bank lenders to decrease execution risk throughout the first half 2023, particularly following the regional bank volatility that took place during April and May. In terms of credit fundamentals, while companies grappled with elevated interest expense, earnings grew at a moderate pace, and leverage levels continued to migrate lower. Despite headlines suggesting otherwise, default rates remained in line with historical averages as companies entered 2023 on sound financial footing.

Looking ahead, uncertainty abounds, and various risks continue to persist. While growth was consistently positive throughout 2023, leading indicators continue to suggest a global economic slow-down is on the horizon. Further, while the consumer has been resilient, much of the recent strength has been fueled with debt and as such, consumer health overall is at risk of declining. Additionally, various geopolitical tensions continue to be a potential source of market volatility and drag on the soft-landing narrative. These potential headwinds are offset by the prospects of a dovish Fed, corporate fundamentals that remain stable and tight labor conditions.

Specific to CADC, the Fund concluded 2023 with an attractive 10.9% current yield12​ and 9.23% distribution rate4​. We are excited about the opportunities that lie ahead in the global credit markets and continue to actively participate in corporate and asset-backed direct lending opportunities, while seeking to take advantage of pockets of volatility within the liquid credit markets. While the Fund maintains an emphasis towards directly originated assets, we continue to utilize the depth and breadth of Ares' investment capabilities to identify pockets of relative value across the more liquid segments of the market, such as high yield bonds and CLO securities. We continue to closely monitor macroeconomic conditions, proactively manage exposures, and identify relative value opportunities created by shifts in sentiment on rates, growth expectations, geopolitical events, and idiosyncratic credit news.

Summary

We expect market volatility to be episodic as central banks attempt to navigate a soft landing, and we believe Ares' scaled platform, tenured experience and cycle-tested investment process will allow the Fund to successfully navigate the evolving market environment. We are pleased with the ongoing construction of the Fund's diversified portfolio, and we believe the Fund is well positioned to find relative value opportunities in an unpredictable market environment given our emphasis on senior secured, floating rate, directly originated assets in defensive, non-cyclical, service-based sectors. The Advisor will continue to seek to leverage Ares' position as a global leader in credit markets to identify attractive investment opportunities in line with the stated objective of the Fund.

We thank you for your investment in and continued support of the CION Ares Diversified Credit Fund.

Sincerely,

  

 

 
Mitch Goldstein
Portfolio Manager
CION Ares Diversified Credit Fund		   Greg Margolies
Portfolio Manager
CION Ares Diversified Credit Fund		   Michael Smith
Portfolio Manager
CION Ares Diversified Credit Fund		  

Views expressed are those of CION Ares Management as of the date of this communication, are subject to change at any time, and may differ from the views of other portfolio managers or of Ares as a whole. Although these views are not intended to be a forecast of future events, a guarantee of future results, or investment advice, any forward-looking statements are not reliable indicators of future events and no guarantee is given that such activities will occur as expected or at all. Information contained herein has been obtained from sources believed to be reliable, but the accuracy and completeness of the information cannot be guaranteed. CION Ares Management does not undertake any obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise, except as required by law. All investments involve risk, including possible loss of principal. Past performance is not indicative of future results.

Annual Report 2023
3

CION Ares Diversified Credit Fund

Letter to Shareholders (continued)

December 31, 2023

CION Securities, LLC ("CSL") is the wholesale marketing agent for the Fund, advised by CION Ares Management and distributed by ALPS Distributors, Inc ("ADI"). CSL, member FINRA, and CAM are not affiliated with ADI, member FINRA. Certain Ares fund securities may be offered through its affiliate, Ares Management Capital Markets LLC, a broker-dealer registered with the SEC, and a member of FINRA and SIPC.

1​ Past performance is not indicative of future results. Performance shown here is the I-Share Class. The I-Share was incepted on July 12, 2017. Returns include reinvestment of distributions and reflect fund expenses inclusive of recoupment of previously provided expense support. The expense ratio is 4.18% as of December 31, 2023 excluding interest expense. Expense ratios are annualized and calculated as a percentage of estimated average net assets. Share values will fluctuate, therefore if repurchased, they may be worth more or less than their original cost.

2​ Secured Debt includes First and Second Lien assets, Structured Credit Debt, Structured Credit Equity. Excludes Cash.

3​ Includes U.S. Direct Lending, European Direct Lending, Alternative Credit, Real Estate Debt and Opportunistic investments. Excludes cash.

4​ The current distribution rate is expressed as a percentage equal to the projected annualized distribution amount (which is calculated by annualizing the current daily cash distribution per share without compounding), divided by the relevant net asset value per share. A portion of distributions may be a direct result of expense support payments provided by CION Ares Management, which are subject to repayment by CADC within three years. The purpose of this arrangement is to ensure that CADC bears an appropriate level of expenses. Any such distributions may not be entirely based on investment performance and can only be sustained if positive investment performance is achieved in future periods and/or CAM continues to make such expense support payments. Future repayments will reduce cash otherwise potentially available for distributions. There can be no assurance that such performance will be achieved in order to sustain these distributions. CAM has no obligation to provide expense support payments in future periods.

5​ Source: Bureau of Labor Statistics. As of January 11, 2024.

6​ Source: Federal Reserve. As of December 13, 2023.

7​ Proxy: S&P 500 Index. Please refer to Index Definitions for index definitions.

8​ Proxy: ICE BofA US High Yield Index. Please refer to Index Definitions for index definitions.

9​ Proxy: Credit Suisse Leveraged Loan Index. Please refer to Index Definitions for index definitions.

10​ Proxy: Bloomberg Aggregate Bond Index. Please refer to Index Definitions for index definitions.

11​ Source: JP Morgan. As of December 31, 2023.

12​ CADC's current yield does not represent a return to investors.

Index Definitions

The Bloomberg Aggregate Bond Index measures the performance of the U.S. investment grade bond market. The index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States — including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year. To be included in the index, bonds must be rated investment grade (at least Baa3/BBB) by Moody's and S&P. Inception date: January 1, 1976.

The Standard & Poor's 500 Index, often abbreviated as the S&P 500, or just "the S&P", is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The index components and their weightings are determined by S&P Dow Jones Indices.

The Credit Suisse Leveraged Loan Index is designed to mirror the investable universe of the US dollar-denominated leveraged loan market. The index inception is January 1992. The index frequency is daily, weekly and monthly. New loans are added to the index on their effective date if they qualify according to the following criteria: 1) Loan facilities must be rated "5B" or lower. That is, the highest Moody's/S&P ratings are Baa1/BB+ or Ba1/BBB+. For unrated loans, the initial spread must be 125 basis points or higher above the benchmark reference reset rate. 2) Only fully-funded term loan facilities are included. 3) The tenor must be at least one year. 4) Issuers must be domiciled in developed countries; issuers from developing countries are excluded.

The ICE BofA US High Yield Index tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch), at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100 million. Index constituents are capitalization-weighted based on their current amount outstanding times the market price plus accrued interest. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index. The index is rebalanced on the last calendar day of the month, based on information available up to and including the third business day before the last business day of the month. No changes are made to constituent holdings other than on month end rebalancing dates. Inception date: August 31, 1986.

Annual Report 2023
4

CION Ares Diversified Credit Fund

Fund Fact Sheet — As of December 31, 2023

CLASS A CADEX | CLASS C CADCX | CLASS I CADUX | CLASS L CADWX
CLASS U CADZX | CLASS U2 CADSX | CLASS W CADFX

FUND OVERVIEW

CION Ares Diversified Credit Fund (CADC) is a diversified, unlisted closed-end management investment company registered under the 1940 Act as an interval fund. The Fund will seek to capitalize on market inefficiencies and relative value opportunities by dynamically allocating a portfolio of directly originated loans, secured floating and fixed rate syndicated loans, corporate bonds, asset-backed securities, commercial real estate loans and other types of credit instruments which, under normal circumstances, will represent at least 80% of the Fund's assets.

Fixed vs. Floating Rate

Excludes cash, other net assets and equity instruments.

KEY FACTS

TOTAL MANAGED ASSETS*

  

$

4.4

B

  

TOTAL ISSUES

    

690

    

DISTRIBUTIONS1​

  

Monthly

  

 

SHARE CLASS

  

INCEPTION

   CURRENT
DISTRIBUTION
RATE2​		   STANDARD
DEVIATION3​		   SHARPE RATIO4
​(ANNUALIZED)		  

CLASS A

  

1/26/2017

    

8.98

%

    

3.80

%

    

1.02

    

CLASS C

  

7/12/2017

    

8.24

%

    

3.80

%

    

0.97

    

CLASS I

  

7/12/2017

    

9.23

%

    

3.81

%

    

1.08

    

CLASS L

  

11/2/2017

    

8.73

%

    

3.88

%

    

0.97

    

CLASS U

  

7/25/2019

    

8.49

%

    

4.39

%

    

0.79

    

CLASS U-2

  

4/13/2020

    

8.49

%

    

2.99

%

    

2.63

    

CLASS W

  

12/4/2018

    

8.73

%

    

4.19

%

    

0.99

    

Portfolio Allocation*

  Allocation by Asset Type

  Allocation by Geography

Top 10 Holdings* % of Portfolio

Kaseya

    

1.1

%

  

Mimecast

    

1.1

%

  

Nielsen

    

1.0

%

  

High Street Insurance Partners

    

1.0

%

  

DigiCert

    

1.0

%

  

TurnPoint Services

    

0.9

%

  

European Camping Group

    

0.9

%

  

eCapital

    

0.9

%

  

RSK Group Limited

    

0.9

%

  

Platinum Credit

    

0.8

%

  

Allocation by Industry* % of Portfolio

Software & Services

    

21.3

%

  

Commercial & Professional Services

    

9.8

%

  

Financial Services

    

9.2

%

  

Health Care Equipment & Services

    

8.1

%

  

Structured Products

    

8.0

%

  

Consumer Services

    

6.7

%

  

Capital Goods

    

6.7

%

  

Insurance

    

6.0

%

  

Other

    

25.6

%

  

Cash

    

-1.3

%

  

* Holdings and allocations, unless otherwise indicated, are based on the total managed assets and subject to change without notice. Total managed assets is defined as the total assets (including any assets attributable to financial leverage) minus accrued liabilities (other than debt representing financial leverage). Data shown is for informational purposes only and not a recommendation to buy or sell any security.

Annual Report 2023
5

CION Ares Diversified Credit Fund

Fund Fact Sheet — As of December 31, 2023 (continued)

CLASS A CADEX | CLASS C CADCX | CLASS I CADUX | CLASS L CADWX
CLASS U CADZX | CLASS U2 CADSX | CLASS W CADFX

MANAGEMENT TEAM

• Mitch Goldstein, Co-Head of Ares Credit Group | 28 Years of Experience

• Greg Margolies, Partner, Ares Management | 35 Years of Experience

• Michael Smith, Co-Head of Ares Credit Group | 28 Years of Experience

• CADC's allocation committee consists of an additional 13 members, averaging nearly 25 years of experience.

ABOUT CION INVESTMENTS

CION Investments is a leading manager of investment solutions designed to redefine the way individual investors can build their portfolios and help meet their long-term investment goals. With more than 30 years of experience in the alternative asset management industry, CION strives to level the playing field. CION currently manages CION Investment Corporation, a leading BDC, and sponsors, through CION Ares Management, CION Ares Diversified Credit Fund, a globally diversified interval fund.

ABOUT ARES MANAGEMENT

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes. Ares Management Corporation seeks to provide flexible capital to support businesses and create value for its stakeholders and within its communities. By collaborating across its investment groups, Ares Management Corporation aims to generate consistent and attractive investment returns throughout market cycles. As of September 30, 2023, Ares Management Corporation's global platform had approximately $395 billion of assets under management, with over 2,300 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.

RISK DISCLOSURES & GLOSSARY

Risks and limitations include, but are not limited to, the following: investment instruments may be susceptible to economic downturns; most of the underlying credit instruments are rated below investment grade and considered speculative; there is no guarantee all shares can be repurchased; the Fund's business and operations may be impacted by fluctuations in the capital markets; the Fund is a diversified, closed-end investment company with limited operating history; diversification does not eliminate the risk of investment losses.

1​ Monthly Distributions — There is no assurance monthly distributions paid by the fund will be maintained at the targeted level or paid at all.

2​ Current Distribution Rate — Current distribution rate is expressed as a percentage equal to the projected annualized distribution amount (which is calculated by annualizing the current cash distribution per share without compounding), divided by the net asset value. The current distribution rate shown may be rounded.

3​ Standard Deviation — a widely used measure of an investment's performance volatility. Standard deviation shows how much variation from the mean exists with a larger number indicating the data points are more spread out over a larger range of values. Figures shown here are based on non-loaded daily NAV total returns utilizing data since inception.

4​ Sharpe Ratio — a risk-adjusted measure that measures reward per unit of risk. The higher the Sharpe Ratio, the better. The numerator is the difference between a portfolio's return and the return of a risk-free instrument. The denominator is the portfolio's standard deviation. Figures shown here are based on non-loaded daily NAV total returns utilizing data since inception.

A portion of distributions may be a direct result of expense support payments provided by CION Ares Management, LLC (CAM), which are subject to repayment by CADC within three years. The purpose of this arrangement is to ensure that CADC bears an appropriate level of expenses. Any such distributions may not be entirely based on investment performance and can only be sustained if positive investment performance is achieved in future periods and/or CAM continues to make such expense support payments. Future repayments will reduce cash otherwise potentially available for distributions. There can be no assurance that such performance will be achieved in order to sustain these distributions. CAM has no obligation to provide expense support payments in future periods.

CADC may fund distributions from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital, as well as net income from operations, capital and non-capital gains from the sale of assets, dividends or distributions from equity investments and expense support payments from CAM, which are subject to repayment. For the year ending December 31, 2022, distributions were paid from taxable income and did not include a return of capital for tax purposes. If expense support payments from CAM were not provided, some or all of the distributions may have been a return of capital which would reduce the available capital for investment. The sources of distributions may vary periodically. Please refer to the semi-annual or annual reports filed with the SEC for the sources of distributions.

Annual Report 2023
6

CION Ares Diversified Credit Fund

Performance Summary

December 31, 2023

The following graph shows the value, as of December 31, 2023, of a hypothetical $10,000 investment made on January 26, 2017 in Class A Shares at net asset value (with a sales charge of 5.75%). For comparative purposes, the performance of the Credit Suisse Leveraged Loan Index ("CSLLI") is shown. CSLLI is designed to mirror the investable universe of the U.S. Dollar-denominated leveraged loan market, and is deemed to be an appropriate broad-based securities market index for the Fund. Performance reflects applicable fee waivers and/or expense limitations in effect during the periods shown and in their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the repurchase of Fund shares. The returns in the graph and table set forth below represent past performance.

Past performance does not guarantee future results. The Fund's investment return and principal value will fluctuate so that an investor's shares, when repurchased, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted below. Please visit our website at https://www.cioninvestments.com/products/cion-ares-diversified-credit-fund/ to obtain the most recent month-end returns.

CION Ares Diversified Credit Fund's Lifetime Performance Data

CADC Performance Since Inception

Annual Report 2023
7

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Automobiles and Components

  
Automotive
Keys Group,
LLC		       1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

11/06/2025

      

$

1,670

  

$

1,603

(e)(f)​

    
Automotive
Keys Group,
LLC		       1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

11/06/2025

      

238

  

228

(e)​

    
Clarios Global
LP		       1st Lien Term
Loan		   9.11% (1M
SOFR +
3.75%)		  

05/06/2030

      

5,611

  

5,618

    
Continental
Acquisition
Holdings, Inc.		       1st Lien
Revolving
Loan		   9.19% (3M
SOFR +
3.75%)		  

01/20/2026

      

1

  

1

(e)(h)​

    
Continental
Acquisition
Holdings, Inc.		       1st Lien Term
Loan		   12.50% (3M
SOFR +
7.00%)		  

01/20/2027

      

5,974

  

5,138

(e)(f)​

    
Continental
Acquisition
Holdings, Inc.		       1st Lien Delay
Draw Loan		   12.50% (3M
SOFR +
7.00%)		  

01/20/2027

      

1,451

  

1,248

(e)(f)​

    
Highline
Aftermarket
Acquisition, LLC		       1st Lien
Revolving
Loan		    

11/10/2025

      

—

  

—

(e)(h)​

    
Highline
Aftermarket
Acquisition, LLC		       2nd Lien Term
Loan		   13.52% (3M
SOFR +
8.00%)		  

11/09/2028

      

5,942

  

5,942

(e)(f)​

    
Highline
Aftermarket
Acquisition, LLC		       2nd Lien
Delay Draw
Loan		   13.52% (3M
SOFR +
8.00%)		  

11/09/2028

      

4,209

  

4,209

(e)​

    
New Churchill
Holdco LLC		       1st Lien
Revolving
Loan		   10.87% (3M
SOFR +
5.50%)		  

11/09/2029

      

19

  

19

(e)(h)​

    
New Churchill
Holdco LLC		       1st Lien Term
Loan		   10.87% (3M
SOFR +
5.50%)		  

11/09/2029

      

1,213

  

1,188

(e)​

    
New Churchill
Holdco LLC		       1st Lien Delay
Draw Loan		   10.88% (3M
SOFR +
5.50%)		  

11/09/2029

      

173

  

170

(e)(h)​

    
Sun Acquirer
Corp.		       1st Lien
Revolving
Loan		   11.22% (1M
SOFR +
5.75%)		  

09/08/2027

      

212

  

210

(e)(h)​

    
Sun Acquirer
Corp.		       1st Lien Term
Loan		   11.22% (1M
SOFR +
5.75%)		  

09/08/2028

      

6,482

  

6,418

(e)​

    
Sun Acquirer
Corp.		     1st Lien Term
Loan		   11.22% (1M
SOFR +
5.75%)		  

09/08/2028

      

1,731

  

1,713

(e)(f)​

    
Sun Acquirer
Corp.		     1st Lien Delay
Draw Loan		   11.22% (1M
SOFR +
5.75%)		  

09/08/2028

      

4,581

  

4,535

(e)​

    
Sun Acquirer
Corp.		     1st Lien Delay
Draw Loan		    

09/08/2028

      

—

  

—

(e)(h)​

    

Annual Report 2023
8

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Wand Newco 3,
Inc.		     1st Lien Term
Loan		   8.22% (1M
SOFR +
2.75%)		  

02/05/2026

      

$

15,959

  

$

15,993

    
Wand Newco 3,
Inc.		     2nd Lien Term
Loan		   12.71% (1M
SOFR +
7.25%)		  

02/05/2027

      

2,026

  

2,026

(e)(f)​

    
                                     

56,259

      

1.75

%

  

Capital Goods

  
AI Aqua Merger
Sub, Inc.		     1st Lien Delay
Draw Loan		    

07/31/2028

      

1,652

  

1,658

(h)(i)​

    
AIM Acquisition,
LLC		     1st Lien
Revolving
Loan		    

12/02/2025

      

—

  

—

(e)(h)​

    
AIM Acquisition,
LLC		     1st Lien Term
Loan		   10.49% (6M
SOFR +
5.00%)		  

12/02/2025

      

212

  

212

(e)(f)​

    
Airx Climate
Solutions, Inc.		     1st Lien
Revolving
Loan		    

11/07/2029

      

—

  

—

(e)(h)​

    
Airx Climate
Solutions, Inc.		     1st Lien Term
Loan		   11.68% (3M
SOFR +
6.25%)		  

11/07/2029

      

1,513

  

1,475

(e)​

    
Airx Climate
Solutions, Inc.		     1st Lien Delay
Draw Loan		    

11/07/2029

      

—

  

—

(e)(h)​

    
AllClear Military
Inc.		     1st Lien Term
Loan		    

08/10/2025

      

1,947

  

1,110

(e)(j)​

    
Artera Services,
LLC		     1st Lien Term
Loan		   8.70% (3M
SOFR +
3.25%)		  

03/06/2025

      

3,484

  

3,270

    
Artera Services,
LLC		     1st Lien Term
Loan		   8.95% (3M
SOFR +
3.50%)		  

03/06/2025

      

3,393

  

3,184

    
BlueHalo Global
Holdings, LLC		     1st Lien
Revolving
Loan		   12.02% (3M
SOFR +
6.50%)		  

10/31/2025

      

444

  

436

(e)(h)​

    
BlueHalo Global
Holdings, LLC		     1st Lien Term
Loan		   12.02% (3M
SOFR +
6.50%)		  

10/31/2025

      

4,048

  

3,967

(e)(f)​

    
Box Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   11.48% (6M
EURIBOR +
7.42%)		  

11/24/2028

      

€

878

  

969

(e)(f)​

      
Box Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   11.50% (6M
SOFR +
5.75%)		  

11/24/2028

      

1,691

  

1,691

(e)(f)​

    
Brookfield WEC
Holdings Inc.		     1st Lien Term
Loan		   8.22% (1M
SOFR +
2.75%)		  

08/01/2025

      

13,108

  

13,133

    
Brown Group
Holding, LLC		     1st Lien Term
Loan		   8.21% (1M
SOFR +
2.75%)		  

06/07/2028

      

4,959

  

4,961

    

Annual Report 2023
9

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Brown Group
Holding, LLC		     1st Lien Term
Loan		   9.14% (3M
SOFR +
3.75%)		  

07/02/2029

      

$

496

  

$

498

    
Burgess Point
Purchaser
Corporation		     1st Lien Term
Loan		   10.71% (1M
SOFR +
5.25%)		  

07/25/2029

      

4,146

  

3,902

    
Chart Industries,
Inc.		     1st Lien Term
Loan		   8.69% (1M
SOFR +
3.25%)		  

03/15/2030

      

6,361

  

6,366

    
CP Atlas Buyer
Inc		     1st Lien Term
Loan		   9.21% (1M
SOFR +
3.75%)		  

11/23/2027

      

4,455

  

4,374

    

CPIG Holdco Inc.

     1st Lien
Revolving
Loan		   10.24% (3M
SOFR +
4.75%)		  

04/28/2028

      

1

  

1

(e)(h)​

    
CPIG Holdco Inc.
Loan		     1st Lien Term   12.49% (3M
SOFR +
7.00%)		  

04/28/2028

      

3,863

  

3,863

(e)​

    
Cube Industrials
Buyer, Inc. &
Cube A&D
Buyer Inc.		     1st Lien
Revolving
Loan		    

10/18/2029

      

—

  

—

(e)(h)​

    
Cube Industrials
Buyer, Inc. &
Cube A&D
Buyer Inc.		     1st Lien Term
Loan		   11.40% (3M
SOFR +
6.00%)		  

10/18/2030

      

4,308

  

4,201

(e)​

    
Dynamic NC
Aerospace
Holdings, LLC		     1st Lien
Revolving
Loan		   12.54% (3M
SOFR +
7.00%)		  

12/30/2025

      

670

  

670

(e)(h)​

    
Dynamic NC
Aerospace
Holdings, LLC		     1st Lien Term
Loan		   12.54% (3M
SOFR +
7.00%)		  

12/30/2026

      

2,750

  

2,750

(e)(f)​

    
Eleda BidCo AB
(fka EISG BidCo
AB)		  

Sweden

   1st Lien Term
Loan		   10.15% (3M
STIBOR +
6.25%)		  

06/30/2026

      

SEK

21,000

  

2,082

(e)(f)​

      
Eleda BidCo AB
(fka EISG BidCo
AB)		  

Sweden

   1st Lien Term
Loan		   10.29% (3M
STIBOR +
6.25%)		  

06/30/2026

      

SEK

24,107

  

2,390

(e)(f)​

      
Eleda BidCo AB
(fka EISG BidCo
AB)		  

Sweden

   1st Lien Delay
Draw Loan		   10.95% (3M
NIBOR +
6.25%)		  

06/30/2026

      

SEK

2,106

  

209

(e)​

      
Eleda BidCo AB
(fka EISG BidCo
AB)		  

Sweden

   1st Lien Delay
Draw Loan		   10.29% (3M
STIBOR +
6.25%)		  

06/30/2026

      

SEK

9,070

  

899

(e)(f)​

      
EPS NASS
Parent, Inc.		     1st Lien
Revolving
Loan		   11.25% (3M
SOFR +
5.75%)		  

04/17/2026

      

135

  

131

(e)(h)​

    
EPS NASS
Parent, Inc.		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

04/19/2028

      

5,715

  

5,544

(e)(f)​

    

Annual Report 2023
10

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
EPS NASS
Parent, Inc.		     1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

04/19/2028

      

$

322

  

$

312

(e)​

    
Helix Acquisition
Holdings, Inc.		     1st Lien Term
Loan		   12.45% (3M
SOFR +
7.00%)		  

03/29/2030

      

473

  

473

(e)​

    
Husky Injection
Molding
Systems Ltd.		  

Canada

   1st Lien Term
Loan		   8.47% (1M
SOFR +
3.00%)		  

03/28/2025

      

15,087

  

15,055

    
INNIO Group
Holding GmbH		  

Germany

   1st Lien Term
Loan		    

10/31/2028

      

€

6,900

  

7,611

(i)​

      
Kene
Acquisition,
Inc.		     1st Lien
Revolving
Loan		    

08/08/2024

      

—

  

—

(e)(h)​

    
Kene
Acquisition,
Inc.		     1st Lien Term
Loan		   9.75% (3M
SOFR +
4.25%)		  

08/10/2026

      

2,790

  

2,790

(e)(f)​

    
Kene
Acquisition,
Inc.		     1st Lien
Delay Draw
Loan		   9.75% (3M
SOFR +
4.25%)		  

08/10/2026

      

467

  

466

(e)(f)​

    

Kodiak BP, LLC

     1st Lien Term
Loan		   8.86% (3M
SOFR +
3.25%)		  

03/12/2028

      

6,497

  

6,477

    
LBM Acquisition
LLC		     1st Lien Term
Loan		   9.21% (1M
SOFR +
3.75%)		  

12/17/2027

      

8,264

  

8,155

    
Maverick
Acquisition, Inc.		     1st Lien Term
Loan		   11.60% (3M
SOFR +
6.25%)		  

06/01/2027

      

5,240

  

4,245

(e)(f)​

    
Maverick
Acquisition, Inc.		     1st Lien Delay
Draw Loan		   11.60% (3M
SOFR +
6.25%)		  

06/01/2027

      

1,195

  

967

(e)​

    
Osmose Utilities
Services, Inc.		     2nd Lien Term
Loan		   12.11% (1M
SOFR +
6.75%)		  

06/25/2029

      

8,237

  

8,155

(e)​

    
Osmosis Buyer
Limited		     1st Lien Term
Loan		   9.09% (1M
SOFR +
3.75%)		  

07/31/2028

      

7,358

  

7,354

    
Prime Buyer,
L.L.C.		     1st Lien
Revolving
Loan		    

12/22/2026

      

—

  

—

(e)(h)​

    
Prime Buyer,
L.L.C.		     1st Lien Term
Loan		   10.71% (1M
SOFR +
5.25%)		  

12/22/2026

      

13,572

  

12,486

(e)(f)​

    
Radius
Aerospace
Europe Limited		   United
Kingdom		   1st Lien
Revolving
Loan		   10.94% (1M
SONIA +
5.75%)		  

03/29/2025

      

£

157

  

200

(e)(h)​

      
Radius
Aerospace
Europe Limited		   United
Kingdom		   1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

03/29/2025

      

1,561

  

1,562

(e)(f)​

    

Annual Report 2023
11

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Radius
Aerospace, Inc.		     1st Lien
Revolving
Loan		   11.23% (1M
SOFR +
5.75%)		  

03/29/2025

      

$

114

  

$

114

(e)(h)​

    
Radius
Aerospace, Inc.		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

03/29/2025

      

2,252

  

2,252

(e)(f)​

    
Sigma Electric
Manufacturing
Corporation		     1st Lien
Revolving
Loan		    

10/31/2024

      

—

  

—

(e)(h)​

    
Sigma Electric
Manufacturing
Corporation		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

10/31/2024

      

387

  

387

(e)(f)​

    
Specialty
Building
Products
Holdings, LLC		     1st Lien Term
Loan		   9.21% (1M
SOFR +
3.75%)		  

10/15/2028

      

1,396

  

1,393

    
SRS Distribution
Inc.		     1st Lien Term
Loan		   8.97% (1M
SOFR +
3.50%)		  

06/02/2028

      

4,016

  

4,017

    
SRS Distribution
Inc.		     1st Lien Term
Loan		   8.96% (1M
SOFR +
3.50%)		  

06/02/2028

      

3,311

  

3,307

    
Sunk Rock
Foundry
Partners LP		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

10/31/2024

      

193

  

193

(e)(f)​

    

TransDigm Inc.

     1st Lien Term
Loan		   8.60% (3M
SOFR +
3.25%)		  

08/24/2028

      

9,696

  

9,732

    
Two Six Labs,
LLC		     1st Lien
Revolving
Loan		    

08/20/2027

      

—

  

—

(e)(h)​

    
Two Six Labs,
LLC		     1st Lien Term
Loan		   10.85% (3M
SOFR +
5.50%)		  

08/20/2027

      

7,299

  

7,299

(e)(f)​

    
Two Six Labs,
LLC		     1st Lien Term
Loan		   11.35% (3M
SOFR +
6.00%)		  

08/20/2027

      

1,338

  

1,338

(e)​

    
Two Six Labs,
LLC		     1st Lien Delay
Draw Loan		   10.85% (3M
SOFR +
5.50%)		  

08/20/2027

      

2,831

  

2,831

(e)​

    
Victory Buyer
LLC		     1st Lien Term
Loan		   9.39% (3M
SOFR +
3.75%)		  

11/19/2028

      

5,293

  

5,009

    

Wilsonart LLC

     1st Lien Term
Loan		   8.70% (3M
SOFR +
3.25%)		  

12/31/2026

      

10,793

  

10,806

    
                                 

     

198,932

      

6.20

%

  

Annual Report 2023
12

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Commercial and Professional Services

  
Aero Operating
LLC		     1st Lien Term
Loan		   14.54% (3M
SOFR +
9.00%)		  

02/09/2026

      

$

2,898

  

$

2,463

(e)(f)​

    
Aero Operating
LLC		     1st Lien
Delay Draw
Loan		   14.54% (3M
SOFR +
9.00%)		  

02/09/2026

      

806

  

685

(e)(f)​

    
Applied
Technical
Services, LLC		     1st Lien
Revolving
Loan		   13.25
(PRIME +
4.75%)% 		 

12/29/2026

      

523

  

523

(e)(h)​

    
Applied
Technical
Services, LLC		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

12/29/2026

      

4,215

  

4,214

(e)(f)​

    
Applied
Technical
Services, LLC		     1st Lien Term
Loan		   11.52% (3M
SOFR +
6.00%)		  

12/29/2026

      

571

  

571

(e)​

    
Applied
Technical
Services, LLC		     1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

12/29/2026

      

1,417

  

1,417

(e)(f)​

    
Applied
Technical
Services, LLC		     1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

12/29/2026

      

4,942

  

4,942

(e)​

    
Applied
Technical
Services, LLC		     1st Lien Delay
Draw Loan		   11.52% (3M
SOFR +
6.00%)		  

12/29/2026

      

573

  

573

(e)​

    
Argenbright
Holdings V, LLC		     1st Lien Term
Loan		   12.78% (3M
SOFR +
7.25%)		  

11/30/2026

      

2,791

  

2,791

(e)(f)​

    
Argenbright
Holdings V, LLC		     1st Lien Delay
Draw Loan		    

11/30/2026

      

—

  

—

(e)(h)​

    
Armorica
Lux S.a.r.l.		  

Luxembourg

   1st Lien Term
Loan		   8.87% (3M
EURIBOR +
4.93%)		  

07/28/2028

      

€

4,000

  

4,195

      
Auxadi Midco
S.L.U.		  

Spain

   1st Lien Term
Loan		   8.72% (3M
EURIBOR +
4.75%)		  

07/17/2028

      

€

473

  

522

(e)(g)​

      
Capstone
Acquisition
Holdings, Inc.		     1st Lien
Revolving
Loan		    

11/12/2025

      

—

  

—

(e)(h)​

    
Capstone
Acquisition
Holdings, Inc.		     1st Lien Term
Loan		   10.21% (1M
SOFR +
4.75%)		  

11/12/2027

      

10,759

  

10,760

(e)(f)​

    
Capstone
Acquisition
Holdings, Inc.		     2nd Lien Term
Loan		   14.21% (1M
SOFR +
8.75%)		  

11/13/2028

      

3,008

  

3,008

(e)(f)​

    
Capstone
Acquisition
Holdings, Inc.		     1st Lien Delay
Draw Loan		   10.21% (1M
SOFR +
4.75%)		  

11/12/2027

      

631

  

631

(e)​

    
Compex Legal
Services, Inc.		     1st Lien
Revolving
Loan		   10.94% (3M
SOFR +
5.45%)		  

02/07/2025

      

270

  

270

(e)(h)​

    

Annual Report 2023
13

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Compex Legal
Services, Inc.		     1st Lien Term
Loan		   10.90% (3M
SOFR +
5.45%)		  

02/09/2026

      

$

1,271

  

$

1,271

(e)(f)​

    
Dispatch
Acquisition
Holdings, LLC		     1st Lien Term
Loan		   9.75% (3M
SOFR +
4.25%)		  

03/27/2028

      

14,793

  

13,868

(f)​

    
Dun &
Bradstreet
Corporation, The		     1st Lien Term
Loan		   8.21% (1M
SOFR +
2.75%)		  

02/06/2026

      

15,118

  

15,139

    
Dun &
Bradstreet
Corporation, The		     1st Lien Term
Loan		   8.36% (1M
SOFR +
3.00%)		  

01/18/2029

      

1,845

  

1,848

    
Elevation
Services Parent
Holdings, LLC		     1st Lien
Revolving
Loan		   11.54% (3M
SOFR +
6.00%)		  

12/18/2026

      

467

  

457

(e)(h)​

    
Elevation
Services Parent
Holdings, LLC		     1st Lien Term
Loan		   11.54% (3M
SOFR +
6.00%)		  

12/18/2026

      

1,310

  

1,283

(e)(f)​

    
Elevation
Services Parent
Holdings, LLC		     1st Lien Term
Loan		   11.53% (3M
SOFR +
6.00%)		  

12/18/2026

      

625

  

612

(e)(f)​

    
Elevation
Services Parent
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.54% (3M
SOFR +
6.00%)		  

12/18/2026

      

1,751

  

1,716

(e)(f)​

    
Elevation
Services Parent
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.53% (3M
SOFR +
6.00%)		  

12/18/2026

      

21

  

21

(e)(h)​

    
Erasmus
Acquisition
Holding B.V.		  

Netherlands

   1st Lien Term
Loan		   11.95% (6M
EURIBOR +
8.06%)		  

03/13/2030

      

€

3,323

  

3,669

(e)(g)​

      
Erasmus
Acquisition
Holding B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   11.95% (6M
EURIBOR +
8.06%)		  

03/13/2030

      

€

222

  

245

(e)(g)(h)​

      
Flywheel
Acquireco, Inc.		     1st Lien
Revolving
Loan		   11.86% (1M
SOFR +
6.50%)		  

05/12/2028

      

1,110

  

1,099

(e)(h)​

    
Flywheel
Acquireco, Inc.		     1st Lien Term
Loan		   11.86% (1M
SOFR +
6.50%)		  

05/13/2030

      

13,783

  

13,645

(e)​

    

HH-Stella, Inc.

     1st Lien
Revolving
Loan		    

04/22/2027

      

—

  

—

(e)(h)​

    

HH-Stella, Inc.

     1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

04/24/2028

      

6,030

  

6,030

(e)(f)​

    

HH-Stella, Inc.

     1st Lien Delay
Draw Loan		   11.50% (3M
SOFR +
6.00%)		  

04/24/2028

      

1,079

  

1,079

(e)​

    

HH-Stella, Inc.

     1st Lien Delay
Draw Loan		   11.50% (3M
SOFR +
6.00%)		  

04/24/2028

      

1,135

  

1,135

(e)(h)​

    

Annual Report 2023
14

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
HP RSS Buyer,
Inc.		     1st Lien Term
Loan		   10.37% (3M
SOFR +
5.00%)		  

12/11/2029

      

$

1,265

  

$

1,240

(e)​

    
HP RSS Buyer,
Inc.		     1st Lien Delay
Draw Loan		   10.37% (1M
SOFR +
5.00%)		  

12/11/2029

      

271

  

266

(e)​

    
HP RSS Buyer,
Inc.		     1st Lien Delay
Draw Loan		   10.37% (1M
SOFR +
5.00%)		  

12/11/2029

      

112

  

110

(e)(h)​

    
Integrated
Power Services
Holdings, Inc.		     2nd Lien Term
Loan		   12.96% (1M
SOFR +
7.50%)		  

11/22/2029

      

4,983

  

4,983

(e)​

    
IRI Group
Holdings, Inc.		     1st Lien
Revolving
Loan		   11.11% (1M
SOFR +
5.75%)		  

12/01/2027

      

235

  

235

(e)(h)​

    
IRI Group
Holdings, Inc.		     1st Lien Term
Loan		   11.61% (1M
SOFR +
6.25%)		  

12/01/2028

      

24,933

  

24,933

(e)(f)(g)​

    
Ishtar Bidco
Norway AS		   United
Kingdom		   1st Lien Delay
Draw Loan		   16.28% (6M
SONIA +
10.75%)		  

11/26/2025

      

£

735

  

656

(e)(f)​

      
Kellermeyer
Bergensons
Services, LLC		     1st Lien Term
Loan		   11.59% (3M
SOFR +
6.00%)		  

11/07/2026

      

3,475

  

3,476

(e)(f)​

    
Kellermeyer
Bergensons
Services, LLC		     1st Lien Term
Loan		    

11/07/2026

      

6,890

  

4,678

(e)(j)​

    
Kellermeyer
Bergensons
Services, LLC		     1st Lien Delay
Draw Loan		   11.59% (3M
SOFR +
6.00%)		  

11/07/2026

      

2,187

  

2,187

(e)(f)​

    
Kings Buyer,
LLC		     1st Lien
Revolving
Loan		    

10/29/2027

      

—

  

—

(e)(h)​

    
Kings Buyer,
LLC		     1st Lien Term
Loan		   11.99% (6M
SOFR +
6.50%)		  

10/29/2027

      

3,436

  

3,385

(e)​

    
Laboratories
Bidco LLC		     1st Lien
Revolving
Loan		   12.29% (3M
SOFR +
6.75%)		  

07/23/2027

      

654

  

569

(e)(h)​

    
Laboratories
Bidco LLC		     1st Lien Term
Loan		   12.31% (3M
SOFR +
6.75%)		  

07/23/2027

      

5,170

  

4,498

(e)(f)​

    
Laboratories
Bidco LLC		     1st Lien Term
Loan		   12.28% (3M
CDOR +
6.75%)		  

07/23/2027

      

CAD

1,750

  

1,149

(e)(f)​

      
Laboratories
Bidco LLC		     1st Lien Term
Loan		   12.31% (3M
SOFR +
6.75%)		  

07/23/2027

      

573

  

498

(e)(f)​

    
Laboratories
Bidco LLC		     1st Lien Term
Loan		   12.28% (3M
SOFR +
6.75%)		  

07/23/2027

      

3,964

  

3,449

(e)​

    

Annual Report 2023
15

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Laboratories
Bidco LLC		     1st Lien Delay
Draw Loan		   12.28% (3M
SOFR +
6.75%)		  

07/23/2027

      

$

288

  

$

250

(e)​

    
Lavatio Midco
Sarl		  

Luxembourg

   1st Lien Delay
Draw Loan		   10.64% (6M
EURIBOR +
6.75%)		  

11/30/2026

      

€

569

  

628

(e)(h)​

      
Lavatio Midco
Sarl		  

Luxembourg

   1st Lien Delay
Draw Loan		   10.64% (6M
EURIBOR +
6.75%)		  

11/30/2026

      

€

746

  

824

(e)(f)​

      
Lightbeam
Bidco, Inc.		     1st Lien
Revolving
Loan		    

05/04/2029

      

—

  

—

(e)(h)​

    
Lightbeam
Bidco, Inc.		     1st Lien Term
Loan		   11.70% (3M
SOFR +
6.25%)		  

05/06/2030

      

1,132

  

1,132

(e)​

    
Lightbeam
Bidco, Inc.		     1st Lien Term
Loan		   10.85% (3M
SOFR +
5.50%)		  

05/06/2030

      

131

  

130

(e)​

    
Lightbeam
Bidco, Inc.		     1st Lien Delay
Draw Loan		   11.70% (3M
SOFR +
6.25%)		  

05/06/2030

      

171

  

171

(e)​

    
Lightbeam
Bidco, Inc.		     1st Lien Delay
Draw Loan		   10.86% (6M
SOFR +
5.50%)		  

05/06/2030

      

81

  

80

(e)(h)​

    
Lowe P27 Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.98% (6M
SOFR +
6.50%)		  

07/31/2026

      

610

  

609

(e)​

    
Lowe P27 Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.33% (6M
SONIA +
6.75%)		  

07/31/2026

      

£

1,706

  

2,174

(e)​

      
Lowe P27 Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.83% (6M
SONIA +
6.50%)		  

07/31/2026

      

£

325

  

415

(e)​

      
Lowe P27 Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.46% (6M
SONIA +
6.50%)		  

07/31/2026

      

£

137

  

174

(e)(h)​

      
Lowe P27 Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		    

07/31/2026

      

£

—

  

—

(e)(h)(i)​

      
Marmic
Purchaser, LLC		     1st Lien
Revolving
Loan		   11.25% (3M
SOFR +
5.75%)		  

03/05/2027

      

230

  

230

(e)(h)​

    
Marmic
Purchaser, LLC		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

03/05/2027

      

2,011

  

2,011

(e)(f)​

    
Marmic
Purchaser, LLC		     1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

03/05/2027

      

2,016

  

2,016

(e)​

    
Marmic
Purchaser, LLC		     1st Lien Delay
Draw Loan		   11.75% (3M
SOFR +
6.25%)		  

03/05/2027

      

783

  

783

(e)(h)​

    

Annual Report 2023
16

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
MPLC Debtco
Limited		  

Jersey

   1st Lien Term
Loan		   11.44% (3M
SONIA +
6.25%)		  

01/07/2027

      

£

148

  

$

189

(e)(f)​

    
MPLC Debtco
Limited		  

Jersey

   1st Lien Delay
Draw Loan		   12.05% (6M
SOFR +
6.25%)		  

01/07/2027

      

2,100

  

2,100

(e)(f)​

    
MPLC Debtco
Limited		  

Jersey

   1st Lien Delay
Draw Loan		   11.76% (6M
SONIA +
6.25%)		  

01/07/2027

      

£

1,052

  

1,341

(e)(f)​

      
Neptune BidCo
US Inc.		     1st Lien
Revolving
Loan		    

10/11/2027

      

—

  

—

(e)(h)​

    
Neptune BidCo
US Inc.		     1st Lien Term
Loan		   10.26% (3M
SOFR +
4.75%)		  

10/11/2028

      

13,244

  

12,048

    
Neptune BidCo
US Inc.		     1st Lien Term
Loan		   10.51% (3M
SOFR +
5.00%)		  

04/11/2029

      

15,321

  

13,961

    
Neptune BidCo
US Inc.		     2nd Lien Term
Loan		   15.26% (3M
SOFR +
9.75%)		  

10/11/2029

      

9,882

  

9,388

(e)​

    
Nest Topco
Borrower Inc.		     1st Lien Term
Loan		   16.00
(PRIME +
7.50%)% 		 

08/31/2029

      

13,162

  

13,162

(e)(g)​

    
North American
Fire Holdings,
LLC		     1st Lien
Revolving
Loan		   11.27% (3M
SOFR +
5.75%)		  

05/19/2027

      

185

  

185

(e)(h)​

    
North American
Fire Holdings,
LLC		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

05/19/2027

      

2,280

  

2,280

(e)(f)​

    
North American
Fire Holdings,
LLC		     1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

05/19/2027

      

2,156

  

2,156

(e)(f)​

    
North American
Fire Holdings,
LLC		     1st Lien Delay
Draw Loan		   11.27% (3M
SOFR +
5.75%)		  

05/19/2027

      

2,853

  

2,853

(e)​

    
North Haven
Fairway Buyer,
LLC		     1st Lien
Revolving
Loan		    

05/17/2028

      

—

  

—

(e)(h)​

    
North Haven
Fairway Buyer,
LLC		     1st Lien Term
Loan		   11.86% (3M
SOFR +
6.50%)		  

05/17/2028

      

45

  

45

(e)​

    
North Haven
Fairway Buyer,
LLC		     1st Lien Delay
Draw Loan		   11.86% (3M
SOFR +
6.50%)		  

05/17/2028

      

155

  

154

(e)(h)​

    
North Haven
Stack Buyer,
LLC		     1st Lien
Revolving
Loan		   11.03% (3M
SOFR +
5.50%)		  

07/16/2027

      

162

  

162

(e)(h)​

    
North Haven
Stack Buyer,
LLC		     1st Lien Term
Loan		   11.03% (3M
SOFR +
5.50%)		  

07/16/2027

      

1,306

  

1,306

(e)(f)​

    

Annual Report 2023
17

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
North Haven
Stack Buyer,
LLC		     1st Lien Delay
Draw Loan		   11.02% (3M
SOFR +
5.50%)		  

07/16/2027

      

$

839

  

$

840

(e)​

    
North Haven
Stack Buyer,
LLC		     1st Lien Delay
Draw Loan		   11.02% (1M
SOFR +
5.50%)		  

07/16/2027

      

145

  

145

(e)​

    
North Haven
Stack Buyer,
LLC		     1st Lien Delay
Draw Loan		   11.01% (3M
SOFR +
5.50%)		  

07/16/2027

      

177

  

177

(e)(h)​

    
North Haven
Stack Buyer,
LLC		     1st Lien Delay
Draw Loan		   11.03% (3M
SOFR +
5.50%)		  

07/16/2027

      

21

  

21

(e)​

    
Orbit Private
Holdings I Ltd		   United
Kingdom		   1st Lien Term
Loan		   10.94% (3M
SONIA +
5.75%)		  

12/11/2028

      

£

4,915

  

6,076

(e)​

      
Priority Waste
Holdings LLC		     1st Lien
Revolving
Loan		   10.89% (3M
SOFR +
5.50%)		  

08/20/2029

      

1

  

1

(e)(h)​

    
Priority Waste
Holdings LLC		     1st Lien Term
Loan		   13.40% (3M
SOFR +
8.00%)		  

08/20/2029

      

1,797

  

1,764

(e)(g)​

    
Priority Waste
Holdings LLC		     1st Lien Delay
Draw Loan		   13.40% (3M
SOFR +
8.00%)		  

08/20/2029

      

1,043

  

1,024

(e)(g)(h)​

    
Priority Waste
Holdings LLC		     1st Lien Delay
Draw Loan		    

08/20/2029

      

—

  

—

(e)(g)(h)​

    

PSC Group LLC

     1st Lien
Revolving
Loan		    

07/23/2025

      

—

  

—

(e)(h)​

    

PSC Group LLC

     1st Lien Term
Loan		   11.53% (3M
SOFR +
6.00%)		  

07/23/2025

      

5,218

  

5,218

(e)(f)​

    

PSC Group LLC

     1st Lien Term
Loan		   11.41% (3M
SOFR +
6.00%)		  

07/23/2025

      

3,520

  

3,520

(e)(f)​

    

PSC Group LLC

     1st Lien Delay
Draw Loan		   11.53% (3M
SOFR +
6.00%)		  

07/23/2025

      

104

  

104

(e)(f)​

    

PSC Group LLC

     1st Lien Delay
Draw Loan		   11.29% (3M
SOFR +
5.75%)		  

07/23/2025

      

1,576

  

1,576

(e)(f)​

    

PSC Group LLC

     1st Lien Delay
Draw Loan		   11.53% (3M
SOFR +
6.00%)		  

07/23/2025

      

959

  

959

(e)​

    

PSC Group LLC

     1st Lien Delay
Draw Loan		   11.54% (3M
SOFR +
6.00%)		  

07/23/2025

      

703

  

704

(e)(h)​

    
Pye-Barker
Fire & Safety,
LLC		     1st Lien Delay
Draw Loan		    

11/26/2027

      

—

  

—

(e)(h)​

    

Annual Report 2023
18

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Registrar
Intermediate,
LLC		     1st Lien
Revolving
Loan		    

08/26/2027

      

$

—

  

$

—

(e)(h)​

    
Registrar
Intermediate,
LLC		     1st Lien Term
Loan		   10.64% (6M
SOFR +
5.00%)		  

08/26/2027

      

4,104

  

4,022

(e)(f)​

    
Research Now
Group, LLC		     1st Lien Term
Loan		   11.14% (3M
SOFR +
5.50%)		  

12/20/2024

      

3,474

  

2,572

(f)​

    
Research Now
Group, LLC		     2nd Lien Term
Loan		   15.14% (3M
SOFR +
9.50%)		  

12/20/2025

      

893

  

661

(e)(f)​

    
Rodeo
AcquisitionCo
LLC		     1st Lien
Revolving
Loan		   11.54% (3M
SOFR +
6.00%)		  

07/26/2027

      

215

  

211

(e)(h)​

    
Rodeo
AcquisitionCo
LLC		     1st Lien Term
Loan		   11.54% (3M
SOFR +
6.00%)		  

07/26/2027

      

2,076

  

2,034

(e)​

    
RSK Group
Limited		   United
Kingdom		   1st Lien Term
Loan		   10.22% (3M
SONIA +
4.88%)		  

08/07/2028

      

£

3,405

  

4,340

(e)(f)(g)​

      
RSK Group
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   10.18% (3M
SONIA +
4.88%)		  

08/07/2028

      

£

8,248

  

10,514

(e)(f)(g)​

      
RSK Group
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   8.80% (3M
EURIBOR +
4.88%)		  

08/07/2028

      

€

1,033

  

1,140

(e)(f)(g)​

      
RSK Group
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   10.25% (3M
SONIA +
4.88%)		  

08/07/2028

      

£

13,314

  

16,970

(e)(g)​

      
RSK Group
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   10.33% (3M
SONIA +
4.88%)		  

08/07/2028

      

£

3,978

  

5,071

(e)(g)(h)​

      
Saturn
Purchaser Corp.		     1st Lien Term
Loan		   10.71% (1M
SOFR +
5.25%)		  

07/23/2029

      

244

  

243

(e)​

    
Schill
Landscaping
and Lawn Care
Services, LLC		     1st Lien
Revolving
Loan		   11.21% (1M
SOFR +
5.75%)		  

12/16/2027

      

288

  

285

(e)(h)​

    
Schill
Landscaping
and Lawn Care
Services, LLC		     1st Lien Term
Loan		   11.21% (1M
SOFR +
5.75%)		  

12/16/2027

      

2,538

  

2,513

(e)(f)​

    
Schill
Landscaping
and Lawn Care
Services, LLC		     1st Lien Delay
Draw Loan		   11.21% (1M
SOFR +
5.75%)		  

12/16/2027

      

1,500

  

1,485

(e)​

    
Shermco
Intermediate
Holdings, Inc.		     1st Lien
Revolving
Loan		   10.86% (1M
SOFR +
5.50%)		  

06/05/2026

      

25

  

25

(e)(h)​

    

Annual Report 2023
19

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Shermco
Intermediate
Holdings, Inc.		     1st Lien Term
Loan		   10.86% (1M
SOFR +
5.50%)		  

06/05/2026

      

$

30,928

  

$

30,928

(e)(f)​

    
Shermco
Intermediate
Holdings, Inc.		     1st Lien Delay
Draw Loan		   10.95% (3M
SOFR +
5.50%)		  

06/05/2026

      

38

  

38

(e)(h)​

    

SSE Buyer, Inc.

     1st Lien
Revolving
Loan		   7.42% (1M
SOFR +
2.00%)		  

06/30/2025

      

1

  

1

(e)(h)​

    

SSE Buyer, Inc.

     2nd Lien Term
Loan		    

06/30/2026

      

706

  

21

(e)(f)(j)​

    
Stealth Holding
LLC		     1st Lien Term
Loan		   12.29% (3M
SOFR +
6.75%)		  

03/02/2026

      

2,430

  

2,430

(e)(f)​

    
Stealth Holding
LLC		     1st Lien Delay
Draw Loan		   12.29% (3M
SOFR +
6.75%)		  

03/02/2026

      

967

  

967

(e)​

    
Stealth Holding
LLC		     1st Lien Delay
Draw Loan		   12.29% (3M
SOFR +
6.75%)		  

03/02/2026

      

1,762

  

1,762

(e)​

    
Stealth Holding
LLC		     1st Lien Delay
Draw Loan		   12.28% (3M
SOFR +
6.75%)		  

03/02/2026

      

1,433

  

1,433

(e)​

    
Steer
Automotive
Group Ltd		   United
Kingdom		   1st Lien Term
Loan		   12.06% (3M
SONIA +
6.75%)		  

04/19/2029

      

£

2,449

  

3,121

(e)(f)​

      
Steer
Automotive
Group Ltd		   United
Kingdom		   1st Lien Term
Loan		   12.06% (3M
SONIA +
6.75%)		  

04/19/2029

      

£

4,509

  

5,747

(e)​

      
Steer
Automotive
Group Ltd		   United
Kingdom		   1st Lien Term
Loan		   12.06% (3M
SONIA +
6.75%)		  

06/30/2030

      

£

6,265

  

7,986

(e)​

      
Steer
Automotive
Group Ltd		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.06% (3M
SONIA +
6.75%)		  

04/19/2029

      

£

1,633

  

2,081

(e)​

      
Steer
Automotive
Group Ltd		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.07% (3M
SONIA +
6.75%)		  

06/30/2030

      

£

1,558

  

1,986

(e)​

      
Survitec Group
Holdco Limited		   United
Kingdom		   1st Lien Term
Loan		   13.82% (6M
SONIA +
8.25%)		  

04/06/2027

      

£

8,152

  

10,079

(e)(f)(g)​

      
Survitec Group
Holdco Limited		   United
Kingdom		   1st Lien Term
Loan		   13.55% (6M
SONIA +
8.00%)		  

04/06/2027

      

£

495

  

612

(e)​

      
Survitec Group
Holdco Limited		   United
Kingdom		   1st Lien Term
Loan		   13.76% (6M
SONIA +
8.25%)		  

04/06/2027

      

£

1,667

  

2,061

(e)(f)(g)​

      
Systems
Planning and
Analysis, Inc.		     1st Lien
Revolving
Loan		    

08/16/2027

      

—

  

—

(e)(h)​

    

Annual Report 2023
20

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Systems
Planning and
Analysis, Inc.		     1st Lien Term
Loan		   11.33% (3M
SOFR +
6.00%)		  

08/16/2027

      

$

4,444

  

$

4,444

(e)(f)​

      
Thermostat
Purchaser III,
Inc.		     1st Lien
Revolving
Loan		    

08/31/2026

      

—

  

—

(e)(h)​

    
Thermostat
Purchaser III,
Inc.		     2nd Lien Term
Loan		   12.79% (3M
SOFR +
7.25%)		  

08/31/2029

      

3,575

  

3,468

(e)​

    

Trans Union LLC

     1st Lien Term
Loan		   7.72% (1M
SOFR +
2.25%)		  

12/01/2028

      

4,231

  

4,242

    

TSS Buyer, LLC

     1st Lien Term
Loan		   11.00% (6M
SOFR +
5.50%)		  

06/22/2029

      

260

  

254

(e)​

    

TSS Buyer, LLC

     1st Lien Delay
Draw Loan		   11.00% (3M
SOFR +
5.50%)		  

06/22/2029

      

124

  

121

(e)(h)​

    
UCIT Online
Security Inc.		  

Canada

   1st Lien Term
Loan		   12.29% (3M
SOFR +
6.75%)		  

03/02/2026

      

1,620

  

1,620

(e)(f)​

    
Villa Dutch
Bidco B.V.		  

Netherlands

   1st Lien Term
Loan		    

11/03/2029

      

€

6,000

  

6,579

(i)​

      
Visual Edge
Technology, Inc.		     1st Lien Term
Loan		   12.50% (3M
SOFR +
7.00%)		  

12/31/2025

      

2,202

  

2,202

(e)(f)(g)​

    
Visual Edge
Technology, Inc.		     1st Lien Delay
Draw Loan		    

12/31/2025

      

—

  

—

(e)(g)(h)​

    
VRC Companies,
LLC		     1st Lien
Revolving
Loan		    

06/29/2027

      

—

  

—

(e)(h)​

    
VRC Companies,
LLC		     1st Lien Term
Loan		   11.14% (3M
SOFR +
5.50%)		  

06/29/2027

      

16,532

  

16,036

(e)(f)​

    
Waste Services
Finco Pty Ltd		  

Australia

   1st Lien Term
Loan		   9.99% (1M
BBSY +
5.63%)		  

12/23/2027

      

AUD

11,142

  

7,592

(e)(f)​

      
Waste Services
Finco Pty Ltd		  

Australia

   1st Lien Delay
Draw Loan		   10.33% (6M
BBSY +
5.63%)		  

12/23/2027

      

AUD

802

  

547

(e)(h)​

      
                                         

422,524

      

13.16

%

  

Consumer Discretionary Distribution and Retail

  
Bamboo
Purchaser, Inc.		     1st Lien
Revolving
Loan		   10.25% (3M
SOFR +
1.75%)		  

11/05/2026

      

1

  

—

(e)(h)​

    
Bamboo
Purchaser, Inc.		     1st Lien Term
Loan		   12.00% (3M
SOFR +
6.50%)		  

11/05/2027

      

3,483

  

3,309

(e)(f)​

    

Annual Report 2023
21

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Bamboo
Purchaser, Inc.		     1st Lien Delay
Draw Loan		   12.00% (3M
SOFR +
6.50%)		  

11/05/2027

      

$

822

  

$

781

(e)​

    
BradyIFS
Holdings, LLC		     1st Lien
Revolving
Loan		    

10/31/2029

      

—

  

—

(e)(h)​

    
BradyIFS
Holdings, LLC		     1st Lien Term
Loan		   11.38% (3M
SOFR +
6.00%)		  

10/31/2029

      

18,246

  

17,881

(e)​

    
BradyIFS
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.37% (3M
SOFR +
6.00%)		  

10/31/2029

      

493

  

483

(e)(h)​

    
Hills
Distribution, Inc.		     1st Lien
Revolving
Loan		   9.87% (3M
SOFR +
4.50%)		  

11/08/2029

      

1

  

1

(e)(h)​

    
Hills
Distribution, Inc.		     1st Lien Term
Loan		   11.37% (6M
SOFR +
6.00%)		  

11/08/2029

      

534

  

523

(e)​

    
Hills
Distribution, Inc.		     1st Lien Delay
Draw Loan		    

11/08/2029

      

—

  

—

(e)(h)​

    
Marcone
Yellowstone
Buyer Inc.		     1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

06/23/2028

      

10,680

  

10,253

(e)(f)​

    
Marcone
Yellowstone
Buyer Inc.		     1st Lien Delay
Draw Loan		   11.75% (3M
SOFR +
6.25%)		  

06/23/2028

      

3,524

  

3,382

(e)​

    
Mavis Tire
Express
Services Topco
Corp.		     1st Lien
Revolving
Loan		    

05/04/2026

      

—

  

—

(e)(h)​

    

Reddy Ice LLC

     1st Lien
Revolving
Loan		    

07/01/2025

      

—

  

—

(e)(h)​

    

Reddy Ice LLC

     1st Lien Term
Loan		   10.57% (3M
SOFR +
5.00%)		  

07/01/2025

      

7,115

  

7,114

(e)(f)​

    

Reddy Ice LLC

     1st Lien Term
Loan		   11.46% (6M
SOFR +
6.00%)		  

07/01/2025

      

162

  

162

(e)​

    

Reddy Ice LLC

     1st Lien Delay
Draw Loan		   10.57% (3M
SOFR +
5.00%)		  

07/01/2025

      

2,639

  

2,640

(e)​

    

Reddy Ice LLC

     1st Lien Delay
Draw Loan		   10.46% (1M
SOFR +
5.00%)		  

07/01/2025

      

260

  

260

(e)(h)​

    
Saldon
Holdings, Inc.		     1st Lien
Revolving
Loan		    

03/13/2025

      

—

  

—

(e)(h)​

    
Saldon
Holdings, Inc.		     1st Lien Term
Loan		   11.11% (1M
SOFR +
5.65%)		  

03/13/2025

      

6,950

  

6,950

(e)(f)​

    

Annual Report 2023
22

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
SCIH Salt
Holdings Inc.		     1st Lien Term
Loan		   9.47% (1M
SOFR +
4.00%)		  

03/16/2027

      

$

4,254

  

$

4,256

    
Trader
Corporation		  

Canada

   1st Lien
Revolving
Loan		    

12/22/2028

      

CAD

—

  

—

(e)(h)​

      
Trader
Corporation		  

Canada

   1st Lien Term
Loan		   12.19% (1M
CDOR +
6.75%)		  

12/21/2029

      

CAD

231

  

174

(e)​

      
US Salt
Investors, LLC		     1st Lien
Revolving
Loan		    

07/20/2026

      

—

  

—

(e)(h)​

    
US Salt
Investors, LLC		     1st Lien Term
Loan		   11.00% (3M
SOFR +
5.50%)		  

07/19/2028

      

5,907

  

5,907

(e)(f)​

    
                                 

64,076

      

2.00

%

  

Consumer Durables and Apparel

  
Centric Brands
LLC		     1st Lien
Revolving
Loan		    

10/09/2024

      

—

  

—

(e)(h)​

    
Centric Brands
LLC		     1st Lien Term
Loan		   7.37% (3M
SOFR +
2.00%)		  

10/09/2025

      

2,740

  

2,685

(e)(g)​

    
DRS Holdings III,
Inc.		     1st Lien
Revolving
Loan		    

11/01/2025

      

—

  

—

(e)(h)​

    
DRS Holdings III,
Inc.		     1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

11/01/2025

      

1,807

  

1,771

(e)(f)​

    
DRS Holdings III,
Inc.		     1st Lien Term
Loan		   11.75% (1M
SOFR +
6.25%)		  

11/01/2025

      

12,432

  

12,183

(e)(f)​

    
Rawlings
Sporting Goods
Company, Inc.		     1st Lien
Revolving
Loan		   9.17% (1M
SOFR +
3.75%)		  

12/31/2025

      

1

  

1

(e)(h)​

    
Rawlings
Sporting Goods
Company, Inc.		     1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

12/31/2026

      

5,505

  

5,504

(e)(f)(g)​

    
Rawlings
Sporting Goods
Company, Inc.		     1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

12/31/2026

      

1,089

  

1,089

(e)(f)​

    
                                 

23,233

      

0.72

%

  

Consumer Services

  
1011778 BC
ULC / New Red
Finance Inc		  

Canada

   1st Lien Term
Loan		   7.61% (1M
SOFR +
2.25%)		  

09/23/2030

      

15,000

  

14,995

    

Annual Report 2023
23

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Aimbridge
Acquisition
Co., Inc.		     2nd Lien Term
Loan		   12.96% (1M
SOFR +
7.50%)		  

02/01/2027

      

$

4,788

  

$

4,549

(e)(f)​

    
American
Residential
Services L.L.C.		     1st Lien
Revolving
Loan		   8.71% (1M
SOFR +
3.25%)		  

10/15/2025

      

—

  

1

(e)(h)​

    
American
Residential
Services L.L.C.		     2nd Lien Term
Loan		   14.11% (3M
SOFR +
8.50%)		  

10/16/2028

      

8,314

  

8,314

(e)​

    
Anticimex
Global AB		  

Sweden

   1st Lien Term
Loan		    

11/16/2028

      

€

7,000

  

7,643

(i)​

      
Apex Service
Partners, LLC		     1st Lien
Revolving
Loan		   14.00% (3M
PRIME +
5.50%)		  

10/24/2029

      

171

  

166

(e)(g)(h)​

    
Apex Service
Partners, LLC		     1st Lien Term
Loan		   12.40% (3M
SOFR +
7.00%)		  

10/24/2030

      

23,834

  

23,239

(e)(g)​

    
Apex Service
Partners, LLC		     1st Lien Delay
Draw Loan		   12.40% (3M
SOFR +
7.00%)		  

10/24/2030

      

1,267

  

1,235

(e)(g)(h)​

    

Apollo Finco BV

  

Belgium

   1st Lien Term
Loan		   8.74% (6M
EURIBOR +
4.85%)		  

10/02/2028

      

€

5,000

  

4,410

      
ASP Dream
Acquisition
Co LLC		     1st Lien Term
Loan		   9.46% (1M
SOFR +
4.00%)		  

12/15/2028

      

6,041

  

6,041

(e)(f)​

    
Aspris Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   11.85% (3M
SONIA +
6.50%)		  

08/23/2028

      

£

3,234

  

4,123

(e)(f)​

      
Aspris Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.83% (3M
SONIA +
6.50%)		  

08/23/2028

      

£

1,406

  

1,793

(e)​

      
Aspris Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.33% (3M
SONIA +
7.00%)		  

02/08/2030

      

£

462

  

589

(e)(h)​

      
Belfor Holdings,
Inc.		     1st Lien Term
Loan		   9.11% (1M
SOFR +
3.75%)		  

11/01/2030

      

3,657

  

3,663

    
CC Fly
Holding II A/S		  

Denmark

   1st Lien Term
Loan		   12.22% (3M
NIBOR +
7.50%)		  

05/09/2025

      

DKK

648

  

93

(e)(f)​

      
CC Fly
Holding II A/S		  

Denmark

   1st Lien Delay
Draw Loan		   11.87% (3M
NIBOR +
7.50%)		  

05/09/2025

      

DKK

3,073

  

442

(e)(f)​

      
CC Fly
Holding II A/S		  

Denmark

   1st Lien Delay
Draw Loan		   11.49% (3M
CIBOR +
7.50%)		  

05/09/2025

      

DKK

3,048

  

438

(e)(f)​

      
CC Fly
Holding II A/S		  

Denmark

   1st Lien Delay
Draw Loan		   11.48% (3M
CIBOR +
7.50%)		  

05/09/2025

      

DKK

1,918

  

275

(e)(f)​

      

Annual Report 2023
24

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Clarion Home
Services Group,
LLC		     1st Lien
Revolving
Loan		   11.48% (3M
SOFR +
6.00%)		  

12/06/2027

      

$

416

  

$

379

(e)​

    
Clarion Home
Services Group,
LLC		     1st Lien Term
Loan		   11.99% (3M
SOFR +
6.50%)		  

12/06/2027

      

2,350

  

2,162

(e)(f)​

    
Clarion Home
Services Group,
LLC		     1st Lien Delay
Draw Loan		   11.98% (3M
SOFR +
6.50%)		  

12/06/2027

      

1,333

  

1,227

(e)​

    
Clarion Home
Services Group,
LLC		     1st Lien Delay
Draw Loan		   12.22% (3M
SOFR +
6.75%)		  

12/06/2027

      

238

  

219

(e)(h)​

    
CMG HoldCo,
LLC		     1st Lien
Revolving
Loan		    

05/19/2028

      

—

  

—

(e)(h)​

    
CMG HoldCo,
LLC		     1st Lien Term
Loan		   10.37% (3M
SOFR +
5.00%)		  

05/19/2028

      

715

  

715

(e)(f)​

    
CMG HoldCo,
LLC		     1st Lien Delay
Draw Loan		   10.37% (3M
SOFR +
5.00%)		  

05/19/2028

      

422

  

422

(e)​

    
CMG HoldCo,
LLC		     1st Lien Delay
Draw Loan		   10.37% (3M
SOFR +
5.00%)		  

05/19/2028

      

846

  

846

(e)(h)​

    
CMG HoldCo,
LLC		     1st Lien Delay
Draw Loan		    

05/19/2028

      

—

  

—

(e)(h)​

    
CST Holding
Company		     1st Lien
Revolving
Loan		   11.96% (1M
SOFR +
6.50%)		  

11/01/2028

      

8

  

8

(e)(h)​

    
CST Holding
Company		     1st Lien Term
Loan		   11.96% (1M
SOFR +
6.50%)		  

11/01/2028

      

1,068

  

1,068

(e)​

    
ECG Bidco
S.A.S.		  

France

   1st Lien Term
Loan		   12.31% (3M
SONIA +
7.00%)		  

10/02/2028

      

£

9,567

  

12,195

(e)(f)​

      
ECG Bidco
S.A.S.		  

France

   1st Lien Term
Loan		   10.43% (3M
EURIBOR +
6.50%)		  

10/02/2028

      

€

6,010

  

6,635

(e)(f)​

      
ECG Bidco
S.A.S.		  

France

   1st Lien Delay
Draw Loan		    

10/02/2028

      

€

—

  

—

(e)(f)(h)​

      
ECG Bidco
S.A.S.		  

France

   1st Lien Delay
Draw Loan		    

02/01/2030

      

€

—

  

—

(e)(g)(h)​

      
ECG Bidco
S.A.S.		  

France

   1st Lien Delay
Draw Loan		   11.43% (3M
EURIBOR +
7.50%)		  

02/01/2030

      

€

17,736

  

19,579

(e)(g)​

      
Equinox
Holdings Inc.		     1st Lien Term
Loan		   8.61% (6M
LIBOR +
3.00%)		  

03/08/2024

      

2,519

  

2,458

    
Equinox
Holdings Inc.		     2nd Lien Term
Loan		   12.61% (3M
LIBOR +
7.00%)		  

09/06/2024

      

5,736

  

5,330

    

Annual Report 2023
25

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Essential
Services
Holding
Corporation		     1st Lien
Revolving
Loan		   11.28% (3M
SOFR +
5.75%)		  

11/17/2025

      

$

624

  

$

624

(e)(h)​

    
Essential
Services
Holding
Corporation		     1st Lien Term
Loan		   11.29% (3M
SOFR +
5.75%)		  

11/16/2026

      

9,521

  

9,521

(e)(f)​

    
Essential
Services
Holding
Corporation		     1st Lien Delay
Draw Loan		   11.29% (3M
SOFR +
5.75%)		  

11/16/2026

      

21,661

  

21,661

(e)(f)​

    
Essential
Services
Holding
Corporation		     1st Lien Delay
Draw Loan		   11.29% (3M
SOFR +
5.75%)		  

11/16/2026

      

8,043

  

8,044

(e)​

    
Eternal Aus
Bidco Pty Ltd		  

Australia

   1st Lien Term
Loan		   10.70% (3M
BBSY +
6.25%)		  

10/29/2029

      

AUD

1,834

  

1,250

(e)(g)​

    
Eternal Aus
Bidco Pty Ltd		  

Australia

   1st Lien Delay
Draw Loan		    

10/29/2029

      

AUD

—

  

—

(e)(g)(h)​

    
EuroParcs
Topholding B.V.		  

Netherlands

   1st Lien Term
Loan		    

07/03/2026

      

€

2,652

  

2,489

(e)(j)​

    
EuroParcs
Topholding B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		    

07/03/2026

      

€

4,690

  

4,401

(e)(j)​

    
Excel Fitness
Holdings, Inc.		     1st Lien Term
Loan		   11.00% (3M
SOFR +
5.50%)		  

04/27/2029

      

759

  

740

(e)​

    
Excel Fitness
Holdings, Inc.		     1st Lien Delay
Draw Loan		    

04/27/2029

      

—

  

—

(e)(h)​

    
Family First
Bidco Limited		   United
Kingdom		   1st Lien Term
Loan		   12.50%  

12/31/2029

      

£

23

  

29

(e)​

    

Flint Opco, LLC

     1st Lien
Revolving
Loan		    

08/15/2029

      

—

  

—

(e)(h)​

    

Flint Opco, LLC

     1st Lien Term
Loan		   10.60% (3M
SOFR +
5.25%)		  

08/15/2030

      

1,034

  

1,008

(e)​

    

Flint Opco, LLC

     1st Lien Delay
Draw Loan		   10.60% (3M
SOFR +
5.25%)		  

08/15/2030

      

114

  

111

(e)(h)​

    
Goldcup
16786 AB		  

Sweden

   1st Lien Delay
Draw Loan		   10.61% (6M
STIBOR +
6.25%)		  

08/18/2025

      

SEK

9,368

  

929

(e)(f)​

    
Groundworks,
LLC		     1st Lien
Revolving
Loan		    

03/14/2029

      

—

  

—

(e)(h)​

    
Groundworks,
LLC		     1st Lien Term
Loan		   11.90% (3M
SOFR +
6.50%)		  

03/14/2030

      

466

  

466

(e)​

    

Annual Report 2023
26

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Groundworks,
LLC		     1st Lien Delay
Draw Loan		   11.90% (1M
SOFR +
6.50%)		  

03/14/2030

      

$

10

  

$

11

(e)(h)​

    
GS SEER Group
Borrower LLC		     1st Lien
Revolving
Loan		    

04/30/2029

      

—

  

—

(e)(h)​

    
GS SEER Group
Borrower LLC		     1st Lien Term
Loan		   12.10% (3M
SOFR +
6.75%)		  

04/29/2030

      

324

  

324

(e)​

    
GS SEER Group
Borrower LLC		     1st Lien Delay
Draw Loan		   12.10% (3M
SOFR +
6.75%)		  

04/29/2030

      

22

  

22

(e)(h)​

    
Helios Service
Partners, LLC &
Astra Service
Partners, LLC		     1st Lien
Revolving
Loan		   11.62% (3M
SOFR +
6.00%)		  

03/19/2027

      

1

  

—

(e)(h)​

    
Helios Service
Partners, LLC &
Astra Service
Partners, LLC		     1st Lien Term
Loan		   11.86% (3M
SOFR +
6.25%)		  

03/19/2027

      

498

  

485

(e)​

    
Helios Service
Partners, LLC &
Astra Service
Partners, LLC		     1st Lien Delay
Draw Loan		   11.86% (3M
SOFR +
6.25%)		  

03/19/2027

      

505

  

493

(e)(h)​

    
Infinity Home
Services
HoldCo, Inc.		     1st Lien
Revolving
Loan		    

12/28/2028

      

—

  

—

(e)(h)​

    
Infinity Home
Services
HoldCo, Inc.		     1st Lien
Revolving
Loan		    

12/28/2028

      

CAD

—

  

—

(e)(h)​

    
Infinity Home
Services
HoldCo, Inc.		     1st Lien Term
Loan		   12.20% (3M
SOFR +
6.75%)		  

12/28/2028

      

3,375

  

3,375

(e)​

    
Infinity Home
Services
HoldCo, Inc.		     1st Lien Delay
Draw Loan		   12.20% (3M
SOFR +
6.75%)		  

12/28/2028

      

733

  

733

(e)(h)​

    
Infinity Home
Services
HoldCo, Inc.		     1st Lien Delay
Draw Loan		   11.50% (3M
CDOR +
6.00%)		  

12/28/2028

      

174

  

175

(e)(h)​

    
IRB Holding
Corp.		     1st Lien Term
Loan		   8.46% (1M
SOFR +
3.00%)		  

12/15/2027

      

18,842

  

18,855

    
Kingpin
Intermediate
Holdings LLC		     1st Lien Term
Loan		   8.86% (1M
SOFR +
3.50%)		  

02/08/2028

      

6,207

  

6,199

    
Leviathan
Intermediate
Holdco, LLC		     1st Lien
Revolving
Loan		    

12/27/2027

      

—

  

—

(e)(h)​

    
Leviathan
Intermediate
Holdco, LLC		     1st Lien Term
Loan		   13.00% (3M
SOFR +
7.50%)		  

12/27/2027

      

235

  

235

(e)​

    

Annual Report 2023
27

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
LGDN Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   14.15% (3M
SONIA +
8.84%)		  

12/09/2027

      

£

2,095

  

$

2,670

(e)(f)​

    
LGDN Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		    

12/09/2027

      

£

—

  

—

(e)(f)(h)​

      
Mister Car
Wash Holdings,
Inc.		     1st Lien Term
Loan		    

05/14/2026

      

4,087

  

4,091

(i)​

    
Movati Athletic
(Group) Inc.		  

Canada

   1st Lien Term
Loan		   11.51% (3M
CDOR +
6.00%)		  

10/05/2024

      

CAD

234

  

177

(e)(f)​

      
Movati Athletic
(Group) Inc.		  

Canada

   1st Lien Delay
Draw Loan		   11.51% (3M
CDOR +
6.00%)		  

10/05/2024

      

CAD

170

  

128

(e)​

      
Northwinds
Holding, Inc.		     1st Lien
Revolving
Loan		    

05/01/2029

      

—

  

—

(e)(h)​

    
Northwinds
Holding, Inc.		     1st Lien Term
Loan		   12.18% (3M
SOFR +
6.50%)		  

05/01/2029

      

4,274

  

4,274

(e)​

    
Northwinds
Holding, Inc.		     1st Lien Delay
Draw Loan		   12.18% (6M
SOFR +
6.50%)		  

05/01/2029

      

948

  

948

(e)​

    
Northwinds
Holding, Inc.		     1st Lien Delay
Draw Loan		   12.18% (3M
SOFR +
6.50%)		  

05/01/2029

      

1,364

  

1,364

(e)(h)​

    

PestCo, LLC

     1st Lien
Revolving
Loan		    

02/17/2028

      

—

  

—

(e)(h)​

    

PestCo, LLC

     1st Lien Term
Loan		   12.03% (3M
SOFR +
6.50%)		  

02/17/2028

      

397

  

397

(e)​

    

PestCo, LLC

     1st Lien Delay
Draw Loan		    

02/17/2028

      

—

  

—

(e)(h)​

    
Radiant
Intermediate
Holding, LLC		     1st Lien Term
Loan		   11.24% (3M
SOFR +
5.75%)		  

11/23/2026

      

496

  

476

(e)​

    
Redwood
Services, LLC		     1st Lien
Revolving
Loan		    

12/31/2025

      

—

  

—

(e)(g)(h)​

    
Redwood
Services, LLC		     1st Lien Term
Loan		   12.14% (3M
SOFR +
6.50%)		  

12/31/2025

      

777

  

777

(e)(g)​

    
Redwood
Services, LLC		     1st Lien Delay
Draw Loan		   12.14% (3M
SOFR +
6.50%)		  

12/31/2025

      

1,045

  

1,046

(e)(g)​

    
Redwood
Services, LLC		     1st Lien Delay
Draw Loan		   12.14% (6M
SOFR +
6.50%)		  

12/31/2025

      

1,701

  

1,701

(e)(g)​

    
Redwood
Services, LLC		     1st Lien Delay
Draw Loan		   12.06% (3M
SOFR +
6.50%)		  

12/31/2025

      

465

  

465

(e)(g)​

    

Annual Report 2023
28

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Redwood
Services, LLC		     1st Lien Delay
Draw Loan		   12.00% (3M
SOFR +
6.50%)		  

12/31/2025

      

$

516

  

$

516

(e)(h)​

    
Safe Home
Security, Inc.		     1st Lien Term
Loan		   12.72% (1M
SOFR +
7.25%)		  

08/05/2024

      

1,271

  

1,271

(e)(f)​

    
Safe Home
Security, Inc.		     1st Lien Delay
Draw Loan		   12.72% (1M
SOFR +
7.25%)		  

08/05/2024

      

100

  

100

(e)​

    
Service Logic
Acquisition, Inc.		     1st Lien
Revolving
Loan		    

10/30/2025

      

—

  

—

(e)(h)​

    
Service Logic
Acquisition, Inc.		     1st Lien Term
Loan		   9.64% (3M
SOFR +
4.00%)		  

10/29/2027

      

5,380

  

5,371

    
Service Logic
Acquisition, Inc.		     1st Lien Term
Loan		   11.14% (1M
SOFR +
5.50%)		  

10/29/2027

      

2,131

  

2,131

(e)​

    
Station Casinos
LLC		     1st Lien Term
Loan		   7.71% (1M
SOFR +
2.25%)		  

02/08/2027

      

7,801

  

7,809

    
United PF
Holdings, LLC		     1st Lien Term
Loan		   14.14% (3M
SOFR +
8.50%)		  

12/30/2026

      

1,314

  

1,169

(e)​

    
Vertex Service
Partners, LLC		     1st Lien
Revolving
Loan		    

11/08/2030

      

—

  

—

(e)(h)​

    
Vertex Service
Partners, LLC		     1st Lien Term
Loan		   10.89% (6M
SOFR +
5.50%)		  

11/08/2030

      

1,044

  

1,018

(e)​

    
Vertex Service
Partners, LLC		     1st Lien Delay
Draw Loan		   10.89% (3M
LIBOR +
5.50%)		  

11/08/2030

      

498

  

485

(e)(h)​

    
Whatabrands
LLC		     1st Lien Term
Loan		   8.47% (1M
SOFR +
3.00%)		  

08/03/2028

      

6,443

  

6,446

    
Witherslack
Bidco Limited		   United
Kingdom		   1st Lien Term
Loan		   12.17% (3M
SONIA +
6.84%)		  

08/17/2028

      

£

5,702

  

7,268

(e)(f)(g)​

      
Witherslack
Bidco Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		    

08/17/2028

      

£

—

  

—

(e)(g)(h)​

      
YE Brands
Holdings, LLC		     1st Lien
Revolving
Loan		   10.95% (1M
SOFR +
5.50%)		  

10/18/2027

      

154

  

154

(e)(h)​

    
YE Brands
Holdings, LLC		     1st Lien Term
Loan		   10.95% (3M
SOFR +
5.50%)		  

10/18/2027

      

1,060

  

1,060

(e)(f)​

    
YE Brands
Holdings, LLC		     1st Lien Term
Loan		   11.20% (3M
SOFR +
5.75%)		  

10/18/2027

      

720

  

720

(e)(f)​

    

Annual Report 2023
29

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
YE Brands
Holdings, LLC		     1st Lien Term
Loan		   11.20% (3M
SOFR +
5.75%)		  

10/18/2027

      

$

422

  

$

422

(e)​

    
                                         

271,886

      

8.47

%

  

Consumer Staples Distribution and Retail

  
BR PJK
Produce, LLC		     1st Lien Delay
Draw Loan		   11.46% (3M
SOFR +
6.00%)		  

11/15/2027

      

195

  

190

(e)(h)​

    
Continental
Cafe, LLC		     1st Lien
Revolving
Loan		   11.45% (1M
SOFR +
6.00%)		  

11/30/2027

      

472

  

472

(e)(h)​

    
Continental
Cafe, LLC		     1st Lien Term
Loan		   11.46% (1M
SOFR +
6.00%)		  

11/30/2027

      

6,830

  

6,830

(e)(f)​

    
Continental
Cafe, LLC		     1st Lien Term
Loan		   11.44% (1M
SOFR +
6.00%)		  

11/30/2027

      

706

  

705

(e)​

    
Continental
Cafe, LLC		     1st Lien Term
Loan		   11.71% (1M
SOFR +
6.25%)		  

11/30/2027

      

808

  

808

(e)​

    
Continental
Cafe, LLC		     1st Lien Delay
Draw Loan		   11.46% (1M
SOFR +
6.00%)		  

11/30/2027

      

2,774

  

2,774

(e)​

    

DecoPac, Inc.

     1st Lien
Revolving
Loan		   11.49% (1M
SOFR +
6.00%)		  

05/14/2026

      

715

  

715

(e)(h)​

    

DecoPac, Inc.

     1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

05/15/2028

      

21,793

  

21,793

(e)(f)(g)​

    
LJ Perimeter
Buyer, Inc.		     1st Lien Term
Loan		   12.03% (3M
SOFR +
6.50%)		  

10/31/2028

      

3,241

  

3,209

(e)​

    
LJ Perimeter
Buyer, Inc.		     1st Lien Delay
Draw Loan		   12.03% (3M
SOFR +
6.50%)		  

10/31/2028

      

417

  

412

(e)(h)​

    
Mr. Greens
Intermediate,
LLC		     1st Lien
Revolving
Loan		    

05/01/2029

      

—

  

—

(e)(h)​

    
Mr. Greens
Intermediate,
LLC		     1st Lien Term
Loan		   11.70% (1M
SOFR +
6.25%)		  

05/01/2029

      

2,309

  

2,309

(e)​

    
Mr. Greens
Intermediate,
LLC		     1st Lien Delay
Draw Loan		    

05/01/2029

      

—

  

—

(e)(h)​

    
SFE
Intermediate
HoldCo LLC		     1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

07/31/2026

      

2,063

  

2,063

(e)(f)​

    
Worldwide
Produce
Acquisition, LLC		     1st Lien
Revolving
Loan		   11.60% (3M
SOFR +
6.25%)		  

01/18/2029

      

10

  

10

(e)(h)​

    

Annual Report 2023
30

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Worldwide
Produce
Acquisition, LLC		     1st Lien Term
Loan		   11.60% (3M
SOFR +
6.25%)		  

01/18/2029

      

$

143

  

$

142

(e)​

    
Worldwide
Produce
Acquisition, LLC		     1st Lien Delay
Draw Loan		   11.60% (3M
SOFR +
6.25%)		  

01/18/2029

      

32

  

31

(e)(h)​

    
Worldwide
Produce
Acquisition, LLC		     1st Lien Delay
Draw Loan		    

01/18/2029

      

—

  

—

(e)(h)​

    

ZB Holdco LLC

     1st Lien
Revolving
Loan		    

02/09/2028

      

—

  

—

(e)(h)​

    

ZB Holdco LLC

     1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

02/09/2028

      

1,574

  

1,574

(e)(f)​

    

ZB Holdco LLC

     1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

02/09/2028

      

383

  

383

(e)​

    

ZB Holdco LLC

     1st Lien Delay
Draw Loan		   11.50% (3M
SOFR +
6.00%)		  

02/09/2028

      

795

  

795

(e)(h)​

    
                                         

45,215

      

1.41

%

  

Energy

  
Cheyenne
Petroleum
Company
Limited
Partnership,
CPC 2001
LLC and Mill
Shoals LLC		     1st Lien Term
Loan		   14.45% (3M
SOFR +
9.00%)		  

11/16/2026

      

6,076

  

6,076

(e)​

    
Cheyenne
Petroleum
Company
Limited
Partnership,
CPC 2001
LLC and Mill
Shoals LLC		     1st Lien Delay
Draw Loan		    

11/16/2026

      

—

  

—

(e)(h)​

    
Freeport LNG
investments,
LLLP		     1st Lien Term
Loan		    

11/17/2026

      

6,000

  

5,948

(i)​

    
GNZ Energy
Bidco Limited		  

New Zealand

   1st Lien Delay
Draw Loan		   11.69% (3M
BKBM +
6.00%)		  

07/26/2027

      

NZD

19,293

  

12,196

(e)(f)​

    
GNZ Energy
Bidco Limited		  

New Zealand

   1st Lien Delay
Draw Loan		    

07/26/2027

      

NZD

—

  

—

(e)(h)​

    
Halcon
Holdings, LLC		     1st Lien Term
Loan		   13.94% (3M
SOFR +
7.50%)		  

11/24/2025

      

10,226

  

10,226

(e)​

    

Annual Report 2023
31

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Halcon
Holdings, LLC		     1st Lien Delay
Draw Loan		   12.94% (3M
SOFR +
7.50%)		  

11/24/2025

      

$

1,790

  

$

1,790

(e)(h)​

    
HighPeak
Energy, Inc.		     1st Lien Term
Loan		   13.00% (12M
SOFR +
7.50%)		  

09/30/2026

      

15,535

  

15,535

(e)​

    

Offen, Inc.

     1st Lien Term
Loan		   10.38% (1M
SOFR +
5.00%)		  

06/22/2026

      

2,643

  

2,643

(e)(f)​

    

Offen, Inc.

     1st Lien Delay
Draw Loan		   10.38% (1M
SOFR +
5.00%)		  

06/22/2026

      

1,009

  

1,009

(e)(f)​

    

Offen, Inc.

     1st Lien Delay
Draw Loan		   10.38% (1M
SOFR +
5.00%)		  

06/22/2026

      

12,572

  

12,571

(e)​

    
PX HoldCo3
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.83% (3M
SONIA +
6.50%)		  

04/27/2027

      

£

2,947

  

3,757

(e)(f)(g)​

    
PX HoldCo3
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.81% (3M
SONIA +
6.50%)		  

04/27/2027

      

£

221

  

282

(e)(g)(h)​

    
                                         

72,033

      

2.24

%

  

Financial Services

  
Alpha Luxco 2
Sarl		  

Luxembourg

   1st Lien Delay
Draw Loan		   10.45% (6M
EURIBOR +
6.56%)		  

01/09/2025

      

€

1,013

  

1,118

(e)(f)(g)​

    
Antenore Bidco
SpA		  

Italy

   1st Lien Delay
Draw Loan		    

11/02/2031

      

€

—

  

—

(e)(h)​

    
AQ Sage Buyer,
LLC		     1st Lien
Revolving
Loan		    

01/26/2026

      

—

  

—

(e)(h)​

    
AQ Sage Buyer,
LLC		     1st Lien Delay
Draw Loan		   11.52% (3M
SOFR +
6.00%)		  

01/25/2027

      

213

  

209

(e)(h)​

    
BCC Blueprint
Holdings I, LLC		     1st Lien Term
Loan		   12.28% (3M
SOFR +
6.75%)		  

09/15/2027

      

7,377

  

7,230

(e)​

    
Beacon Pointe
Harmony, LLC		     1st Lien
Revolving
Loan		    

12/29/2027

      

—

  

—

(e)(h)​

    
Beacon Pointe
Harmony, LLC		     1st Lien Term
Loan		   10.86% (1M
SOFR +
5.50%)		  

12/29/2028

      

6,031

  

6,031

(e)(f)​

    
Beacon Pointe
Harmony, LLC		     1st Lien Delay
Draw Loan		   10.86% (1M
SOFR +
5.50%)		  

12/29/2028

      

2,366

  

2,366

(e)​

    
Beacon Pointe
Harmony, LLC		     1st Lien Delay
Draw Loan		   10.86% (1M
SOFR +
5.50%)		  

12/29/2028

      

563

  

563

(e)(h)​

    

Annual Report 2023
32

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
BlauwTrust
Holding B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   11.18% (3M
EURIBOR +
7.25%)		  

01/08/2029

      

€

5,591

  

$

6,172

(e)(f)(g)​

    
BlauwTrust
Holding B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   11.18% (3M
EURIBOR +
7.25%)		  

01/08/2029

      

€

523

  

577

(e)(g)(h)​

      
Brokers
Alliance S.L.		  

Spain

   1st Lien Delay
Draw Loan		   9.68% (3M
EURIBOR +
5.75%)		  

04/09/2029

      

€

331

  

365

(e)(g)(h)​

      
Brokers
Alliance S.L.		  

Spain

   1st Lien Delay
Draw Loan		   9.68% (3M
EURIBOR +
5.75%)		  

04/09/2029

      

€

901

  

995

(e)(f)(g)​

      
Brokers
Alliance S.L.		  

Spain

   1st Lien Delay
Draw Loan		    

04/09/2029

      

€

—

  

—

(e)(g)(h)(i)​

      

Cliffwater LLC

     1st Lien
Revolving
Loan		    

10/07/2030

      

—

  

—

(e)(h)​

    

Cliffwater LLC

     1st Lien Term
Loan		   11.36% (1M
SOFR +
6.00%)		  

10/07/2030

      

685

  

671

(e)​

    
Convera
International
Financial S.a r.l.		  

Luxembourg

   1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

03/01/2028

      

20,945

  

20,945

(e)(f)​

    
Convera
International
Financial S.a r.l.		  

Luxembourg

   1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

03/01/2028

      

4,473

  

4,473

(e)​

    
Convera
International
Holdings
Limited		  

Jersey

   1st Lien
Revolving
Loan		    

03/01/2027

      

—

  

—

(e)(h)​

    
Edelman
Financial
Center, LLC,
The (fka Flight
Debt Merger
Sub Inc.)		     2nd Lien Term
Loan		   12.22% (1M
SOFR +
6.75%)		  

07/20/2026

      

1,402

  

1,400

    
Focus Financial
Partners, LLC		     1st Lien Term
Loan		   8.86% (1M
SOFR +
3.50%)		  

06/30/2028

      

5,985

  

5,992

    
GC Waves
Holdings, Inc.		     1st Lien
Revolving
Loan		    

08/11/2028

      

—

  

—

(e)(h)​

    
GC Waves
Holdings, Inc.		     1st Lien Term
Loan		   11.46% (1M
SOFR +
6.00%)		  

08/11/2028

      

1,002

  

982

(e)​

    
GC Waves
Holdings, Inc.		     1st Lien Delay
Draw Loan		   11.46% (1M
SOFR +
6.00%)		  

08/11/2028

      

251

  

245

(e)(h)​

    
GC Waves
Holdings, Inc.		     1st Lien Delay
Draw Loan		   11.46% (1M
SOFR +
6.00%)		  

08/11/2028

      

8

  

7

(e)​

    

Annual Report 2023
33

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
GTCR F Buyer
Corp.
Loan		     1st Lien
Revolving 		   

09/06/2029

      

$

—

  

$

—

(e)(h)​

    
GTCR F Buyer
Corp.		     1st Lien Term
Loan		   11.36% (1M
SOFR +
6.00%)		  

09/06/2030

      

899

  

877

(e)​

    
GTCR F Buyer
Corp.		     1st Lien Delay
Draw Loan		    

09/06/2030

      

—

  

—

(e)(h)​

    
GTCR W Merger
Sub LLC		     1st Lien Term
Loan		    

09/20/2030

      

11,500

  

11,543

(i)​

    
HighTower
Holding, LLC		     1st Lien Term
Loan		   9.64% (3M
SOFR +
4.00%)		  

04/21/2028

      

4,489

  

4,468

    
The Mather
Group, LLC		     1st Lien
Revolving
Loan		   13.50%
(PRIME +
5.00%)		  

03/31/2028

      

150

  

146

(e)(h)​

    
The Mather
Group, LLC		     1st Lien Term
Loan		   11.50% (6M
SOFR +
6.00%)		  

03/31/2028

      

4,925

  

4,777

(e)(f)​

    
The Mather
Group, LLC		     1st Lien Delay
Draw Loan		   11.50% (3M
SOFR +
6.00%)		  

03/31/2028

      

1,911

  

1,853

(e)(h)​

    
Mercury
Borrower, Inc.		     1st Lien
Revolving
Loan		    

07/31/2026

      

—

  

—

(e)(h)​

    
Mercury
Borrower, Inc.		     1st Lien Term
Loan		   8.97% (1M
SOFR +
3.50%)		  

08/02/2028

      

3,882

  

3,869

    
Mercury
Borrower, Inc.		     2nd Lien Term
Loan		   12.18% (3M
SOFR +
6.50%)		  

08/02/2029

      

713

  

683

    
Monica Holdco
(US), Inc.		     1st Lien
Revolving
Loan		   12.28% (3M
SOFR +
6.75%)		  

01/08/2026

      

1,002

  

1,002

(e)(h)​

    
Monica Holdco
(US), Inc.		     1st Lien Term
Loan		   12.25% (3M
SOFR +
6.75%)		  

01/07/2028

      

8,015

  

8,015

(e)(f)​

    
Motion
Acquisition
Limited		   United
Kingdom		   1st Lien Term
Loan		   8.86% (3M
SOFR +
3.25%)		  

11/12/2026

      

9,820

  

9,820

    
Motion
Acquisition
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   8.86% (3M
SOFR +
3.25%)		  

11/12/2026

      

1,400

  

1,400

    
Pathstone
Family Office
LLC		     1st Lien
Revolving
Loan		   12.21% (1M
SOFR +
6.75%)		  

05/15/2028

      

42

  

42

(e)(h)​

    
Pathstone
Family Office
LLC		     1st Lien Term
Loan		   12.21% (1M
SOFR +
6.75%)		  

05/15/2029

      

992

  

992

(e)​

    

Annual Report 2023
34

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Pathstone
Family Office
LLC		     1st Lien Term
Loan		   12.11% (1M
SOFR +
6.75)		  

05/15/2029

      

$

2,611

  

$

2,611

(e)​

    
Pathstone
Family Office
LLC		     1st Lien Delay
Draw Loan		   14.25% (3M
SOFR +
5.75%)		  

05/15/2029

      

—

  

—

(e)(h)​

    

PCIA SPV-3, LLC

     1st Lien
Revolving
Loan		    

08/01/2029

      

—

  

—

(e)(h)​

    

PCIA SPV-3, LLC

     1st Lien Term
Loan		   11.63% (3M
SOFR +
6.25%)		  

08/01/2029

      

1,516

  

1,516

(e)​

    

PCIA SPV-3, LLC

     1st Lien Delay
Draw Loan		   11.62% (3M
SOFR +
6.25%)		  

08/01/2029

      

202

  

202

(e)(h)​

    
Pegasus (Bidco)
Limited		  

Jersey

   1st Lien Term
Loan		   12.51% (6M
SONIA +
7.00%)		  

04/04/2029

      

£

4,125

  

4,995

(e)(f)​

      
Pegasus (Bidco)
Limited		  

Jersey

   1st Lien Delay
Draw Loan		   12.51% (6M
SONIA +
7.00%)		  

04/04/2029

      

£

822

  

995

(e)​

      
Pegasus (Bidco)
Limited		  

Jersey

   1st Lien Delay
Draw Loan		    

04/04/2029

      

£

—

  

—

(e)(f)(h)(i)​

      
Platinum Credit
Bidco Limited		  

Jersey

   1st Lien
Revolving
Loan		    

05/09/2029

      

£

—

  

—

(e)(h)​

      
Platinum Credit
Bidco Limited		  

Jersey

   1st Lien Term
Loan		   12.19% (3M
SONIA +
7.00%)		  

11/09/2029

      

£

27,960

  

35,639

(e)(f)​

      
Plutus Bidco
Limited		  

Jersey

   1st Lien Term
Loan		   10.94% (6M
SONIA +
5.75%)		  

09/21/2028

      

£

5,250

  

6,692

(e)(g)​

      
Plutus Bidco
Limited		  

Jersey

   1st Lien Delay
Draw Loan		   10.94% (6M
SONIA +
5.75%)		  

09/21/2028

      

£

1,750

  

2,231

(e)(g)​

      

ProFund S.a r.l.

  

Poland

   1st Lien Term
Loan		   9.89% (6M
EURIBOR +
6.00%)		  

12/03/2027

      

€

2,164

  

2,389

(e)(f)​

      

ProFund S.a r.l.

  

Poland

   1st Lien Delay
Draw Loan		   9.89% (6M
EURIBOR +
6.00%)		  

12/03/2027

      

€

90

  

99

(e)(h)​

    

ProFund S.a r.l.

  

Poland

   1st Lien Delay
Draw Loan		   10.05% (6M
WIBOR +
6.00%)		  

12/03/2027

      

PLN

15,023

  

3,818

(e)​

    
Schenectady
International
Group, Inc.		     1st Lien Term
Loan		   10.24% (3M
SOFR +
4.75%)		  

10/15/2025

      

1,000

  

677

    
Steward
Partners Global
Advisory, LLC		     1st Lien Term
Loan		   10.78% (6M
SOFR +
5.25%)		  

10/16/2028

      

388

  

381

(e)​

    

Annual Report 2023
35

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Steward
Partners Global
Advisory, LLC		     1st Lien Delay
Draw Loan		    

10/16/2028

      

$

—

  

$

—

(e)(h)​

    
Symbol Bidco I
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.32% (3M
SONIA +
7.00%)		  

12/21/2026

      

£

571

  

729

(e)(f)​

    
Symbol Bidco I
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.32% (3M
SONIA +
7.00%)		  

12/21/2026

      

£

429

  

546

(e)​

    
Symbol Bidco I
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.56% (3M
SONIA +
7.25%)		  

12/21/2026

      

£

265

  

338

(e)(h)​

    
TA/WEG
Holdings, LLC		     1st Lien
Revolving
Loan		    

10/04/2027

      

—

  

—

(e)(h)​

    
TA/WEG
Holdings, LLC		     1st Lien Term
Loan		   11.23% (3M
SOFR +
5.75%)		  

10/04/2027

      

3,405

  

3,405

(e)(f)​

    
TA/WEG
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.23% (3M
SOFR +
5.75%)		  

10/04/2027

      

10,330

  

10,330

(e)(f)​

    
TA/WEG
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.23% (3M
SOFR +
5.75%)		  

10/04/2027

      

2,441

  

2,441

(e)​

    
TA/WEG
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.12% (12M
SOFR +
5.75%)		  

10/04/2027

      

1,684

  

1,684

(e)​

    
TK Elevator
Midco GmbH		  

Germany

   1st Lien Term
Loan		   9.38% (6M
SOFR +
3.50%)		  

07/30/2027

      

5,076

  

5,083

    
Toscafund
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   13.51% (6M
SONIA +
8.00%)		  

04/02/2025

      

£

2,530

  

3,224

(e)(f)​

    

Trustly AB

  

Sweden

   1st Lien Term
Loan		   10.79% (3M
STIBOR +
6.75%)		  

06/30/2025

      

SEK

5,500

  

545

(e)​

    

Trustly AB

  

Sweden

   1st Lien Delay
Draw Loan		   10.79% (3M
STIBOR +
6.75%)		  

06/30/2025

      

SEK

2,700

  

268

(e)​

    
The Ultimus
Group Midco,
LLC		     1st Lien
Revolving
Loan		   10.50% (3M
SOFR +
5.00%)		  

02/01/2026

      

45

  

45

(e)(h)​

    
The Ultimus
Group Midco,
LLC		     1st Lien Term
Loan		   9.95% (3M
SOFR +
4.50%)		  

02/01/2026

      

6,940

  

6,871

(e)(f)​

    
Waverly
Advisors, LLC		     1st Lien
Revolving
Loan		    

03/01/2028

      

—

  

—

(e)(h)​

    
Waverly
Advisors, LLC		     1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

03/01/2028

      

2,031

  

2,031

(e)(f)​

    

Annual Report 2023
36

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Waverly
Advisors, LLC		     1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

03/01/2028

      

$

1,484

  

$

1,484

(e)​

    
                                     

211,097

      

6.58

%

  

Food and Beverage

  
Berner Food &
Beverage, LLC		     1st Lien
Revolving
Loan		   13.00% (3M
PRIME +
4.50%)		  

07/30/2026

      

125

  

125

(e)(h)​

    
Berner Food &
Beverage, LLC		     1st Lien Term
Loan		   11.03% (3M
SOFR +
5.50%)		  

07/30/2027

      

2,580

  

2,580

(e)(f)​

    
CHG PPC
Parent LLC		     2nd Lien Term
Loan		   12.22% (1M
SOFR +
6.75%)		  

12/10/2029

      

3,000

  

3,000

(e)(f)​

    

Chobani, LLC

     1st Lien Term
Loan		   9.11% (6M
SOFR +
3.75%)		  

10/25/2027

      

6,500

  

6,505

    
City Line
Distributors LLC		     1st Lien
Revolving
Loan		    

08/31/2028

      

—

  

—

(e)(h)​

    
City Line
Distributors LLC		     1st Lien Term
Loan		   11.46% (1M
SOFR +
6.00%)		  

08/31/2028

      

314

  

306

(e)​

    
City Line
Distributors LLC		     1st Lien Delay
Draw Loan		    

08/31/2028

      

—

  

—

(e)(h)​

    
Demakes
Borrower, LLC		     1st Lien Term
Loan		   11.60
SOFR +
6.25%)% (6M 		 

12/12/2029

      

958

  

935

(e)​

    
Demakes
Borrower, LLC		     1st Lien Delay
Draw Loan		    

12/12/2029

      

—

  

—

(e)(h)​

    
Florida Food
Products, LLC		     1st Lien Term
Loan		   10.47% (1M
SOFR +
5.00%)		  

10/18/2028

      

37

  

34

(e)​

    
Florida Food
Products, LLC		     2nd Lien Term
Loan		   13.47% (1M
SOFR +
8.00%)		  

10/18/2029

      

7,299

  

6,715

(e)​

    
Gotham Greens
Holdings, PBC		     1st Lien Term
Loan		   14.33% (1M
SOFR +
8.88%)		  

12/29/2026

      

6,687

  

6,687

(e)(f)​

    
Gotham Greens
Holdings, PBC		     1st Lien Delay
Draw Loan		   14.33% (1M
SOFR +
8.88%)		  

12/29/2026

      

8,572

  

8,572

(e)(h)​

    
KNPC Holdco,
LLC		     1st Lien Term
Loan		   11.00% (3M
SOFR +
5.50%)		  

10/22/2029

      

2,054

  

2,054

(e)(f)​

    
KNPC Holdco,
LLC		     1st Lien Term
Loan		   12.25% (3M
SOFR + 		  10/22/2029
6.75%)		      

490

  

490

(e)​

    

Annual Report 2023
37

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
KNPC Holdco,
LLC		     1st Lien Term
Loan		   11.48% (3M
SOFR +
6.00%)		  

10/22/2029

      

$

477

  

$

478

(e)​

    
Max US Bidco
Inc.		     1st Lien Term
Loan		   10.35% (3M
SOFR +
5.00%)		  

10/02/2030

      

10,000

  

9,315

    
Post Holdings,
Inc.		     1st Lien Term
Loan		   7.71% (1M
SOFR +
2.25%)		  

04/26/2026

      

5,000

  

4,950

(e)​

    
Quirch Foods
Holdings, LLC		     1st Lien Term
Loan		   10.39% (3M
SOFR +
4.75%)		  

10/27/2027

      

7,246

  

7,233

    
RB Holdings
Interco, LLC		     1st Lien
Revolving
Loan		   10.53% (3M
SOFR +
5.00%)		  

05/04/2028

      

605

  

598

(e)(h)​

    
RB Holdings
Interco, LLC		     1st Lien Term
Loan		   10.52% (3M
SOFR +
5.00%)		  

05/04/2028

      

3,732

  

3,695

(e)(f)​

    
Sugar PPC
Buyer LLC		     1st Lien Term
Loan		   11.34% (1M
SOFR +
6.00%)		  

10/02/2030

      

2,149

  

2,100

(e)​

    
Sugar PPC
Buyer LLC		     1st Lien Delay
Draw Loan		    

10/02/2030

      

—

  

—

(e)(h)​

    
Watermill
Express, LLC		     1st Lien
Revolving
Loan		   10.46% (1M
SOFR +
5.00%)		  

04/20/2027

      

121

  

121

(e)(h)​

    
Watermill
Express, LLC		     1st Lien Term
Loan		   10.50% (3M
SOFR +
5.00%)		  

04/20/2027

      

2,239

  

2,239

(e)(f)​

    
Watermill
Express, LLC		     1st Lien Delay
Draw Loan		   10.50% (3M
SOFR +
5.00%)		  

04/20/2027

      

216

  

216

(e)​

    
Winebow
Holdings, Inc.		     1st Lien Term
Loan		   11.71% (1M
SOFR +
6.25%)		  

07/01/2025

      

3,370

  

3,236

(e)(f)​

    
                                 

72,184

      

2.25

%

  

Health Care Equipment and Services

  
athenahealth
Group Inc.		     1st Lien
Revolving
Loan		    

02/15/2027

      

—

  

—

(e)(h)​

    
athenahealth
Group Inc.		     1st Lien Term
Loan		   8.61% (1M
SOFR +
3.25%)		  

02/15/2029

      

8,026

  

7,982

    
Bausch + Lomb
Corporation		  

Canada

   1st Lien Term
Loan		   8.71% (3M
SOFR +
3.25%)		  

05/10/2027

      

2,886

  

2,848

    
Bracket
Intermediate
Holding Corp.		     1st Lien Term
Loan		   10.45% (3M
SOFR +
5.00%)		  

05/08/2028

      

8,729

  

8,717

    

Annual Report 2023
38

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
CEP V I 5 UK
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.38% (3M
SOFR +
7.00%)		  

02/18/2027

      

$

26,787

  

$

24,109

(e)(f)​

    
Color
Intermediate,
LLC		     1st Lien Term
Loan		   10.95% (3M
SOFR +
5.50%)		  

10/04/2029

      

1,850

  

1,850

(e)(f)​

    
Comprehensive
EyeCare
Partners, LLC		     1st Lien
Revolving
Loan		   12.11% (3M
SOFR +
6.50%)		  

02/14/2025

      

1

  

1

(e)​

    
Comprehensive
EyeCare
Partners, LLC		     1st Lien
Revolving
Loan		   12.11% (3M
SOFR +
6.50%)		  

02/14/2025

      

—

  

—

(e)​

    
Comprehensive
EyeCare
Partners, LLC		     1st Lien Term
Loan		   12.11% (3M
SOFR +
6.50%)		  

02/14/2025

      

976

  

878

(e)(f)​

    
Comprehensive
EyeCare
Partners, LLC		     1st Lien Delay
Draw Loan		   12.11% (3M
SOFR +
6.50%)		  

02/14/2025

      

687

  

618

(e)(f)​

    
Convey Health
Solutions, Inc.		     1st Lien Term
Loan		   10.70% (3M
SOFR +
5.25%)		  

09/04/2026

      

2,671

  

2,270

(e)(f)​

    
Crown CT
Parent Inc.		     1st Lien
Revolving
Loan		    

03/08/2028

      

—

  

—

(e)(h)​

    
Crown CT
Parent Inc.		     1st Lien Term
Loan		   11.00% (3M
SOFR +
5.50%)		  

03/08/2029

      

8,173

  

7,764

(e)(f)​

    
Crown CT
Parent Inc.		     1st Lien Delay
Draw Loan		    

03/08/2029

      

—

  

—

(e)(h)​

    

CVP Holdco, Inc.

     1st Lien
Revolving
Loan		    

10/31/2024

      

—

  

—

(e)(h)​

    

CVP Holdco, Inc.

     1st Lien Term
Loan		   11.85% (1M
SOFR +
6.40%)		  

10/31/2025

      

2,794

  

2,794

(e)(f)​

    

CVP Holdco, Inc.

     1st Lien Delay
Draw Loan		   11.46% (1M
SOFR +
6.00%)		  

10/31/2025

      

2,578

  

2,578

(e)(f)​

    

CVP Holdco, Inc.

     1st Lien Delay
Draw Loan		   11.36% (1M
SOFR +
5.90%)		  

10/31/2025

      

26,972

  

26,972

(e)​

    

CVP Holdco, Inc.

     1st Lien Delay
Draw Loan		   11.71% (1M
SOFR +
6.25%)		  

10/31/2025

      

868

  

867

(e)(h)​

    
Electron Bidco
Inc.		     1st Lien Term
Loan		   8.47% (1M
SOFR +
3.00%)		  

11/01/2028

      

9,975

  

9,989

    
Evolent Health
LLC		     1st Lien
Revolving
Loan		   9.04% (3M
SOFR +
4.00%)		  

01/22/2029

      

1

  

1

(e)(h)​

    

Annual Report 2023
39

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Floss Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   13.09% (6M
SONIA +
7.63%)		  

09/07/2026

      

£

437

  

$

501

(e)(f)​

    
Floss Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   13.46% (6M
SONIA +
8.00%)		  

09/07/2026

      

£

338

   388

(e)(f)​

    
Fortrea
Holdings Inc.		     1st Lien Term
Loan		   9.11% (1M
SOFR +
3.75%)		  

07/01/2030

      

7,156

  

7,144

    
Global Medical
Response, Inc.		     1st Lien Term
Loan		   9.89% (3M
SOFR +
4.25%)		  

03/14/2025

      

4,183

  

3,258

    
Global Medical
Response, Inc.		     1st Lien Term
Loan		   9.93% (3M
SOFR +
4.25%)		  

10/02/2025

      

11,863

  

9,243

    
Global Medical
Response, Inc.		     2nd Lien Term
Loan		   12.10% (3M
SOFR +
6.75%)		  

12/17/2029

      

29,366

  

22,906

(e)​

    
LifeScan Global
Corporation		     1st Lien Term
Loan		   11.98% (6M
SOFR +
6.50%)		  

12/31/2026

      

3,592

  

2,662

    
LifeScan Global
Corporation		     2nd Lien Term
Loan		    

03/31/2027

      

5,692

  

3,415

(j)​

    
Mamba
Purchaser, Inc.		     1st Lien Term
Loan		   8.97% (1M
SOFR +
3.50%)		  

10/16/2028

      

7,981

  

7,966

    
Medmark
Services Inc		     1st Lien Term
Loan		   10.61% (3M
SOFR +
5.00%)		  

06/11/2027

      

1,777

  

1,742

(e)(f)​

    
Medmark
Services Inc		     2nd Lien Term
Loan		   14.11% (3M
SOFR +
8.50%)		  

06/11/2028

      

9,139

  

8,773

(e)​

    
Medmark
Services Inc		     1st Lien Delay
Draw Loan		   10.61% (3M
SOFR +
5.00%)		  

06/11/2027

      

1,524

  

1,493

(e)(f)​

    
Medmark
Services Inc		     2nd Lien Delay
Draw Loan		   14.11% (3M
SOFR +
8.50%)		  

06/11/2028

      

4,897

  

4,701

(e)​

    
Network
Bidco B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   9.76% (3M
EURIBOR +
5.83%)		  

05/14/2029

      

€

5,778

   6,379

(e)(f)​

    
Network
Bidco B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   9.25% (3M
EURIBOR +
5.25%)		  

05/14/2029

      

€

870

   960

(e)(h)​

    
Next Holdco,
LLC		     1st Lien
Revolving
Loan		    

11/09/2029

      

—

  

—

(e)(h)​

    
Next Holdco,
LLC		     1st Lien Term
Loan		   11.37% (1M
SOFR +
6.00%)		  

11/11/2030

      

996

  

981

(e)​

    

Annual Report 2023
40

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Next Holdco,
LLC		     1st Lien Delay
Draw Loan		    

11/11/2030

      

$

—

  

$

—

(e)(h)​

    

NextCare, Inc.

     2nd Lien Term
Loan		   16.00% (3M
SOFR +
10.50%)		  

12/31/2024

      

7,228

  

7,228

(e)(f)​

    
Nomi Health,
Inc.		     1st Lien Term
Loan		   13.64% (6M
SOFR +
8.25%)		  

07/21/2028

      

2,495

  

2,420

(e)​

    
NSPC
Intermediate
Corp.		     1st Lien Term
Loan		    

02/13/2026

      

82

  

—

(e)(f)(j)​

    
NSPC
Intermediate
Corp.		     1st Lien Term
Loan		    

02/13/2026

      

7

  

—

(e)​

    
Olympia
Acquisition, Inc.		     1st Lien Term
Loan		    

02/26/2027

      

3,509

  

2,035

(e)(j)​

    
Olympia
Acquisition, Inc.		     1st Lien Delay
Draw Loan		    

02/26/2027

      

540

  

314

(e)(j)​

    
Olympia
Acquisition, Inc.		     1st Lien Delay
Draw Loan		   15.01% (3M
SOFR +
9.50%)		  

02/26/2027

      

187

  

187

(e)(h)​

    
OMH-HealthEdge
Holdings, LLC		     1st Lien
Revolving
Loan		    

10/08/2029

      

—

  

—

(e)(h)​

    
OMH-HealthEdge
Holdings, LLC		     1st Lien Term
Loan		   11.35% (3M
SOFR +
6.00%)		  

10/08/2029

      

8,101

  

7,899

(e)​

    

Paragon 28, Inc.

     1st Lien
Revolving
Loan		   9.38% (1M
SOFR +
4.00%)		  

11/02/2028

      

1

  

1

(e)(h)​

    

Paragon 28, Inc.

     1st Lien Term
Loan		   12.13% (3M
SOFR +
6.75%)		  

11/02/2028

      

3,652

  

3,560

(e)(g)​

    

Paragon 28, Inc.

     1st Lien Delay
Draw Loan		    

11/02/2028

      

—

  

—

(e)(g)(h)​

    
Pluto
Acquisition I,
Inc.		     1st Lien Term
Loan		   9.65% (3M
SOFR +
4.00%)		  

06/22/2026

      

21,415

  

16,633

(f)​

    
Premise Health
Holding Corp		     1st Lien
Revolving
Loan		    

04/10/2025

      

—

  

—

(e)(h)​

    
Premise Health
Holding Corp		     1st Lien Term
Loan		   9.25% (3M
SOFR +
3.75%)		  

07/10/2025

      

11

  

11

(e)(f)​

    
Premise Health
Holding Corp		     2nd Lien Term
Loan		   13.00% (3M
SOFR +
7.50%)		  

07/10/2026

      

2,000

  

1,960

(e)(f)​

    
Prime Dental
Alliance B.V.		  

Netherlands

   1st Lien Term
Loan		   11.43% (3M
EURIBOR +
7.50%)		  

06/21/2027

      

€

2,200

  

2,429

(e)(f)​

      

Annual Report 2023
41

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Prime Dental
Alliance B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   11.68% (3M
EURIBOR +
7.75%)		  

06/17/2027

      

€

2,548

  

$

2,813

(e)(h)​

    
Prime Dental
Alliance B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   11.43% (3M
EURIBOR +
7.50%)		  

06/21/2027

      

€

1,654

  

1,826

(e)​

      
Prime Dental
Alliance B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   11.68% (3M
EURIBOR +
7.75%)		  

06/21/2027

      

€

915

  

1,011

(e)(h)​

      

R1 RCM Inc.

     1st Lien Term
Loan		   8.36% (1M
SOFR +
3.00%)		  

06/21/2029

      

7,543

  

7,536

    
Rubicone Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   12.58% (3M
SONIA +
7.25%)		  

12/01/2028

      

£

2,889

  

3,682

(e)(f)(g)​

      
Rubicone Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.58% (3M
SONIA +
7.25%)		  

12/01/2028

      

£

1,667

  

2,125

(e)(g)​

      
Rubicone Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		    

12/01/2028

      

£

—

  

—

(e)(g)(h)(i)​

      
SiroMed
Physician
Services, Inc.		     1st Lien
Revolving
Loan		    

03/31/2025

      

—

  

—

(e)(h)​

    
SiroMed
Physician
Services, Inc.		     1st Lien Term
Loan		   10.75% (3M
SOFR +
5.25%)		  

03/31/2025

      

468

  

468

(e)(f)​

    
Sotera Health
Holdings, LLC		     1st Lien Term
Loan		   8.39% (3M
SOFR +
2.75%)		  

12/11/2026

      

9,959

  

9,942

    
Symplr Software
Inc.		     1st Lien
Revolving
Loan		   9.11% (1M
SOFR +
3.75%)		  

12/22/2025

      

—

  

—

(e)(h)​

    
Symplr Software
Inc.		     1st Lien Term
Loan		   9.98% (3M
SOFR +
4.50%)		  

12/22/2027

      

46

  

41

(f)​

    
Symplr Software
Inc.		     2nd Lien Term
Loan		   13.36% (3M
SOFR +
7.88%)		  

12/22/2028

      

12,343

  

10,985

(e)(f)​

    
Tandarts Today
Holding B.V.		  

Netherlands

   1st Lien Term
Loan		   12.18% (3M
EURIBOR +
8.25%)		  

02/24/2028

      

€

643

  

689

(e)(f)(g)​

      
Tandarts Today
Holding B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   12.18% (3M
EURIBOR +
8.25%)		  

02/24/2028

      

€

1,006

  

1,077

(e)(g)(h)​

      
Therapy Brands
Holdings LLC		     2nd Lien Term
Loan		   12.22% (1M
SOFR +
6.75%)		  

05/18/2029

      

4,334

  

4,117

(e)(f)​

    
United Digestive
MSO Parent, LLC		     1st Lien
Revolving
Loan		    

03/30/2029

      

—

  

—

(e)(h)​

    

Annual Report 2023
42

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
United Digestive
MSO Parent, LLC		     1st Lien Term
Loan		   12.25% (3M
SOFR +
6.75%)		  

03/30/2029

      

$

3,145

  

$

3,145

(e)​

    
United Digestive
MSO Parent, LLC		     1st Lien Delay
Draw Loan		    

03/30/2029

      

—

  

—

(e)(h)​

    
Veonet Lense
GmbH		  

Germany

   1st Lien Term
Loan		    

03/14/2029

      

€

5,000

  

5,504

(i)​

    
Viant Medical
Holdings, Inc.
(f/k/a MedPlast
Holdings Inc.)		     1st Lien Term
Loan		   9.22% (1M
SOFR +
3.75%)		  

07/02/2025

      

579

  

572

(f)​

    
Viant Medical
Holdings, Inc.
(f/k/a MedPlast
Holdings Inc.)		     1st Lien Term
Loan		   11.72% (1M
SOFR +
6.25%)		  

07/02/2025

      

527

  

527

(e)(f)​

    
Viant Medical
Holdings, Inc.
(f/k/a MedPlast
Holdings Inc.)		     2nd Lien Term
Loan		   13.22% (1M
SOFR +
7.75%)		  

07/02/2026

      

1,788

  

1,715

(f)​

    
VPP
Intermediate
Holdings, LLC		     1st Lien
Revolving
Loan		    

12/01/2027

      

—

  

—

(e)(h)​

    
VPP
Intermediate
Holdings, LLC		     1st Lien Term
Loan		   11.71% (1M
SOFR +
6.25%)		  

12/01/2027

      

1,549

  

1,549

(e)(f)​

    
VPP
Intermediate
Holdings, LLC		     1st Lien Delay
Draw Loan		   11.71% (1M
SOFR +
6.25%)		  

12/01/2027

      

466

  

466

(e)​

    
VPP
Intermediate
Holdings, LLC		     1st Lien Delay
Draw Loan		   12.10% (1M
SOFR +
6.75%)		  

12/01/2027

      

627

  

627

(e)(h)​

    
WSHP FC
Acquisition LLC		     1st Lien
Revolving
Loan		   12.00% (3M
SOFR +
6.50%)		  

03/30/2028

      

2,757

  

2,619

(e)(h)​

    
WSHP FC
Acquisition LLC		     1st Lien Term
Loan		   12.00% (3M
SOFR +
6.50%)		  

03/30/2028

      

19,314

  

18,349

(e)(f)​

    
WSHP FC
Acquisition LLC		     1st Lien Delay
Draw Loan		   12.00% (3M
SOFR +
6.50%)		  

03/30/2028

      

1,227

  

1,166

(e)(f)​

    
WSHP FC
Acquisition LLC		     1st Lien Delay
Draw Loan		   12.00% (3M
SOFR +
6.50%)		  

03/30/2028

      

5,711

  

5,424

(e)​

    
                                         

315,402

      

9.83

%

  

Household and Personal Products

  
Beacon
Wellness
Brands, Inc.		       1st Lien
Revolving
Loan		    

12/22/2027

      

—

  

—

(e)(h)​

    

Annual Report 2023
43

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Beacon
Wellness
Brands, Inc.		       1st Lien Term
Loan		   11.21% (1M
SOFR +
5.75%)		  

12/22/2027

      

$

1,654

  

$

1,587

(e)(f)​

    
Foundation
Consumer
Brands, LLC		       1st Lien
Revolving
Loan		    

10/01/2026

      

—

  

—

(e)(h)​

    
Foundation
Consumer
Brands, LLC		       1st Lien Term
Loan		   11.79% (3M
SOFR +
6.25%)		  

02/12/2027

      

4,481

  

4,481

(e)(f)​

    
Foundation
Consumer
Brands, LLC		       1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

02/12/2027

      

7,454

  

7,454

(e)​

    
Premier
Specialties,
Inc.		       1st Lien
Revolving
Loan		   12.46% (1M
SOFR +
7.00%)		  

08/20/2027

      

77

  

69

(e)(h)​

    
Premier
Specialties,
Inc.		       1st Lien Term
Loan		   12.46% (1M
SOFR +
7.00%)		  

08/20/2027

      

3,015

  

2,683

(e)(f)​

    
Silk Holdings III
Corp.		       1st Lien
Revolving
Loan		   11.35% (3M
SOFR +
6.00%)		  

05/01/2029

      

1

  

1

(e)​

    
Silk Holdings III
Corp.		       1st Lien
Revolving
Loan		    

05/01/2029

      

—

  

—

(e)(h)​

    
Silk Holdings III
Corp.		       1st Lien Term
Loan		   13.10% (3M
SOFR +
7.75%)		  

05/01/2029

      

3,977

  

3,977

(e)​

    
Sunshine
Luxembourg VII
S.a r.l.		   Luxembourg
   1st Lien Term
Loan		   8.95% (3M
SOFR +
3.50%)		  

10/01/2026

      

13,466

  

13,523

    
                                         

33,775

      

1.05

%

  

Insurance

  
Accession Risk
Management
Group, Inc.		       1st Lien
Revolving
Loan		    

11/01/2029

      

—

  

—

(e)(h)​

    
Accession Risk
Management
Group, Inc.		       1st Lien
Term Loan		   11.03% (3M
SOFR +
5.50%)		  

11/01/2029

      

3,869

  

3,792

(e)(f)​

    
Accession Risk
Management
Group, Inc.		       1st Lien
Term Loan		   11.00% (3M
SOFR +
5.50%)		  

11/01/2029

      

45

  

44

(e)​

    
Accession Risk
Management
Group, Inc.		       1st Lien
Delay Draw
Loan		   11.35% (3M
SOFR +
6.00%)		  

11/01/2029

      

55

  

55

(e)(h)​

    
Accession Risk
Management
Group, Inc.		       1st Lien Delay
Draw Loan		   11.41% (1M
SOFR +
6.00%)		  

11/01/2029

      

124

  

122

(e)​

    

Acrisure, LLC

       1st Lien Term
Loan		   9.89% (3M
SOFR +
4.50%)		  

11/06/2030

      

249

  

249

    

Annual Report 2023
44

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Alfred
AcquiCo B.V.		  

Netherlands

   1st Lien Term
Loan		   10.58% (1M
EURIBOR +
6.75%)		  

09/17/2029

      

€

2,000

  

$

2,208

(e)(f)​

    
Amynta Agency
Borrower Inc.
and Amynta
Warranty
Borrower Inc.		       1st Lien Term
Loan		   9.61% (1M
SOFR +
4.25%)		  

02/28/2028

      

231

  

231

    
AQ Sunshine,
Inc.		       1st Lien
Revolving
Loan		    

04/15/2027

      

—

  

—

(e)(h)​

    
AQ Sunshine,
Inc.		       1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

04/15/2027

      

4,969

  

4,869

(e)(f)​

    
AQ Sunshine,
Inc.		       1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

04/15/2027

      

1,701

  

1,667

(e)​

    
AQ Sunshine,
Inc.		       1st Lien Term
Loan		   11.71% (6M
SOFR +
6.25%)		  

04/15/2027

      

900

  

882

(e)​

    
AQ Sunshine,
Inc.		       1st Lien Delay
Draw Loan		   11.75% (3M
SOFR +
6.25%)		  

04/15/2027

      

8,195

  

8,031

(e)​

    
AQ Sunshine,
Inc.		       1st Lien Delay
Draw Loan		   11.60% (3M
SOFR +
6.25%)		  

04/15/2027

      

87

  

85

(e)(h)​

    
AQ Sunshine,
Inc.		       1st Lien Delay
Draw Loan		    

04/15/2027

      

—

  

—

(e)(h)​

    
Ardonagh
Midco 3 PLC		   United
Kingdom
   1st Lien Term
Loan		   12.81% (6M
SONIA +
7.25%)		  

07/14/2026

      

£

1,491

  

1,901

(e)(f)(g)​

    
Ardonagh
Midco 3 PLC		   United
Kingdom
   1st Lien Term
Loan		   11.20% (6M
EURIBOR +
7.25%)		  

07/14/2026

      

€

190

  

210

(e)(f)(g)​

    
Ardonagh
Midco 3 PLC		   United
Kingdom
   1st Lien Delay
Draw Loan		   12.81% (6M
SONIA +
7.25%)		  

07/14/2026

      

£

312

  

397

(e)(g)​

    
Ardonagh
Midco 3 PLC		   United
Kingdom
   1st Lien Delay
Draw Loan		   11.90% (6M
SOFR +
6.00%)		  

07/14/2026

      

16,452

  

16,452

(e)(f)(g)​

    
Ardonagh
Midco 3 PLC		   United
Kingdom		   1st Lien Delay
Draw Loan		   9.95% (6M
EURIBOR +
6.00%)		  

07/14/2026

      

£

1

  

1

(e)(g)​

    
Ardonagh
Midco 3 PLC		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.57% (6M
SOFR +
6.75%)		  

07/14/2026

      

229

  

229

(e)(g)(h)​

    
Broadstreet
Partners, Inc.		       1st Lien Term
Loan		   8.47% (1M
SOFR +
3.00%)		  

01/27/2027

      

1,949

  

1,949

    
Captive
Resources
Midco, LLC		       1st Lien
Revolving
Loan		    

07/03/2028

      

—

  

—

(e)(h)​

    

Annual Report 2023
45

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Captive
Resources
Midco, LLC		       1st Lien Term
Loan		   10.61% (1M
SOFR +
5.25%)		  

07/01/2029

      

$

1,312

  

$

1,312

(e)(f)​

    
CFCo, LLC       1st Lien Term
Loan		    

09/13/2038

      

3,231

  

26

(e)(j)​

    
Daylight Beta
Parent LLC		       1st Lien Term
Loan		   10.00%  

09/12/2033

      

1,813

  

1,813

(e)(g)​

    
DOXA Insurance
Holdings, LLC		       1st Lien
Revolving
Loan		    

12/20/2029

      

—

  

—

(e)(h)​

    
DOXA Insurance
Holdings, LLC		       1st Lien Term
Loan		   10.87% (6M
SOFR +
5.50%)		  

12/20/2030

        

1,256

  

1,230

(e)​

    
DOXA Insurance
Holdings, LLC		       1st Lien Delay
Draw Loan		    

12/20/2030

      

—

  

—

(e)(h)​

    
Foundation Risk
Partners, Corp.		       1st Lien
Revolving
Loan		    

10/29/2027

      

—

  

—

(e)(h)​

    
Foundation Risk
Partners, Corp.		       1st Lien Term
Loan		   11.45% (3M
SOFR +
6.00%)		  

10/30/2028

      

19,101

  

19,101

(e)(f)​

    
Foundation Risk
Partners, Corp.		       1st Lien Delay
Draw Loan		   11.45% (3M
SOFR +
6.00%)		  

10/30/2028

      

14,894

  

14,894

(e)(h)​

    
Foundation Risk
Partners, Corp.		       1st Lien Delay
Draw Loan		    

10/30/2028

      

—

  

—

(e)(h)​

    
Galway
Borrower LLC		       1st Lien
Revolving
Loan		    

09/30/2027

      

—

  

—

(e)(h)​

    
Galway
Borrower LLC		       1st Lien Term
Loan		   10.70% (3M
SOFR +
5.25%)		  

09/29/2028

      

11,966

  

11,727

(e)(f)​

    
Higginbotham
Insurance
Agency, Inc.		       1st Lien Delay
Draw Loan		   10.96% (1M
SOFR +
5.50%)		  

11/24/2028

      

398

  

394

(e)(h)​

    
High Street
Buyer, Inc.		       1st Lien
Revolving
Loan		    

04/16/2027

      

—

  

—

(e)(h)​

    
High Street
Buyer, Inc.		       1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

04/14/2028

      

4,687

  

4,687

(e)(f)​

    
High Street
Buyer, Inc.		       1st Lien Delay
Draw Loan		   11.25% (3M
SOFR +
5.75%)		  

04/14/2028

      

17,568

  

17,568

(e)(f)​

    
High Street
Buyer, Inc.		       1st Lien Delay
Draw Loan		   11.00% (1M
SOFR +
5.50%)		  

04/14/2028

      

6,350

  

6,350

(e)(h)​

    
Hub
International
Limited		       1st Lien Term
Loan		   9.37% (3M
SOFR +
4.00%)		  

11/10/2029

      

2,517

  

2,526

    

Annual Report 2023
46

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Hub
International
Limited		       1st Lien Term
Loan		   9.66% (3M
SOFR +
4.25%)		  

06/20/2030

      

$

10,040

  

$

10,078

    
Hyperion
Refinance
S.a.r.l.		   Luxembourg
   1st Lien Term
Loan		   8.75% (1M
SOFR +
3.25%)		  

11/12/2027

      

2,005

  

2,007

    
Inszone Mid,
LLC		       1st Lien
Revolving
Loan		    

11/30/2029

      

—

  

—

(e)(h)​

    
Inszone Mid,
LLC		       1st Lien Term
Loan		   11.11% (1M
SOFR +
5.75%)		  

11/30/2029

      

2,068

  

2,027

(e)​

    
Inszone Mid,
LLC		       1st Lien Delay
Draw Loan		   11.11% (1M
SOFR +
5.75%)		  

11/30/2029

      

169

  

165

(e)(h)​

    
Jewel Bidco
Limited		   United
Kingdom
   1st Lien Term
Loan		   12.05% (6M
SONIA +
6.50%)		  

07/24/2028

      

£

6,203

  

7,906

(e)(f)​

    
Jewel Bidco
Limited		   United
Kingdom
   1st Lien Delay
Draw Loan		   12.06% (6M
SONIA +
6.50%)		  

07/24/2028

      

£

3,074

  

3,919

(e)(h)​

    
JMG Group
Investments
Limited		   United
Kingdom
   1st Lien Delay
Draw Loan		   11.35% (3M
SONIA +
6.00%)		  

12/11/2028

      

£

1,190

  

1,517

(e)(g)​

    
JMG Group
Investments
Limited		   United
Kingdom
   1st Lien Delay
Draw Loan		   11.35% (3M
SONIA +
6.00%)		  

12/11/2028

      

£

310

  

395

(e)(f)(g)​

    
JMG Group
Investments
Limited		   United
Kingdom
   1st Lien Delay
Draw Loan		   11.35% (3M
SONIA +
6.00%)		  

12/11/2028

      

£

1,488

  

1,897

(e)​

    
JMG Group
Investments
Limited		   United
Kingdom
   1st Lien Delay
Draw Loan		   11.58% (3M
SONIA +
6.25%)		  

12/11/2028

      

£

2,662

  

3,393

(e)(g)(h)​

    
JMG Group
Investments
Limited		   United
Kingdom
   1st Lien Delay
Draw Loan		    

12/11/2028

      

£

—

  

—

(e)(h)(i)​

    
Keystone
Agency
Partners LLC		       1st Lien
Revolving
Loan		    

05/03/2027

      

—

  

—

(e)(h)​

    
Keystone
Agency
Partners LLC		       1st Lien Term
Loan		   10.96% (6M
SOFR +
5.50%)		  

05/03/2027

      

384

  

376

(e)​

    
Keystone
Agency
Partners LLC		       1st Lien Delay
Draw Loan		    

05/03/2027

      

—

  

—

(e)(h)​

    

LJo Finco AB

  

Sweden

   1st Lien
Revolving
Loan		    

06/12/2030

      

SEK

—

  

—

(e)(h)​

    

LJo Finco AB

  

Sweden

   1st Lien Term
Loan		   10.52% (3M
STIBOR +
6.50%)		  

09/12/2030

      

SEK

86,000

  

8,527

(e)​

    

Annual Report 2023
47

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

  

Maturity
Date

  

Acquisition
Date

  

Shares

  

Principal
Amount(a)​

  

Fair Value(a)​

  

% of
Net
Assets

  

LJo Finco AB

  

Sweden

  

1st Lien Delay
Draw Loan

    

09/12/2030

      

SEK

—

  

$

—

(e)(h)​

    

Lucida Broking
Holdings
Limited

  

United
Kingdom

  

1st Lien Term
Loan

  

12.78% (6M
SONIA +
7.25%)

  

06/06/2024

      

£

1,000

  

1,274

(e)(f)​

    

Lucida Broking
Holdings
Limited

  

United
Kingdom

  

1st Lien Delay
Draw Loan

  

12.83% (6M
SONIA +
7.25%)

  

06/06/2024

      

£

667

  

850

(e)(f)​

    

Oakbridge
Insurance
Agency LLC

      

1st Lien
Revolving
Loan

    

11/01/2029

      

—

  

—

(e)(h)​

    

Oakbridge
Insurance
Agency LLC

      

1st Lien Term
Loan

  

11.09% (1M
SOFR +
5.75%)

  

11/01/2029

      

1,290

  

1,264

(e)​

    

Oakbridge
Insurance
Agency LLC

      

1st Lien Delay
Draw Loan

    

11/01/2029

      

—

  

—

(e)(h)​

    

Optio Group
Limited

  

United
Kingdom

  

1st Lien Delay
Draw Loan

  

12.78% (6M
SONIA +
7.25%)

  

03/16/2026

      

£

360

  

459

(e)(f)​

    

Optio Group
Limited

  

United
Kingdom

  

1st Lien Delay
Draw Loan

    

03/16/2026

      

£

280

  

357

(e)(g)​

    

Patriot Growth
Insurance
Services, LLC

      

1st Lien
Revolving
Loan

    

10/16/2028

      

—

  

—

(e)(h)​

    

Patriot Growth
Insurance
Services, LLC

      

1st Lien Term
Loan

  

11.00% (3M
SOFR +
5.50%)

  

10/16/2028

      

1,774

  

1,739

(e)(f)​

    

People
Corporation

  

Canada

  

1st Lien
Revolving
Loan

  

11.74% (3M
CDOR +
6.25%)

  

02/18/2027

      

CAD

735

  

555

(e)(h)​

    

People
Corporation

  

Canada

  

1st Lien Term
Loan

  

11.75% (3M
CDOR +
6.25%)

  

02/18/2028

      

CAD

7,022

  

5,299

(e)(f)​

    

People
Corporation

  

Canada

  

1st Lien Delay
Draw Loan

  

11.75% (3M
CDOR +
6.25%)

  

02/18/2028

      

CAD

2,292

  

1,730

(e)​

    

People
Corporation

  

Canada

  

1st Lien Delay
Draw Loan

  

11.25% (3M
CDOR +
5.75%)

  

02/18/2028

      

CAD

4,072

  

3,073

(e)​

    

People
Corporation

  

Canada

    

11.50% (3M
CDOR +
6.00%)

  

02/18/2028

      

CAD

149

  

113

(e)(h)​

    

Project
Hammond
Bidco Limited

  

United
Kingdom

  

1st Lien Term
Loan

  

10.56% (3M
SONIA +
5.25%)

  

12/04/2028

      

£

1,750

  

2,230

(e)(f)(g)​

    

Project
Hammond
Bidco Limited

  

United
Kingdom

  

1st Lien Delay
Draw Loan

  

10.56% (3M
SONIA +
5.25%)

  

12/04/2028

      

£

438

  

558

(e)(g)(h)​

    

Annual Report 2023
48

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
SageSure
Holdings, LLC		       2nd Lien Term
Loan		   11.36% (3M
SOFR +
5.75%)		  

01/28/2028

      

$

5,533

  

$

5,532

(e)(f)(g)​

    
SageSure
Holdings, LLC		       2nd Lien
Delay Draw
Loan		   11.36% (3M
SOFR +
5.75%)		  

01/28/2028

      

84

  

84

(e)(g)(h)​

    
SCM Insurance
Services Inc.		   Canada

   1st Lien
Revolving
Loan		    

08/29/2025

      

CAD

—

  

—

(e)(h)​

    
SCM Insurance
Services Inc.		   Canada

   1st Lien Term
Loan		   11.70% (3M
CDOR +
6.25%)		  

08/29/2025

      

CAD

156

  

118

(e)(f)​

    
SelectQuote,
Inc.		       1st Lien Term
Loan		   14.96% (1M
SOFR +
9.50%)		  

11/05/2024

      

7,130

  

6,559

(e)(g)​

    
Seventeen
Group Limited		   United
Kingdom		   1st Lien Term
Loan		   11.60% (6M
SONIA +
6.25%)		  

07/26/2028

      

£

455

  

580

(e)(f)(g)​

    
Seventeen
Group Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   11.58% (6M
SONIA +
6.25%)		  

07/26/2028

      

£

36

  

46

(e)(g)(h)​

    
SG Acquisition,
Inc.		       1st Lien Term
Loan		   10.98% (3M
SOFR +
5.50%)		  

01/27/2027

      

2,730

  

2,730

(e)(f)​

    
Spitfire Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   12.98% (6M
SOFR +
7.25%)		  

09/28/2029

      

14,960

  

14,960

(e)(f)​

    
Spitfire Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		    

09/28/2029

      

£

—

  

—

(e)(h)​

    
Spring
Insurance
Solutions, LLC		       1st Lien Term
Loan		   12.72% (3M
SOFR +
7.00%)		  

11/24/2025

      

3,393

  

3,020

(e)(f)​

    
Spring
Insurance
Solutions, LLC		       1st Lien Delay
Draw Loan		   12.72% (3M
SOFR +
7.00%)		  

11/24/2025

      

578

  

514

(e)​

    
Staysure Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   12.60% (3M
SONIA +
7.25%)		  

07/01/2025

      

£

1,000

  

1,275

(e)​

    

USI, Inc.

     1st Lien Term
Loan		   8.35% (3M
SOFR +
3.00%)		  

11/22/2029

      

7,114

  

7,119

    

USI, Inc.

     1st Lien Term
Loan		   8.64% (3M
SOFR +
3.25%)		  

09/27/2030

      

6,723

  

6,726

    
World Insurance
Associates, LLC		       1st Lien
Revolving
Loan		    

04/03/2028

      

—

  

—

(e)(h)​

    
World Insurance
Associates, LLC		       1st Lien Delay
Draw Loan		    

04/03/2028

      

—

  

—

(e)(h)​

    
                                         

235,973

      

7.35

%

  

Annual Report 2023
49

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Materials

  
ASP-r-pac
Acquisition Co
LLC		       1st Lien
Revolving
Loan		    

12/29/2027

      

$

—

  

$

—

(e)(h)​

    
ASP-r-pac
Acquisition Co
LLC		       1st Lien Term
Loan		   11.64% (3M
SOFR +
6.00%)		  

12/29/2027

      

6,135

  

5,951

(e)(f)​

    
Charter Next
Generation, Inc.		       1st Lien Term
Loan		   9.22% (1M
SOFR +
3.75%)		  

12/01/2027

      

9,154

  

9,186

    
Coyote Buyer,
LLC		       1st Lien
Revolving
Loan		    

02/06/2025

      

—

  

—

(e)(h)​

    
Coyote Buyer,
LLC		       1st Lien Term
Loan		   11.53% (3M
SOFR +
6.00%)		  

02/06/2026

      

20,063

  

20,062

(e)(f)​

    
Coyote Buyer,
LLC		       1st Lien Term
Loan		   13.54% (3M
SOFR +
8.00%)		  

08/06/2026

      

4,892

  

4,892

(e)(f)​

    
Nelipak
European
Holdings
Cooperatief U.A.		   Netherlands


   1st Lien
Revolving
Loan		   8.33% (1M
EURIBOR +
4.50%)		  

07/02/2026

      

€

130

  

143

(e)(h)​

    
Nelipak
European
Holdings
Cooperatief U.A.		   Netherlands

   1st Lien Term
Loan		   8.45% (3M
EURIBOR +
4.50%)		  

07/02/2026

      

€

791

  

874

(e)(f)​

    
Nelipak Holding
Company		       1st Lien
Revolving
Loan		   9.71% (1M
SOFR +
4.25%)		  

07/02/2026

      

165

  

165

(e)(h)​

    
Nelipak Holding
Company		       1st Lien Term
Loan		   9.78% (3M
SOFR +
4.25%)		  

07/02/2026

      

2,908

  

2,909

(e)(f)​

    
Novipax Buyer,
L.L.C.		       1st Lien Term
Loan		   12.21% (1M
SOFR +
6.75%)		  

12/01/2026

      

4,147

  

3,981

(e)(f)​

    
Novipax Buyer,
L.L.C.		       1st Lien Term
Loan		   12.21% (1M
SOFR +
6.75%)		  

12/01/2026

      

248

  

237

(e)​

    
PAKNK
Netherlands
Treasury B.V.		   Netherlands

   1st Lien Term
Loan		   8.45% (3M
EURIBOR +
4.50%)		  

07/02/2026

      

€

5,146

  

5,681

(e)(f)​

    
Plaskolite PPC
Intermediate II
LLC		       1st Lien Term
Loan		   9.64% (3M
SOFR +
4.00%)		  

12/15/2025

      

8,267

  

7,871

(f)​

    
Plaskolite PPC
Intermediate II
LLC		       2nd Lien Term
Loan
   12.89% (3M
SOFR +
7.25%)		  

12/14/2026

      

2,960

  

2,812

(e)(f)​

    
Polymer
Solutions
Group, LLC		       1st Lien Term
Loan		   9.97% (3M
SOFR +
4.50%)		  

11/26/2026

      

645

  

645

(e)(f)​

    

Annual Report 2023
50

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Precision
Concepts
Canada
Corporation		  

Canada

   1st Lien Term
Loan		   11.95
(3M SOFR +
6.50%)% 		 

01/12/2026

      

$

621

  

$

614

(e)(f)​

    
Precision
Concepts
International
LLC		       1st Lien
Revolving
Loan		    

01/12/2026

      

—

  

—

(e)(h)​

    
Precision
Concepts
International
LLC		       1st Lien Term
Loan		   11.95% (3M
SOFR +
6.50%)		  

01/12/2026

      

4,819

  

4,770

(e)(f)​

    
Pregis TopCo
LLC		       1st Lien Term
Loan		   9.11% (1M
SOFR +
3.75%)		  

07/31/2026

      

5,968

  

5,977

    
Pretium PKG
Holdings, Inc.		       1st Lien Term
Loan		   10.35% (3M
SOFR +
5.00%)		  

10/02/2028

      

1,860

  

1,819

    
Pretium PKG
Holdings, Inc.		       1st Lien Term
Loan		   9.99% (3M
SOFR +
4.60%)		  

10/02/2028

      

7,832

  

6,083

    
Trident TPI
Holdings, Inc.		       1st Lien Term
Loan		   9.61% (3M
SOFR +
4.00%)		  

09/15/2028

      

8,607

  

8,566

    

Vobev, LLC

       1st Lien
Revolving
Loan		   10.49% (6M
SOFR +
5.00%)		  

04/20/2028

      

1

  

1

(e)(h)​

    

Vobev, LLC

       1st Lien Term
Loan		   13.23% (3M
SOFR +
7.75%)		  

04/20/2028

      

12,491

  

10,242

(e)​

    

Vobev, LLC

       1st Lien Delay
Draw Loan		   12.48% (1M
SOFR +
7.00%)		  

04/20/2028

      

2,195

  

1,800

(e)(g)(h)​

    
                                         

105,281

      

3.28

%

  

Media and Entertainment

          
3 Step Sports
LLC		       1st Lien
Revolving
Loan		   13.33% (3M
SOFR +
8.00%)		  

10/02/2028

      

31

  

30

(e)(h)​

    
3 Step Sports
LLC		       1st Lien Term
Loan		   13.47% (3M
SOFR +
8.00%)		  

10/02/2029

      

1,923

  

1,846

(e)(g)​

    
3 Step Sports
LLC		     1st Lien Delay
Draw Loan		   13.46% (6M
SOFR +
8.00%)		  

10/02/2029

      

219

  

210

(e)(g)(h)​

    
Aventine
Intermediate
LLC		       1st Lien Term
Loan		   11.47% (3M
SOFR +
6.00%)		  

06/18/2027

      

2,321

  

2,181

(e)(f)(g)​

    
Aventine
Intermediate
LLC		       1st Lien Delay
Draw Loan		   11.47% (3M
SOFR +
6.00%)		  

06/18/2027

      

871

  

819

(e)(g)​

    

Annual Report 2023
51

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
AVSC Holding
Corp.		       1st Lien Term
Loan		   10.96% (1M
SOFR +
5.50%)		  

10/15/2026

      

$

1,900

  

$

1,856

(g)​

    
CC Globe
Holding II A/S		   Denmark
   1st Lien Term
Loan		   11.14% (3M
CIBOR +
7.25%)		  

03/31/2028

      

DKK

19,796

  

2,932

(e)(f)(g)​

    
CC Globe
Holding II A/S		   Denmark
   1st Lien Term
Loan		   11.23% (6M
CIBOR +
7.25%)		  

03/31/2028

      

DKK

18,316

  

2,712

(e)​

    
CC Globe
Holding II A/S		  

Denmark

   1st Lien Delay
Draw Loan		   11.14% (3M
CIBOR +
7.25%)		  

03/31/2028

      

DKK

11,149

  

1,651

(e)(g)​

    
CC Globe
Holding II A/S		   Denmark
   1st Lien Delay
Draw Loan		    

03/31/2028

      

DKK

—

  

—

(e)(h)​

    
Creative Artists
Agency, LLC		       1st Lien Term
Loan		   8.86% (1M
SOFR +
3.50%)		  

11/27/2028

      

6,950

  

6,974

    
Diamond Sports
Group, LLC		       2nd Lien Term
Loan		    

08/24/2026

      

1,093

  

43

(j)​

    
Global Music
Rights, LLC		       1st Lien
Revolving
Loan		    

08/27/2027

      

—

  

—

(e)(h)​

    
Global Music
Rights, LLC		       1st Lien Term
Loan		   11.20% (3M
SOFR +
5.75%)		  

08/28/2028

      

4,917

  

4,917

(e)(f)​

    

MailSouth, Inc.

     1st Lien Term
Loan		    

04/23/2024

      

2,482

  

274

(e)(j)​

    
Production
Resource
Group, LLC		       1st Lien Term
Loan		   13.96% (1M
SOFR +
8.50%)		  

08/21/2024

      

858

  

858

(e)​

    
Production
Resource
Group, LLC		       1st Lien Delay
Draw Loan		   12.96% (1M
SOFR +
7.50%)		  

08/21/2024

      

470

  

470

(e)​

    
Professional
Fighters
League, LLC		       1st Lien Term
Loan		   12.00%  

01/20/2026

      

690

  

690

(e)​

    
Professional
Fighters
League, LLC		       2nd Lien
Delay Draw
Loan		   14.00%  

01/20/2026

      

7

  

6

(e)​

    
Storm
Investment
S.a.r.l.		   Luxembourg
   1st Lien Term
Loan		   3.75%  

06/22/2029

      

€

9,193

  

10,149

(e)​

    
William Morris
Endeavor
Entertainment,
LLC (IMG
Worldwide
Holdings, LLC)		       1st Lien Term
Loan		   8.22% (1M
SOFR +
2.75%)		  

05/18/2025

      

15,212

  

15,241

    
                                         

53,859

      

1.68

%

  

Annual Report 2023
52

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Pharmaceuticals, Biotechnology and Life Sciences

  
ADMA Biologics,
Inc.		       1st Lien
Revolving
Loan		   9.13% (3M
SOFR +
3.75%)		  

12/20/2027

      

$

1

  

$

1

(e)​

    
ADMA Biologics,
Inc.		       1st Lien Term
Loan		   11.88% (6M
SOFR +
6.50%)		  

12/20/2027

      

900

  

889

(e)​

    
AI Sirona
(Luxembourg)
Acquisition
S.a.r.l.		   Luxembourg

   1st Lien Term
Loan		   8.84% (1M
EURIBOR +
5.00%)		  

09/30/2028

      

€

7,000

  

7,726

    
Alcami
Corporation		       1st Lien
Revolving
Loan		    

12/21/2028

      

—

  

—

(e)(h)​

    
Alcami
Corporation		       1st Lien Term
Loan		   12.46% (1M
SOFR +
7.00%)		  

12/21/2028

      

203

  

203

(e)​

    
Alcami
Corporation		       1st Lien Delay
Draw Loan		    

12/21/2028

      

—

  

—

(e)(h)​

    
Aspire
Bidco Limited		   Jersey

   1st Lien Term
Loan		   12.21% (3M
SONIA +
6.90%)		  

09/04/2028

      

£

7,777

  

9,913

(e)(f)(g)​

    
Aspire Bidco
Limited		   Jersey

   1st Lien Delay
Draw Loan		   12.21% (3M
SONIA +
6.90%)		  

09/04/2028

      

£

647

  

825

(e)(g)(h)​

    
Bamboo US
BidCo LLC		       1st Lien
Revolving
Loan		    

10/01/2029

      

—

  

—

(e)(h)​

    
Bamboo US
BidCo LLC		       1st Lien Term
Loan		   11.38% (3M
SOFR +
6.00%)		  

09/30/2030

      

2,603

  

2,525

(e)(g)​

    
Bamboo US
BidCo LLC		       1st Lien Term
Loan		   9.95% (3M
EURIBOR +
6.00%)		  

09/30/2030

      

€

2,085

  

2,233

(e)(g)​

    
Bamboo US
BidCo LLC		       1st Lien Delay
Draw Loan		   11.38% (1M
SOFR +
6.00%)		  

09/30/2030

      

28

  

27

(e)(g)(h)​

    
Catalent
Pharma
Solutions, Inc.		       1st Lien Term
Loan		   8.36% (1M
SOFR +
3.00%)		  

02/22/2028

      

6,000

  

6,000

(e)​

    
Cheplapharm
Arzneimittel
GmbH		   Germany
   1st Lien Term
Loan		    

02/22/2029

      

€

6,875

  

7,568

(i)​

    
Cobalt Buyer
Sub, Inc.		       1st Lien
Revolving
Loan		   11.47% (1M
SOFR +
6.00%)		  

10/01/2027

      

382

  

378

(e)(h)​

    
Cobalt Buyer
Sub, Inc.		       1st Lien Term
Loan		   11.47% (1M
SOFR +
6.00%)		  

10/02/2028

      

7,278

  

7,206

(e)(f)​

    

Annual Report 2023
53

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Cobalt Buyer
Sub, Inc.		       1st Lien Term
Loan		   11.47% (1M
SOFR +
6.00%)		  

10/02/2028

      

$

2,524

  

$

2,498

(e)​

    
Cobalt Buyer
Sub, Inc.		       1st Lien Delay
Draw Loan		   11.47% (1M
SOFR +
6.00%)		  

10/02/2028

      

2,440

  

2,416

(e)​

    
Da Vinci
Purchaser Corp.		       1st Lien Term
Loan		   9.47% (1M
SOFR +
4.00%)		  

01/08/2027

      

5,108

  

5,112

    
Grifols
Worldwide
Operations
USA, Inc.		       1st Lien Term
Loan		   7.54% (3M
SOFR +
2.00%)		  

11/15/2027

      

13

  

13

    
NMC Skincare
Intermediate
Holdings II, LLC		       1st Lien
Revolving
Loan		   11.46% (1M
SOFR +
6.00%)		  

11/02/2026

      

36

  

34

(e)(h)​

    
NMC Skincare
Intermediate
Holdings II, LLC		       1st Lien Term
Loan		   11.44% (1M
SOFR +
6.00%)		  

11/02/2026

      

2,193

  

2,084

(e)(f)​

    
NMC Skincare
Intermediate
Holdings II, LLC		       1st Lien Delay
Draw Loan		   11.44% (1M
SOFR +
6.00%)		  

11/02/2026

      

618

  

587

(e)​

    
North American
Science
Associates, LLC		       1st Lien
Revolving
Loan		   10.03% (3M
SOFR +
4.50%)		  

03/15/2027

      

1

  

1

(e)​

    
North American
Science
Associates, LLC		       1st Lien Term
Loan		   11.28% (3M
SOFR +
5.75%)		  

09/15/2027

      

10,974

  

10,974

(e)(f)​

    
North American
Science
Associates, LLC		       1st Lien Delay
Draw Loan		   11.28% (3M
SOFR +
5.75%)		  

09/15/2027

      

986

  

986

(e)(f)​

    
North American
Science
Associates, LLC		       1st Lien Delay
Draw Loan		   11.28% (3M
SOFR +
5.75%)		  

09/15/2027

      

901

  

901

(e)​

    
Solar Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   9.69% (3M
EURIBOR +
5.75%)		  

11/23/2029

      

£

393

  

500

(e)(g)(h)​

    

Verista, Inc.

     1st Lien
Revolving
Loan		   11.38% (3M
SOFR +
6.00%)		  

02/16/2027

      

333

  

323

(e)(h)​

    

Verista, Inc.

     1st Lien Term
Loan		   11.39% (3M
SOFR +
6.00%)		  

02/16/2027

      

8,927

  

8,659

(e)(f)​

    

Verista, Inc.

     1st Lien Delay
Draw Loan		   11.39% (3M
SOFR +
6.00%)		  

02/16/2027

      

1,832

  

1,777

(e) ​

    
WCI-BXC
Purchaser, LLC		       1st Lien
Revolving
Loan		    

11/06/2029

      

—

  

—

(e)(h)​

    

Annual Report 2023
54

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
WCI-BXC
Purchaser, LLC		       1st Lien Term
Loan		   11.64% (6M
SOFR +
6.25%)		  

11/06/2030

      

$

768

  

$

748

(e)​

    
                                         

83,107

      

2.59

%

  

Real Estate Management and Development

  
285 Mezz LLC       1st Lien Delay
Draw Loan		    

04/05/2024

      

4,972

  

4,117

(e)(j)​

    
285
Schermerhorn
LLC		       1st Lien Delay
Draw Loan		    

04/05/2024

      

3,916

  

3,243

(e)(h)(j)​

    

Odevo AB

  

Sweden

   1st Lien Term
Loan		   11.23% (3M
SONIA +
5.88%)		  

12/21/2028

      

€

6,948

  

7,670

(e)(f)​

    

Odevo AB

  

Sweden

   1st Lien Delay
Draw Loan		   11.36% (3M
SOFR +
5.88%)		  

12/21/2028

      

€

10,285

  

11,354

(e)​

   

Odevo AB

  

Sweden

   1st Lien Delay
Draw Loan		   12.20% (1M
SOFR +
6.63%)		  

12/21/2028

      

€

2,778

  

3,066

(e)(h)​

    
                                         

29,450

      

0.92

%

  

Software and Services

  

Access CIG, LLC

     1st Lien Term
Loan		   10.39% (3M
SOFR +
5.00%)		  

08/18/2028

      

1,347

  

1,347

    
Activate
holdings (US)
Corp.		       1st Lien
Revolving
Loan		   12.10% (3M
SOFR +
6.75%)		  

07/27/2029

      

116

  

113

(e)(h)​

    
Activate
holdings (US)
Corp.		       1st Lien Term
Loan		   12.10% (3M
SOFR +
6.75%)		  

07/29/2030

      

10,996

  

10,886

(e)​

    
AffiniPay Midco,
LLC		       1st Lien
Revolving
Loan		    

06/09/2028

      

—

  

—

(e)(h)​

    
AffiniPay Midco,
LLC		       1st Lien Term
Loan		   10.88% (3M
SOFR +
5.50%)		  

06/09/2028

      

9,568

  

9,568

(e)(f)​

    
AffiniPay Midco,
LLC		       1st Lien Term
Loan		   10.86% (1M
SOFR +
5.50%)		  

06/09/2028

      

9,388

  

9,388

(e)(f)​

    
AffiniPay Midco,
LLC		       1st Lien Term
Loan		   10.88% (6M
SOFR +
5.50%)		  

06/09/2028

      

296

  

296

(e)​

    
AffiniPay Midco,
LLC		       1st Lien Delay
Draw Loan		   10.86% (3M
SOFR +
5.50%)		  

06/09/2028

      

1,334

  

1,334

(e)​

    

Anaplan, Inc.

       1st Lien
Revolving
Loan		    

06/21/2028

      

—

  

—

(e)(h)​

    

Annual Report 2023
55

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Anaplan, Inc.

       1st Lien Term
Loan		   11.85% (3M
SOFR +
6.50%)		  

06/21/2029

      

$

5,991

  

$

5,991

(e)(f)​

    
Anaqua Parent
Holdings, Inc.		       1st Lien
Revolving
Loan		    

10/10/2025

      

—

  

—

(e)(h)​

    
Anaqua Parent
Holdings, Inc.		       1st Lien Term
Loan		   9.45% (6M
EURIBOR +
5.50%)		  

04/10/2026

      

€

652

  

719

(e)​

    
Anaqua Parent
Holdings, Inc.		       1st Lien Term
Loan		   10.79% (3M
SOFR +
5.25%)		  

04/10/2026

      

1,763

  

1,763

(e)(f)​

    
Anaqua Parent
Holdings, Inc.		       1st Lien Term
Loan		   10.88% (3M
SOFR +
5.25%)		  

04/10/2026

      

1,956

  

1,956

(e)(f)(g)​

    
Anaqua Parent
Holdings, Inc.		       1st Lien Delay
Draw Loan		   10.88% (6M
SOFR +
5.25%)		  

04/10/2026

      

281

  

281

(e)(g)​

    
APG
Intermediate
Holdings
Corporation		       1st Lien
Revolving
Loan		   10.60% (3M
SOFR +
5.25%)		  

01/03/2025

      

—

  

—

(e)(h)​

    
APG
Intermediate
Holdings
Corporation		       1st Lien Term
Loan		   10.75% (3M
SOFR +
5.25%)		  

01/03/2025

      

977

  

977

(e)​

    
APG
Intermediate
Holdings
Corporation		       1st Lien Delay
Draw Loan		   10.76% (3M
SOFR +
5.25%)		  

01/03/2025

      

58

  

58

(e)​

    
Applied
Systems, Inc.		       1st Lien Term
Loan		   9.85% (3M
SOFR +
4.50%)		  

09/18/2026

      

3,901

  

3,915

    
Appriss Health,
LLC		       1st Lien
Revolving
Loan		    

05/06/2027

      

—

  

—

(e)(h)​

    
Appriss Health,
LLC		       1st Lien Term
Loan		   12.32% (3M
SOFR +
6.75%)		  

05/06/2027

      

2,883

  

2,883

(e)​

    
Aptean Acquiror
Inc.		       1st Lien Term
Loan		   9.71% (1M
SOFR +
4.25%)		  

04/23/2026

      

12,888

  

12,850

(f)​

    
Aptean Acquiror
Inc.		     2nd Lien Term
Loan		   12.46% (1M
SOFR +
7.00%)		  

04/23/2027

      

3,570

  

3,571

(e)(f)​

    

Asurion, LLC

     1st Lien Term
Loan		   8.72% (1M
SOFR +
3.25%)		  

12/23/2026

      

5,987

  

5,967

    

Asurion, LLC

     1st Lien Term
Loan		   8.72% (1M
SOFR +
3.25%)		  

07/31/2027

      

2,081

  

2,063

    

Annual Report 2023
56

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Asurion, LLC

     1st Lien Term
Loan		   9.71% (1M
SOFR +
4.25%)		  

08/19/2028

      

$

4,744

  

$

4,721

    

Asurion, LLC

     2nd Lien Term
Loan		   10.72% (1M
SOFR +
5.25%)		  

01/31/2028

      

570

  

542

    

Asurion, LLC

       2nd Lien Term
Loan		   10.72% (1M
SOFR +
5.25%)		  

01/20/2029

      

5,000

  

4,702

    

Avaya Inc.

       1st Lien Term
Loan		   13.86% (1M
SOFR +
8.50%)		  

08/01/2028

      

922

  

811

(g)​

    
Banyan
Software
Holdings, LLC		       1st Lien
Revolving
Loan		   10.96% (1M
SOFR +
5.50%)		  

10/30/2025

      

1

  

1

(e)(h)​

    
Banyan
Software
Holdings, LLC		       1st Lien Term
Loan		   12.46% (1M
SOFR +
7.00%)		  

10/30/2026

      

3,485

  

3,484

(e)(f)​

    
Banyan
Software
Holdings, LLC		       1st Lien Delay
Draw Loan		   12.46% (1M
SOFR +
7.00%)		  

10/30/2026

      

1,496

  

1,496

(e)(f)​

    
Banyan
Software
Holdings, LLC		       1st Lien Delay
Draw Loan		   12.46% (1M
SOFR +
7.00%)		  

10/30/2026

      

3,558

  

3,558

(e)​

    
Banyan
Software
Holdings, LLC		       1st Lien Delay
Draw Loan		   12.71% (1M
SOFR +
7.25%)		  

10/30/2026

      

124

  

124

(e)(h)​

    
BCTO IGNITION
PURCHASER,
INC.		       1st Lien Term
Loan		   14.40% (3M
SOFR +
9.00%)		  

10/19/2030

      

867

  

849

(e)​

    
Bobcat
Purchaser, LLC		       1st Lien
Revolving
Loan		    

06/17/2030

      

—

  

—

(e)(h)​

    
Bobcat
Purchaser, LLC		       1st Lien Term
Loan		   11.59% (3M
SOFR +
6.25%)		  

06/17/2030

      

2,954

  

2,954

(e)​

    
Bobcat
Purchaser, LLC		       1st Lien Delay
Draw Loan		   11.60% (3M
SOFR +
6.25%)		  

06/17/2030

      

999

  

999

(e)​

    
Bottomline
Technologies,
Inc. and Legal
Spend
Holdings, LLC		       1st Lien
Revolving
Loan		    

05/15/2028

      

—

  

—

(e)(h)​

    
Bottomline
Technologies,
Inc. and Legal
Spend
Holdings, LLC		       1st Lien Term
Loan		   10.61% (1M
SOFR +
5.25%)		  

05/14/2029

      

17,984

  

17,984

(e)(f)​

    

Annual Report 2023
57

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Bottomline
Technologies,
Inc. and Legal
Spend
Holdings, LLC		     1st Lien Term
Loan		   11.11% (1M
SOFR +
5.75%)		  

05/14/2029

      

$

732

  

$

732

(e)​

    
Businessolver.com,
Inc.		       1st Lien Term
Loan		   10.93% (1M
SOFR +
5.50%)		  

12/01/2027

      

4,228

  

4,227

(e)(f)​

    
Businessolver.com,
Inc.		       1st Lien Delay
Draw Loan		   10.93% (1M
SOFR +
5.50%)		  

12/01/2027

      

97

  

97

(e)(h)​

    
BYJU's Alpha,
Inc.		       1st Lien Term
Loan		    

11/24/2026

      

4,406

  

1,528

(j)​

    
Capnor Connery
Bidco A/S		   Denmark

   1st Lien Term
Loan		   10.72% (1M
EURIBOR +
6.88%)		  

04/30/2026

      

€

2,954

  

3,262

(e)(f)​

    
Capnor Connery
Bidco A/S		   Denmark
   1st Lien Term
Loan		   10.88% (1M
STIBOR +
6.88%)		  

04/30/2026

      

SEK

4,210

  

417

(e)(f)​

    
Capnor Connery
Bidco A/S		   Denmark
   1st Lien Term
Loan		   11.42% (1M
NIBOR +
6.88%)		  

04/30/2026

      

NOK

2,551

  

251

(e)(f)​

    
Capnor Connery
Bidco A/S		   Denmark
   1st Lien Delay
Draw Loan		   10.75% (1M
CIBOR +
6.88%)		  

04/30/2026

      

DKK

22,065

  

3,267

(e)(f)​

    
Capnor Connery
Bidco A/S		  

Denmark

   1st Lien Delay
Draw Loan		   10.94% (1M
STIBOR +
6.88%)		  

04/30/2026

      

DKK

9,643

  

1,428

(e)(h)​

    
Cardinal Parent,
Inc.		       1st Lien
Revolving
Loan		   12.00
(PRIME +
3.50%)% 		 

11/12/2025

      

1

  

1

(e)(h)​

    
Cardinal Parent,
Inc.		     2nd Lien Term
Loan		   13.25% (3M
SOFR +
7.75%)		  

11/13/2028

      

9,269

  

9,083

(e)(f)​

    
Cloud Software
Group, Inc.		     1st Lien
Revolving
Loan		    

09/30/2027

      

—

  

—

(e)(h)​

    
Cloud Software
Group, Inc.		       1st Lien Term
Loan		   9.99% (3M
SOFR +
4.50%)		  

03/30/2029

      

19,531

  

19,040

    
Compusoft US
LLC		       1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

05/26/2028

      

836

  

819

(e)​

    
Compusoft US
LLC		       1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

05/26/2028

      

1,719

  

1,685

(e)(f)​

    

Confirmasoft AB

   Sweden

   1st Lien Delay
Draw Loan		   11.46% (3M
NIBOR +
6.75%)		  

06/03/2027

      

€

1,502

  

1,658

(e)(h)​

    

Confirmasoft AB

  

Sweden

   1st Lien Delay
Draw Loan		   10.71% (3M
EURIBOR +
6.75%)		  

06/03/2027

      

€

1,995

  

2,202

(e)(f)​

    

Annual Report 2023
58

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Confirmasoft AB

  

Sweden

   1st Lien Delay
Draw Loan		   10.93% (3M
EURIBOR +
7.00%)		  

06/03/2027

      

€

53

  

$

59

(e)(h)​

    
Conservice
Midco, LLC		       2nd Lien Term
Loan		   13.21% (1M
SOFR +
7.75%)		  

05/15/2028

      

25,955

  

25,955

(e)(f)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien
Revolving
Loan		   11.25% (3M
SOFR +
5.75%)		  

05/26/2028

      

101

  

99

(e)(h)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien
Term Loan		   11.25% (3M
SOFR +
5.75%)		  

05/26/2028

      

6,720

  

6,586

(e)(f)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien
Term Loan		   10.19% (3M
EURIBOR +
6.25%)		  

05/26/2028

      

€

1,984

  

2,168

(e)(f)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien Term
Loan		   11.25% (3M
SOFR +
5.75%)		  

05/26/2028

      

1,684

  

1,651

(e)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien Term
Loan		   10.19% (3M
EURIBOR +
6.25%)		  

05/26/2028

      

€

171

  

187

(e)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   10.19% (3M
EURIBOR +
6.25%)		  

05/26/2028

      

€

69

  

75

(e)(h)​

    
Consilio Midco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   10.20% (3M
EURIBOR +
6.25%)		  

05/26/2028

      

€

31

  

34

(e)​

    
Cority Software
(USA) Inc.		       1st Lien Term
Loan		   10.39% (3M
SOFR +
5.00%)		  

07/02/2026

      

1,605

  

1,605

(e)(f)​

    
Cority Software
(USA) Inc.		       1st Lien Term
Loan		   12.39% (3M
SOFR +
7.00%)		  

07/02/2026

      

137

  

137

(e)(f)​

    
Cority Software
(USA) Inc.		       1st Lien Term
Loan		   11.39% (3M
SOFR +
6.00%)		  

07/02/2026

      

905

  

905

(e)​

    
Cority Software
Inc.		   Canada
   1st Lien
Revolving
Loan		    

07/02/2025

      

—

  

—

(e)(h)​

    
Cority Software
Inc.		   Canada
   1st Lien Term
Loan		   10.39% (3M
SOFR +
5.00%)		  

07/02/2026

      

1,834

  

1,834

(e)(f)​

    
Cornerstone
OnDemand, Inc.		       1st Lien
Revolving
Loan		    

10/15/2026

      

—

  

—

(e)(h)​

    
Cornerstone
OnDemand, Inc.		       2nd Lien Term
Loan		   11.97% (1M
SOFR +
6.50%)		  

10/15/2029

      

17,522

  

16,821

(e)​

    
Coupa Holdings,
LLC		     1st Lien
Revolving
Loan		    

02/27/2029

      

—

  

—

(e)(h)​

    

Annual Report 2023
59

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Coupa Holdings,
LLC		       1st Lien Term
Loan		   12.86% (1M
SOFR +
7.50%)		  

02/27/2030

      

$

229

  

$

229

(e)​

    
Coupa Holdings,
LLC		       1st Lien Delay
Draw Loan		    

02/27/2030

      

—

  

—

(e)(h)​

    
Datix Bidco
Limited		   United
Kingdom		   1st Lien Term
Loan		   9.94% (6M
SOFR +
4.50%)		  

04/28/2025

      

3,009

  

3,009

(e)(f)​

    
Datix Bidco
Limited		   United
Kingdom		   2nd Lien Term
Loan		   13.19% (6M
SOFR +
7.75%)		  

04/27/2026

      

1,884

  

1,884

(e)​

    
Datix Bidco
Limited		   United
Kingdom		   1st Lien Delay
Draw Loan		   9.94% (6M
SOFR +
4.50%)		  

04/28/2025

      

—

  

—

(e)​

    
DCert Buyer,
Inc.		     1st Lien Term
Loan		   9.36% (1M
SOFR +
4.00%)		  

10/16/2026

      

10,817

  

10,704

(f)​

    
DCert Buyer,
Inc.		       2nd Lien Term
Loan		   12.36% (1M
SOFR +
7.00%)		  

02/16/2029

      

5,691

  

5,634

(e)(f)​

    
Denali Holdco
LLC		     1st Lien
Revolving
Loan		    

09/15/2027

      

—

  

—

(e)(h)​

    
Denali Holdco
LLC		     1st Lien Term
Loan		   10.96% (1M
SOFR +
5.50%)		  

09/15/2027

      

4,142

  

4,142

(e)(f)​

    
Denali Holdco
LLC		     1st Lien Delay
Draw Loan		   11.04% (3M
SOFR +
5.50%)		  

09/15/2027

      

87

  

87

(e)(h)​

    
Diligent
Corporation		     1st Lien
Revolving
Loan		   11.76% (3M
SOFR +
6.25%)		  

08/04/2025

      

277

  

277

(e)(h)​

    
Diligent
Corporation		     1st Lien Term
Loan		   11.78% (3M
SOFR +
6.25%)		  

08/04/2025

      

2,989

  

2,989

(e)(f)​

    
Diligent
Corporation		     1st Lien Term
Loan		   11.28% (3M
SOFR +
5.75%)		  

08/04/2025

      

2,211

  

2,210

(e)(f)​

    
Diligent
Corporation		     1st Lien Term
Loan		   11.78% (3M
SOFR +
6.25%)		  

08/04/2025

      

478

  

478

(e)​

    

Doxim Inc.

     1st Lien Term
Loan		   13.46% (1M
SOFR +
8.00%)		  

05/31/2026

      

6,170

  

6,170

(e)(f)​

    

Doxim Inc.

     1st Lien Term
Loan		   12.46% (1M
SOFR +
7.00%)		  

05/31/2026

      

811

  

803

(e)(f)​

   

Doxim Inc.

     1st Lien Term
Loan		   12.21% (1M
SOFR +
6.75%)		  

05/31/2026

      

3,353

  

3,320

(e)(f)​

    

Annual Report 2023
60

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Doxim Inc.

     First Lien Last
Out Term Loan		   11.86% (1M
SOFR +
6.40%)		  

05/31/2026

      

$

710

  

$

703

(e)(f)​

    

Doxim Inc.

     First Lien Last
Out Delay Draw SOFR +
Loan		   11.86% (1M
6.40%)		  

05/31/2026

      

325

  

322

(e)​

    
DS Admiral
Bidco, LLC		       1st Lien
Revolving
Loan		   11.85% (3M
SOFR +
6.50%)		  

03/16/2026

      

72

  

72

(e)(h)​

    
DS Admiral
Bidco, LLC		       1st Lien Term
Loan		   11.85% (3M
SOFR +
6.50%)		  

03/16/2028

      

2,377

  

2,377

(e)(f)​

    
Dye & Durham
Corporation		  

Canada

   1st Lien
Revolving
Loan		   11.20% (3M
CDOR +
5.75%)		  

12/03/2026

      

CAD

664

  

501

(e)(h)​

    
Dye & Durham
Corporation		  

Canada

   1st Lien Term
Loan		   11.21% (3M
CDOR +
5.75%)		  

12/03/2027

      

CAD

6,711

  

5,065

(e)(f)​

    
Dye & Durham
Corporation		  

Canada

   1st Lien Delay
Draw Loan		   11.21% (3M
CDOR +
5.75%)		  

12/03/2027

      

CAD

1,496

  

1,129

(e)​

    
Echo Purchaser,
Inc.		     1st Lien
Revolving
Loan		   10.86% (3M
SOFR +
5.50%)		  

11/19/2029

      

9

  

8

(e)(g)(h)​

    
Echo Purchaser,
Inc.		       1st Lien Term
Loan		   10.87% (6M
SOFR +
5.50%)		  

11/19/2029

      

1,845

  

1,808

(e)(g)​

    
Echo Purchaser,
Inc.		       1st Lien Delay
Draw Loan		    

11/19/2029

      

—

  

—

(e)(g)(h)​

    
Elemica Parent,
Inc.		     1st Lien
Revolving
Loan		   11.03% (3M
SOFR +
5.50%)		  

09/18/2025

      

479

  

464

(e)​

    
Elemica Parent,
Inc.		       1st Lien Term
Loan		   11.03% (3M
SOFR +
5.50%)		  

09/18/2025

      

3,633

  

3,633

(e)(f)​

    
Elemica Parent,
Inc.		       1st Lien Delay
Draw Loan		   11.03% (3M
SOFR +
5.50%)		  

09/18/2025

      

2,760

  

2,760

(e)(f)​

    
Enigma
Acquisition B.V.		   Netherlands

   1st Lien Delay
Draw Loan		   11.64% (6M
EURIBOR +
7.50%)		  

01/26/2028

      

€

4,291

  

4,737

(e)(f)​

    
Enverus
Holdings, Inc.		       1st Lien
Revolving
Loan		    

12/24/2029

      

—

  

—

(e)(h)​

    
Enverus
Holdings, Inc.		       1st Lien Term
Loan		   10.86% (6M
SOFR +
5.50%)		  

12/24/2029

      

8,762

  

8,587

(e)​

    
Enverus
Holdings, Inc.		       1st Lien Delay
Draw Loan		    

12/24/2029

      

—

  

—

(e)(h)​

    

Annual Report 2023
61

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Epicor Software
Corporation		     1st Lien Term
Loan		   8.72% (1M
SOFR +
3.25%)		  

07/30/2027

      

$

7,035

  

$

7,053

    
eResearch
Technology, Inc.		       1st Lien Term
Loan		   9.97% (1M
SOFR +
4.50%)		  

02/04/2027

      

997

  

995

(f)​

    
eResearch
Technology, Inc.		       2nd Lien Term
Loan		   13.46% (1M
SOFR +
8.00%)		  

02/04/2028

      

9,193

  

9,192

(e)(f)​

    
eResearch
Technology, Inc.		       2nd Lien Delay
Draw Loan		   13.46% (1M
SOFR +
8.00%)		  

02/04/2028

      

672

  

672

(e)​

    
ESHA Research,
LLC		       1st Lien
Revolving
Loan		   11.73% (6M
SOFR +
6.25%)		  

06/08/2028

      

55

  

53

(e)(h)​

    
ESHA Research,
LLC		     1st Lien Term
Loan		   11.76% (3M
SOFR +
6.25%)		  

06/08/2028

      

480

  

466

(e)(f)​

    
ExtraHop
Networks, Inc.		       1st Lien Term
Loan		   12.96% (1M
SOFR +
7.50%)		  

07/22/2027

      

2,000

  

2,000

(e)​

    
ExtraHop
Networks, Inc.		     1st Lien Delay
Draw Loan		   12.96% (1M
SOFR +
7.50%)		  

07/22/2027

      

622

  

622

(e)(h)​

    
ExtraHop
Networks, Inc.		     1st Lien Delay
Draw Loan		    

07/22/2027

      

—

  

—

(e)(h)​

   
Finastra USA,
Inc.		     1st Lien
Revolving
Loan		    

09/13/2029

      

—

  

—

(e)(h)​

    
Finastra USA,
Inc.		     1st Lien Term
Loan		   12.71% (3M
SOFR +
7.25%)		  

09/13/2029

      

18,908

  

18,719

(e) ​

    
Flexential Topco
Corporation		     1st Lien
Revolving
Loan		   12.00
(Fixed +
26.00%)% 		 

08/25/2027

      

2,400

  

2,560

(e)(h)​

    
Flexera
Software LLC		     1st Lien Term
Loan		   9.22% (1M
SOFR +
3.75%)		  

03/03/2028

      

6,844

  

6,830

    
Gainwell
Acquisition
Corp.		     1st Lien Term
Loan		   9.45% (3M
SOFR +
4.00%)		  

10/01/2027

      

6,953

  

6,745

    
Gilfoyle
Bidco AB		  

Sweden

   1st Lien Term
Loan		   13.16% (6M
STIBOR +
9.00%)		  

09/04/2028

      

SEK

63,007

  

6,059

(e)(g)​

    
Gilfoyle
Bidco AB		  

Sweden

   1st Lien Delay
Draw Loan		   13.16% (6M
STIBOR +
9.00%)		  

09/04/2028

      

SEK

10,699

  

1,029

(e)(g)(h)​

    
GraphPAD
Software, LLC		     1st Lien
Revolving
Loan		   13.50%
(PRIME +
5.00%)		  

04/27/2027

      

1

  

1

(e)(h)​

    

Annual Report 2023
62

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
GraphPAD
Software, LLC		     1st Lien Term
Loan		   11.72% (6M
SOFR +
6.00%)		  

04/27/2027

      

$

4,626

  

$

4,626

(e)(f)​

    
GraphPAD
Software, LLC		     1st Lien Term
Loan		   11.19% (3M
SOFR +
5.50%)		  

04/27/2027

      

1

  

1

(e)(f)​

    
GraphPAD
Software, LLC		     1st Lien Term
Loan		   11.22% (3M
SOFR +
5.50%)		  

04/27/2027

      

1,103

  

1,092

(e)(f)​

    
GraphPAD
Software, LLC		     1st Lien Term
Loan		   11.13% (6M
SOFR +
5.50%)		  

04/27/2027

      

855

  

846

(e)(f)​

    
GraphPAD
Software, LLC		       1st Lien Delay
Draw Loan		   11.13% (3M
SOFR +
5.50%)		  

04/27/2027

      

436

  

432

(e)​

    
Guidepoint
Security
Holdings, LLC		     1st Lien
Revolving
Loan		    

10/02/2029

      

—

  

—

(e)(h)​

    
Guidepoint
Security
Holdings, LLC		     1st Lien Term
Loan		   11.38% (3M
SOFR +
6.00%)		  

10/02/2029

      

1,143

  

1,120

(e)​

    
Guidepoint
Security
Holdings, LLC		     1st Lien Delay
Draw Loan		    

10/02/2029

      

—

  

—

(e)(h)​

    
Hakken
Bidco B.V.		  

Netherlands

   1st Lien Term
Loan		   10.94% (3M
EURIBOR +
7.00%)		  

01/26/2030

      

€

3,060

  

3,378

(e)​

    
Hakken
Bidco B.V.		  

Netherlands

   1st Lien Delay
Draw Loan		   10.97% (3M
EURIBOR +
7.00%)		  

07/26/2030

      

€

358

  

395

(e)(h)​

    
Heavy
Construction
Systems
Specialists, LLC		     1st Lien
Revolving
Loan		    

11/16/2027

      

—

  

—

(e)(h)​

    
Heavy
Construction
Systems
Specialists, LLC		     1st Lien Term
Loan		   10.86% (1M
SOFR +
5.50%)		  

11/16/2028

      

4,116

  

4,116

(e)(f)​

    
Help/Systems
Holdings, Inc.		     1st Lien Term
Loan		   9.48% (3M
SOFR +
4.00%)		  

11/19/2026

      

15,729

  

14,870

(f)​

    
Help/Systems
Holdings, Inc.		     2nd Lien
Term Loan		   12.35% (3M
SOFR +
6.75%)		  

11/19/2027

      

2,360

  

1,908

(f)​

    
Hyland
Software, Inc.		     1st Lien
Revolving
Loan		    

09/19/2029

      

—

  

—

(e)(h)​

    
Hyland
Software, Inc.		     1st Lien Term
Loan		   11.36% (1M
SOFR +
6.00%)		  

09/19/2030

      

9,682

  

9,537

(e)​

    
Idemia Group
S.A.S.		   France
   1st Lien Term
Loan		    

09/30/2028

      

€

7,000

  

7,725

(i)​

    

Annual Report 2023
63

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Idera, Inc.

     1st Lien Term
Loan		   9.28% (3M
SOFR +
3.75%)		  

03/02/2028

      

$

5,576

  

$

5,540

(f)​

    

Idera, Inc.

     2nd Lien Term
Loan		   12.28% (3M
SOFR +
6.75%)		  

03/02/2029

      

3,567

  

3,465

    

Imprivata, Inc.

     2nd Lien Term
Loan		   11.60% (3M
SOFR +
6.25%)		  

12/01/2028

      

6,384

  

6,256

(e)(f)​

    
IQN Holding
Corp.		     1st Lien
Revolving
Loan		    

05/02/2028

      

—

  

—

(e)(h)​

    
IQN Holding
Corp.		     1st Lien Term
Loan		   10.64% (3M
SOFR +
5.25%)		  

05/02/2029

      

6,772

  

6,636

(e)(f)​

    
IQN Holding
Corp.		     1st Lien Delay
Draw Loan		    

05/02/2029

      

—

  

—

(e)(h)​

    
Ivanti Software,
Inc.		     1st Lien
Revolving
Loan		   11.00%
(PRIME +
2.50%)		  

12/01/2025

      

21

  

20

(e)(h)​

    
Ivanti Software,
Inc.		     2nd Lien Term
Loan		   12.91% (3M
SOFR +
7.25%)		  

12/01/2028

      

5,000

  

4,000

    

Kaseya Inc.

     1st Lien
Revolving
Loan		   10.36% (1M
SOFR +
6.00%)		  

06/25/2029

      

598

  

598

(e)(g)(h)​

    

Kaseya Inc.

     1st Lien Term
Loan		   11.38% (3M
SOFR +
6.00%)		  

06/25/2029

      

39,390

  

39,390

(e)(f)(g)​

    

Kaseya Inc.

     1st Lien Delay
Draw Loan		   11.38% (3M
SOFR +
6.00%)		  

06/25/2029

      

145

  

145

(e)(g)(h)​

    
LeanTaaS
Holdings, Inc.		       1st Lien Term
Loan		   12.86% (1M
SOFR +
7.50%)		  

07/12/2028

      

2,635

  

2,635

(e)​

    
LeanTaaS
Holdings, Inc.		     1st Lien Delay
Draw Loan		   12.86% (1M
SOFR +
7.50%)		  

07/12/2028

      

351

  

351

(e)(h)​

    
LeanTaaS
Holdings, Inc.		     1st Lien Delay
Draw Loan		   12.86% (3M
SOFR +
7.50%)		  

07/12/2028

      

780

  

780

(e)(h)​

    

Majesco

     1st Lien
Revolving
Loan		    

09/21/2026

      

—

  

—

(e)(h)​

    

Majesco

     1st Lien Term
Loan		   12.60% (3M
SOFR +
7.25%)		  

09/21/2027

      

7,831

  

7,831

(e)(f)​

    
Maltese Bidco 1
Limited		   United
Kingdom		   1st Lien Term
Loan		   10.50% (3M
EURIBOR +
6.50%)		  

02/14/2029

      

€

3,600

  

3,974

(e)(f)(g)​

      

Annual Report 2023
64

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
MH Sub I, LLC
(Micro Holding
Corp.)		     1st Lien Term
Loan		   9.61% (1M
SOFR +
4.25%)		  

05/03/2028

      

$

9,666

  

$

9,488

    
Mimecast
Borrowerco, Inc.		     1st Lien Term
Loan		   11.21% (1M
SOFR +
5.75%)		  

05/18/2029

      

38,086

  

38,086

(e)(f)(g)​

    
Mimecast
Borrowerco, Inc.		     1st Lien Term
Loan		   10.94% (3M
SONIA +
5.75%)		  

05/18/2029

      

£

6,965

  

8,878

(e)(f)(g)​

    
Mimecast
Borrowerco, Inc.		     1st Lien Delay
Draw Loan		    

05/18/2029

      

—

  

—

(e)(g)(h)​

    
Mitchell
International,
Inc.		     1st Lien Term
Loan		   9.40% (3M
SOFR +
3.75%)		  

10/15/2028

      

100

  

99

    
Mitchell
International,
Inc.		     1st Lien Term
Loan		   9.40% (3M
SOFR +
3.75%)		  

10/16/2028

      

9,975

  

9,958

    
Mitchell
International,
Inc.		     2nd Lien Term
Loan		   12.15% (3M
SOFR +
6.50%)		  

10/15/2029

      

12,252

  

11,999

    
MRI Software
LLC		     1st Lien
Revolving
Loan		    

02/10/2027

      

—

  

—

(e)(h)​

    
MRI Software
LLC		     1st Lien Term
Loan		   10.95% (3M
SOFR +
5.50%)		  

02/10/2027

      

7,169

  

7,098

(e)(f)​

    
MRI Software
LLC		     1st Lien Term
Loan		   10.95% (3M
SOFR +
5.50%)		  

02/10/2027

      

2,699

  

2,672

(e)(g)​

    
MRI Software
LLC		     1st Lien Delay
Draw Loan		    

02/10/2027

      

—

  

—

(e)(h)​

    

Netsmart, Inc.

     1st Lien Term
Loan		   9.22% (1M
SOFR +
3.75%)		  

10/01/2027

      

7,571

  

7,575

    

Open Text Corp

  

Canada

   1st Lien Term
Loan		   8.21% (1M
SOFR +
2.75%)		  

01/31/2030

      

12,627

  

12,648

    

OpenMarket Inc.

     1st Lien Term
Loan		   11.86% (3M
SOFR +
6.25%)		  

09/17/2026

      

6,888

  

6,888

(e)(f)​

    
Park Place
Technologies,
LLC		     1st Lien Term
Loan		   10.46% (1M
SOFR +
5.00%)		  

11/10/2027

      

1,735

  

1,723

(f)​

    
Park Place
Technologies,
LLC		     2nd Lien Term
Loan		   14.46% (1M
SOFR +
9.00%)		  

11/10/2028

      

9,474

  

9,474

(e)(f)​

    
PDDS Holdco,
Inc.		       1st Lien
Revolving
Loan		   13.10% (6M
SOFR +
7.50%)		  

07/18/2028

      

17

  

18

(e)(h)​

    

Annual Report 2023
65

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
PDDS Holdco,
Inc.		     1st Lien Term
Loan		   12.96% (3M
SOFR +
7.50%)		  

07/18/2028

      

$

733

  

$

733

(e)​

    
PDDS Holdco,
Inc.		       1st Lien Delay
Draw Loan		   12.96% (6M
SOFR +
7.50%)		  

07/18/2028

      

70

  

70

(e)​

    
PDDS Holdco,
Inc.		     1st Lien Delay
Draw Loan		   12.96% (6M
SOFR +
7.50%)		  

07/18/2028

      

162

  

162

(e)(g)(h)​

    
PDI TA Holdings,
Inc.		     1st Lien
Revolving
Loan		   10.02% (3M
SOFR +
4.50%)		  

10/24/2024

      

205

  

203

(e)​

    
PDI TA Holdings,
Inc.		     1st Lien Term
Loan		   10.07% (3M
SOFR +
4.50%)		  

10/24/2024

      

2,323

  

2,299

(e)(f)​

    
PDI TA Holdings,
Inc.		     2nd Lien Term
Loan		   14.02% (3M
SOFR +
8.50%)		  

10/24/2025

      

1,215

  

1,215

(e)​

    
PDI TA Holdings,
Inc.		     2nd Lien Term
Loan		   14.02% (3M
SOFR +
8.50%)		  

10/24/2025

      

131

  

131

(e)(f)​

    
PDI TA Holdings,
Inc.		     2nd Lien Term
Loan		   14.23% (3M
SOFR +
8.71%)		  

10/24/2025

      

114

  

114

(e)(f)​

    
PDI TA Holdings,
Inc.		     2nd Lien
Delay Draw
Loan		   14.05% (3M
SOFR +
8.53%)		  

10/24/2025

      

138

  

138

(e)​

    

Pluralsight, Inc.

     1st Lien
Revolving
Loan		   13.52% (3M
SOFR +
8.00%)		  

04/06/2027

      

936

  

833

(e)(h)​

    

Pluralsight, Inc.

     1st Lien Term
Loan		   13.56% (3M
SOFR +
8.00%)		  

04/06/2027

      

16,506

  

14,690

(e)​

    
PracticeTek
Purchaser, LLC		     1st Lien
Revolving
Loan		   9.86% (1M
SOFR +
4.50%)		  

08/30/2029

      

1

  

—

(e)(h)​

    
PracticeTek
Purchaser, LLC		     1st Lien Term
Loan		   11.36% (1M
SOFR +
6.00%)		  

08/30/2029

      

7,597

  

7,407

(e)​

    
PracticeTek
Purchaser, LLC		     1st Lien
Delay Draw
Loan		    

08/30/2029

      

—

  

—

(e)(h)​

    
Precisely
Software
Incorporated
(f/k/a Syncsort
Incorporated)		     1st Lien Term
Loan		   9.64% (3M
SOFR +
4.00%)		  

04/24/2028

      

13,264

  

13,118

(f)​

    
ProfitSolv
Purchaser, Inc.		     1st Lien
Revolving
Loan		    

03/05/2027

      

—

  

—

(e)(h)​

    

Annual Report 2023
66

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
ProfitSolv
Purchaser, Inc.		     1st Lien Term
Loan		   10.46% (1M
SOFR +
5.00%)		  

03/05/2027

      

$

3,728

  

$

3,728

(e)(f)​

    
ProfitSolv
Purchaser, Inc.		     1st Lien
Delay Draw
Loan		   10.46% (1M
SOFR +
5.00%)		  

03/05/2027

      

1,331

  

1,330

(e)​

    
Project
Accelerate
Parent LLC		     1st Lien Term
Loan		   9.89% (3M
SOFR +
4.25%)		  

01/02/2025

      

10,497

  

10,471

    
Project Boost
Purchaser, LLC		     1st Lien Term
Loan		   8.97% (1M
SOFR +
3.50%)		  

05/30/2026

      

8,954

  

8,947

    
Project Boost
Purchaser, LLC		     1st Lien Term
Loan		   8.97% (1M
SOFR +
3.50%)		  

06/01/2026

      

4,867

  

4,866

    
Project
Essential
Bidco, Inc.		     1st Lien
Revolving
Loan		    

04/20/2027

      

—

  

—

(e)(h)​

    
Project
Essential
Bidco, Inc.		     1st Lien Term
Loan		   11.78% (3M
SOFR +
6.25%)		  

04/20/2028

      

4,100

  

3,772

(e)(f)​

    

Proofpoint, Inc.

     1st Lien
Revolving
Loan		    

08/31/2026

      

—

  

—

(e)(h)​

    

Proofpoint, Inc.

     1st Lien Term
Loan		   8.72% (1M
SOFR +
3.25%)		  

08/31/2028

      

11,864

  

11,852

    

Proofpoint, Inc.

     2nd Lien Term
Loan		   11.72% (1M
SOFR +
6.25%)		  

08/31/2029

      

5,156

  

5,156

(e)​

    
Pushpay USA
Inc.		     1st Lien
Revolving
Loan		    

05/10/2029

      

—

  

—

(e)(h)​

    
Pushpay USA
Inc.		     1st Lien Term
Loan		   12.28% (3M
SOFR +
6.75%)		  

05/10/2030

      

232

  

229

(e)​

    
QF Holdings,
Inc.		     1st Lien
Revolving
Loan		    

12/15/2027

      

—

  

—

(e)(h)​

    
QF Holdings,
Inc.		     1st Lien Term
Loan		   11.73% (3M
SOFR +
6.25%)		  

12/15/2027

      

2,099

  

2,099

(e)​

    
QF Holdings,
Inc.		     1st Lien Term
Loan		   11.73% (3M
SOFR +
6.25%)		  

12/15/2027

      

2,500

  

2,500

(e)(f)​

    
QF Holdings,
Inc.		     1st Lien
Delay Draw
Loan		   11.73% (3M
SOFR +
6.25%)		  

12/15/2027

      

525

  

524

(e)​

    
Quest Software
US Holdings
Inc.		     1st Lien Term
Loan		   9.78% (3M
SOFR +
4.25%)		  

02/01/2029

      

8,589

  

6,526

    

Annual Report 2023
67

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Quest Software
US Holdings
Inc.		     2nd Lien Term
Loan		   13.03% (3M
SOFR +
7.50%)		  

02/01/2030

      

$

686

  

$

405

    
Raptor
Technologies,
LLC (Sycamore
Bidco Ltd)		     1st Lien
Revolving
Loan		    

10/05/2027

      

—

  

—

(e)(h)​

    
Raptor
Technologies,
LLC (Sycamore
Bidco Ltd)		     1st Lien Term
Loan		   10.97% (3M
SOFR +
5.63%)		  

10/05/2028

      

3,175

  

3,175

(e)(f)​

    
Raptor
Technologies,
LLC (Sycamore
Bidco Ltd)		     1st Lien Term
Loan		   10.97% (3M
SOFR +
5.63%)		  

10/05/2028

      

2,779

  

2,780

(e)​

    

RealPage, Inc.

     2nd Lien Term
Loan		   11.97% (1M
SOFR +
6.50%)		  

04/23/2029

      

9,423

  

9,423

(e)(f)​

    

Relativity ODA LLC

     1st Lien
Revolving
Loan		    

05/12/2027

      

—

  

—

(e)(g)(h)​

    

Relativity ODA LLC

     1st Lien Term
Loan		   11.96% (1M
SOFR +
6.50%)		  

05/12/2027

      

7,543

  

7,543

(e)(g)​

    

Revalize, Inc.

     1st Lien
Revolving
Loan		   11.20% (1M
SOFR +
5.75%)		  

04/15/2027

      

57

  

54

(e)(h)​

    

Revalize, Inc.

     1st Lien
Delay Draw
Loan		   11.21% (3M
SOFR +
5.75%)		  

04/15/2027

      

2,918

  

2,772

(e)​

    
RMS Holdco II,
LLC		     1st Lien
Revolving
Loan		    

12/16/2027

      

—

  

—

(e)(h)​

    
RMS Holdco II,
LLC		     1st Lien Term
Loan		   11.75% (3M
SOFR +
6.25%)		  

12/16/2027

      

7,085

  

6,872

(e)(f)​

    
Sedgwick
Claims
Management
Services, Inc.
(Lightning
Cayman Merger
Sub, Ltd.)		     1st Lien Term
Loan		   9.11% (1M
SOFR +
3.75%)		  

02/24/2028

      

7,520

  

7,538

    

Smarsh Inc.

     1st Lien
Revolving
Loan		    

02/16/2029

      

—

  

—

(e)(h)​

    

Smarsh Inc.

     1st Lien Term
Loan		   11.10% (3M
SOFR +
5.75%)		  

02/16/2029

      

3,561

  

3,561

(e)(f)​

    

Smarsh Inc.

     1st Lien
Delay Draw
Loan		   11.10% (3M
SOFR +
5.75%)		  

02/16/2029

      

445

  

445

(e)(h)​

    

Annual Report 2023
68

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Sophia, L.P.

     1st Lien Term
Loan		   8.96% (1M
SOFR +
3.50%)		  

10/07/2027

      

$

10,502

  

$

10,512

    

Sophia, L.P.

     1st Lien Term
Loan		   9.61% (1M
SOFR +
4.25%)		  

10/07/2027

      

983

  

980

    

Sophia, L.P.

     2nd Lien Term
Loan		   13.46% (1M
SOFR +
8.00%)		  

10/09/2028

      

10,498

  

10,498

(e)(f)​

    

Storable, Inc.

     2nd Lien Term
Loan		   11.93% (6M
SOFR +
6.75%)		  

04/16/2029

      

9,527

  

9,432

(e)(f)​

    
Sundance
Group Holdings,
Inc.		     1st Lien
Revolving
Loan		   11.73% (3M
SOFR +
6.25%)		  

07/02/2027

      

1

  

1

(e)(h)​

    
Sundance
Group Holdings,
Inc.		     1st Lien Term
Loan		   11.73% (3M
SOFR +
6.25%)		  

07/02/2027

      

1,510

  

1,510

(e)(f)​

    
Sundance
Group Holdings,
Inc.		     1st Lien Term
Loan		   11.74% (3M
SOFR +
6.25%)		  

07/02/2027

      

81

  

81

(e)​

    
Sundance
Group Holdings,
Inc.		     1st Lien
Delay Draw
Loan		   11.73% (3M
SOFR +
6.25%)		  

07/02/2027

      

453

  

453

(e)​

    
TCP Hawker
Intermediate
LLC		     1st Lien
Revolving
Loan		    

08/28/2026

      

—

  

—

(e)(h)​

    
TCP Hawker
Intermediate
LLC		     1st Lien Term
Loan		   11.00% (3M
SOFR +
5.50%)		  

08/28/2026

      

2,707

  

2,707

(e)(f)​

    
TCP Hawker
Intermediate
LLC		     1st Lien Term
Loan		   11.50% (3M
SOFR +
6.00%)		  

08/28/2026

      

1,235

  

1,235

(e)​

    
TCP Hawker
Intermediate
LLC		     1st Lien
Delay Draw
Loan		   11.00% (3M
SOFR +
5.50%)		  

08/28/2026

      

966

  

965

(e)(f)​

    
TCP Hawker
Intermediate
LLC		     1st Lien
Delay Draw
Loan		   11.00% (3M
SOFR +
5.50%)		  

08/28/2026

      

911

  

911

(e)​

    
TCP Hawker
Intermediate
LLC		     1st Lien
Delay Draw
Loan		    

08/28/2026

      

—

  

—

(e)(h)​

    
Tiger UK Bidco
Limited		   United
Kingdom		   1st Lien
Delay Draw
Loan		   11.75% (3M
SONIA +
6.42%)		  

06/30/2028

      

£

5,529

  

7,047

(e)(f)​

    
Tiger UK Bidco
Limited		   United
Kingdom		   1st Lien
Delay Draw
Loan		   11.75% (3M
SONIA +
6.42%)		  

06/30/2028

      

£

1,464

  

1,866

(e)​

    

UKG Inc.

     1st Lien
Revolving
Loan		   9.11% (1M
SOFR +
3.75%)		  

02/01/2026

      

—

  

—

(e)(h)​

    

Annual Report 2023
69

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
UserZoom
Technologies,
Inc.		     1st Lien Term
Loan		   12.99% (3M
SOFR +
7.50%)		  

04/05/2029

      

$

250

  

$

247

(e)​

    

WebPT, Inc.

     1st Lien
Revolving
Loan		   12.22% (3M
SOFR +
6.75%)		  

01/18/2028

      

52

  

51

(e)(h)​

    

WebPT, Inc.

     1st Lien Term
Loan		   12.24% (3M
SOFR +
6.75%)		  

01/18/2028

      

2,042

  

2,042

(e)​

    
Wellness
AcquisitionCo,
Inc.		     1st Lien
Revolving
Loan		    

01/20/2027

      

—

  

—

(e)(h)​

    
Wellness
AcquisitionCo,
Inc.		     1st Lien Term
Loan		   10.99% (3M
SOFR +
5.50%)		  

01/20/2027

      

3,032

  

3,032

(e)(f)​

    
Wellness
AcquisitionCo,
Inc.		     1st Lien
Delay Draw
Loan		    

01/20/2027

      

—

  

—

(e)(h)​

    
WorkWave
Intermediate II,
LLC		     1st Lien
Revolving
Loan		    

06/29/2027

      

—

  

—

(e)(h)​

    
WorkWave
Intermediate II,
LLC		     1st Lien Term
Loan		   11.95% (3M
SOFR +
6.50%)		  

06/29/2027

      

4,746

  

4,746

(e)​

    
WorkWave
Intermediate II,
LLC		     1st Lien
Delay Draw
Loan		   11.95% (3M
SOFR +
6.50%)		  

06/29/2027

      

1,550

  

1,550

(e)​

    
WorkWave
Intermediate II,
LLC		     1st Lien
Delay Draw
Loan		   11.95% (3M
SOFR +
6.50%)		  

06/29/2027

      

1,649

  

1,649

(e)(g)​

    
WSBidCo
Limited		  

Jersey

   1st Lien Term
Loan		   12.06% (3M
SONIA +
6.75%)		  

06/16/2028

      

£

2,679

  

3,414

(e)(f)(g)​

    
WSBidCo
Limited		  

Jersey

   1st Lien
Delay Draw
Loan		   12.56% (3M
SONIA +
7.25%)		  

06/16/2028

      

£

2,679

  

3,414

(e)(g)​

    
WSBidCo
Limited		  

Jersey

   1st Lien
Delay Draw
Loan		   12.06% (3M
SONIA +
6.75%)		  

06/16/2028

      

£

769

  

981

(e)(g)(h)​

    
                                     

837,753

      

26.10

%

  

Technology Hardware and Equipment

  
Chariot Buyer
LLC		     1st Lien
Revolving
Loan 		   

11/03/2026

      

—

  

—

(e)(h)​

    
Chariot Buyer
LLC		       2nd Lien Term
Loan		   12.21% (1M
SOFR +
6.75%)		  

11/05/2029

      

13,775

  

13,637

(e)(f)​

    
Emerald Debt
Merger Sub LLC		       1st Lien Term
Loan 		  8.36% (1M
SOFR +
3.00%)		  

05/31/2030

      

6,159

  

6,177

    

Annual Report 2023
70

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
FL Hawk
Intermediate
Holdings, Inc.		  
  1st Lien
Revolving
Loan		    

02/22/2027

      

$

—

  

$

—

(e)(h)​

    
FL Hawk
Intermediate
Holdings, Inc.		       1st Lien Term
Loan		   10.36% (3M
SOFR +
4.75%)		  

02/22/2028

      

7,177

  

7,177

(e)(f)​

    
Micromeritics
Instrument
Corp.		       1st Lien
Revolving
Loan		    

12/18/2025

      

—

  

—

(e)(h)​

    
Micromeritics
Instrument
Corp.		       1st Lien Term
Loan		   9.93% (3M
SOFR +
4.50%)		  

12/18/2025

      

1,488

  

1,488

(e)(f)​

    
MWG BidCo
ApS		   Denmark
   1st Lien Term
Loan		   10.70% (3M
CIBOR +
6.75%)		  

02/29/2028

      

DKK

20,066

  

2,972

(e)​

    
MWG BidCo
ApS		   Denmark
   1st Lien
Delay Draw
Loan		   10.68% (3M
LIBOR +
6.75%)		  

02/29/2028

      

DKK

4,660

  

690

(e)(h)​

    
MWG BidCo
ApS		   Denmark
   1st Lien
Delay Draw
Loan		    

02/29/2028

      

DKK

—

  

—

(e)(h)(i)​

    

Repairify, Inc.

       1st Lien
Revolving
Loan		   10.70% (3M
SOFR +
5.00%)		  

06/14/2027

      

510

  

500

(e)(h)​

    

Repairify, Inc.

       1st Lien Term
Loan		   10.43% (6M
SOFR +
5.00%)		  

06/14/2027

      

3,490

  

3,420

(e)(f)​

    
Stellant Midco,
LLC		       1st Lien Term
Loan		   11.04% (3M
SOFR +
5.5%)		  

10/02/2028

      

1,590

  

1,590

(e)(f)​

    
TCG
AcquisitionCo
B.V.		   Netherlands

   1st Lien Term
Loan		    

09/14/2028

      

€

7,000

  

7,676

(i)​

    
Wildcat
BuyerCo, Inc.		       1st Lien
Revolving
Loan		    

02/26/2027

      

—

  

—

(e)(h)​

    
Wildcat
BuyerCo, Inc.		       1st Lien Term
Loan		   11.10% (3M
SOFR +
5.75%)		  

02/26/2027

      

3,528

  

3,528

(e)(f)​

    
Wildcat
BuyerCo, Inc.		       1st Lien Term
Loan		   11.13% (6M
SOFR +
5.75%)		  

02/26/2027

      

675

  

675

(e)​

    
Wildcat
BuyerCo, Inc.		       1st Lien
Delay Draw
Loan		   11.13% (3M
SOFR +
5.75%)		  

02/26/2027

      

1,109

  

1,109

(e)(f)​

    
Wildcat
BuyerCo, Inc.		       1st Lien
Delay Draw
Loan		   11.10% (3M
SOFR +
5.75%)		  

02/26/2027

      

1,429

  

1,430

(e)​

    

Annual Report 2023
71

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Wildcat
BuyerCo, Inc.		       1st Lien
Delay Draw
Loan		   11.13% (3M
SOFR +
5.75%)		  

02/26/2027

      

$

102

  

$

101

(e)(h)​

    
                                         

52,170

      

1.63

%

  

Telecommunication Services

  
Aventiv
Technologies,
LLC		       1st Lien Term
Loan		   10.50% (3M
SOFR +
4.89%)		  

11/01/2024

      

2,585

  

1,989

    
Aventiv
Technologies,
LLC		       2nd Lien Term
Loan		    

11/01/2025

      

5,692

  

1,950

(e)(j)​

    

CB-SDG Limited

   United
Kingdom		   1st Lien Term
Loan		    

04/02/2026

      

£

3,737

  

2,037

(e)(j)​

    
Hamsard 3713
Limited		   United
Kingdom 		  1st Lien Term
Loan		   12.44% (3M
SOFR +
6.86%)		  

08/19/2030

      

€

8,541

  

9,429

(e)​

    
Hamsard 3713
Limited		   United
Kingdom
  1st Lien
Delay Draw
Loan		    

08/19/2030

      

€

—

  

—

(e)(h)​

    
Hamsard 3713
Limited		   United
Kingdom
   1st Lien
Delay Draw
Loan		    

08/19/2030

      

€

—

  

—

(e)(h)(i)​

    

Panther NewCo

   France

   1st Lien Term
Loan		   11.89% (6M
EURIBOR +
7.75%)		  

05/24/2029

      

€

8,250

  

9,108

(e)(g)​

    

Panther NewCo

   France

   1st Lien
Delay Draw
Loan		   9.89% (6M
EURIBOR +
5.75%)		  

05/24/2029

      

€

1,049

  

1,158

(e)(g)(h)​

    
Switch Master
Holdco LLC		       1st Lien Term
Loan		   8.36% (1M
SOFR +
3.00%)		  

12/15/2024

      

18,602

  

17,951

(e)​

    
Zayo Group
Holdings, Inc.		       1st Lien Term
Loan		   8.47% (1M
SOFR +
3.00%)		  

03/09/2027

      

5,191

  

4,443

    
                                         

48,065

      

1.50

%

  

Transportation

  
Draken Bidco
Limited		   United
Kingdom
  1st Lien Term
Loan		   12.12% (3M
SOFR +
6.50%)		  

07/20/2029

      

10,560

  

10,560

(e)(f)(g)​

    
Draken Bidco
Limited		   United
Kingdom
  1st Lien
Delay Draw
Loan		    

07/20/2029

      

—

  

—

(e)(g)(h)(i)​

    
Neovia
Logistics, LP		       1st Lien Term
Loan		   14.48% (3M
SOFR +
9.00%)		  

11/01/2027

      

436

  

429

(e)​

    

Annual Report 2023
72

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans(b)(c)(d)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Shur-Co
Acquisition, Inc.		  
  1st Lien Term
Loan		   11.23% (6M
SOFR +
6.05%)		  

06/30/2027

      

$

2,578

  

$

2,578

(e)(f)​

    
Shur-Co
Acquisition, Inc.		       1st Lien Term
Loan		   11.23% (6M
SOFR +
6.05%)		  

06/30/2027

      

553

  

553

(e)​

    
                                 

14,120

      

0.44

%

  

Utilities

  

CQP Holdco L.P.

       1st Lien Term
Loan		    

12/31/2030

      

7,000

  

7,009

(i)​

    
Scholt Energy
B.V.		   Netherlands
   1st Lien Term
Loan		   9.68% (3M
EURIBOR +
5.75%)		  

08/10/2028

      

€

8,000

  

8,831

(e)(f)​

    
                                 

15,840

      

0.49

%

  

Total Senior Loans (Cost $3,309,422)

                          

   

3,262,234

      

101.65

%

  

Subordinated Loans(b)(c)(d)(e)​

  

Capital Goods

  
Eleda BidCo AB
(fka EISG BidCo
AB)		   Sweden
   Subordinated
Term Loan		   14.04% (3M
STIBOR +
10.00%)		  

06/29/2026

      

SEK

14,852

  

1,473

(e)(g)​

    
                                 

1,473

      

0.05

%

  

Financial Services

  
eCapital
Finance Corp.		   Sweden
   Subordinated
Term Loan		   13.19% (1M
SOFR +
7.75%)		  

12/31/2025

      

35,493

  

35,493

    
eCapital
Finance Corp.		   Canada
   Subordinated
Delay Draw
Loan		   13.19% (1M
SOFR +
7.75%)		  

12/31/2025

      

2,803

  

2,803

    
TVG-TMG
Topco, Inc.		       Subordinated
Term Loan		  

12.00%

  

03/30/2029

      

3,391

  

3,188

(g)​

    
                                 

41,484

      

1.29

%

  

Health Care Equipment and Services

  
AmeriVet
Partners
Management,
Inc.		       Subordinated
Term Loan		  

16.50%

  

12/02/2030

      

6,652

  

6,253

(g)​

    
AmeriVet
Partners
Management,
Inc.		       Subordinated
Delay Draw
Loan		    

12/02/2030

      

—

  

—

(g)(h)​

    
                                 

6,253

      

0.19

%

  

Media and Entertainment

  
22
LimitedHoldCo 		  United
Kingdom
  Subordinated
Delay Draw
Loan		   12.96% (6M
SONIA +
7.50%)		  

08/23/2033

      

£

617

  

762

(g)(h)​

    

Annual Report 2023
73

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Subordinated Loans(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
22 HoldCo
Limited		   United
Kingdom
  Subordinated
Term Loan		   12.96% (6M
SONIA +
7.50%)		  

08/23/2033

      

£

2,761

  

$

3,414

(g)​

    
                                 

4,176

      

0.13

%

  

Pharmaceuticals, Biotechnology and Life Sciences

  
Cardinal Topco
Holdings, L.P.		       Subordinated
Term Loan		  

11.00%

  

03/17/2025

      

9

  

9

    
                                 

9

      

—

%

  

Total Subordinated Loans (Cost $53,080)

                          

   

53,395

      

1.66

%

  

Corporate Bonds(b)(c)​

  

Automobiles and Components

  
Nissan Motor
Co Ltd		   Japan
    

4.35%

  

09/17/2027

      

3,571

  

3,419

(d)​

    
                                 

3,419

      

0.11

%

  

Capital Goods

  
Artera Services,
LLC		        

9.03%

  

12/04/2025

      

505

  

479

(d)​

    
CP Atlas Buyer
Inc		        

7.00%

  

12/01/2028

      

8,219

  

7,155

(d)​

    
LBM Acquisition
LLC		        

6.25%

  

01/15/2029

      

22,777

  

20,339

(d)​

    
Specialty
Building
Products
Holdings LLC /
SBP Finance
Corp		        

6.38%

  

09/30/2026

      

18,674

  

18,315

(d)​

    
SRS
Distribution Inc.		      

6.00%

  

12/01/2029

      

7,000

  

6,527

(d)​

    
Tutor Perini
Corporation		         6.88%  

05/01/2025

      

24,017

  

23,434

(d)​

    
VistaJet Malta
Finance PLC /
Vista
Management
Holding Inc		   Malta
    

9.50%

  

06/01/2028

      

10,218

  

8,648

(d)​

    
VistaJet Malta
Finance PLC /
Vista
Management
Holding Inc		   Malta
    

6.38%

  

02/01/2030

      

11,327

  

7,904

(d)​

    
                                 

92,801

      

2.89

%

  

Annual Report 2023
74

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds(b)(c)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Commercial and Professional Services

  

NBLY 2021-1

           3.58%  

04/30/2051

          

$

24

    

$

21

(d)(e)​

      
Neptune BidCo
US Inc.		       9.29%  

04/15/2029

      

8,991

  

8,382

(d)​

    

VRC

          12.00%  

06/29/2028

            

26

      

24

(e)​

      
Companies,
LLC		                                          
                                 

8,427

      

0.26

%

  

Consumer Discretionary Distribution and Retail

  

Carvana Co

           12.00%  

12/01/2028

            

112

      

95

(d)(g)​

      

Carvana Co

           13.00%  

06/01/2030

            

171

      

144

(d)(g)​

      

Carvana Co

           14.00%  

06/01/2031

            

201

      

172

(d)(g)​

      
Michaels Cos
Inc/The		         5.25%  

05/01/2028

      

770

  

616

(d)​

    

SCIH Salt

          6.63%  

05/01/2029

            

11,500

      

10,740

(d)​

      

Holdings Inc.

                                          
                                 

11,767

      

0.37

%

  

Consumer Services

  

AUTHB 2021-1

           3.73%  

07/30/2051

            

25

      

22

(d)(e)​

      
Caesars
Entertainment
Inc		         8.13%  

07/01/2027

      

10,517

  

10,784

(d)​

    

SERV 2020-1

           3.34%  

01/30/2051

            

24

      

19

(d)(e)​

      

Viking Cruises Ltd

           9.13%  

07/15/2031

            

5,000

      

5,329

(d)​

      
                                 

16,154

      

0.50

%

  

Consumer Staples Distribution and Retail

  

BUNDT 2021-1

                   2.99%  

07/30/2051

            

25

      

22

(d)(e)​

      
                                 

22

      

—

%

  

Energy

  
Ascent
Resources -
Utica LLC/ARU
Finance Corp		       9.00%  

11/01/2027

      

500

  

630

(d)​

    
Enviva
Partners LP /
Enviva Partners
Finance Corp		       6.50%  

01/15/2026

      

16,514

  

8,133

(d)​

    

ITT Holdings LLC

           6.50%  

08/01/2029

            

24,309

      

21,505

(d)​

      

Annual Report 2023
75

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds(b)(c)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
NGL Energy
Operating LLC /
NGL Energy
Finance Corp		       7.50%  

02/01/2026

      

$

1,540

  

$

1,555

(d)​

    
Summit
Midstream
Holdings LLC /
Summit
Midstream
Finance Corp		       12.00%  

10/15/2026

      

15,708

  

15,158

(d)​

    
Tallgrass
Energy
Partners LP /
Tallgrass Energy
Finance Corp		       6.00%  

12/31/2030

      

200

  

186

(d)​

    

Transocean Inc

   Cayman
Islands		     6.80%  

03/15/2038

      

13,528

  

10,843

    
                                     

58,010

      

1.81

%

  

Equity Real Estate Investment Trusts (REITs)

  
Brookfield
Property REIT
Inc / BPR
Cumulus LLC /
BPR Nimbus
LLC / GGSI
Sellco LL		       4.50%  

04/01/2027

      

14,997

  

13,497

(d)​

    
Iron Mountain
Inc		       4.88%  

09/15/2027

      

714

  

697

(d)​

    
Iron Mountain
Inc		       4.88%  

09/15/2029

      

5,154

  

4,881

(d)​

    
Iron Mountain
Inc		       5.25%  

07/15/2030

      

4,089

  

3,908

(d)​

    
                                     

22,983

      

0.72

%

  

Financial Services

  
Antenore Bidco
SpA		  

Italy

      

10/08/2030

      

€

3,000

  

3,312

(e)​

      
BCC Blueprint
Investments,
LLC		       9.30%  

09/15/2026

      

733

  

733

(e)(g)​

    
Blackstone
Private Credit
Fund		       2.35%  

11/22/2024

      

8,500

  

8,221

    
Blackstone
Private Credit
Fund		       2.63%  

12/15/2026

      

5,000

  

4,528

    
HighTower
Holding, LLC		       6.75%  

04/15/2029

      

3,280

  

2,956

(d)​

    

Annual Report 2023
76

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds(b)(c)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Ladder Capital
Finance
Holdings LLLP /
Ladder Capital
Finance Corp		       5.25%  

10/01/2025

      

$

2,600

  

$

2,565

(d)​

    
Ladder Capital
Finance
Holdings LLLP /
Ladder Capital
Finance Corp		       4.25%  

02/01/2027

      

3,016

  

2,841

(d)​

    
Midcap
Financial Issuer
Trust		       6.50%  

05/01/2028

      

22,980

  

21,550

(d)​

    
Nationstar
Mortgage
Holdings Inc.		       5.50%  

08/15/2028

      

13,381

  

12,894

(d)​

    
United Shore
Financial
Services LLC		       5.75%  

06/15/2027

      

14,762

  

14,468

(d)​

    

WAX 2022-1

           5.50%  

03/15/2052

                

18,715

      

17,755

(d)(e)​

      
                                     

91,823

      

2.86

%

  

Food, Beverage and Tobacco

  
Triton Water
Holdings, Inc.		       6.25%  

04/01/2029

      

100

  

87

(d)​

    
                                     

87

      

—

%

  

Health Care Equipment and Services

  
JDC Healthcare
Management,
LLC		        

09/29/2029

      

35

  

1

(e)(g)(j)​

    
                                 

1

      

—

%

  

Insurance

  
Alliant Holdings
Intermediate
LLC / Alliant
Holdings
Co-Issuer		       6.75%  

10/15/2027

      

1,910

  

1,894

(d)​

    
Alliant Holdings
Intermediate
LLC / Alliant
Holdings
Co-Issuer		       4.25%  

10/15/2027

      

1,556

  

1,495

(d)​

    
Ardonagh
Midco 2 PLC		   United
Kingdom		     11.50%  

01/15/2027

      

41

  

40

(d)​

    

NFP Corp.

           6.88%  

08/15/2028

                

6,760

      

6,871

(d)​

      
                                     

10,300

      

0.32

%

  

Annual Report 2023
77

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds(b)(c)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Materials

  
Ardagh
Packaging
Finance PLC /
Ardagh Holdings
USA Inc		  

Ireland

     5.25%  

08/15/2027

      

$

21,100

  

$

16,375

(d)​

    

Ball Corp

           2.88%  

08/15/2030

                

10,000

      

8,582

        
Chemours
Company, The		       4.63%  

11/15/2029

      

7,746

  

6,799

(d)​

    
First Quantum
Minerals L		  

Canada

     8.63%  

06/01/2031

      

16,693

  

14,154

(d)​

    
First Quantum
Minerals Ltd		  

Canada

     7.50%  

04/01/2025

      

5,962

  

5,696

(d)​

    
Kobe US
Midco 2 Inc		       9.25%  

11/01/2026

      

699

  

521

(d)​

    
OI European
Group BV		  

Netherlands

     4.75%  

02/15/2030

      

5,250

  

4,911

(d)​

    
Owens-Brockway
Glass Container
Inc		       6.63%  

05/13/2027

      

2,250

  

2,250

(d)​

    
Trident TPI
Holdings, Inc.		       12.75%  

12/31/2028

      

14,102

  

15,089

(d)​

    
                                     

104,468

      

1.70

%

  

Media and Entertainment

  

ANGI Group LLC

           3.88%  

08/15/2028

                

12,003

      

10,141

(d)​

      
Aventine
Holdings II LLC		       10.25%  

12/23/2030

      

12,739

  

10,191

(e)(g)​

    
CSC Holdings
LLC		       5.25%  

06/01/2024

      

1,000

  

979

    
CSC Holdings
LLC		       4.63%  

12/01/2030

      

2,000

  

1,205

(d)​

    
CSC Holdings
LLC		       3.38%  

02/15/2031

      

4,000

  

2,919

(d)​

    
CSC Holdings
LLC		       4.50%  

11/15/2031

      

870

  

658

(d)​

    
Eagle Football
Holdings BidCo
Limited		   United
Kingdom		     13.33% (6M
SOFR +
8.00%)		  

12/13/2028

      

1,311

  

1,245

(e)​

    
Eagle Football
Holdings BidCo
Limited		   United
Kingdom		     16.00%  

12/13/2028

      

599

  

593

(e)​

    
Scripps
Escrow II Inc		       3.88%  

01/15/2029

      

14,325

  

12,669

(d)​

    

Tegna Inc

           4.63%  

03/15/2028

                

10,000

      

9,341

        
                                     

49,941

      

1.56

%

  

Annual Report 2023
78

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds(b)(c)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Software and Services

      
AffiniPay
Intermediate
Holdings, LLC		       15.39% (3M
SOFR +
10.00%)		  

06/09/2030

      

$

6,093

  

$

6,092

(e)​

    
Cloud Software
Group, Inc.		       9.00%  

09/30/2029

      

100

  

95

(d)​

    
Insightful
Science
Intermediate I,
LLC		       10.50%  

04/28/2032

      

1,645

  

1,530

(e)​

    
Open Text
Holdings Inc		       4.13%  

02/15/2030

      

13,500

  

12,218

(d)​

    
Practicetek
Midco, LLC		       14.00%  

08/30/2030

      

8,171

  

7,926

(e)(g)​

    
                                 

27,861

      

0.87

%

  

Telecommunication Services

      
Telesat
Canada /
Telesat LLC		  

Canada

     5.63%  

12/06/2026

      

13,222

  

8,276

(d)​

    
Zayo Group
Holdings, Inc.		       4.00%  

03/01/2027

      

2,000

  

1,604

(d)​

    
                                 

9,880

      

0.31

%

  

Utilities

      
New Fortress
Energy Inc		       6.50%  

09/30/2026

      

18,598

  

17,858

(d)​

    
                                 

17,858

      

0.56

%

  

Total Corporate Bonds (Cost $498,670)

                                

495,711

      

15.44

%

  

Collateralized Loan Obligations — Credit Linked Notes

      

Financial Services

      
Buttercup
2023-1 LLC		       11.81% (1M
SOFR +
6.50%)		  

09/30/2030

      

11,300

  

11,300

    
                                 

11,300

      

0.35

%

  

Total Collateralized Loan Obligations — Credit Linked Notes (Cost $11,300)

                                

11,300

      

0.35

%

  

Collateralized Loan Obligations — Debt(b)(c)(d)(e)​

      
AIMCO
2021-15A E		   Cayman
Islands		     11.61% (3M
SOFR +
6.21%)		  

10/17/2034

      

750

  

737

    
AMMC
2012-11A ER2		   Cayman
Islands		     11.45% (3M
SOFR +
6.06%)		  

04/30/2031

      

1,500

  

1,433

    

Annual Report 2023
79

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Debt(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
AMMC
2018-22A E2		   Cayman
Islands		     11.14% (3M
SOFR +
5.76%)		  

04/25/2031

      

$

750

  

$

690

    
ATCLO
2016-7A FR		   Cayman
Islands		     13.69% (3M
SOFR +
8.31%)		  

11/27/2031

      

875

  

471

    

ATRM 9A ER

   Cayman
Islands		     12.10% (3M
SOFR +
6.71%)		  

05/28/2030

      

2,000

  

1,974

    
BABSN
2015-2A AR		   Cayman
Islands		     6.87% (3M
SOFR +
1.45%)		  

10/20/2030

      

1,343

  

1,345

    
BALLY
2023-24A C		  

Jersey

     10.31% (3M
SOFR +
5.05%)		  

07/15/2036

      

2,000

  

2,038

    
BCC
2019-2A ER		   Cayman
Islands		     11.98% (3M
SOFR +
6.58%)		  

10/17/2032

      

1,250

  

1,215

    
BCC
2019-4A ER		   Cayman
Islands		     13.38% (3M
SOFR +
7.99%)		  

04/23/2035

      

6,000

  

5,971

    

BCC 2021-3A E

   Cayman
Islands		     12.16% (3M
SOFR +
6.76%)		  

07/24/2034

      

500

  

478

    

BCC 2022-2A E

  

Jersey

     13.25% (3M
SOFR +
7.84%)		  

04/22/2035

      

8,000

  

7,812

    

BCC 2023-3A D

  

Jersey

     10.61% (3M
SOFR +
5.25%)		  

07/24/2036

      

3,000

  

3,070

    
CANYC
2018-1A E		   Cayman
Islands		     11.41% (3M
SOFR +
6.01%)		  

07/15/2031

      

850

  

809

    
CANYC
2020-1A ER		   Cayman
Islands		     12.01% (3M
SOFR +
6.61%)		  

07/15/2034

      

1,952

  

1,828

    
CEDF
2018-9A E		   Cayman
Islands		     11.03% (3M
SOFR +
5.61%)		  

04/20/2031

      

250

  

235

    
CGMS
2023-2A D1		   Cayman
Islands		     10.26% (3M
SOFR +
5.00%)		  

07/20/2036

      

5,000

  

5,095

    
CIFC
2014-3A ER2		   Cayman
Islands		     11.77% (3M
SOFR +
6.36%)		  

10/22/2031

      

997

  

964

    
CIFC
2015-1A ARR		       6.78% (3M
SOFR +
1.37%)		  

01/22/2031

      

3,717

  

3,721

    
CRBN
2017-1A A1		   Cayman
Islands		     6.82% (3M
SOFR +
1.40%)		  

01/20/2031

      

4,998

  

5,004

    

Annual Report 2023
80

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Debt(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
DEN12
2016-1A ER		   Cayman
Islands		     11.56% (3M
SOFR +
6.16%)		  

04/15/2031

      

$

375

  

$

344

    
DEN14
2016-1A ER		   Cayman
Islands		     12.02% (3M
SOFR +
6.61%)		  

10/23/2031

      

750

  

697

    
DRSLF
2013-28A B3LR		       13.40% (3M
SOFR +
8.01%)		  

08/15/2030

      

500

  

377

    
DRSLF
2018-55A E		   Cayman
Islands		     11.06% (3M
SOFR +
5.66%)		  

04/15/2031

      

375

  

345

    
DRSLF
2018-57A E		   Cayman
Islands		     10.84% (3M
SOFR +
5.46%)		  

05/15/2031

      

500

  

442

    
DRSLF
2018-58A E		   Cayman
Islands		     11.01% (3M
SOFR +
5.61%)		  

07/17/2031

      

1,000

  

924

    
DRSLF
2018-70A E		   Cayman
Islands		     11.71% (3M
SOFR +
6.31%)		  

01/16/2032

      

250

  

241

    
DRSLF
2020-83A E		   Cayman
Islands		     11.21% (3M
SOFR +
5.81%)		  

01/18/2032

      

800

  

782

    
DRSLF
2020-86A ER		   Cayman
Islands		     12.16% (3M
SOFR +
6.76%)		  

07/17/2034

      

250

  

241

    
DRSLF
2022-106A D		   Cayman
Islands		     11.09% (3M
SOFR +
5.70%)		  

10/15/2035

      

1,000

  

1,016

    
DRSLF
2022-106A E		   Cayman
Islands		     14.26% (3M
SOFR +
8.87%)		  

10/15/2035

      

500

  

511

    
DRSLF
2022-108A D		  

Jersey

     9.65% (3M
SOFR +
4.25%)		  

07/18/2035

      

2,000

  

2,011

    
ELM24
2023-3A E		   Cayman
Islands		     12.91% (3M
SOFR +
7.57%)		  

12/11/2033

      

445

  

449

    
ELMW4
2020-1A E		   Cayman
Islands		     12.26% (3M
SOFR +
6.86%)		  

04/15/2033

      

663

  

670

    
ELMW8
2021-1A F1		   Cayman
Islands		     13.68% (3M
SOFR +
8.26%)		  

01/20/2034

      

750

  

744

    
FILPK
2018-1A E		   Cayman
Islands		     11.06% (3M
SOFR +
5.66%)		  

07/15/2030

      

288

  

277

    

FLAT 2021-1A E

   Cayman
Islands		     11.66% (3M
SOFR +
6.26%)		  

07/19/2034

      

250

  

249

    

Annual Report 2023
81

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Debt(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
GLD10
2015-10A ER		   Cayman
Islands		     11.33% (3M
SOFR +
5.91%)		  

07/20/2031

      

$

750

  

$

746

    

ICG 2018-1X D

   Cayman
Islands		     10.82% (3M
SOFR +
5.41%)		  

04/21/2031

      

500

  

379

    
INGIM
2013-3A DR		   Cayman
Islands		     11.56% (3M
SOFR +
6.16%)		  

10/18/2031

      

1,250

  

1,148

    
JNPPK
2023-1A D		  

Jersey

     10.12% (3M
SOFR +
4.70%)		  

07/20/2035

      

2,500

  

2,525

    
KKR
2022-41A E		   Cayman
Islands		     12.09% (3M
SOFR +
6.70%)		  

04/15/2035

      

1,500

  

1,409

    

KKR 34X E

   Cayman
Islands		     12.51% (3M
SOFR +
7.11%)		  

07/15/2034

      

600

  

585

    

KKR 44A D

   Cayman
Islands		     10.31% (3M
SOFR +
5.00%)		  

01/20/2036

      

3,800

  

3,815

    
MAGNE
2015-14RA A1		   Cayman
Islands		     6.78% (3M
SOFR +
1.38%)		  

10/18/2031

      

14,800

  

14,820

    
MAGNE
2015-15A ER		   Cayman
Islands		     10.84% (3M
SOFR +
5.46%)		  

07/25/2031

      

500

  

485

    
MDPK
2014-14A FR		   Cayman
Islands		     13.44% (3M
SOFR +
8.03%)		  

10/22/2030

      

1,000

  

838

    
MDPK
2016-22A ER		   Cayman
Islands		     12.36% (3M
SOFR +
6.96%)		  

01/15/2033

      

1,100

  

1,090

    
MDPK
2018-27A D		   Cayman
Islands		     10.68% (3M
SOFR +
5.26%)		  

04/20/2030

      

650

  

614

    
MDPK
2018-28A F		   Cayman
Islands		     13.26% (3M
SOFR +
7.86%)		  

07/15/2030

      

500

  

477

    
MDPK
2020-46A ER		   Cayman
Islands		     11.91% (3M
SOFR +
6.51%)		  

10/15/2034

      

750

  

752

    
MDPK
2021-52A E		   Cayman
Islands		     12.17% (3M
SOFR +
6.76%)		  

01/22/2035

      

450

  

441

    
MDPK
2021-59A A		   Cayman
Islands		     6.80% (3M
SOFR +
1.40%)		  

01/18/2034

      

1,500

  

1,502

    
MDPK
2022-55A E		   Cayman
Islands		     13.57% (3M
SOFR +
8.17%)		  

07/18/2035

      

852

  

865

    

Annual Report 2023
82

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Debt(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
OAKC
2022-12A DR		  

Bermuda

     10.42% (3M
SOFR +
5.00%)		  

07/20/2036

      

$

5,000

  

$

4,995

    
OCT35
2018-1A D		   Cayman
Islands		     10.88% (3M
SOFR +
5.46%)		  

01/20/2031

      

1,500

  

1,313

    
OHALF
2015-1X ER3		   Cayman
Islands		     12.31% (3M
SOFR +
6.91%)		  

01/19/2037

      

860

  

869

    
OHALF
2016-1A ER		   Cayman
Islands		     12.03% (3M
SOFR +
6.61%)		  

01/20/2033

      

4,000

  

4,032

    
PLMRS
2018-2A A1A		   Cayman
Islands		     6.76% (3M
SOFR +
1.36%)		  

07/16/2031

      

5,787

  

5,794

    
RRAM
2022-21A D		  

Bermuda

     13.04% (3M
SOFR +
7.65%)		  

07/15/2035

      

1,000

  

1,014

    
VOYA
2016-3A A1R		   Cayman
Islands		     6.85% (3M
SOFR +
1.45%)		  

10/18/2031

      

14,055

  

14,073

    
VOYA
2019-4X ER		   Cayman
Islands		     12.37% (3M
SOFR +
6.97%)		  

01/15/2035

      

500

  

475

    
WELF
2017-3A D		       11.21% (3M
SOFR +
5.81%)		  

01/17/2031

      

1,000

  

772

    
WELF
2018-3A D		   Cayman
Islands		     11.93% (3M
SOFR +
6.51%)		  

01/20/2032

      

250

  

224

    
WOODS
2018-12BA E		   Cayman
Islands		     11.43% (3M
SOFR +
6.05%)		  

06/15/2031

      

750

  

651

    

Total Collateralized Loan Obligations — Debt (Cost $122,278)

                                

121,913

      

3.80

%

  

Collateralized Loan Obligations — Equity(d)(e)​

      
AIMCO
2020-11A SUB		   Cayman
Islands		     17.86%  

10/17/2034

      

7,258

  

6,316

    
AIMCO
2021-16A SUB		   Cayman
Islands		     16.65%  

01/17/2035

      

4,600

  

3,572

    
AIMCO
2021-16X SUB		   Cayman
Islands		     16.65%  

01/17/2035

      

1,000

  

777

    
AIMCO
2023-20A SUB		  

Jersey

      

10/16/2036

      

1,500

  

1,413

    
ANCHC
2019-13X SUB		   Cayman
Islands		      

04/15/2034

      

750

  

469

    
ANCHC
2020-15A SUB		   Cayman
Islands		     18.26%  

07/20/2034

      

1,250

  

872

    

Annual Report 2023
83

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Equity(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
ANCHC
2020-16A SUB		   Cayman
Islands		     17.03%  

01/19/2035

      

$

250

  

$

143

    
ANCHC
2021-20A SUB		   Cayman
Islands		     7.45%  

01/20/2035

      

3,500

  

2,007

    
ANCHC
2021-20X SUB		   Cayman
Islands		     7.45%  

01/20/2035

      

1,150

  

659

    
ANCHF
2015-1A SBR1		   Cayman
Islands		      

07/28/2037

      

4,860

  

3,407

    
ANCHF
2015-2A SBRA		   Cayman
Islands		     33.35%  

04/25/2038

      

4,550

  

2,546

    
ANCHF
2016-3A SB1R		   Cayman
Islands		     32.85%  

01/28/2039

      

2,840

  

1,536

    
ANCHF
2016-3A SUBR		   Cayman
Islands		     19.67%  

01/28/2039

      

520

  

281

    
ANCHF
2016-4A SUBA		   Cayman
Islands		     34.93%  

04/27/2039

      

4,830

  

2,699

    
ANCHF
2018-5A SUB2		   Cayman
Islands		     43.34%  

04/25/2036

      

4,900

  

2,351

    
ANCHF
2018-6A SUB2		   Cayman
Islands		     40.55%  

07/25/2036

      

1,800

  

713

    
ANCHF
2019-7A SUB2		   Cayman
Islands		     38.94%  

04/25/2037

      

1,420

  

687

    
ANCHF
2019-8A SUBA		   Cayman
Islands		      

07/25/2037

      

404

  

198

    
ANCHF
2019-9A SUB		   Cayman
Islands		     36.84%  

10/25/2037

      

680

  

335

    
ANCHF
2019-9A SUBA		   Cayman
Islands		     36.83%  

10/25/2037

      

250

  

123

    
ANCHF
2020-10A SUBA		   Cayman
Islands		     28.73%  

04/25/2038

      

1,731

  

843

    
ANCHF
2021-13A SUB		   Cayman
Islands		     25.54%  

07/27/2039

      

640

  

407

    

ATRM 15A SUB

   Cayman
Islands		     20.07%  

01/23/2031

      

4,080

  

2,052

    
BARK
2021-1A SUB		   Cayman
Islands		     17.58%  

04/20/2034

      

250

  

184

    
BCC
2017-2A SUB		   Cayman
Islands		     15.13%  

07/25/2034

      

3,461

  

2,094

    
BCC
2018-1A SUB		   Cayman
Islands		     9.94%  

04/23/2031

      

1,420

  

371

    
BCC
2019-2A SUB		   Cayman
Islands		     19.09%  

10/17/2032

      

810

  

430

    
BCC
2020-1A SUB		   Cayman
Islands		     27.59%  

04/18/2033

      

1,250

  

743

    
BCC
2020-2A SUB		   Cayman
Islands		     46.01%  

07/19/2034

      

800

  

478

    
BCC
2021-2A SUB		   Cayman
Islands		     11.26%  

07/16/2034

      

1,000

  

573

    

Annual Report 2023
84

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Equity(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
BCC
2022-1A SUB		   Cayman
Islands		     16.78%  

04/18/2035

      

$

6,750

  

$

4,658

    
CANYC
2019-1A SUB		   Cayman
Islands		     18.52%  

04/15/2032

      

2,798

  

1,160

    
CEDF
2016-5A SUB		   Cayman
Islands		     21.90%  

07/17/2031

      

2,000

  

976

    
CGMS
2018-3A SUB		   Cayman
Islands		      

10/15/2030

      

750

  

256

    
CGMS
2018-4A SUB		   Cayman
Islands		     15.94%  

01/20/2031

      

2,310

  

945

    
CGMS
2019-3A SUB		   Cayman
Islands		     22.88%  

10/20/2032

      

3,875

  

2,439

    
CGMS
2021-2A SUB		   Cayman
Islands		     20.11%  

04/20/2034

      

5,460

  

3,633

    
CGMS
2021-4A SUB		   Cayman
Islands		     21.07%  

04/20/2034

      

750

  

561

    
CGMS
2021-5A SUB		   Cayman
Islands		     23.23%  

07/20/2034

      

500

  

326

    
CGMS
2021-8A SUBA		   Cayman
Islands		     19.15%  

10/15/2034

      

1,000

  

633

    
CGMS
2023-5A SUB		   Cayman
Islands		      

01/27/2036

      

3,080

  

2,651

    
CIFC
2015-4A SUB		   Cayman
Islands		     13.47%  

04/20/2034

      

2,252

  

804

    
CIFC
2019-1A SUB		   Cayman
Islands		     25.31%  

04/20/2032

      

1,500

  

776

    
CIFC
2019-FAL SUB		   Cayman
Islands		     22.69%  

01/20/2033

      

3,050

  

1,985

    
CIFC
2020-3A SUB		   Cayman
Islands		     15.56%  

10/20/2034

      

1,000

  

821

    
CIFC
2021-2A SUB		   Cayman
Islands		      

04/15/2034

      

3,080

  

2,290

    
CIFC
2021-5A SUB		   Cayman
Islands		     15.53%  

07/15/2034

      

5,200

  

3,603

    
CIFC
2021-7A SUB		   Cayman
Islands		     23.89%  

01/23/2035

      

250

  

193

    
DAVIS
2022-1A M1		   Cayman
Islands		      

04/20/2035

      

7,250

  

106

    
DAVIS
2022-1A M2		   Cayman
Islands		      

04/20/2035

      

7,250

  

210

    
DAVIS
2022-1A SUB		   Cayman
Islands		     17.62%  

04/20/2035

      

7,250

  

5,548

    
DRSLF
2018-58X SUB		   Cayman
Islands		     15.76%  

07/17/2031

      

3,125

  

1,329

    
DRSLF
2020-78A SUB		   Cayman
Islands		     21.42%  

04/17/2033

      

7,225

  

4,521

    
DRSLF
2021-95A SUB		   Cayman
Islands		     24.19%  

08/20/2034

      

1,500

  

895

    

Annual Report 2023
85

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Equity(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
DRSLF
2022-108A SUB		  

Jersey

     25.10%  

07/18/2035

      

$

875

  

$

659

    
DRSLF
2022-98A SUB		   Cayman
Islands		     19.71%  

04/20/2035

      

4,000

  

2,766

    
DRSLF
2022-98X SUB		   Cayman
Islands		     19.72%  

04/20/2035

      

1,000

  

691

    
ELM11
2021-4A SUB		   Cayman
Islands		     19.37%  

10/20/2034

      

4,050

  

3,679

    
ELM15
2022-2A INC		   Cayman
Islands		     19.47%  

04/22/2035

      

3,050

  

2,479

    
ELM16
2022-3A SUB		   Cayman
Islands		     25.10%  

04/20/2034

      

3,575

  

3,019

    
ELM17
2022-4A SUB		   Cayman
Islands		     19.80%  

07/17/2035

      

2,880

  

2,449

    
ELM24
2023-3A SUB		   Cayman
Islands		      

12/11/2033

      

1,555

  

1,386

    
ELMW5
2020-2A SUB		   Cayman
Islands		     32.67%  

07/24/2031

      

2,500

  

2,372

    
ELMW8
2021-1A SUB		   Cayman
Islands		     18.27%  

01/20/2034

      

2,003

  

1,587

    
GNRT
2022-10A SUB		   Cayman
Islands		     24.22%  

07/22/2035

      

6,500

  

5,264

    

GNRT 7A SUB

   Cayman
Islands		     36.10%  

01/22/2033

      

4,000

  

3,206

    

GNRT 9A SUB

   Cayman
Islands		     25.44%  

10/20/2034

      

1,000

  

790

    
HRPK
2020-1A SUB		   Cayman
Islands		     15.35%  

04/20/2034

      

3,985

  

3,369

    
ICG 2021-1A
SUB		   Cayman
Islands		     14.74%  

04/17/2034

      

2,000

  

848

    
ICG 2021-1X
SUB		   Cayman
Islands		     14.74%  

04/17/2034

      

600

  

255

    
INVCO
2021-2A SUB		   Cayman
Islands		     15.63%  

07/15/2034

      

440

  

274

    
INVCO
2021-2A Y		   Cayman
Islands		      

07/15/2034

      

44

  

13

    
INVCO
2021-3A SUB		   Cayman
Islands		     17.14%  

10/22/2034

      

2,700

  

1,669

    
INVCO
2021-3A Y		   Cayman
Islands		      

10/22/2034

      

270

  

76

    
INVCO
2021-3X SUB		   Cayman
Islands		     17.14%  

10/22/2034

      

957

  

591

    
INVCO
2021-3X Y		   Cayman
Islands		      

10/22/2034

      

96

  

27

    
MAGNE
2020-28A SUB		   Cayman
Islands		     22.88%  

01/20/2035

      

5,250

  

4,423

    
MDPK
2016-22A SUB		   Cayman
Islands		     20.08%  

01/15/2033

      

7,400

  

4,268

    

Annual Report 2023
86

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Equity(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
MDPK
2018-28A SUB		   Cayman
Islands		     20.44%  

07/15/2030

      

$

3,000

  

$

1,450

    
MDPK
2018-31A SUB		   Cayman
Islands		     20.32%  

01/23/2048

      

4,250

  

2,546

    
MDPK
2018-32A SUB		   Cayman
Islands		     27.40%  

01/22/2048

      

1,250

  

716

    
MDPK
2019-34A SUB		   Cayman
Islands		     23.20%  

04/25/2032

      

780

  

440

    
MDPK
2019-37A SUB		   Cayman
Islands		     22.88%  

07/15/2049

      

7,500

  

5,158

    
MDPK
2021-38A SUB		   Cayman
Islands		     18.90%  

07/17/2034

      

1,290

  

964

    
MDPK
2021-50A SUB		   Cayman
Islands		     17.30%  

04/19/2034

      

2,500

  

1,852

    
MDPK
2021-59A SUB		   Cayman
Islands		     21.01%  

01/18/2034

      

4,500

  

3,103

    
MDPK
2021-59X SUB		   Cayman
Islands		     21.01%  

01/18/2034

      

1,500

  

1,034

    
MDPK
2022-53A SUB		   Cayman
Islands		     20.64%  

04/21/2035

      

6,000

  

4,628

    
MDPK
2022-55A SUB		   Cayman
Islands		     22.52%  

07/18/2035

      

3,025

  

2,468

    
MDPK
2023-63A SUB		   Cayman
Islands		     13.77%  

04/21/2035

      

6,050

  

4,851

    
OAKC
2012-7A SUB		   Cayman
Islands		     16.23%  

02/20/2034

      

500

  

278

    
OAKC
2014-10RA SUB		   Cayman
Islands		     14.73%  

04/20/2034

      

1,743

  

802

    
OAKC
2014-10RX SUB		   Cayman
Islands		     18.57%  

04/20/2034

      

1,000

  

460

    
OAKC
2017-15A SUB		   Cayman
Islands		     19.60%  

01/20/2030

      

1,360

  

754

    
OAKC
2021-16A SUB		   Cayman
Islands		     19.79%  

10/18/2034

      

4,575

  

3,877

    
OAKCL
2019-2A SUB		   Cayman
Islands		     16.99%  

04/15/2031

      

3,860

  

1,686

    
OAKCL
2019-3A SUB		   Cayman
Islands		     20.21%  

10/20/2034

      

6,229

  

3,768

    
OCP
2023-30A SUB		  

Jersey

      

01/24/2037

      

3,850

  

2,780

(l)​

    
OHALF
2013-1A SUB		   Cayman
Islands		     16.44%  

07/23/2031

      

876

  

310

    
OHALF
2016-1A SUB		   Cayman
Islands		     23.52%  

01/20/2033

      

8,800

  

6,027

    
RESPK
2020-1A M2		   Cayman
Islands		      

10/15/2034

      

2,953

  

104

    
RESPK
2020-1A SUB		   Cayman
Islands		     16.47%  

10/15/2034

      

2,953

  

1,758

    

Annual Report 2023
87

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations — Equity(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
ROCKP
2021-1A M1		   Cayman
Islands		      

04/20/2034

      

$

1,000

  

$

8

    
ROCKP
2021-1A M2		   Cayman
Islands		      

04/20/2034

      

1,000

  

18

    
ROCKP
2021-1A SUB		   Cayman
Islands		     15.51%  

04/20/2034

      

1,000

  

691

    
ROCKP
2021-1X M1		   Cayman
Islands		      

04/20/2034

      

1,100

  

9

    
ROCKP
2021-1X M2		   Cayman
Islands		      

04/20/2034

      

1,100

  

19

    
ROCKP
2021-1X SUB		   Cayman
Islands		     15.51%  

04/20/2034

      

1,100

  

760

    
RRAM
2017-2A SUB		   Cayman
Islands		     12.05%  

10/15/2117

      

500

  

318

    
RRAM
2019-6A SUB		   Cayman
Islands		     11.34%  

04/15/2036

      

1,000

  

819

    
RRAM
2020-8A SUB		   Cayman
Islands		     13.62%  

04/15/2120

      

550

  

355

    
RRAM
2021-14A SUB		   Cayman
Islands		     10.49%  

04/15/2121

      

750

  

544

    
RRAM
2021-17A SUB		   Cayman
Islands		     13.90%  

07/15/2034

      

1,000

  

715

    
RRAM
2021-19X SUB		   Cayman
Islands		     13.61%  

10/15/2035

      

1,166

  

975

    
RRAM
2023-25A SUB		  

Bermuda

      

04/15/2036

      

6,750

  

5,211

    
RRAM
2023-26A SUB		   Cayman
Islands		      

04/15/2038

      

14,483

  

10,988

    
RRAMX
2022-7A SUB		   Cayman
Islands		      

07/15/2122

      

2,175

  

1,606

    
SPEAK
2018-5A SUB		   Cayman
Islands		      

04/25/2031

      

2,500

  

711

    
SPEAK
2020-8A SUB		   Cayman
Islands		     17.52%  

04/20/2033

      

6,350

  

3,616

    
TPRK
2021-1A SUB		   Cayman
Islands		     17.07%  

04/15/2034

      

1,500

  

1,246

    
WELF
2018-3A SUB		   Cayman
Islands		     9.66%  

01/20/2032

      

2,400

  

441

    
WELF
2020-1A SUB		   Cayman
Islands		     15.25%  

04/15/2033

      

5,955

  

3,126

    
WLLMN
2021-1A M1		   Cayman
Islands		      

07/15/2034

      

2,550

  

31

    
WLLMN
2021-1A M2		   Cayman
Islands		      

07/15/2034

      

2,550

  

68

    
WLLMN
2021-1A SUB		   Cayman
Islands		     14.17%  

07/15/2034

      

2,550

  

1,822

    

Total Collateralized Loan Obligations — Equity (Cost $224,473)

                                

212,669

      

6.63

%

  

Annual Report 2023
88

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Automobiles and Components

  
Automotive Keys
Investor, LLC		    

Class A

      

11/06/2020

  

62,749

    

$

—

(d)(e)(k)​

      
Highline PPC
Blocker LLC		          

11/04/2020

  

500

    

48

(d)(e)(k)​

    

Sun TopCo, LP

      

Class A

          

09/08/2021

    

1,000

          

114

(d)(e)(k)​

      
Victory Topco,
LP		    

Class A-2

      

11/10/2023

  

2,510

    

251

(d)(e)(k)​

    
                                 

413

      

0.01

%

  

Capital Goods

  
Dynamic NC
Investment
Holdings, LP		          

12/30/2020

  

50,000

    

45

(d)(e)(k)​

    
Kene Holdings,
L.P.		    

Class A

      

08/08/2019

  

50,000

    

93

(d)(e)(k)​

    
Tutor Perini
Corporation		          

05/19/2021

  

12,650

    

115

    
                                 

253

      

0.01

%

  

Commercial and Professional Services

  
Bedrock
Parent
Holdings, LP		    

Class A

      

04/22/2021

  

644

    

62

(d)(e)(k)​

    
Capstone
Parent
Holdings, LP		    

Class A

      

11/12/2020

  

50

    

90

(d)(e)(k)​

    
Elliott Metron
Co-Investor
Aggregator L.P.		          

10/05/2022

  

1,000,000

    

1,250

(d)(e)(k)​

    
IRI-NPD
Co-Invest
Aggregator, L.P.		          

08/01/2022

  

31

    

52

(d)(e)(k)​

    
KKR Nest
Co-Invest L.P.		          

09/28/2021

  

50,000

    

54

(d)(e)(k)​

    
Landscape
Parallel
Partners, L.P.		          

12/16/2021

  

20

    

57

(d)(e)(k)​

    
North American
Fire Ultimate
Holdings, LLC		          

05/19/2021

  

68,175

    

302

(d)(e)(k)​

    
PSP Registrar
Co-Investment
Fund, L.P.		    

Class A

      

08/26/2021

  

50,000

    

56

(d)(e)(k)​

    
RC V Tecmo
Investor LLC		          

08/14/2020

  

50,000

    

100

(d)(e)(k)​

    

SSE Parent, LP

      

Class A-1

          

06/30/2020

    

25

          

—

(d)(e)(k)​

      

SSE Parent, LP

      

Class A-2

          

06/30/2020

    

25

          

—

(d)(e)(k)​

      

Annual Report 2023
89

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Laboratories
Topco LLC		    

Class A

      

07/23/2021

  

33,333

    

$

9

(d)(e)(k)​

      
                                 

2,032

      

0.06

%

  

Consumer Discretionary Distribution and Retail

  

Arko Corp

                  

12/22/2020

    

106

          

1

        
Emerald Lake
Pearl
Acquisition-A,
L.P.		          

07/19/2021

  

43,500

    

40

(d)(e)(k)​

    
Fastsigns
Holdings Inc.		          

03/13/2019

  

50

    

145

(d)(e)(k)​

    
Marcone
Yellowstone
Holdings, LLC		    

Class A

      

06/23/2021

  

96

    

112

(d)(e)(k)​

    

Metis Topco, LP

                  

05/04/2021

    

50

          

70

(d)(e)(k)​

      
Stonecourt IV
Partners LP		          

10/08/2021

  

2,423,676

    

3,054

(d)(e)(k)​

    
                                 

3,422

      

0.11

%

  

Consumer Durables and Apparel

  
Centric Brands
GP LLC		          

10/09/2020

  

9,495

    

1

(d)(e)(k)​

    
DRS Holdings I,
Inc.		          

11/01/2019

  

50

    

48

(d)(e)(k)​

    
                                 

49

      

—

%

  

Consumer Services

  
Apex Service
Partners
Holdings, LLC		    

Series B

      

10/24/2023

  

44,263

    

1,220

(d)(e)(k)​

    
CMG Buyer
Holdings, Inc.		          

05/19/2022

  

5

    

133

(d)(e)(k)​

    
Family First
Bidco Limited		   United
Kingdom		        

12/01/2022

  

166

    

—

(d)(e)(k)​

    
GS SEER Group
Holdings LLC		    

Class A

      

04/28/2023

  

25

    

23

(d)(e)(k)​

    
IHS Parent
Holdings, L.P.		    

Class A

      

12/28/2022

  

25,000

    

33

(d)(e)(k)​

    
LBC Breeze
Holdings LLC		    

Class A

      

12/06/2021

  

50

    

44

(d)(e)(k)​

    
Leviathan
Holdings, L.P.		          

12/27/2022

  

25,000

    

24

(d)(e)(k)​

    
Northwinds
Services Group
LLC		          

05/01/2023

  

38,462

    

55

(d)​€

    

Annual Report 2023
90

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
OMERS
Mahomes
Investment
Holdings LLC		    

Class A

      

11/16/2020

  

16

    

$

109

(d)(e)(k)​

      
PestCo
Holdings, LLC		    

Class A

      

01/26/2023

  

2

    

32

(d)(e)(k)​

    
Vertex Service
Partners
Holdings, LLC		    

Class B

      

11/08/2023

  

33

    

33

(d)(e)(k)​

    
ZBS Mechanical
Group Co-Invest
Fund 2, LLC		          

10/07/2021

  

50,000

    

199

(d)(e)(k)​

    
                                 

1,905

      

0.06

%

  

Consumer Staples Distribution and Retail

  
KCAKE
Holdings Inc.		          

05/14/2021

  

50

    

53

(d)(e)(k)​

    
LJ Perimeter
Co-Invest, L.P.		    

Class A

      

10/26/2022

  

50,052

    

51

(d)(e)(k)​

    
REP WWP
Coinvest IV, L.P.		          

01/17/2023

  

25,000

    

27

(d)(e)(k)​

    
Restaurant
Produce and
Services
Blocker, LLC		    

Tranche B

      

05/01/2023

  

50,000

    

52

(d)(e)(k)​

    

ZB PARENT LLC

                  

02/09/2022

    

50

          

69

(e)(k)​

      
                                 

252

      

0.01

%

  

Energy

  
Galileo
Co-Investment
Trust I		  

New Zealand

        

07/07/2022

  

50,000

    

28

(d)(e)(k)​

    
SilverBow
Resources, Inc.		          

06/30/2022

  

6,090

    

177

(d)(k)​

    
Summit
Midstream
Partners Lp		          

02/25/2022

  

27,500

    

493

(k)​

    
                                 

698

      

0.01

%

  

Financial Services

  
BCC Blueprint
Investments,
LLC		          

09/15/2021

  

742,499

    

612

(d)(e)(k)​

    
GTCR (D)
Investors LP		          

09/19/2023

  

37,037

    

39

(d)(e)(k)​

    
Isthmus
Capital LLC		          

06/13/2023

  

11

    

61

(d)(e)(k)​

    

Annual Report 2023
91

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Kelso XI
Tailwind
Co-Investment,
L.P.		          

09/11/2023

  

40,195

    

$

40

(d)(e)(k)​

      

Sera 2021 LLC

      

Class A

          

03/30/2021

    

4

          

162

(d)(e)(k)​

      
The Ultimus
Group
Aggregator, LP		    

Class B

      

02/01/2019

  

182

    

—

(d)(e)(k)​

    
The Ultimus
Group, LLC		    

Class B

      

02/01/2019

  

1,609

    

—

(d)(e)(k)​

    
TVG-TMG
Holdings, LLC		          

03/31/2022

  

50

    

—

(d)(e)(k)​

    
WAAM Topco,
LLC		    

Class A

      

06/22/2023

  

41,556

    

53

(e)(k)​

    
                                 

967

      

0.03

%

  

Food, Beverage and Tobacco

  
PPC CHG
Blocker LLC		          

12/10/2021

  

1

    

63

(d)(e)(k)​

    
                                 

63

      

—

%

  

Health Care Equipment and Services

  
Air Methods
Corporation		          

12/28/2023

  

4,700

    

259

(e)(k)​

    
Asclepius
Holdings LLC		          

02/28/2022

  

448

    

—

(d)(e)(k)​

    

AVE Holdings LP

      

Class C

          

11/30/2023

    

983

          

196

(d)(e)(k)​

      
BCPE
Co-Invest (A), LP		    

Class A

      

02/15/2022

  

45,000

    

55

(d)(e)(k)​

    
Crown CT
HoldCo Inc.		    

Class A

      

03/08/2022

  

5

    

35

(d)(e)(k)​

    
KOLN Co-Invest
Unblocked, LP		    

Class A

      

03/29/2023

  

50

    

49

(d)(e)(k)​

    
Network
Investco BV		  

Netherlands

        

07/08/2022

  

1,073,830

    

1,660

(d)(e)(k)​

    
NSPC
Holdings, LLC		          

02/13/2023

  

5,360

    

—

(d)(e)(k)​

    
Olympia
TopCo, L.P.		    

Class A

      

09/24/2019

  

50,000

    

—

(d)(e)(k)​

    
OMERS Bluejay
Investment
Holdings LP		    

Class A

      

07/10/2018

  

25

    

39

(d)(e)(k)​

    
OMERS
Wildcats
Investment
Holdings LLC		    

Class A

      

10/31/2019

  

216

    

127

(d)(e)(k)​

    
SiroMed Equity
Holdings, LLC		          

03/26/2018

  

3,703

    

7

(d)(e)(k)​

    

Annual Report 2023
92

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
VPP Group
Holdings, L.P.		          

12/01/2021

  

50

    

$

72

(d)(e)(k)​

      
VPP Group
Holdings, L.P.		    

Class A2

      

03/22/2023

  

—

    

—

(d)(e)(k)​

    
WSHP FC
Holdings LLC		          

07/01/2022

  

362

    

48

(d)(e)(k)​

    
                                 

2,547

      

0.08

%

  

Household and Personal Products

  
CDI Holdings
I Corp.		          

12/22/2021

  

50

    

32

(d)(e)(k)​

    
RMCF V CIV
XLIV, L.P.		          

08/20/2021

  

50,004

    

11

(d)(e)(k)​

    
Silk Holdings
I Corp.		          

05/01/2023

  

50

    

94

(d)(e)(k)​

    
                                 

137

      

—

%

  

Insurance

  
CFCo, LLC      

Class B

          

09/11/2023

    

5,035,395

          

—

(d)(e)(k)​

      
High Street
HoldCo LLC		    

Class A

   10.00%    

04/16/2021

  

50,000

    

128

(d)(e)​

    
High Street
HoldCo LLC		    

Class C

   10.00%    

04/16/2021

  

563,740

    

1,437

(d)(e)​

    
INSZ
Holdings, LLC		          

11/08/2022

  

31,139

    

31

(d)(e)(k)​

    
INSZ
Holdings, LLC		          

11/30/2023

  

1,073,000

    

1,073

(d)(e)(k)​

    
Maple
Acquisition
Holdings, LP		    

Class A2

      

11/01/2023

  

13,871

    

277

(d)(e)(k)​

    

SageSure LLC

      

Series A

          

02/18/2022

    

3

          

110

(d)(e)(k)​

      
                                 

3,056

      

0.10

%

  

Materials

  
ASP-r-pac
Holdings LP		    

Class A

      

12/29/2021

  

500

    

22

(d)(e)(k)​

    
KNPAK
Holdings, LP		    

Class A

      

07/02/2019

  

100,000

    

139

(d)(e)(k)​

    
Novipax Parent
Holding
Company, L.L.C.		    

Class C

      

12/01/2020

  

50

    

—

(d)(e)(k)​

    
Plaskolite PPC
Blocker LLC		          

12/14/2018

  

10

    

1

(d)(e)(k)​

    
                                 

162

      

0.01

%

  

Annual Report 2023
93

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Media and Entertainment

  
Eagle Football
Holdings
Limited		   United
Kingdom		        

09/14/2023

  

14

    

$

93

(d)(e)(k)​

      
Storm
Investment
S.a.r.l.		  

Luxembourg

        

06/24/2021

  

590

    

28

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class A

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class B

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class C

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class D

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class E

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class F

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class G

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class H

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

  

Class I

      

06/24/2021

  

491,621

    

840

(d)(e)(k)​

    
Storm
Investment
S.a.r.l.		  

Luxembourg

        

04/01/2022

  

25,565

    

—

(d)(e)(k)​

    
                                 

7,681

      

0.24

%

  

Pharmaceuticals, Biotechnology and Life Sciences

  
Athyrium
Buffalo LP/
Partnership
Interests		          

06/17/2022

  

2,097,909

    

2,035

(d)(e)(k)​

    
Athyrium
Buffalo LP/
Partnership
Interests		    

Class B

      

08/25/2023

  

1,032,980

    

1,002

(d)(e)(k)​

    
Bausch
Health Cos Inc		  

Canada

        

09/01/2022

  

108,571

    

871

    

Annual Report 2023
94

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Cobalt
Holdings I, LP		    

Class A

      

10/01/2021

  

500

    

$

61

(d)(e)(k)​

      
Covaris Parent,
LLC		    

Class A-2

      

01/21/2022

  

50

    

51

(d)(e)(k)​

    
WCI-BXC
Investment
Holdings, L.P.		          

11/03/2023

  

126,000

    

126

(d)(e)(k)​

    
                                 

4,146

      

0.13

%

  

Real Estate Management and Development

  
Illinois
Investment
S.a.r.l.		  

Luxembourg

        

09/15/2021

  

4,081

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class A

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class B

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class C

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class D

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class E

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class F

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class G

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class H

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

  

Class I

      

09/15/2021

  

3,400,700

    

—

(d)(e)(k)​

    
Illinois
Investment
S.a.r.l.		  

Luxembourg

        

05/26/2022

  

106,292

    

—

(d)(e)(k)​

    
                                 

—

      

—

%

  

Annual Report 2023
95

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Software and Services

  
APG Holdings,
LLC		    

Class A

      

01/03/2020

  

50,000

    

$

54

(d)(e)(k)​

    
Astorg VII
Co-Invest ERT		  

Luxembourg

        

01/31/2020

  

1,208,500

    

1,660

(d)(e)(k)​

    
Avaya Holdings
Corp		          

05/01/2023

  

2,607

    

18

(k)​

    
Avaya
Holdings Corp		          

05/01/2023

  

57,134

    

400

(k)​

    
Bobcat
Topco L.P./
Class A-1 Units		    

Class A-1

      

06/16/2023

  

50,000

    

50

(e)(k)​

    
Consilio
Investment
Holdings, L.P.		          

05/28/2021

  

5,038

    

93

(d)(e)(k)​

    
Consilio
Investment
Holdings, L.P.		    

Series A

      

09/15/2022

  

243

    

5

(d)(e)(k)​

    
Cority
Parent, Inc.		  

Canada

  

Class B-1

      

07/02/2019

  

47,536

    

2

(d)(e)(k)​

    
Denali
Apexco LP		    

Class A

      

09/15/2021

  

50,000

    

63

(d)(e)(k)​

    
Destiny
Digital
Holdings, L.P.		          

05/27/2021

  

3,076

    

34

(d)(e)(k)​

    
Elliott Alto
Co-Investor
Aggregator L.P.		          

09/28/2022

  

500,000

    

762

(d)(e)(k)​

    
EQT IX
Co-Investment
(E) SCSP		          

04/16/2021

  

5,000

    

73

(d)(e)(k)​

    
H&F Unite
Partners, L.P.		          

05/01/2019

  

50,032

    

77

(d)(e)(k)​

    
Insight PDI
Holdings, LLC		    

Class A

      

03/19/2019

  

26,548

    

43

(d)(e)(k)​

    
Magic Topco,
L.P.		    

Class B

      

09/21/2020

  

12,975

    

—

(d)(e)(k)​

    
Magnesium
Co- Invest SCSp		  

Luxembourg

        

05/06/2022

  

5

    

55

(d)(e)(k)​

    
PS Co-Invest,
L.P.		          

03/05/2021

  

50,000

    

65

(d)(e)(k)​

    
RMCF VI CIV
XLVIII, L.P.		          

06/08/2022

  

64,827

    

57

(d)(e)(k)​

    
RMS Group
Holdings, Inc.		          

12/16/2021

  

5

    

51

(d)(e)(k)​

    
Rocket
Parent, LLC		    

Class A

      

12/17/2018

  

74,502

    

258

(d)(e)(k)​

    
Skywalker
TopCo, LLC		          

11/20/2020

  

25,407

    

153

(d)(e)(k)​

    

Annual Report 2023
96

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Common Stock (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Sunshine
Software
Holdings, Inc.		    

Class A-1

      

10/15/2021

  

5,000

    

$

60

(d)(e)(k)​

      
                                 

4,033

      

0.11

%

  

Technology Hardware and Equipment

  
Repairify
Holdings, LLC		    

Class A

      

06/14/2021

  

1,655

    

44

(d)(e)(k)​

    
Wildcat
Parent, LP		          

02/27/2020

  

535

    

172

(d)(e)(k)​

    
                                 

216

      

0.01

%

  

Transportation

  
Neovia
Acquisition, LLC		          

11/01/2022

  

6

    

117

(e)(k)​

    
Shur-Co
HoldCo, Inc.		          

06/30/2021

  

500

    

121

(d)(e)(k)​

    
                                 

238

      

0.01

%

  

Utilities

  
Apex Clean
Energy TopCo,
LLC		    

Class A

      

11/17/2021

  

149,776

    

21,078

(d)(e)(k)​

    
                                 

21,078

      

0.66

%

  

Total Common Stock (Cost $38,138)

                                

53,348

      

1.66

%

  

Preferred Stock(b)(c)(d)(e)​

  

Automobiles and Components

  
Automotive
Keys Investor,
LLC		       9.00%    

12/22/2020

  

37,749

    

16

(g)(j)​

    
Automotive
Keys Investor,
LLC		       15.00%    

01/01/2023

  

25,000

    

11

(g)(j)​

    
                                 

27

      

—

%

  

Commercial and Professional Services

  
Marmic Topco,
L.P.		       8.00%    

03/05/2021

  

57,624

    

138

(g)​

    
Visual Edge
Technology, Inc.		       10.00%    

07/20/2023

  

13

    

116

(g)​

    
Visual Edge
Technology, Inc.		          

07/20/2023

  

17

    

—

(k)​

    
                                 

254

      

0.01

%

  

Annual Report 2023
97

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Preferred Stock(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Consumer Discretionary Distribution and Retail

  

GMP Hills, LP

           8.00%      

11/08/2023

    

611,000

        

$

608

        
Metis Holdco,
Inc.		    

Class A

   7.00%    

05/04/2021

  

7,959

    

9,572

(g)​

    
Monolith Brands
Group, Inc.		    

Series A

      

04/14/2022

  

192,811

    

2,814

(k)​

    
                                 

12,994

      

0.40

%

  

Consumer Services

  
Aragorn Parent
Holdings LP		    

Series A

   10.00%    

10/15/2020

  

50,000

    

109

(g)​

    
Family First
Bidco Limited		   United
Kingdom		     12.50%    

12/01/2022

  

20,838

    

14

    
OMERS
Mahomes
Investment
Holdings LLC		       15.00%    

07/26/2023

  

1

    

7

(g)​

    
Redwood
Services
Holdco, LLC		    

Series D

   8.00%    

12/31/2020

  

100,000

    

268

(g)​

    
                                 

398

      

0.01

%

  

Financial Services

  
Aquarian
Peninsula
Holdings LLC		       14.16% (3M
SOFR +
10.50%)		    

12/29/2022

  

15,000,000

    

16,623

(g)​

    
ASE Royal
Aggregator, LLC		    

Class A

      

07/31/2023

  

1,646,000

    

1,646

(k)​

    
Corient
Holdings, Inc.		    

Series A

      

05/23/2023

  

9,627

    

10,541

(k)​

    
The Ultimus
Group, LLC		    

Class A

   8.00%    

02/01/2019

  

2

    

3

(g)​

    
TVG-TMG
Holdings, LLC		    

Series A

      

03/31/2022

  

50

    

28

(k)​

    
                                 

28,841

      

0.90

%

  

Food and Beverage

  
City Line
Investments
LLC		    

Class A

   8.00%    

08/31/2023

  

25,000

    

27

(g)​

    
Gotham
Greens
Holdings, PBC		    

Series E-1

   6.00%    

06/29/2022

  

70,879

    

6,067

(f)(g)​

    
Gotham Greens
Holdings, PBC		    

Series E-1

      

08/02/2023

  

5,900

    

—

(f)(g)(k)​

    

Annual Report 2023
98

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Preferred Stock(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Watermill
Express
Holdings, LLC		    

Class A

   8.00%    

04/20/2021

  

5,000

    

$

79

(g)​

      
                                 

6,173

      

0.19

%

  

Health Care Equipment and Services

  
Evolent
Health,
Inc.		    

Series A

   11.40% (3M
SOFR +
6.00%)		    

01/20/2023

  

64

    

72

(g)​

    
Minerva
Holdco, Inc.		    

Series A

   10.75%    

02/15/2022

  

21,262

    

24,971

(g)​

    
Olympia
Acquisition,
Inc.		       16.40% (3M
SOFR +
11.00%)		    

02/28/2022

  

472

    

—

(g)(j)(k)​

    
Olympia
TopCo, L.P.		       15.00%    

07/28/2021

  

2,184

    

—

(g)(j)(k)​

    
OMERS
Wildcats
Investment
Holdings LLC		    

Class A

   15.00%    

08/02/2023

  

8

    

5

(g)​

    
Symplr
Software
Intermediate
Holdings, Inc.		    

Series C-1

   11.00%    

12/22/2020

  

50

    

56

(g)​

    
Symplr
Software
Intermediate
Holdings, Inc.		    

Series C-2

   11.00%    

06/18/2021

  

5,980

    

6,324

(g)​

    
Symplr
Software
Intermediate
Holdings, Inc.		    

Series C-3

   11.00%    

10/12/2021

  

789

    

805

(g)​

    
                                 

32,233

      

1.00

%

  

Insurance

  
High Street
HoldCo LLC		    

Series A-1

   10.00%    

01/01/2022

  

3,898,354

    

4,687

(g)​

    
High Street
HoldCo LLC		    

Series A-2

   10.00%    

01/01/2022

  

789,494

    

937

(g)​

    
High Street
HoldCo LLC		    

Series A-3

   10.00%    

01/01/2022

  

389,813

    

459

(g)​

    
High Street
HoldCo LLC		    

Series A-4

   10.00%    

01/01/2022

  

1,480,301

    

1,729

(g)​

    
High Street
HoldCo LLC		    

Series A-5

   10.00%    

01/01/2022

  

347,693

    

403

(g)​

    
High Street
HoldCo LLC		    

Series A-6

   10.00%    

01/01/2022

  

660,617

    

759

(g)​

    
High Street
HoldCo LLC		    

Series A-7

   10.00%    

01/01/2022

  

938,771

    

1,061

(g)​

    

Annual Report 2023
99

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Preferred Stock(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
High Street
HoldCo LLC		    

Series A-8

   10.00%    

11/01/2022

  

409,637

    

$

423

(g)​

      
High Street
HoldCo LLC		    

Series A-9

   10.00%    

11/08/2022

  

97,533

    

100

(g)​

    
High Street
HoldCo LLC		    

Series A-10

   10.00%    

12/12/2022

  

253,585

    

259

(g)​

    
High Street
HoldCo LLC		    

Series A-11

   10.00%    

12/30/2022

  

331,611

    

337

(g)​

    
High Street
HoldCo LLC		    

Series A-12

   10.00%    

02/01/2023

  

702,235

    

707

(g)​

    
High Street
HoldCo LLC		    

Series A-13

   10.00%    

04/11/2023

  

214,572

    

212

(g)​

    
High Street
HoldCo LLC		    

Series A-14

   10.00%    

07/10/2023

  

136,546

    

132

(g)​

    
High Street
HoldCo LLC		    

Series A-15

   10.00%    

07/18/2023

  

711,315

    

684

(g)​

    
                                 

12,889

      

0.40

%

  

Materials

  
Novipax Parent
Holding
Company, L.L.C.		    

Class A

   10.00%    

12/01/2020

  

50

    

34

(g)​

    
Plaskolite PPC
Blocker LLC		       15.00%    

10/31/2023

  

1

    

—

(g)​

    
                                 

34

      

—

%

  

Media and Entertainment

  
3 Step
Holdings, LLC		    

Series D

      

10/02/2023

  

3,038

    

50

(k)​

    
CFC Funding
LLC		       9.75%    

07/21/2023

  

4,270

    

4,142

(g)​

    
League One
Volleyball, Inc.		    

Series B

      

07/27/2023

  

194

    

1

(k)​

    

LiveBarn Inc.

  

Canada

              

08/17/2023

    

648,925

          

2,286

(k)​

      

PFL MMA, Inc.

      

Series E

          

04/26/2022

    

7,823

          

25

(k)​

      

PRG III, LLC

      

Class A

          

10/06/2020

    

2,250

          

912

(g)(j)(k)​

      
                                 

7,416

      

0.23

%

  

Pharmaceuticals, Biotechnology and Life Sciences

  
Cardinal Topco
Holdings, L.P.		    

Class A

   8.00%    

09/15/2020

  

83

    

252

(g)​

    
Cobalt
Holdings I, LP		       8.00%    

10/01/2021

  

50

    

6

(g)​

    

Annual Report 2023
100

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Preferred Stock(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Cobalt
Intermediate I,
Inc.		    

Series A

   15.66% (3M
SOFR +
10.00%)		    

10/01/2021

  

8,582

    

$

11,551

(g)​

      
                                 

11,809

      

0.37

%

  

Software and Services

  
Activate
holdings (US)
Corp.		       8.00%    

10/11/2023

  

50,000

    

48

(g)​

    
Appriss
Health
Intermediate
Holdings, Inc.		    

Series A

   11.00%    

05/06/2021

  

3,657

    

4,504

(g)​

    
Banyan
Software, LP		          

01/07/2022

  

16,323

    

1,171

(k)​

    
Cority Parent,
Inc.		  

Canada

  

Class A-1

   9.00%    

07/02/2019

  

50

    

208

(g)​

    
DCert Preferred
Holdings, Inc.		    

Series A

   10.50%    

05/25/2021

  

22,284

    

25,891

(g)​

    
Diligent
Preferred
Issuer, Inc.		       10.50%    

04/06/2021

  

1,476

    

1,757

(g)​

    
EZ Elemica
Holdings, Inc.		          

09/18/2019

  

50

    

63

(k)​

    
GSV PracticeTek
Holdings, LLC		    

Class A

   8.00%    

03/31/2021

  

269,272

    

269

(g)​

    
Insightful
Science
Holdings, LLC		       14.00%    

04/28/2021

  

62,340

    

2,236

(g)​

    
Knockout
Intermediate
Holdings I Inc.		       11.75%    

06/22/2022

  

7,299

    

8,600

(g)​

    
Magic Topco,
L.P.		    

Class A

   9.00%    

09/21/2020

  

58

    

134

(g)​

    
Packers
Software
Intermediate
Holdings, Inc.		    

Series A

   16.19%    

11/12/2020

  

50

    

62

(g)​

    
Packers
Software
Intermediate
Holdings, Inc.		    

Series A-2

   16.19%    

12/23/2020

  

18

    

22

(g)​

    
Packers
Software
Intermediate
Holdings, Inc.		    

Series A-3

   11.00%    

11/24/2021

  

24

    

26

(g)​

    
Peachtree
Parent, Inc.		    

Series A

   13.25%    

03/19/2019

  

25

    

44

(g)​

    

Annual Report 2023
101

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Preferred Stock(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  
Picard
Holdco, Inc.		    

Series A

   17.49% (3M
SOFR +
12.00%)		    

09/29/2022

  

428

    

$

463

(g)​

    
Project
Essential Super
Parent, Inc.		       15.05% (3M
SOFR +
9.50%)		    

04/20/2021

  

2,963

    

3,811

(g)​

      
Sunshine
Software
Holdings, Inc.		    

Series A

   10.50%    

10/15/2021

  

15,929

    

17,382

(g)​

    
Titan DI
Preferred
Holdings, Inc.		       13.50%    

02/11/2020

  

—

    

82

(g)​

    
                                 

66,773

      

2.08

%

  

Transportation

  
Neovia
Logistics
Holdings Ltd.		    

Class B

   19.44% (1M
SOFR +
12.50%)		    

11/01/2022

  

718

    

892

(g)​

    
                                 

892

      

0.03

%

  

Utilities

  

Ferrellgas, L.P.

           8.96%      

03/30/2021

    

8,734

          

8,821

(g)​

      
                                 

8,821

      

0.27

%

  

Total Preferred Stock (Cost $195,208)

                                

189,554

      

5.91

%

  

Private Asset-Backed Debt(b)(c)(d)(e)​

  

Automobiles and Components

  

HV Chimera LLC

     1st Lien Term
Loan		   8.39% (3M
SOFR +
2.80%)		  

08/10/2026

      

$

4,426

  

4,360

      
                                 

4,360

      

0.14

%

  

Consumer Discretionary Distribution and Retail

  
Tricolor
Funding SPV 3
LLC		     1st Lien
Revolving
Loan		   12.96% (1M
SOFR +
7.5%)		  

08/06/2027

      

1,039

  

1,040

    
Tricolor
Funding SPV 3
LLC		     1st Lien
Revolving
Loan		   12.96% (1M
SOFR +
7.50%)		  

08/06/2027

      

881

  

881

(n)​

    
                                 

1,921

      

0.06

%

  

Consumer Services

  
CFG
Investments
WH Limited		     1st Lien
Revolving
Loan		   11.46% (1M
SOFR +
6.00%)		  

02/17/2025

      

4,674

  

4,674

(h)​

    
                                 

4,674

      

0.15

%

  

Annual Report 2023
102

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Private Asset-Backed Debt(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Financial Services

  
Adonis
Financial
Funding, LLC		     1st Lien
Revolving
Loan		    

03/02/2026

      

$

486

  

$

311

(j)​

    
ASF Copper,
L.P.		     1st Lien Term
Loan		   11.35% (6M
LIBOR +
6.00%)		  

11/30/2027

      

8

  

8

    

ASF Copper, L.P.

     1st Lien Term
Loan		   9.97% (6M
EURIBOR +
6.00%)		  

11/30/2027

      

€

137

  

151

    

ASF Pollock, L.P.

     1st Lien Term
Loan		   11.35% (6M
SOFR +
6.00%)		  

11/30/2027

      

272

  

272

    

ASF Pollock, L.P.

     1st Lien Term
Loan		   9.97% (6M
EURIBOR +
6.00%)		  

11/30/2027

      

€

72

  

80

    
ASF VII
Wagner B L.P.		   United
Kingdom		   1st Lien Term
Loan		   11.35% (6M
SOFR +
6.00%)		  

08/16/2028

      

217

  

217

    
ASF VII
Wagner B L.P.		   United
Kingdom		   2nd Lien Term
Loan		   9.97% (6M
EURIBOR +
6.00%)		  

08/16/2028

      

€

140

  

154

    
ASF VII
Wagner L.P.		   United
Kingdom		   2nd Lien Term
Loan		   11.35% (6M
SOFR +
6.00%)		  

08/16/2028

      

462

  

462

    
ASF VII
Wagner L.P.		   United
Kingdom		   2nd Lien Term
Loan		   9.97% (6M
EURIBOR +
6.00%)		  

08/16/2028

      

€

299

  

330

    
DFC Global
Facility
Borrower III LLC		     1st Lien
Revolving
Loan		   12.94% (1M
SOFR +
7.50%)		  

04/14/2028

      

CAD

21,655

  

16,343

(h)(m)​

    
Hg Saturn 2
SumoCo
Limited		  

Guernsey

   1st Lien Term
Loan		   12.65% (3M
SOFR +
7.25%)		  

01/19/2027

      

15,855

  

15,855

(g)​

    
Hg Saturn
LuchaCo
Limited		  

Guernsey

   1st Lien Term
Loan		   12.69% (6M
SONIA +
7.50%)		  

03/30/2026

      

£

3,400

  

4,285

(g)​

    
Isthmus
Capital LLC		     1st Lien Delay
Draw Loan		   9.50% (3M
FIXED +
1.00%)		  

06/13/2030

      

5,257

  

5,257

    
Sera 2021 LLC
     1st Lien Delay
Draw Loan		   12.75%
(PRIME +
4.25%)		  

03/30/2026

      

851

  

851

(h)​

    
Sunbit
Receivables
Trust IV		     1st Lien
Revolving
Loan		    

12/22/2026

      

5,000

  

—

(h)​

    
                                 

44,576

      

1.39

%

  

Annual Report 2023
103

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Private Asset-Backed Debt(b)(c)(d)(e)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Real Estate Management and Development

  
Illinois
Investment
S.a.r.l.		  

Luxembourg

   1st Lien Term
Loan		   5.17%  

12/31/2026

      

SEK

31,362

  

$

3,109

    
Invesco Vaf V
Investments,
LLC		     1st Lien Term
Loan		   11.50%  

07/10/2028

      

3,333

  

3,300

(g)​

    
Invesco Vaf V
Investments,
LLC		     1st Lien Delay
Draw Loan		   11.50% (3M
LIBOR +
11.50%)		  

07/10/2028

      

1,667

  

1,650

(g)​

    
                                 

8,059

      

0.25

%

  

Total Private Asset-Backed Debt (Cost $63,105)

                                

63,590

      

1.98

%

  

Warrants(d)(k)​

  

Commercial and Professional Services

  
Priority Waste
Super Holdings,
LLC		          

08/18/2023

  

3,926

    

120

(e)​

    
Visual Edge
Technology, Inc.		          

03/22/2018

  

27,334

    

—

(e)​

    
                                 

120

      

—

%

  

Consumer Discretionary Distribution and Retail

  

Arko Corp

                  

12/22/2020

    

55

          

—

        
                                 

—

      

—

%

  

Food, Beverage and Tobacco

  
Gotham Greens
Holdings, PBC		          

06/29/2022

  

31,842

    

—

(e)(f)​

    
                                 

—

      

—

%

  

Health Care Equipment and Services

  
Air Medical
Buyer Corp		          

03/14/2018

  

122

    

1

(e)​

   
Air Methods
Corporation		          

12/28/2023

  

31,225

    

864

(e)​

    
GMR Buyer
Corp.		          

12/17/2021

  

1,927

    

19

(e)(k)​

    
Nomi Health,
Inc.		          

07/21/2023

  

2,174

    

—

(e)​

    
                                 

884

      

0.03

%

  

Annual Report 2023
104

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Warrants(d)(k)​ (continued)

Company

  

Country(a)​

  

Investment

  

Interest

   Maturity
Date		   Acquisition
Date		  

Shares

   Principal
Amount(a)​		  

Fair Value(a)​

   % of
Net
Assets		  

Materials

  
Vobev
Holdings, LLC		          

04/20/2023

  

1,079

    

$

—

(e)​

      
Vobev
Holdings, LLC		          

11/06/2023

  

12,161

    

780

(e)​

      
                                 

780

      

0.02

%

  

Media and Entertainment

  
Eagle Football
Holdings
Limited		          

12/09/2022

  

10

    

155

(e)​

    

PFL MMA, Inc.

                  

01/19/2021

    

115,111

          

59

(e)​

      

PFL MMA, Inc.

                  

11/23/2022

    

2,457

          

7

(e)​

      
                                 

221

      

0.01

%

  

Total Warrants (Cost $472)

                                

2,005

      

0.07

%

  

Total Investments (Cost $4,516,146)

                                

4,465,719

      

139.15

%

  

Liabilities In Excess Of Other Assets

                                

(1,256,499

)

    

(39.15

)%

  

Net Assets

                              

$

3,209,220

      

100.00

%

  

(a)  Investment holdings in foreign currencies are converted to U.S. Dollars using period end spot rates. Investments are in United States enterprises and all principal balances shown are in U.S. Dollars unless otherwise noted.

(b)  Variable rate loans bear interest at a rate that may be determined by reference to the Secured Overnight Financing Rate ("SOFR"), London Interbank Offered Rate ("LIBOR"), or an alternate base rate such as the Bank Bill Swap Bid Rate ("BBSY"), Bank Bill Benchmark Rate ("BKBM"), Canadian Dollar Offered Rate ("CDOR"), Copenhagen Interbank Offered Rate ("CIBOR"), Euro Interbank Offered Rate ("EURIBOR"), Norwegian Interbank Offered Rate ("NIBOR"), Prime Rate ("PRIME"), Sterling Overnight Index Average ("SONIA"), Stockholm Interbank Offered Rate ("STIBOR") or Warsaw Interbank Offered Rate ("WIBOR"), at the borrower's option. SOFR based contracts may include a credit spread adjustment that is charged in addition to the base rate and the stated spread. Stated interest rates in this schedule represents the "all-in" rate as of December 31, 2023.

(c)  Variable rate coupon rate shown as of December 31, 2023.

(d)  These investments, which as of December 31, 2023 represented 136.41% of the Fund's net assets or 93.30% of the Fund's total assets, may be subject to legal restrictions on sales. Acquisition dates are included above for equity securities that may be subject to legal restrictions on sales.

(e)  Investments whose values were determined using significant unobservable inputs (Level 3) (See Note 4 to the consolidated financial statements).

(f)  These assets are held at CADEX Credit Financing, LLC, a wholly owned special purpose financing vehicle, and are pledged as collateral for a secured revolving credit facility.

(g)  Includes a payment-in-kind provision.

(h)  As of December 31, 2023, the Fund had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and there can be no assurance that such conditions will be satisfied.

Annual Report 2023
105

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  
22 HoldCo Limited  

Subordinated Delay Draw Term Loan

  

$

1,560

    

$

—

    

$

1,560

    
285 Schermerhorn LLC  

1st Lien Delay Draw Term Loan

    

3

      

—

      

3

    
3 Step Sports LLC  

1st Lien Revolving Loan

    

124

      

(31

)

    

93

    
3 Step Sports LLC  

1st Lien Delay Draw Term Loan

    

1,498

      

—

      

1,498

    

Accession Risk Management Group, Inc.

  

1st Lien Revolving Loan

    

77

      

—

      

77

    

Accession Risk Management Group, Inc.

  

1st Lien Delay Draw Term Loan

    

811

      

—

      

811

    

Activate holdings (US) Corp.

  

1st Lien Revolving Loan

    

579

      

(116

)

    

463

    

AffiniPay Midco, LLC

  

1st Lien Revolving Loan

    

1,517

      

—

      

1,517

    

AI Aqua Merger Sub, Inc.

  

1st Lien Delay Draw Term Loan

    

348

      

—

      

348

    

AIM Acquisition, LLC

  

1st Lien Revolving Loan

    

457

      

—

      

457

    

Airx Climate Solutions, Inc.

  

1st Lien Revolving Loan

    

147

      

—

      

147

    

Airx Climate Solutions, Inc.

  

1st Lien Delay Draw Term Loan

    

534

      

—

      

534

    

Alcami Corporation

  

1st Lien Revolving Loan

    

27

      

—

      

27

    

Alcami Corporation

  

1st Lien Delay Draw Term Loan

    

17

      

—

      

17

    

American Residential Services L.L.C.

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

AmeriVet Partners Management, Inc.

  

Subordinated Delay Draw Loan

    

1,969

      

—

      

1,969

    

Anaplan, Inc.

  

1st Lien Revolving Loan

    

381

      

—

      

381

    

Anaqua Parent Holdings, Inc.

  

1st Lien Revolving Loan

    

231

      

—

      

231

    

Antenore Bidco SpA

  

1st Lien Delay Draw Term Loan

    

1,104

      

—

      

1,104

    

Apex Service Partners, LLC

  

1st Lien Revolving Loan

    

2,132

      

(171

)

    

1,961

    

Apex Service Partners, LLC

  

1st Lien Delay Draw Term Loan

    

4,434

      

—

      

4,434

    

APG Intermediate Holdings Corporation

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Applied Technical Services, LLC

  

1st Lien Revolving Loan

    

909

      

(523

)

    

386

    

Appriss Health, LLC

  

1st Lien Revolving Loan

    

212

      

—

      

212

    

AQ Sage Buyer, LLC

  

1st Lien Revolving Loan

    

50

      

—

      

50

    

AQ Sage Buyer, LLC

  

1st Lien Delay Draw Term Loan

    

321

      

—

      

321

    

AQ Sunshine, Inc.

  

1st Lien Revolving Loan

    

1,163

      

—

      

1,163

    

AQ Sunshine, Inc.

  

1st Lien Delay Draw Term Loan

    

651

      

—

      

651

    

Ardonagh Midco 3 PLC

  

1st Lien Delay Draw Term Loan

    

229

      

—

      

229

    

Argenbright Holdings V, LLC

  

1st Lien Delay Draw Term Loan

    

178

      

—

      

178

    

ASPIRE BIDCO LIMITED

  

1st Lien Delay Draw Term Loan

    

1,649

      

—

      

1,649

    

Aspris Bidco Limited

  

1st Lien Delay Draw Term Loan

    

403

      

—

      

403

    

ASP-r-pac Acquisition Co LLC

  

1st Lien Revolving Loan

    

839

      

—

      

839

    

athenahealth Group Inc.

  

1st Lien Revolving Loan

    

2,100

      

—

      

2,100

    

Bamboo Purchaser, Inc.

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

Bamboo US BidCo LLC

  

1st Lien Revolving Loan

    

1,413

      

—

      

1,413

    

Bamboo US BidCo LLC

  

1st Lien Delay Draw Term Loan

    

379

      

—

      

379

    

Banyan Software Holdings, LLC

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

Banyan Software Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

125

      

—

      

125

    

Annual Report 2023
106

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

Beacon Pointe Harmony, LLC

  

1st Lien Revolving Loan

  

$

909

    

$

—

    

$

909

    

Beacon Pointe Harmony, LLC

  

1st Lien Delay Draw Term Loan

    

1,734

      

—

      

1,734

    

Beacon Wellness Brands, Inc.

  

1st Lien Revolving Loan

    

410

      

—

      

410

    

Berner Food & Beverage, LLC

  

1st Lien Revolving Loan

    

262

      

(125

)

    

137

    

BlauwTrust Holding B.V.

  

1st Lien Delay Draw Term Loan

    

118

      

—

      

118

    

BlueHalo Global Holdings, LLC

  

1st Lien Revolving Loan

    

759

      

(444

)

    

315

    

Bobcat Purchaser, LLC

  

1st Lien Revolving Loan

    

306

      

—

      

306

    
Bottomline Technologies, Inc. and
Legal Spend Holdings, LLC		  

1st Lien Revolving Loan

    

1,811

      

—

      

1,811

    
BR PJK Produce, LLC  

1st Lien Delay Draw Term Loan

    

371

      

—

      

371

    

BradyIFS Holdings, LLC

  

1st Lien Revolving Loan

    

1,783

      

—

      

1,783

    

BradyIFS Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

1,517

      

—

      

1,517

    

Brokers Alliance S.L.

   1st Lien Term Loan    

2,196

      

—

      

2,196

    

Brokers Alliance S.L.

  

1st Lien Delay Draw Term Loan

    

4,857

      

—

      

4,857

    

Businessolver.com, Inc.

  

1st Lien Delay Draw Term Loan

    

425

      

—

      

425

    

Capnor Connery Bidco A/S

  

1st Lien Delay Draw Term Loan

    

5,380

      

—

      

5,380

    

Capstone Acquisition Holdings, Inc.

  

1st Lien Revolving Loan

    

1,150

      

—

      

1,150

    

Captive Resources Midco, LLC

  

1st Lien Revolving Loan

    

102

      

—

      

102

    

Cardinal Parent, Inc.

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

CC Globe Holding II A/S

  

1st Lien Delay Draw Term Loan

    

561

      

—

      

561

    

Centric Brands LLC

  

1st Lien Revolving Loan

    

293

      

—

      

293

    

CFG Investments WH Limited

  

1st Lien Revolving Loan

    

5,000

      

(4,674

)

    

326

    

Chariot Buyer LLC

  

1st Lien Revolving Loan

    

100

      

—

      

100

    
Cheyenne Petroleum Company Limited
Partnership, CPC 2001 LLC and
Mill Shoals LLC		  

1st Lien Delay Draw Term Loan

    

1,168

      

—

      

1,168

    

City Line Distributors LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

City Line Distributors LLC

  

1st Lien Delay Draw Term Loan

    

126

      

—

      

126

    

Clarion Home Services Group, LLC

  

1st Lien Delay Draw Term Loan

    

261

      

—

      

261

    

Cliffwater LLC

  

1st Lien Revolving Loan

    

58

      

—

      

58

    

Cloud Software Group, Inc.

  

1st Lien Revolving Loan

    

2,574

      

—

      

2,574

    

CMG HoldCo, LLC

  

1st Lien Revolving Loan

    

318

      

—

      

318

    

CMG HoldCo, LLC

  

1st Lien Delay Draw Term Loan

    

2,795

      

—

      

2,795

    

Cobalt Buyer Sub, Inc.

  

1st Lien Revolving Loan

    

895

      

(382

)

    

513

    

Compex Legal Services, Inc.

  

1st Lien Revolving Loan

    

900

      

(270

)

    

630

    

Confirmasoft AB

  

1st Lien Delay Draw Term Loan

    

1,749

      

—

      

1,749

    

Consilio Midco Limited

  

1st Lien Revolving Loan

    

225

      

(202

)

    

23

    

Consilio Midco Limited

  

1st Lien Delay Draw Term Loan

    

87

      

—

      

87

    

Continental Acquisition Holdings, Inc.

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

Continental Cafe, LLC

  

1st Lien Revolving Loan

    

787

      

(472

)

    

315

    

Annual Report 2023
107

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

Convera International Holdings Limited

  

1st Lien Revolving Loan

  

$

1,777

    

$

—

    

$

1,777

    

Cority Software Inc.

  

1st Lien Revolving Loan

    

231

      

—

      

231

    

Cornerstone OnDemand, Inc.

  

1st Lien Revolving Loan

    

100

      

—

      

100

    

Coupa Holdings, LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Coupa Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

20

      

—

      

20

    

Coyote Buyer, LLC

  

1st Lien Revolving Loan

    

2,067

      

—

      

2,067

    

CPIG Holdco Inc.

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

Crown CT Parent Inc.

  

1st Lien Revolving Loan

    

903

      

—

      

903

    

Crown CT Parent Inc.

  

1st Lien Delay Draw Term Loan

    

1,040

      

—

      

1,040

    

CST Holding Company

  

1st Lien Revolving Loan

    

79

      

(8

)

    

71

    
Cube Industrials Buyer, Inc. & Cube
A&D Buyer Inc.		  

1st Lien Revolving Loan

    

339

      

—

      

339

    

CVP Holdco, Inc.

  

1st Lien Revolving Loan

    

3,005

      

—

      

3,005

    

CVP Holdco, Inc.

  

1st Lien Delay Draw Term Loan

    

965

      

—

      

965

    

DecoPac, Inc.

  

1st Lien Revolving Loan

    

2,383

      

(715

)

    

1,668

    

Demakes Borrower, LLC

  

1st Lien Delay Draw Term Loan

    

270

      

—

      

270

    

Denali Holdco LLC

  

1st Lien Revolving Loan

    

592

      

—

      

592

    

Denali Holdco LLC

  

1st Lien Delay Draw Term Loan

    

456

      

—

      

456

    

DFC Global Facility Borrower III LLC

  

1st Lien Revolving Loan

    

19,304

      

(16,358

)

    

2,946

    

Diligent Corporation

  

1st Lien Revolving Loan

    

513

      

(277

)

    

236

    

DOXA Insurance Holdings, LLC

  

1st Lien Revolving Loan

    

200

      

—

      

200

    

DOXA Insurance Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

1,193

      

—

      

1,193

    

Draken Bidco Limited

  

1st Lien Delay Draw Term Loan

    

1,440

      

—

      

1,440

    

DRS Holdings III, Inc.

  

1st Lien Revolving Loan

    

173

      

—

      

173

    

DS Admiral Bidco, LLC

  

1st Lien Revolving Loan

    

359

      

(72

)

    

287

    

Dye & Durham Corporation

  

1st Lien Revolving Loan

    

1,416

      

(664

)

    

752

    

Dynamic NC Aerospace Holdings, LLC

  

1st Lien Revolving Loan

    

1,296

      

(670

)

    

626

    

ECG Bidco S.A.S.

  

1st Lien Delay Draw Term Loan

    

5,902

      

—

      

5,902

    

Echo Purchaser, Inc.

  

1st Lien Revolving Loan

    

214

      

(9

)

    

205

    

Echo Purchaser, Inc.

  

1st Lien Delay Draw Term Loan

    

335

      

—

      

335

    

Elevation Services Parent Holdings, LLC

  

1st Lien Revolving Loan

    

631

      

(467

)

    

164

    

Elevation Services Parent Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

965

      

—

      

965

    

Enverus Holdings, Inc.

  

1st Lien Revolving Loan

    

744

      

—

      

744

    

Enverus Holdings, Inc.

  

1st Lien Delay Draw Term Loan

    

438

      

—

      

438

    

EPS NASS Parent, Inc.

  

1st Lien Revolving Loan

    

158

      

(135

)

    

23

    

Erasmus Acquisition Holding B.V.

  

1st Lien Delay Draw Term Loan

    

1,065

      

—

      

1,065

    

ESHA Research, LLC

  

1st Lien Revolving Loan

    

76

      

(55

)

    

21

    

Essential Services Holding Corporation

  

1st Lien Revolving Loan

    

1,560

      

(624

)

    

936

    

Eternal Aus Bidco Pty Ltd

  

1st Lien Delay Draw Term Loan

    

241

      

—

      

241

    

Evolent Health LLC

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

Annual Report 2023
108

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

Excel Fitness Holdings, Inc.

  

1st Lien Delay Draw Term Loan

  

$

380

    

$

—

    

$

380

    

ExtraHop Networks, Inc.

  

1st Lien Delay Draw Term Loan

    

1,072

      

—

      

1,072

    

Finastra USA, Inc.

  

1st Lien Revolving Loan

    

2,178

      

—

      

2,178

    

FL Hawk Intermediate Holdings, Inc.

  

1st Lien Revolving Loan

    

1,312

      

—

      

1,312

    

Flexential Topco Corporation

  

1st Lien Revolving Loan

    

3,000

      

(2,400

)

    

600

    

Flint Opco, LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Flint Opco, LLC

  

1st Lien Delay Draw Term Loan

    

321

      

—

      

321

    

Flywheel Acquireco, Inc.

  

1st Lien Revolving Loan

    

1,665

      

(1,110

)

    

555

    

Foundation Consumer Brands, LLC

  

1st Lien Revolving Loan

    

389

      

—

      

389

    

Foundation Risk Partners, Corp.

  

1st Lien Revolving Loan

    

2,627

      

—

      

2,627

    

Foundation Risk Partners, Corp.

  

1st Lien Delay Draw Term Loan

    

4,297

      

—

      

4,297

    

Galway Borrower LLC

  

1st Lien Revolving Loan

    

969

      

—

      

969

    

GC Waves Holdings, Inc.

  

1st Lien Revolving Loan

    

173

      

—

      

173

    

GC Waves Holdings, Inc.

  

1st Lien Delay Draw Term Loan

    

2,498

      

—

      

2,498

    

Gilfoyle Bidco AB

  

1st Lien Delay Draw Term Loan

    

900

      

—

      

900

    

Global Music Rights, LLC

  

1st Lien Revolving Loan

    

473

      

—

      

473

    

GNZ Energy Bidco Limited

  

1st Lien Delay Draw Term Loan

    

1,240

      

—

      

1,240

    

Gotham Greens Holdings, PBC

  

1st Lien Delay Draw Term Loan

    

5,245

      

—

      

5,245

    

GraphPAD Software, LLC

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

Groundworks, LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Groundworks, LLC

  

1st Lien Delay Draw Term Loan

    

20

      

—

      

20

    

GS SEER Group Borrower LLC

  

1st Lien Revolving Loan

    

37

      

—

      

37

    

GS SEER Group Borrower LLC

  

1st Lien Delay Draw Term Loan

    

116

      

—

      

116

    

GTCR F Buyer Corp.

  

1st Lien Revolving Loan

    

45

      

—

      

45

    

GTCR F Buyer Corp.

  

1st Lien Delay Draw Term Loan

    

281

      

—

      

281

    

Guidepoint Security Holdings, LLC

  

1st Lien Revolving Loan

    

200

      

—

      

200

    

Guidepoint Security Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

295

      

—

      

295

    

Hakken Bidco B.V.

  

1st Lien Delay Draw Term Loan

    

956

      

—

      

956

    

Halcon Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

89

      

—

      

89

    

Hamsard 3713 Limited

  

1st Lien Delay Draw Term Loan

    

5,614

      

—

      

5,614

    
Heavy Construction Systems
Specialists, LLC		  

1st Lien Revolving Loan

    

410

      

—

      

410

    
Helios Service Partners, LLC & Astra
Service Partners, LLC		  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    
Helios Service Partners, LLC & Astra
Service Partners, LLC		  

1st Lien Delay Draw Term Loan

    

430

      

—

      

430

    

HH-Stella, Inc.

  

1st Lien Revolving Loan

    

444

      

—

      

444

    

HH-Stella, Inc.

  

1st Lien Delay Draw Term Loan

    

652

      

—

      

652

    

Higginbotham Insurance Agency, Inc.

  

1st Lien Delay Draw Term Loan

    

200

      

—

      

200

    

High Street Buyer, Inc.

  

1st Lien Revolving Loan

    

688

      

—

      

688

    

Annual Report 2023
109

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

High Street Buyer, Inc.

  

1st Lien Delay Draw Term Loan

  

$

5,301

    

$

—

    

$

5,301

    

Highline Aftermarket Acquisition, LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Hills Distribution, Inc.

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

Hills Distribution, Inc.

  

1st Lien Delay Draw Term Loan

    

314

      

—

      

314

    

HP RSS Buyer, Inc.

  

1st Lien Delay Draw Term Loan

    

701

      

—

      

701

    

Hyland Software, Inc.

  

1st Lien Revolving Loan

    

594

      

—

      

594

    

Infinity Home Services HoldCo, Inc.

  

1st Lien Revolving Loan

    

456

      

—

      

456

    

Infinity Home Services HoldCo, Inc.

  

1st Lien Delay Draw Term Loan

    

1,410

      

—

      

1,410

    

Inszone Mid, LLC

  

1st Lien Revolving Loan

    

122

      

—

      

122

    

Inszone Mid, LLC

  

1st Lien Delay Draw Term Loan

    

1,899

      

—

      

1,899

    

IQN Holding Corp.

  

1st Lien Revolving Loan

    

628

      

—

      

628

    

IQN Holding Corp.

  

1st Lien Delay Draw Term Loan

    

704

      

—

      

704

    

IRI Group Holdings, Inc.

  

1st Lien Revolving Loan

    

1,305

      

(235

)

    

1,070

    

Ivanti Software, Inc.

  

1st Lien Revolving Loan

    

460

      

(21

)

    

439

    

Jewel Bidco Limited

  

1st Lien Delay Draw Term Loan

    

922

      

—

      

922

    

JMG Group Investments Limited

  

1st Lien Delay Draw Term Loan

    

9,957

      

—

      

9,957

    

Kaseya Inc.

  

1st Lien Revolving Loan

    

2,372

      

(598

)

    

1,774

    

Kaseya Inc.

  

1st Lien Delay Draw Term Loan

    

2,221

      

—

      

2,221

    

Kene Acquisition, Inc.

  

1st Lien Revolving Loan

    

676

      

—

      

676

    

Keystone Agency Partners LLC

  

1st Lien Revolving Loan

    

20

      

—

      

20

    

Keystone Agency Partners LLC

  

1st Lien Delay Draw Term Loan

    

1,429

      

—

      

1,429

    

Kings Buyer, LLC

  

1st Lien Revolving Loan

    

116

      

—

      

116

    

Laboratories Bidco LLC

  

1st Lien Revolving Loan

    

1,568

      

(654

)

    

914

    

Lavatio Midco Sarl

  

1st Lien Delay Draw Term Loan

    

408

      

—

      

408

    

LeanTaaS Holdings, Inc.

  

1st Lien Delay Draw Term Loan

    

3,874

      

—

      

3,874

    

Leviathan Intermediate Holdco, LLC

  

1st Lien Revolving Loan

    

13

      

—

      

13

    

LGDN Bidco Limited

  

1st Lien Delay Draw Term Loan

    

275

      

—

      

275

    

Lightbeam Bidco, Inc.

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Lightbeam Bidco, Inc.

  

1st Lien Delay Draw Term Loan

    

547

      

—

      

547

    

LJ Perimeter Buyer, Inc.

  

1st Lien Delay Draw Term Loan

    

512

      

—

      

512

    

LJo Finco AB

  

1st Lien Revolving Loan

    

2,330

      

—

      

2,330

    

LJo Finco AB

  

1st Lien Delay Draw Term Loan

    

5,105

      

—

      

5,105

    

Lowe P27 Bidco Limited

  

1st Lien Delay Draw Term Loan

    

2,026

      

—

      

2,026

    

Majesco

  

1st Lien Revolving Loan

    

624

      

—

      

624

    

Marmic Purchaser, LLC

  

1st Lien Revolving Loan

    

287

      

(230

)

    

57

    

Marmic Purchaser, LLC

  

1st Lien Delay Draw Term Loan

    

910

      

—

      

910

    

Mavis Tire Express Services Topco Corp.

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Mercury Borrower, Inc.

  

1st Lien Revolving Loan

    

470

      

—

      

470

    

Micromeritics Instrument Corp.

  

1st Lien Revolving Loan

    

331

      

—

      

331

    

Annual Report 2023
110

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

Mimecast Borrowerco, Inc.

  

1st Lien Delay Draw Term Loan

  

$

3,831

    

$

—

    

$

3,831

    

Monica Holdco (US), Inc.

  

1st Lien Revolving Loan

    

1,009

      

(1,002

)

    

7

    

Mr. Greens Intermediate, LLC

  

1st Lien Revolving Loan

    

114

      

—

      

114

    

Mr. Greens Intermediate, LLC

  

1st Lien Delay Draw Term Loan

    

967

      

—

      

967

    

MRI Software LLC

  

1st Lien Revolving Loan

    

541

      

—

      

541

    

MRI Software LLC

  

1st Lien Delay Draw Term Loan

    

325

      

—

      

325

    

MWG BidCo ApS

   1st Lien Term Loan    

254

      

—

      

254

    

MWG BidCo ApS

  

1st Lien Delay Draw Term Loan

    

41

      

—

      

41

    

Nelipak European Holdings Cooperatief U.A.

  

1st Lien Revolving Loan

    

629

      

(130

)

    

499

    

Nelipak Holding Company

  

1st Lien Revolving Loan

    

605

      

(165

)

    

440

    

Neptune BidCo US Inc.

  

1st Lien Revolving Loan

    

2,988

      

—

      

2,988

    

Network Bidco B.V.

  

1st Lien Delay Draw Term Loan

    

1,493

      

—

      

1,493

    

New Churchill Holdco LLC

  

1st Lien Revolving Loan

    

151

      

(19

)

    

132

    

New Churchill Holdco LLC

  

1st Lien Delay Draw Term Loan

    

1,992

      

—

      

1,992

    

Next Holdco, LLC

  

1st Lien Revolving Loan

    

37

      

—

      

37

    

Next Holdco, LLC

  

1st Lien Delay Draw Term Loan

    

255

      

—

      

255

    

NMC Skincare Intermediate Holdings II, LLC

  

1st Lien Revolving Loan

    

465

      

(36

)

    

429

    

North American Fire Holdings, LLC

  

1st Lien Revolving Loan

    

411

      

(185

)

    

226

    

North Haven Fairway Buyer, LLC

  

1st Lien Revolving Loan

    

13

      

—

      

13

    

North Haven Fairway Buyer, LLC

  

1st Lien Delay Draw Term Loan

    

44

      

—

      

44

    

North Haven Stack Buyer, LLC

  

1st Lien Revolving Loan

    

259

      

(162

)

    

97

    

North Haven Stack Buyer, LLC

  

1st Lien Delay Draw Term Loan

    

447

      

—

      

447

    

Northwinds Holding, Inc.

  

1st Lien Revolving Loan

    

885

      

—

      

885

    

Northwinds Holding, Inc.

  

1st Lien Delay Draw Term Loan

    

1,021

      

—

      

1,021

    

Oakbridge Insurance Agency LLC

  

1st Lien Revolving Loan

    

113

      

—

      

113

    

Oakbridge Insurance Agency LLC

  

1st Lien Delay Draw Term Loan

    

626

      

—

      

626

    

Odevo AB

  

1st Lien Delay Draw Term Loan

    

5,325

      

—

      

5,325

    

Olympia Acquisition, Inc.

  

1st Lien Delay Draw Term Loan

    

54

      

—

      

54

    

OMH-HealthEdge Holdings, LLC

  

1st Lien Revolving Loan

    

878

      

—

      

878

    

Panther NewCo

  

1st Lien Delay Draw Term Loan

    

2,703

      

—

      

2,703

    

Paragon 28, Inc.

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

Paragon 28, Inc.

  

1st Lien Delay Draw Term Loan

    

1,217

      

—

      

1,217

    

Pathstone Family Office LLC

  

1st Lien Revolving Loan

    

190

      

(42

)

    

148

    

Pathstone Family Office LLC

  

1st Lien Delay Draw Term Loan

    

258

      

—

      

258

    

Patriot Growth Insurance Services, LLC

  

1st Lien Revolving Loan

    

250

      

—

      

250

    

PCIA SPV-3, LLC

  

1st Lien Revolving Loan

    

321

      

—

      

321

    

PCIA SPV-3, LLC

  

1st Lien Delay Draw Term Loan

    

682

      

—

      

682

    

PDDS Holdco, Inc.

  

1st Lien Revolving Loan

    

58

      

(17

)

    

41

    

PDDS Holdco, Inc.

  

1st Lien Delay Draw Term Loan

    

83

      

—

      

83

    

Annual Report 2023
111

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

Pegasus (Bidco) Limited

  

1st Lien Delay Draw Term Loan

  

$

3,505

    

$

—

    

$

3,505

    

People Corporation

  

1st Lien Revolving Loan

    

858

      

(735

)

    

123

    

People Corporation

  

1st Lien Delay Draw Term Loan

    

1,444

      

—

      

1,444

    

PestCo, LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

PestCo, LLC

  

1st Lien Delay Draw Term Loan

    

100

      

—

      

100

    

Platinum Credit Bidco Limited

  

1st Lien Revolving Loan

    

4,448

      

—

      

4,448

    

Pluralsight, Inc.

  

1st Lien Revolving Loan

    

1,205

      

(936

)

    

269

    

PracticeTek Purchaser, LLC

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

PracticeTek Purchaser, LLC

  

1st Lien Delay Draw Term Loan

    

2,363

      

—

      

2,363

    

Precision Concepts International LLC

  

1st Lien Revolving Loan

    

312

      

—

      

312

    

Premier Specialties, Inc.

  

1st Lien Revolving Loan

    

385

      

(77

)

    

308

    

Premise Health Holding Corp

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Prime Buyer, L.L.C.

  

1st Lien Revolving Loan

    

3,985

      

—

      

3,985

    

Prime Dental Alliance B.V.

   1st Lien Term Loan    

42

      

—

      

42

    

Prime Dental Alliance B.V.

  

1st Lien Delay Draw Term Loan

    

1,150

      

—

      

1,150

    

Priority Waste Holdings LLC

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

Priority Waste Holdings LLC

  

1st Lien Delay Draw Term Loan

    

894

      

—

      

894

    

ProfitSolv Purchaser, Inc.

  

1st Lien Revolving Loan

    

608

      

—

      

608

    

ProFund S.a r.l.

  

1st Lien Delay Draw Term Loan

    

398

      

—

      

398

    

Project Essential Bidco, Inc.

  

1st Lien Revolving Loan

    

121

      

—

      

121

    

Project Hammond Bidco Limited

  

1st Lien Delay Draw Term Loan

    

1,673

      

—

      

1,673

    

Proofpoint, Inc.

  

1st Lien Revolving Loan

    

240

      

—

      

240

    

PSC Group LLC

  

1st Lien Revolving Loan

    

2,106

      

—

      

2,106

    

PSC Group LLC

  

1st Lien Delay Draw Term Loan

    

136

      

—

      

136

    

Pushpay USA Inc.

  

1st Lien Revolving Loan

    

18

      

—

      

18

    

PX HoldCo3 Limited

  

1st Lien Delay Draw Term Loan

    

423

      

—

      

423

    

Pye-Barker Fire & Safety, LLC

  

1st Lien Delay Draw Term Loan

    

2,576

      

—

      

2,576

    

QF Holdings, Inc.

  

1st Lien Revolving Loan

    

317

      

—

      

317

    

Radius Aerospace Europe Limited

  

1st Lien Revolving Loan

    

193

      

(157

)

    

36

    

Radius Aerospace, Inc.

  

1st Lien Revolving Loan

    

428

      

(114

)

    

314

    
Raptor Technologies, LLC
(Sycamore Bidco Ltd)		  

1st Lien Revolving Loan

    

498

      

—

      

498

    

Rawlings Sporting Goods Company, Inc.

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

RB Holdings Interco, LLC

  

1st Lien Revolving Loan

    

698

      

(605

)

    

93

    

Reddy Ice LLC

  

1st Lien Revolving Loan

    

955

      

—

      

955

    

Reddy Ice LLC

  

1st Lien Delay Draw Term Loan

    

151

      

—

      

151

    

Redwood Services, LLC

  

1st Lien Revolving Loan

    

194

      

—

      

194

    

Redwood Services, LLC

  

1st Lien Delay Draw Term Loan

    

1,653

      

—

      

1,653

    

Registrar Intermediate, LLC

  

1st Lien Revolving Loan

    

764

      

—

      

764

    

Relativity ODA LLC

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Annual Report 2023
112

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

Repairify, Inc.

  

1st Lien Revolving Loan

  

$

765

    

$

(510

)

  

$

255

    

Revalize, Inc.

  

1st Lien Revolving Loan

    

227

      

(57

)

    

170

    

RMS Holdco II, LLC

  

1st Lien Revolving Loan

    

883

      

—

      

883

    

Rodeo AcquisitionCo LLC

  

1st Lien Revolving Loan

    

312

      

(215

)

    

97

    

RSK Group Limited

  

1st Lien Delay Draw Term Loan

    

888

      

—

      

888

    

Rubicone Bidco Limited

  

1st Lien Delay Draw Term Loan

    

708

      

—

      

708

    

SageSure Holdings, LLC

  

2nd Lien Delay Draw Term Loan

    

1,293

      

—

      

1,293

    

Saldon Holdings, Inc.

  

1st Lien Revolving Loan

    

381

      

—

      

381

    
Schill Landscaping and Lawn Care
Services, LLC		  

1st Lien Revolving Loan

    

720

      

(288

)

    

432

    

SCM Insurance Services Inc.

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Sera 2021 LLC

  

1st Lien Delay Draw Term Loan

    

390

      

—

      

390

    

Service Logic Acquisition, Inc.

  

1st Lien Revolving Loan

    

1,007

      

—

      

1,007

    

Seventeen Group Limited

  

1st Lien Delay Draw Term Loan

    

649

      

—

      

649

    

Shermco Intermediate Holdings, Inc.

  

1st Lien Revolving Loan

    

1,000

      

(25

)

    

975

    

Shermco Intermediate Holdings, Inc.

  

1st Lien Delay Draw Term Loan

    

245

      

—

      

245

    

Sigma Electric Manufacturing Corporation

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Smarsh Inc.

  

1st Lien Revolving Loan

    

227

      

—

      

227

    

Smarsh Inc.

  

1st Lien Delay Draw Term Loan

    

445

      

—

      

445

    

Solar Bidco Limited

  

1st Lien Delay Draw Term Loan

    

1,411

      

—

      

1,411

    

Spitfire Bidco Limited

  

1st Lien Delay Draw Term Loan

    

4,007

      

—

      

4,007

    

SSE Buyer, Inc.

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

Steward Partners Global Advisory, LLC

  

1st Lien Delay Draw Term Loan

    

583

      

—

      

583

    

Sugar PPC Buyer LLC

  

1st Lien Delay Draw Term Loan

    

597

      

—

      

597

    

Sun Acquirer Corp.

  

1st Lien Revolving Loan

    

1,059

      

(212

)

    

847

    

Sun Acquirer Corp.

  

1st Lien Delay Draw Term Loan

    

1,370

      

—

      

1,370

    

Sunbit Receivables Trust IV

  

1st Lien Revolving Loan

    

5,000

      

—

      

5,000

    

Sundance Group Holdings, Inc.

  

1st Lien Revolving Loan

    

2

      

(1

)

    

1

    

Symbol Bidco I Limited

  

1st Lien Delay Draw Term Loan

    

845

      

—

      

845

    

Symplr Software Inc.

  

1st Lien Revolving Loan

    

1

      

—

      

1

    

Systems Planning and Analysis, Inc.

  

1st Lien Revolving Loan

    

1,004

      

—

      

1,004

    

TA/WEG Holdings, LLC

  

1st Lien Revolving Loan

    

914

      

—

      

914

    

Tandarts Today Holding B.V.

  

1st Lien Delay Draw Term Loan

    

2,621

      

—

      

2,621

    

TCP Hawker Intermediate LLC

  

1st Lien Revolving Loan

    

595

      

—

      

595

    

TCP Hawker Intermediate LLC

  

1st Lien Delay Draw Term Loan

    

836

      

—

      

836

    

The Mather Group, LLC

  

1st Lien Revolving Loan

    

750

      

(150

)

    

600

    

The Mather Group, LLC

  

1st Lien Delay Draw Term Loan

    

571

      

—

      

571

    

The Ultimus Group Midco, LLC

  

1st Lien Revolving Loan

    

396

      

(45

)

    

351

    

Thermostat Purchaser III, Inc.

  

1st Lien Revolving Loan

    

100

      

—

      

100

    

Trader Corporation

  

1st Lien Revolving Loan

    

13

      

—

      

13

    

Annual Report 2023
113

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Company

  

Investment Type

   Total revolving
and delayed draw
loan commitments		   Less: funded
commitments		   Total unfunded
commitments		  

TSS Buyer, LLC

  

1st Lien Delay Draw Term Loan

  

$

161

    

$

—

    

$

161

    

Two Six Labs, LLC

  

1st Lien Revolving Loan

    

2,561

      

—

      

2,561

    

UKG Inc.

  

1st Lien Revolving Loan

    

2

      

—

      

2

    

United Digestive MSO Parent, LLC

  

1st Lien Revolving Loan

    

130

      

—

      

130

    

United Digestive MSO Parent, LLC

  

1st Lien Delay Draw Term Loan

    

834

      

—

      

834

    

US Salt Investors, LLC

  

1st Lien Revolving Loan

    

679

      

—

      

679

    

Verista, Inc.

  

1st Lien Revolving Loan

    

2,000

      

(333

)

    

1,667

    

Vertex Service Partners, LLC

  

1st Lien Revolving Loan

    

210

      

—

      

210

    

Vertex Service Partners, LLC

  

1st Lien Delay Draw Term Loan

    

1,493

      

—

      

1,493

    

Visual Edge Technology, Inc.

  

1st Lien Delay Draw Term Loan

    

50

      

—

      

50

    

Vobev, LLC

  

1st Lien Revolving Loan

    

1

      

(1

)

    

—

    

Vobev, LLC

  

1st Lien Delay Draw Term Loan

    

449

      

—

      

449

    

VPP Intermediate Holdings, LLC

  

1st Lien Revolving Loan

    

315

      

—

      

315

    

VPP Intermediate Holdings, LLC

  

1st Lien Delay Draw Term Loan

    

1,960

      

—

      

1,960

    

VRC Companies, LLC

  

1st Lien Revolving Loan

    

1,342

      

—

      

1,342

    

Waste Services Finco Pty Ltd

  

1st Lien Delay Draw Term Loan

    

364

      

—

      

364

    

Watermill Express, LLC

  

1st Lien Revolving Loan

    

275

      

(121

)

    

154

    

Waverly Advisors, LLC

  

1st Lien Revolving Loan

    

375

      

—

      

375

    

WCI-BXC Purchaser, LLC

  

1st Lien Revolving Loan

    

34

      

—

      

34

    

WebPT, Inc.

  

1st Lien Revolving Loan

    

216

      

(52

)

    

164

    

Wellness AcquisitionCo, Inc.

  

1st Lien Revolving Loan

    

504

      

—

      

504

    

Wellness AcquisitionCo, Inc.

  

1st Lien Delay Draw Term Loan

    

609

      

—

      

609

    

Wildcat BuyerCo, Inc.

  

1st Lien Revolving Loan

    

255

      

—

      

255

    

Wildcat BuyerCo, Inc.

  

1st Lien Delay Draw Term Loan

    

330

      

—

      

330

    

Witherslack Bidco Limited

  

1st Lien Delay Draw Term Loan

    

525

      

—

      

525

    

WorkWave Intermediate II, LLC

  

1st Lien Revolving Loan

    

460

      

—

      

460

    

World Insurance Associates, LLC

  

1st Lien Revolving Loan

    

60

      

—

      

60

    

World Insurance Associates, LLC

  

1st Lien Delay Draw Term Loan

    

2,572

      

—

      

2,572

    

Worldwide Produce Acquisition, LLC

  

1st Lien Revolving Loan

    

21

      

(10

)

    

11

    

Worldwide Produce Acquisition, LLC

  

1st Lien Delay Draw Term Loan

    

53

      

—

      

53

    

WSBidCo Limited

  

1st Lien Delay Draw Term Loan

    

2,696

      

—

      

2,696

    

WSHP FC Acquisition LLC

  

1st Lien Revolving Loan

    

2,945

      

(2,757

)

    

188

    

YE Brands Holdings, LLC

  

1st Lien Revolving Loan

    

297

      

(154

)

    

143

    

ZB Holdco LLC

  

1st Lien Revolving Loan

    

637

      

—

      

637

    

ZB Holdco LLC

  

1st Lien Delay Draw Term Loan

    

480

      

—

      

480

    
       

$

338,231

    

$

(42,039

)

  

$

296,192

    

(i)  This loan or a portion of this loan represents an unsettled loan purchase. The interest rate will be determined at the time of settlement and will be based upon a spread plus the applicable reference rate determined at the time of purchase.

(j)  Loan or bond was on non-accrual status as of December 31, 2023.

Annual Report 2023
114

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

(k)  Non-income producing security as of December 31, 2023.

(l)  When-Issued or delayed delivery security based on typical market settlement convention for such security.

(m)  The Fund sold a participating interest of CAD $8,582 in aggregate principal amount outstanding of the portfolio company's first lien senior secured revolver. As the transaction did not qualify as a "true sale" in accordance with U.S. generally accepted accounting principles ("GAAP"), the Fund recorded a corresponding secured borrowing of $5,697 at fair value, included in "accrued expenses and other payables" in the consolidated statement of assets and liabilities. As of December 31, 2023, the interest rate in effect for the secured borrowing was 12.96%.

(n)  The Fund sold a participating interest of $850 in aggregate principal amount outstanding of the portfolio company's first lien senior secured revolver. As the transaction did not qualify as a "true sale" in accordance with GAAP, the Fund recorded a corresponding secured borrowing of $850 at fair value, included in "accrued expenses and other payables" in the consolidated statement of assets and liabilities. As of December 31, 2023, the interest rate in effect for the secured borrowing was 12.96%.

As of December 31, 2023, the aggregate cost of securities for federal income tax purposes was $4,543,501. Unrealized appreciation and depreciation on investments for federal income tax purposes are as follows:

Gross unrealized appreciation

  

$

86,101

    

Gross unrealized depreciation

    

(164,070

)

  

Net unrealized depreciation

  

$

(77,969

)

  

Securities sold short as of December 31, 2023 were as follows:

Corporate Bonds Sold Short

Company

  

Industry

   Interest
Rate		  

Maturity Date

  

Principal Amount

  

Value

   % of Net
Assets		  

Staples Inc.

  

Consumer Discretionary Distribution and Retail

    

7.50

%

  

04/15/2026

  

$

(770

)

  

$

(718

)

          

Total Corporate Bonds Sold Short (Cost $(638))

                  

$

(718

)

    

(0.02

)%

  

Forward currency contracts as of December 31, 2023 were as follows:

Description

   Notional
Amount to be
Purchased		   Notional Amount
to be Sold		  

Counterparty

   Settlement
Date		   Unrealized
Appreciation		   Unrealized
Depreciation		  

Foreign currency forward contract

  

$

19,049

    

CAD

25,235

    

Goldman Sachs

  

January 18, 2024

  

$

—

    

$

(206

)

  

Foreign currency forward contract

  

$

122,347

    

£

95,973

    

Goldman Sachs

  

January 26, 2024

    

—

      

(5,675

)

  

Foreign currency forward contract

  

$

108,044

    

€

97,774

    

Goldman Sachs

  

January 26, 2024

    

—

      

(3,852

)

  

Foreign currency forward contract

  

$

8,427

    

CAD

11,164

    

Goldman Sachs

  

January 26, 2024

    

—

      

(319

)

  

Foreign currency forward contract

  

$

8,442

    

DKK

56,938

    

Goldman Sachs

  

January 26, 2024

    

—

      

(331

)

  

Foreign currency forward contract

  

$

778

    

NOK

7,895

    

Goldman Sachs

  

January 26, 2024

    

—

      

(70

)

  

Foreign currency forward contract

  

$

12,222

    

NZD

19,332

    

Goldman Sachs

  

January 26, 2024

    

—

      

(972

)

  

Foreign currency forward contract

  

$

3,817

    

PLN

15,023

    

Goldman Sachs

  

January 26, 2024

    

—

      

(270

)

  

Foreign currency forward contract

  

$

27,881

    

SEK

280,934

    

Goldman Sachs

  

January 26, 2024

    

—

      

(2,516

)

  

Foreign currency forward contract

  

$

10,567

    

AUD

15,492

    

Goldman Sachs

  

January 29, 2024

    

—

      

(616

)

  

Foreign currency forward contract

  

$

4,302

    

£

3,371

    

Goldman Sachs

  

August 21, 2026

    

—

      

(131

)

  

Total

                  

$

—

    

$

(14,958

)

  

Annual Report 2023
115

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Purchased options outstanding as of December 31, 2023 were as follows:

Options on Equity Indices — Buy Protection

Description

  

Exercise Price

  

Expiration Date

  

Counterparty

  

Notional Amount

  

Premium

  

Fair Value

  
Call-United States Oil Fund
LP-USO US		  

$

102

  

04/19/2024

   Citigroup Global
Markets Inc.		  

$

6,718

  

$

166

  

$

102

  
Put-SPDR S&P 500 ETF
Trust-SPY US		  

330

  

06/21/2024

   Citigroup Global
Markets Inc.		  

47,531

  

40

  

17

  

Total Purchased Options on Equity Indices

                  

$

206

    

$

119

    

Written options outstanding as of December 31, 2023 were as follows:

Options on Equity Indices — Sell Protection

Description

  

Exercise Price

  

Expiration Date

  

Counterparty

  

Notional Amount

  

Premium

  

Fair Value

  
Put-SPDR S&P 500 ETF
Trust-SPY US		  

$

40

  

06/21/2024

   Citigroup Global
Markets Inc.		  

$

(47,531

)

  

$

(107

)

  

$

(70

)

  

Total Written Options

                  

$

(107

)

  

$

(70

)

  

Swap Agreements outstanding as of December 31, 2023 were as follows:

Swap Agreements: Centrally Cleared or Exchange Traded

Credit Default Swaps on Credit Indices — Buy Protection (1)

Description

   Payment
Frequency		   Fixed
Deal Pay
Rate		  

Expiration Date

  

Exchange

   Notional
Amount (2)		  

Value (3)

   Upfront
Premiums
Paid
(Received)		   Unrealized
Appreciation
(Depreciation)		  

CDX.NA.HY S35 5Y

    

Q

      

5.00

%

  

12/20/2025

  

ICE

  

$

4,121

    

$

(244

)

  

$

(404

)

  

$

160

    

CDX.NA.HY S37 5Y

    

Q

      

5.00

%

  

12/20/2026

  

ICE

    

3,638

      

(260

)

    

(148

)

    

(112

)

  

CDX.NA.HY S39 5Y

    

Q

      

5.00

%

  

12/20/2027

  

ICE

    

2,450

      

(153

)

    

(2

)

    

(151

)

  

Total Swap Agreements — Buy Protection: Centrally Cleared or Exchange Traded

                      

$

(657

)

  

$

(554

)

  

$

(103

)

  

Credit Default Swaps on Credit Indices — Sell Protection (4)

Description

   Payment
Frequency		   Fixed
Deal Pay
Rate		  

Expiration Date

  

Exchange

   Notional
Amount (2)		  

Value (3)

   Upfront
Premiums
Paid
(Received)		   Unrealized
Appreciation
(Depreciation)		  
UBER CDS USD
SR 5Y		  

Q

  

5.00

%

  

06/20/2027

   Goldman
Sachs		  

$

(900

)

  

$

122

  

$

61

  

$

61

  
SRT CDS Tranche
95.12-99.23		  

M

  

5.25

%

  

09/30/2031

   Goldman
Sachs		  

(16,690

)

  

78

  

—

  

78

  

Total Swap Agreements — Sell Protection: Centrally Cleared or Exchange Traded

       $200   $61   $139  

Annual Report 2023
116

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

December 31, 2023

(in thousands, except shares, percentages and as otherwise noted)

Swap Agreements: Over the Counter

Credit Default Swaps on Credit Indices — Buy Protection (1)

Description

   Payment
Frequency		   Fixed
Deal Pay
Rate		  

Expiration Date

  

Counterparty

   Notional
Amount (2)		  

Value (3)

   Upfront
Premiums
Paid
(Received)		   Unrealized
Appreciation
(Depreciation)		  
CDX.NA.HY S35
5Y Tranche 15-25		  

Q

  

5.00

%

  

12/20/2025

   Goldman
Sachs		  

$

3,531

  

$

(286

)

  

$

(21

)

  

$

(265

)

  
CMBX.NA.BBB—
S9		  

M

  

3.00

%

  

9/17/2058

   Goldman
Sachs		  

1,030

  

179

  

246

  

(67

)

  

Total Swap Agreements — Buy Protection: Over the Counter

                      

$

(107

)

  

$

225

    

$

(332

)

  

(1)  If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying investments comprising the referenced index or (ii) receive a net settlement amount in the form of cash or investments equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying investments comprising the referenced index.

(2)  The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(3)  The quoted market prices and resulting values for credit default swap agreements on credit indices serve as an indicator of the current status of the payment/performance risk and represent the expected amount paid or received for the credit derivative had the notional amount of the swap agreement been closed/sold as of year-end. Increasing values (buy protection) or decreasing values (sell protection), when compared to the notional amount of the swap, represent a deterioration of the referenced entity's credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

(4)  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

Abbreviations:

144A  Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

CLO  Collateralized Loan Obligation

Currencies:

€  Euro Currency

£  British Pounds

$  U.S. Dollars

AUD  Australian Dollars

CAD  Canadian Dollars

DKK  Danish Krone

GBP  British Pounds

NOK  Norwegian Krone

NZD  New Zealand Dollars

PLN  Polish Zloty

SEK  Swedish Krone

USD  U.S. Dollars

Annual Report 2023
117

CION Ares Diversified Credit Fund

Consolidated Statement of Assets and Liabilities

December 31, 2023
(in thousands)

Assets

  

Investments in unaffiliated issuers, at fair value (cost $4,516,146)

  

$

4,465,719

    

Derivatives

    

498

    

Cash

    

86,464

    

Cash denominated in foreign currency, at value (cost $22,502)

    

22,495

    

Due from brokers

    

41,994

    

Receivable for common shares issued by the Fund

    

24,988

    

Receivable for securities sold

    

11,464

    

Interest and dividend receivable

    

34,233

    

Other assets

    

3,542

    

Total assets

  

$

4,691,397

    

Liabilities

  

Debt

  

$

673,056

    
Mandatory redeemable preferred shares (liquidation preference $570,000, net of unamortized
deferred issuance costs of $4,347)		    

565,653

    

Securities sold short (cost $638)

    

718

    

Derivatives

    

15,313

    

Payable for securities purchased

    

161,533

    

Interest and facility fees payable

    

8,246

    

Accrued expenses and other payables

    

57,658

    

Total liabilities

    

1,482,177

    

Commitments and contingencies (See Note 2)

      

Net assets

  

$

3,209,220

    

Net assets consist of:

  

Paid-in capital

  

$

3,217,071

    

Accumulated overdistributed earnings

    

(7,851

)

  

Net assets

  

$

3,209,220

    

Annual Report 2023
118

CION Ares Diversified Credit Fund

Consolidated Statement of Assets and Liabilities (continued)

December 31, 2023
(in thousands, except per share data)

Common shares:

  

Class A:

  

Net Assets

  

$

68,153

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

2,731

    

Net Asset Value Per Share

  

$

24.96

    

Maximum Offering Price Per Share

  

$

26.48

    

Class C:

  

Net Assets

  

$

79,242

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

3,200

    

Net Asset Value Per Share

  

$

24.77

    

Class I:

  

Net Assets

  

$

2,432,547

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

96,434

    

Net Asset Value Per Share

  

$

25.23

    

Class L:

  

Net Assets

  

$

11,283

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

451

    

Net Asset Value Per Share

  

$

25.04

    

Maximum Offering Price Per Share

  

$

26.15

    

Class U:

  

Net Assets

  

$

477,044

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

19,025

    

Net Asset Value Per Share

  

$

25.08

    

Class U-2:

  

Net Assets

  

$

106,738

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

4,262

    

Net Asset Value Per Share

  

$

25.05

    

Maximum Offering Price Per Share

  

$

25.69

    

Class W:

  

Net Assets

  

$

34,213

    

Shares Outstanding ($.001 par value; unlimited shares authorized)

    

1,356

    

Net Asset Value Per Share

  

$

25.23

    

Maximum Offering Price Per Share

  

$

26.01

    

See accompanying notes to consolidated financial statements.

Annual Report 2023
119

CION Ares Diversified Credit Fund

Consolidated Statement of Operations

For the year ended December 31, 2023
(in thousands)

Investment income:

  

Interest

  

$

445,222

    

Dividend

    

19,227

    

Total investment income

    

464,449

    

Expenses:

  

Management fee (Note 3)

    

49,083

    

Incentive fee (Note 3)

    

48,004

    

Interest and credit facility fees (Note 6 and 7)

    

69,476

    

Shareholder service expense and distribution fees (Note 3)

    

4,942

    

Other expenses

    

12,503

    

Total operating expenses

    

184,008

    

Tax expenses

    

2,000

    

Total expenses

    

186,008

    

Net investment income

    

278,441

    

Realized and unrealized gains (losses) on investments, foreign currency and derivative contracts

  

Net realized losses on investments

    

(31,488

)

  

Net realized gains on securities sold short

    

193

    

Net realized losses on derivative contracts

    

(5,493

)

  

Net realized gains on foreign currency

    

2,339

    

Net unrealized gains on investments

    

126,756

    

Net unrealized losses on securities sold short

    

(250

)

  

Net unrealized losses on derivative contracts

    

(4,414

)

  

Net unrealized losses on foreign currency

    

(16,574

)

  

Net realized and unrealized gains on investments, foreign currency and other transactions

    

71,069

    

Net increase in net assets resulting from operations

  

$

349,510

    

See accompanying notes to consolidated financial statements.

Annual Report 2023
120

CION Ares Diversified Credit Fund

Consolidated Statements of Changes in Net Assets

(in thousands, except per share data, percentages and as otherwise noted)

    For the Year Ended
December 31, 2023		   For the Year Ended
December 31, 2022		  

Increase (decrease) in net assets from operations:

  

Net investment income

  

$

278,441

    

$

155,102

    

Net realized (losses) gains on investments, foreign currency and other transactions

    

(34,449

)

    

11,917

    

Net unrealized gains (losses) on investments, foreign currency and other transactions

    

105,518

      

(210,771

)

  

Net increase (decrease) from operations

    

349,510

      

(43,752

)

  

Distributions to shareholders from (Note 2):

  

Distributed earnings — Class A

    

(5,157

)

    

(3,380

)

  

Distributed earnings — Class C

    

(5,652

)

    

(4,298

)

  

Distributed earnings — Class I

    

(171,051

)

    

(98,901

)

  

Distributed earnings — Class L

    

(858

)

    

(604

)

  

Distributed earnings — Class U

    

(32,512

)

    

(20,824

)

  

Distributed earnings — Class U-2

    

(6,983

)

    

(4,278

)

  

Distributed earnings — Class W

    

(2,627

)

    

(1,995

)

  

Total distributions

    

(224,840

)

    

(134,280

)

  

Increase (decrease) in net assets from operations and distributions

    

124,670

      

(178,032

)

  

Share transactions:

  

Class A:

  

Proceeds of shares issued

    

16,142

      

11,939

    

Value of distributions reinvested

    

1,243

      

928

    

Cost of shares repurchased

    

(10,903

)

    

(11,568

)

  

Net increase from share transactions

    

6,482

      

1,299

    

Class C:

  

Proceeds of shares issued

    

7,637

      

9,867

    

Value of distributions reinvested

    

2,613

      

2,041

    

Cost of shares repurchased

    

(8,058

)

    

(9,508

)

  

Net increase from share transactions

    

2,192

      

2,400

    

Class I:

  

Proceeds of shares issued

    

721,481

      

792,673

    

Value of distributions reinvested

    

40,766

      

24,844

    

Cost of shares repurchased

    

(241,871

)

    

(207,867

)

  

Net increase from share transactions

    

520,376

      

609,650

    

Class L:

  

Proceeds of shares issued

    

273

      

1,452

    

Value of distributions reinvested

    

611

      

448

    

Cost of shares repurchased

    

(627

)

    

(403

)

  

Net increase from share transactions

    

257

      

1,497

    

Annual Report 2023
121

CION Ares Diversified Credit Fund

Consolidated Statements of Changes in Net Assets (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the Year Ended
December 31, 2023		   For the Year Ended
December 31, 2022		  

Class U:

  

Proceeds of shares issued

    

76,019

      

82,718

    

Value of distributions reinvested

    

24,403

      

16,219

    

Cost of shares repurchased

    

(31,821

)

    

(26,911

)

  

Net increase from share transactions

    

68,601

      

72,026

    

Class U-2:

  

Proceeds of shares issued

    

22,286

      

33,378

    

Value of distributions reinvested

    

5,334

      

3,392

    

Cost of shares repurchased

    

(9,913

)

    

(2,891

)

  

Net increase from share transactions

    

17,707

      

33,879

    

Class W:

  

Proceeds of shares issued

    

—

      

—

    

Value of distributions reinvested

    

1,952

      

1,459

    

Cost of shares repurchased

    

(1,399

)

    

(5,354

)

  

Net increase (decrease) from share transactions

    

553

      

(3,895

)

  

Total increase in net assets

    

740,838

      

538,824

    

Net Assets, beginning of period

    

2,468,382

      

1,929,558

    

Net Assets, end of period

  

$

3,209,220

    

$

2,468,382

    

See accompanying notes to consolidated financial statements.

Annual Report 2023
122

CION Ares Diversified Credit Fund

Consolidated Statement of Cash Flows

For the year ended December 31, 2023
(in thousands, except per share data, percentages and as otherwise noted)

Operating activities:

  

Net increase in net assets resulting from operations

  

$

349,510

    

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:

  

Purchases of investments

    

(2,006,337

)

  

Proceeds from the sale of investments

    

1,241,331

    

Proceeds from securities sold short

    

1,951

    

Purchases to cover securities sold short

    

(2,606

)

  

Purchases of derivative contracts

    

(5,692

)

  

Proceeds from the sale of derivative contracts

    

179

    

Amortization and accretion of discounts and premiums, net

    

(15,870

)

  

Net realized and unrealized gains on investments

    

(95,268

)

  

Net realized and unrealized losses on securities sold short

    

57

    

Net realized and unrealized losses on derivative contracts

    

9,907

    

Net realized and unrealized losses on foreign currency

    

14,235

    

Amortization of debt issuance cost

    

2,693

    

Payment-in-kind ("PIK") interest and dividends

    

(17,135

)

  

Collections of PIK interest and dividends

    

2,609

    

Changes in operating assets and liabilities:

  

Due from brokers

    

(15,107

)

  

Interest and dividend receivable

    

(6,135

)

  

Other assets

    

(92

)

  

Interest and facility fees payable

    

2,819

    

Accrued expenses and other payables

    

4,090

    

Net cash used in operating activities

    

(534,861

)

  

Financing activities:

  

Borrowings on debt

    

999,176

    

Repayments of debt

    

(996,200

)

  

Proceeds from issuance of mandatory redeemable preferred shares

    

150,000

    

Deferred debt and mandatory redeemable preferred shares issuance costs

    

(1,644

)

  

Proceeds of common shares issued

    

837,262

    

Cost of common shares repurchased

    

(308,051

)

  

Distributions to shareholders

    

(214,064

)

  

Value of distributions reinvested

    

76,922

    

Net cash provided by financing activities

    

543,401

    

Change in Cash

    

8,540

    

Cash, Beginning of Period

    

100,419

    

Cash, End of Period

  

$

108,959

    

Supplemental disclosure of cash flow information:

  

Cash paid for interest and credit facility fees during the period

  

$

63,979

    

Cash paid for taxes during the period

  

$

3,748

    

See accompanying notes to consolidated financial statements.

Annual Report 2023
123

CION Ares Diversified Credit Fund

Financial Highlights

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Class A

  

Per share data:

  

Net asset value, beginning of period

  

$

23.86

    

$

25.75

    

$

25.13

    

$

25.93

    

Income from investment operations:

  

Net investment income(a)​

    

2.50

      

1.62

      

1.46

      

1.40

    

Net realized and unrealized gains (losses)

    

0.61

      

(2.09

)

    

0.55

      

(0.80

)

  

Total income (loss) from investment operations

    

3.11

      

(0.47

)

    

2.01

      

0.60

    

Less distributions declared to shareholders:

  

From net investment income

    

(2.01

)

    

(1.42

)

    

(1.39

)

    

(1.40

)

  

Total distributions

    

(2.01

)

    

(1.42

)

    

(1.39

)

    

(1.40

)

  

Net asset value, end of period

  

$

24.96

    

$

23.86

    

$

25.75

    

$

25.13

    

Total return, excluding expense support(b)​

    

13.53

%

    

(1.70

)%

    

8.93

%

    

3.61

%

  

Total return, including expense support(b)​

    

13.53

%

    

(1.84

)%

    

8.21

%

    

2.77

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

68,153

    

$

58,829

    

$

62,031

    

$

58,881

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

6.97

%(h)​

    

4.92

%(h)​

    

3.11

%(h)​

    

3.44

%

  

Expenses, including expense support(d)(f)(g)​

    

6.97

%(h)​

    

5.06

%(h)​

    

3.83

%(h)​

    

4.28

%

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.40

%

    

3.40

%

    

2.46

%

    

2.90

%

  

Expenses, including expense support(d)(f)(g)​

    

4.40

%

    

3.54

%

    

3.18

%

    

3.73

%

  

Net investment income(d)​

    

10.25

%

    

6.53

%

    

5.72

%

    

5.86

%

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%

  

Annual Report 2023
124

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the
Year Ended
October 31,
2018		   For the
Period from
January 26,
2017 to
October 31,
2017		  

Class A

  

Per share data:

  

Net asset value, beginning of period

  

$

25.44

    

$

25.80

    

$

25.25

    

$

25.00

    

Income from investment operations:

  

Net investment income(a)​

    

0.23

      

1.39

      

1.52

      

0.86

    

Net realized and unrealized gains (losses)

    

0.49

      

(0.36

)

    

0.42

      

0.44

    

Total income from investment operations

    

0.72

      

1.03

      

1.94

      

1.30

    

Less distributions declared to shareholders:

  

From net investment income

    

(0.23

)

    

(1.39

)

    

(1.39

)

    

(0.86

)

  

From net realized gains on investments

    

—

      

—

      

—

      

(0.12

)

  

From net unrealized gains on investments and foreign currency

    

—

      

—

      

—

      

(0.07

)

  

Total distributions

    

(0.23

)

    

(1.39

)

    

(1.39

)

    

(1.05

)

  

Net asset value, end of period

  

$

25.93

    

$

25.44

    

$

25.80

    

$

25.25

    

Total return, excluding expense support(b)​

    

2.86

%(c)​

    

4.37

%

    

(2.44

)%

    

(37.12

)%(c)​

  

Total return, including expense support(d)​

    

2.86

%(c)​

    

4.10

%

    

7.91

%

    

5.32

%(c)​

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

60,203

    

$

54,386

    

$

37,915

    

$

12,865

    

Including interest expense:

  

Expenses, excluding expense support(e)(h)​

    

4.01

%(f)​

    

4.03

%

    

5.98

%

    

58.85

%(f)​

  

Expenses, including expense support(e)(g)(h)​

    

4.01

%(f)​

    

4.30

%

    

0.34

%

    

0.00

%(f)​

  

Excluding interest expense:

  

Expenses, excluding expense support(h)​

    

3.33

%(f)​

    

3.38

%

    

5.97

%

    

58.85

%(f)​

  

Expenses, including expense support(g)(h)​

    

3.33

%(f)​

    

3.65

%

    

0.33

%

    

0.00

%(f)​

  

Net investment income(e)​

    

5.27

%(f)​

    

5.56

%

    

5.91

%

    

4.48

%(f)​

  

Portfolio turnover rate

    

5.42

%(c)​

    

63.58

%

    

28.36

%

    

164.09

%(c)​

  

*  For the two month period ended December 31, 2019. See Note 1 to the consolidated financial statements.

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's dividend reinvestment plan, (the "DRIP"). Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by CION Ares Management, LLC (the "Adviser").

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized, except for certain non-recurring costs.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
125

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Base management fees

    

1.82

%

    

1.77

%

    

1.58

%

    

1.56

%

  

Income based incentive fees

    

1.77

%

    

0.79

%

    

—

%

    

—

%

  

Cost of borrowing

    

2.57

%

    

1.52

%

    

0.65

%

    

0.54

%

  

Net expense support

    

—

%

    

0.14

%

    

0.72

%

    

0.84

%

  

Other operating expenses

    

0.81

%

    

0.84

%

    

0.88

%

    

1.35

%

  

Total operating expenses

    

6.97

%

    

5.06

%

    

3.83

%

    

4.28

%

  
    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the
Year Ended
October 31,
2018		   For the
Period from
January 26,
2017 to
October 31,
2017		  

Base management fees

    

1.56

%

    

1.47

%

    

1.49

%

    

1.49

%

  

Income based incentive fees

    

—

%

    

—

%

    

—

%

    

—

%

  

Cost of borrowing

    

0.68

%

    

0.65

%

    

—

%

    

—

%

  

Net expense support

    

—

%

    

0.27

%

    

(5.91

)%

    

(56.68

)%

  

Other operating expenses

    

1.77

%

    

1.91

%

    

4.76

%

    

55.19

%

  

Total operating expenses

    

4.01

%

    

4.30

%

    

0.34

%

    

—

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 to the consolidated financial statements.

Annual Report 2023
126

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Class C

  

Per share data:

  

Net asset value, beginning of period

  

$

23.66

    

$

25.65

    

$

25.05

    

$

25.90

    

Income from investment operations:

  

Net investment income(a)​

    

2.32

      

1.48

      

1.43

      

1.35

    

Net realized and unrealized gains (losses)

    

0.60

      

(2.08

)

    

0.56

      

(0.80

)

  

Total income (loss) from investment operations

    

2.92

      

(0.60

)

    

1.99

      

0.55

    

Less distributions declared to shareholders:

  

From net investment income

    

(1.81

)

    

(1.39

)

    

(1.39

)

    

(1.40

)

  

Total distributions

    

(1.81

)

    

(1.39

)

    

(1.39

)

    

(1.40

)

  

Net asset value, end of period

  

$

24.77

    

$

23.66

    

$

25.65

    

$

25.05

    

Total return, excluding expense support(b)​

    

12.80

%

    

(2.31

)%

    

8.20

%

    

2.81

%

  

Total return, including expense support(b)​

    

12.80

%

    

(2.42

)%

    

8.16

%

    

2.57

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

79,242

    

$

73,573

    

$

77,361

    

$

68,039

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

7.62

%(h)​

    

5.50

%(h)​

    

3.87

%(h)​

    

4.18

%

  

Expenses, including expense support(d)(f)(g)​

    

7.62

%(h)​

    

5.61

%(h)​

    

3.91

%(h)​

    

4.41

%

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

5.05

%

    

3.98

%

    

3.22

%

    

3.64

%

  

Expenses, including expense support(d)(f)(g)​

    

5.05

%

    

4.09

%

    

3.26

%

    

3.88

%

  

Net investment income(d)​

    

9.59

%

    

5.99

%

    

5.65

%

    

5.66

%

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%

  

Annual Report 2023
127

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the
Year Ended
October 31,
2018		   For the Period from
July 12, 2017
(commencement of
operations) to
October 31, 2017		  

Class C

  

Per share data:

  

Net asset value, beginning of period

  

$

25.44

    

$

25.80

    

$

25.25

    

$

24.95

    

Income from investment operations:

  

Net investment income(a)​

    

0.19

      

1.39

      

1.52

      

0.39

    

Net realized and unrealized gains (losses)

    

0.50

      

(0.36

)

    

0.42

      

0.33

    

Total income from investment operations

    

0.69

      

1.03

      

1.94

      

0.72

    

Less distributions declared to shareholders:

  

From net investment income

    

(0.23

)

    

(1.39

)

    

(1.39

)

    

(0.39

)

  

From net realized gains on investments

    

—

      

—

      

—

      

(0.02

)

  

From net unrealized gains on investments and foreign currency

    

—

      

—

      

—

      

(0.01

)

  

Total distributions

    

(0.23

)

    

(1.39

)

    

(1.39

)

    

(0.42

)

  

Net asset value, end of period

  

$

25.90

    

$

25.44

    

$

25.80

    

$

25.25

    

Total return, excluding expense support(b)​

    

2.74

%(c)​

    

3.70

%

    

(3.19

)%

    

(3.56

)%(c)​

  

Total return, including expense support(d)​

    

2.74

%(c)​

    

4.10

%

    

7.91

%

    

2.95

%(c)​

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

65,779

    

$

59,912

    

$

29,868

    

$

3,898

    

Including interest expense:

  

Expenses, excluding expense support(e)​

    

4.76

%(f)​

    

4.82

%

    

6.73

%

    

25.59

%(f)​

  

Expenses, including expense support(e)(g)​

    

4.76

%(f)​

    

4.42

%

    

0.34

%

    

0.00

%(f)​

  

Excluding interest expense:

  

Expenses, excluding expense support

    

4.07

%(f)​

    

4.15

%

    

6.72

%

    

22.59

%(f)​

  

Expenses, including expense support(g)​

    

4.07

%(f)​

    

3.75

%

    

0.33

%

    

0.00

%(f)​

  

Net investment income(e)​

    

4.52

%(f)​

    

5.48

%

    

5.91

%

    

5.17

%(f)​

  

Portfolio turnover rate

    

5.42

%(c)​

    

63.58

%

    

28.36

%

    

164.09

%(c)​

  

*  For the two month period ended December 31, 2019. See Note 1 to the consolidated financial statements.

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's DRIP. Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by the Adviser.

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized, except for certain non-recurring costs.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
128

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Base management fees

    

1.82

%

    

1.77

%

    

1.58

%

    

1.56

%

  

Income based incentive fees

    

1.66

%

    

0.61

%

    

—

%

    

—

%

  

Cost of borrowing

    

2.57

%

    

1.52

%

    

0.65

%

    

0.52

%

  

Net expense support

    

—

%

    

0.11

%

    

0.04

%

    

0.24

%

  

Other operating expenses

    

1.57

%

    

1.60

%

    

1.64

%

    

2.09

%

  

Total operating expenses

    

7.62

%

    

5.61

%

    

3.91

%

    

4.41

%

  
    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the
Year Ended
October 31,
2018		   For the Period from
July 12, 2017
(commencement of
operations) to
October 31, 2017		  

Base management fees

    

1.56

%

    

1.47

%

    

1.49

%

    

1.49

%

  

Income based incentive fees

    

—

%

    

—

%

    

—

%

    

—

%

  

Cost of borrowing

    

0.68

%

    

0.67

%

    

—

%

    

—

%

  

Net expense support

    

—

%

    

(0.40

)%

    

(6.20

)%

    

(33.93

)%

  

Other operating expenses

    

2.52

%

    

2.67

%

    

5.05

%

    

32.44

%

  

Total operating expenses

    

4.76

%

    

4.42

%

    

0.34

%

    

—

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 of the Notes to Consolidated Financial Statements.

Annual Report 2023
129

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Class I

  

Per share data:

  

Net asset value, beginning of period

  

$

24.12

    

$

26.01

    

$

25.22

    

$

25.93

    

Income from investment operations:

  

Net investment income(a)​

    

2.58

      

1.73

      

1.62

      

1.49

    

Net realized and unrealized gains (losses)

    

0.62

      

(2.14

)

    

0.56

      

(0.80

)

  

Total income (loss) from investment operations

    

3.20

      

(0.41

)

    

2.18

      

0.69

    

Less distributions declared to shareholders:

  

From net investment income

    

(2.09

)

    

(1.48

)

    

(1.39

)

    

(1.40

)

  

Total distributions

    

(2.09

)

    

(1.48

)

    

(1.39

)

    

(1.40

)

  

Net asset value, end of period

  

$

25.23

    

$

24.12

    

$

26.01

    

$

25.22

    

Total return, excluding expense support(b)​

    

13.79

%

    

(1.62

)%

    

8.90

%

    

3.55

%

  

Total return, including expense support(b)​

    

13.79

%

    

(1.62

)%

    

8.87

%

    

3.12

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

2,432,547

    

$

1,819,625

    

$

1,339,092

    

$

603,536

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

6.75

%(h)​

    

4.87

%(h)​

    

3.25

%(h)​

    

3.50

%

  

Expenses, including expense support(d)(f)(g)​

    

6.75

%(h)​

    

4.87

%(h)​

    

3.28

%(h)​

    

3.93

%

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.18

%

    

3.32

%

    

2.56

%

    

2.97

%

  

Expenses, including expense support(d)(f)(g)​

    

4.18

%

    

3.32

%

    

2.59

%

    

3.39

%

  

Net investment income(d)​

    

10.50

%

    

6.92

%

    

6.34

%

    

6.24

%

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%

  

Annual Report 2023
130

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the
Year Ended
October 31,
2018		   For the Period from
July 12, 2017
(commencement of
operations) to
October 31, 2017		  

Class I

  

Per share data:

  

Net asset value, beginning of period

  

$

25.44

    

$

25.80

    

$

25.25

    

$

24.95

    

Income from investment operations:

  

Net investment income(a)​

    

0.23

      

1.39

      

1.52

      

0.40

    

Net realized and unrealized gains (losses)

    

0.49

      

(0.36

)

    

0.42

      

0.32

    

Total income from investment operations

    

0.72

      

1.03

      

1.94

      

0.72

    

Less distributions declared to shareholders:

  

From net investment income

    

(0.23

)

    

(1.39

)

    

(1.39

)

    

(0.40

)

  

From net realized gains on investments

    

—

      

—

      

—

      

(0.01

)

  

From net unrealized gains on investments and foreign currency

    

—

      

—

      

—

      

(0.01

)

  

Total distributions

    

(0.23

)

    

(1.39

)

    

(1.39

)

    

(0.42

)

  

Net asset value, end of period

  

$

25.93

    

$

25.44

    

$

25.80

    

$

25.25

    

Total return, excluding expense support(b)​

    

2.88

%(c)​

    

4.78

%

    

(2.19

)%

    

(2.49

)%(c)​

  

Total return, including expense support(d)​

    

2.86

%(c)​

    

4.10

%

    

7.91

%

    

2.95

%(c)​

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

354,144

    

$

298,481

    

$

111,705

    

$

6,048

    

Including interest expense:

  

Expenses, excluding expense support(e)(h)​

    

3.74

%(f)​

    

3.87

%

    

5.73

%

    

18.62

%(f)​

  

Expenses, including expense support(e)(g)(h)​

    

3.87

%(f)​

    

4.55

%

    

0.34

%

    

0.00

%(f)​

  

Excluding interest expense:

  

Expenses, excluding expense support(h)​

    

3.06

%(f)​

    

3.17

%

    

5.71

%

    

18.62

%(f)​

  

Expenses, including expense support(g)(h)​

    

3.19

%(f)​

    

3.85

%

    

0.32

%

    

0.00

%(f)​

  

Net investment income(e)​

    

5.44

%(f)​

    

5.38

%

    

5.91

%

    

5.19

%(f)​

  

Portfolio turnover rate

    

5.42

%(c)​

    

63.58

%

    

28.36

%

    

164.09

%(c)​

  

*  For the two month period ended December 31, 2019. See Note 1 to the consolidated financial statements.

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's DRIP. Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by the Adviser.

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized, except for certain non-recurring costs.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
131

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Base management fees

    

1.82

%

    

1.78

%

    

1.60

%

    

1.59

%

  

Income based incentive fees

    

1.81

%

    

0.95

%

    

0.33

%

    

0.25

%

  

Cost of borrowing

    

2.56

%

    

1.55

%

    

0.69

%

    

0.53

%

  

Net expense support

    

—

%

    

—

%

    

0.03

%

    

0.43

%

  

Other operating expenses

    

0.56

%

    

0.59

%

    

0.63

%

    

1.14

%

  

Total operating expenses

    

6.75

%

    

4.87

%

    

3.28

%

    

3.93

%

  
    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the
Year Ended
October 31,
2018		   For the Period from
July 12, 2017
(commencement of
operations) to
October 31, 2017		  

Base management fees

    

1.56

%

    

1.48

%

    

1.49

%

    

1.49

%

  

Income based incentive fees

    

—

%

    

—

%

    

—

%

    

—

%

  

Cost of borrowing

    

0.68

%

    

0.71

%

    

—

%

    

—

%

  

Net expense support

    

0.13

%

    

0.68

%

    

(4.79

)%

    

(29.81

)%

  

Other operating expenses

    

1.51

%

    

1.68

%

    

3.64

%

    

28.33

%

  

Total operating expenses

    

3.87

%

    

4.55

%

    

0.34

%

    

—

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 to the consolidated financial statements.

Annual Report 2023
132

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Class L

  

Per share data:

  

Net asset value, beginning of period

  

$

23.93

    

$

25.85

    

$

25.14

    

$

25.92

    

Income from investment operations:

  

Net investment income(a)​

    

2.45

      

1.63

      

1.54

      

1.44

    

Net realized and unrealized gains (losses)

    

0.61

      

(2.11

)

    

0.56

      

(0.82

)

  

Total income (loss) from investment operations

    

3.06

      

(0.48

)

    

2.10

      

0.62

    

Less distributions declared to shareholders:

  

From net investment income

    

(1.95

)

    

(1.44

)

    

(1.39

)

    

(1.40

)

  

Total distributions

    

(1.95

)

    

(1.44

)

    

(1.39

)

    

(1.40

)

  

Net asset value, end of period

  

$

25.04

    

$

23.93

    

$

25.85

    

$

25.14

    

Total return, excluding expense support(b)​

    

13.28

%

    

(1.92

)%

    

8.69

%

    

3.27

%

  

Total return, including expense support(b)​

    

13.28

%

    

(1.92

)%

    

8.58

%

    

2.85

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

11,283

    

$

10,537

    

$

9,845

    

$

7,364

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

7.19

%(h)​

    

5.12

%(h)​

    

3.40

%(h)​

    

3.82

%

  

Expenses, including expense support(d)(f)(g)​

    

7.19

%(h)​

    

5.12

%(h)​

    

3.51

%(h)​

    

4.24

%

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.62

%

    

3.59

%

    

2.75

%

    

3.27

%

  

Expenses, including expense support(d)(f)(g)​

    

4.62

%

    

3.59

%

    

2.86

%

    

3.69

%

  

Net investment income(d)​

    

10.03

%

    

6.56

%

    

6.05

%

    

6.04

%

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%

  

Annual Report 2023
133

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the Period from
November 2, 2017
(commencement of
operations) to
October 31, 2018		  

Class L

  

Per share data:

  

Net asset value, beginning of period

  

$

25.44

    

$

25.80

    

$

25.23

    

Income from investment operations:

  

Net investment income(a)​

    

0.19

      

1.39

      

1.52

    

Net realized and unrealized gains (losses)

    

0.52

      

(0.36

)

    

0.43

    

Total income from investment operations

    

0.71

      

1.03

      

1.95

    

Less distributions declared to shareholders:

  

From net investment income

    

(0.23

)

    

(1.39

)

    

(1.38

)

  

Total distributions

    

(0.23

)

    

(1.39

)

    

(1.38

)

  

Net asset value, end of period

  

$

25.92

    

$

25.44

    

$

25.80

    

Total return, excluding expense support(b)​

    

2.82

%(c)​

    

4.32

%

    

(2.69

)%(c)​

  

Total return, including expense support(d)​

    

2.82

%(c)​

    

4.10

%

    

7.96

%(c)​

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

6,325

    

$

5,536

    

$

1,933

    

Including interest expense:

  

Expenses, excluding expense support(e)(h)​

    

4.24

%(f)​

    

4.38

%

    

6.23

%(f)​

  

Expenses, including expense support(e)(g)(h)​

    

4.24

%(f)​

    

4.60

%

    

0.34

%(f)​

  

Excluding interest expense:

  

Expenses, excluding expense support(h)​

    

3.56

%(f)​

    

3.67

%

    

6.21

%(f)​

  

Expenses, including expense support(g)(h)​

    

3.56

%(f)​

    

3.89

%

    

0.32

%(f)​

  

Net investment income(e)​

    

4.47

%(f)​

    

5.35

%

    

5.19

%(f)​

  

Portfolio turnover rate

    

5.42

%(c)​

    

63.58

%

    

28.36

%(c)​

  

*  For the two month period ended December 31, 2019. See Note 1 to the consolidated financial statements.

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's DRIP. Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by the Adviser.

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized, except for certain non-recurring costs.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
134

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Base management fees

    

1.82

%

    

1.78

%

    

1.58

%

    

1.58

%

  

Income based incentive fees

    

1.73

%

    

0.75

%

    

0.05

%

    

0.02

%

  

Cost of borrowing

    

2.57

%

    

1.53

%

    

0.65

%

    

0.55

%

  

Net expense support

    

—

%

    

—

%

    

0.11

%

    

0.42

%

  

Other operating expenses

    

1.07

%

    

1.06

%

    

1.12

%

    

1.68

%

  

Total operating expenses

    

7.19

%

    

5.12

%

    

3.51

%

    

4.24

%

  

 

    For the
Period Ended
December 31,
2019*		   For the
Year Ended
October 31,
2019		   For the Period from
November 2, 2017
(commencement of
operations) to
October 31, 2018		  

Base management fees

    

1.56

%

    

1.49

%

    

1.48

%

  

Income based incentive fees

    

—

%

    

—

%

    

—

%

  

Cost of borrowing

    

0.68

%

    

0.72

%

    

—

%

  

Net expense support

    

—

%

    

0.21

%

    

(4.71

)%

  

Other operating expenses

    

2.01

%

    

2.18

%

    

3.57

%

  

Total operating expenses

    

4.24

%

    

4.60

%

    

0.34

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 to the consolidated financial statements.

Annual Report 2023
135

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Class U

  

Per share data:

  

Net asset value, beginning of period

  

$

23.95

    

$

25.87

    

$

25.18

    

$

25.92

    

Income from investment operations:

  

Net investment income(a)​

    

2.41

      

1.59

      

1.52

      

1.42

    

Net realized and unrealized gains (losses)

    

0.61

      

(2.11

)

    

0.56

      

(0.76

)

  

Total income (loss) from investment operations

    

3.02

      

(0.52

)

    

2.08

      

0.66

    

Less distributions declared to shareholders:

  

From net investment income

    

(1.89

)

    

(1.40

)

    

(1.39

)

    

(1.40

)

  

Total distributions

    

(1.89

)

    

(1.40

)

    

(1.39

)

    

(1.40

)

  

Net asset value, end of period

  

$

25.08

    

$

23.95

    

$

25.87

    

$

25.18

    

Total return, excluding expense support(b)​

    

13.07

%

    

(2.07

)%

    

8.48

%

    

3.01

%

  

Total return, including expense support(b)​

    

13.07

%

    

(2.07

)%

    

8.48

%

    

2.99

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

477,044

    

$

388,866

    

$

345,691

    

$

199,175

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

7.39

%(h)​

    

5.33

%(h)​

    

3.64

%(h)​

    

4.00

%

  

Expenses, including expense support(d)(f)(g)​

    

7.39

%(h)​

    

5.33

%(h)​

    

3.64

%(h)​

    

4.02

%

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.82

%

    

3.80

%

    

2.97

%

    

3.51

%

  

Expenses, including expense support(d)(f)(g)​

    

4.82

%

    

3.80

%

    

2.97

%

    

3.54

%

  

Net investment income(d)​

    

9.85

%

    

6.39

%

    

5.96

%

    

5.98

%

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%

  

Annual Report 2023
136

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Period Ended
December 31,
2019*		   For the Period from
July 26, 2019
(commencement of
operations) to
October 31, 2019		  

Class U

  

Per share data:

  

Net asset value, beginning of period

  

$

25.44

    

$

25.86

    

Income from investment operations:

  

Net investment income(a)​

    

0.20

      

0.40

    

Net realized and unrealized gains (losses)

    

0.51

      

(0.45

)

  

Total income (loss) from investment operations

    

0.71

      

(0.05

)

  

Less distributions declared to shareholders:

  

From net investment income

    

(0.23

)

    

(0.37

)

  

Total distributions

    

(0.23

)

    

(0.37

)

  

Net asset value, end of period

  

$

25.92

    

$

25.44

    

Total return, excluding expense support(b)​

    

2.74

%

    

1.60

%

  

Total return, including expense support(b)​

    

2.82

%

    

(0.14

)%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

42,902

    

$

10,434

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.31

%(e)​

    

4.85

%(e)​

  

Expenses, including expense support(d)(f)(g)​

    

3.83

%(e)​

    

6.59

%(e)​

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

3.66

%(e)​

    

3.88

%(e)​

  

Expenses, including expense support(d)(f)(g)​

    

4.48

%(e)​

    

5.62

%(e)​

  

Net investment income(d)​

    

5.39

%(e)​

    

12.08

%(e)​

  

Portfolio turnover rate

    

5.42

%(c)​

    

63.58

%(c)​

  

*  For the two month period ended December 31, 2019. See Note 1 to the consolidated financial statements.

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's DRIP. Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by the Adviser.

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized, except for certain non-recurring costs.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
137

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Base management fees

    

1.82

%

    

1.78

%

    

1.59

%

    

1.60

%

  

Income based incentive fees

    

1.70

%

    

0.67

%

    

—

%

    

—

%

  

Cost of borrowing

    

2.57

%

    

1.53

%

    

0.67

%

    

0.48

%

  

Net expense support

    

—

%

    

—

%

    

—

%

    

0.02

%

  

Other operating expenses

    

1.30

%

    

1.35

%

    

1.38

%

    

1.92

%

  

Total operating expenses

    

7.39

%

    

5.33

%

    

3.64

%

    

4.02

%

  

 

    For the
Period Ended
December 31,
2019*		   For the Period from
July 26, 2019
(commencement of
operations) to
October 31, 2019		  

Base management fees

    

1.56

%

    

1.61

%

  

Income based incentive fees

    

—

%

    

—

%

  

Cost of borrowing

    

0.65

%

    

0.89

%

  

Net expense support

    

(0.47

)%

    

1.74

%

  

Other operating expenses

    

2.10

%

    

2.35

%

  

Total operating expenses

    

3.83

%

    

6.59

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 to the consolidated financial statements.

Annual Report 2023
138

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the Period from
April 13, 2020
(commencement of
operations) to
December 31, 2020		  

Class U-2

  

Per share data:

  

Net asset value, beginning of period

  

$

23.92

    

$

25.85

    

$

25.17

    

$

21.79

    

Income from investment operations:

  

Net investment income(a)​

    

2.40

      

1.60

      

1.52

      

0.76

    

Net realized and unrealized gains (losses)

    

0.62

      

(2.13

)

    

0.55

      

3.62

    

Total income (loss) from investment operations

    

3.02

      

(0.53

)

    

2.07

      

4.38

    

Less distributions declared to shareholders:

  

From net investment income

    

(1.89

)

    

(1.40

)

    

(1.39

)

    

(1.00

)

  

Total distributions

    

(1.89

)

    

(1.40

)

    

(1.39

)

    

(1.00

)

  

Net asset value, end of period

  

$

25.05

    

$

23.92

    

$

25.85

    

$

25.17

    

Total return, excluding expense support(b)​

    

13.08

%

    

(2.11

)%

    

8.44

%

    

19.71

%

  

Total return, including expense support(b)​

    

13.08

%

    

(2.11

)%

    

8.44

%

    

19.71

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

106,738

    

$

84,792

    

$

56,851

    

$

12,018

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

7.40

%(h)​

    

5.39

%(h)​

    

3.74

%(h)​

    

4.10

%(e)​

  

Expenses, including expense support(d)(f)(g)​

    

7.40

%(h)​

    

5.39

%(h)​

    

3.74

%(h)​

    

4.10

%(e)​

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.84

%

    

3.83

%

    

3.00

%

    

3.69

%(e)​

  

Expenses, including expense support(d)(f)(g)​

    

4.84

%

    

3.83

%

    

3.00

%

    

3.69

%(e)​

  

Net investment income(d)​

    

9.84

%

    

6.48

%

    

5.98

%

    

4.48

%(e)​

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%(c)​

  

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's DRIP. Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by the Adviser.

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
139

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the Period from
April 13, 2020
(commencement of
operations) to
December 31, 2020		  

Base management fees

    

1.82

%

    

1.78

%

    

1.62

%

    

1.54

%

  

Income based incentive fees

    

1.70

%

    

0.71

%

    

—

%

    

—

%

  

Cost of borrowing

    

2.56

%

    

1.56

%

    

0.74

%

    

0.39

%

  

Other operating expenses

    

1.32

%

    

1.34

%

    

1.38

%

    

2.17

%

  

Total operating expenses

    

7.40

%

    

5.39

%

    

3.74

%

    

4.10

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 to the consolidated financial statements.

Annual Report 2023
140

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Class W

  

Per share data:

  

Net asset value, beginning of period

  

$

24.11

    

$

26.03

    

$

25.27

    

$

25.92

    

Income from investment operations:

  

Net investment income(a)​

    

2.47

      

1.62

      

1.58

      

1.50

    

Net realized and unrealized gains (losses)

    

0.61

      

(2.10

)

    

0.57

      

(0.75

)

  

Total income (loss) from investment operations

    

3.08

      

(0.48

)

    

2.15

      

0.75

    

Less distributions declared to shareholders:

  

From net investment income

    

(1.96

)

    

(1.44

)

    

(1.39

)

    

(1.40

)

  

Total distributions

    

(1.96

)

    

(1.44

)

    

(1.39

)

    

(1.40

)

  

Net asset value, end of period

  

$

25.23

    

$

24.11

    

$

26.03

    

$

25.27

    

Total return, excluding expense support(b)​

    

13.28

%

    

(1.91

)%

    

8.73

%

    

3.35

%

  

Total return, including expense support(b)​

    

13.28

%

    

(1.91

)%

    

8.73

%

    

3.35

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

34,213

    

$

32,160

    

$

38,688

    

$

39,831

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

7.19

%(h)​

    

5.03

%(h)​

    

3.39

%(h)​

    

3.65

%

  

Expenses, including expense support(d)(f)(g)​

    

7.19

%(h)​

    

5.03

%(h)​

    

3.39

%(h)​

    

3.65

%

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.62

%

    

3.53

%

    

2.75

%

    

3.14

%

  

Expenses, including expense support(d)(f)(g)​

    

4.62

%

    

3.53

%

    

2.75

%

    

3.14

%

  

Net investment income(d)​

    

10.03

%

    

6.45

%

    

6.17

%

    

6.23

%

  

Portfolio turnover rate

    

30.64

%

    

38.16

%

    

43.72

%

    

59.77

%

  

Annual Report 2023
141

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

    For the
Period Ended
December 31,
2019*		   For the Period from
December 21, 2018
(commencement of
operations) to
October 31, 2019		  

Class W

  

Per share data:

  

Net asset value, beginning of period

  

$

25.44

    

$

25.03

    

Income from investment operations:

  

Net investment income(a)​

    

0.25

      

1.23

    

Net realized and unrealized gains (losses)

    

0.46

      

0.38

    

Total income (loss) from investment operations

    

0.71

      

1.61

    

Less distributions declared to shareholders:

  

From net investment income

    

(0.23

)

    

(1.20

)

  

Total distributions

    

(0.23

)

    

(1.20

)

  

Net asset value, end of period

  

$

25.92

    

$

25.44

    

Total return, excluding expense support(b)​

    

2.82

%

    

7.00

%

  

Total return, including expense support(b)​

    

2.82

%

    

6.25

%

  

Ratios to average net assets/supplemental data:

  

Net assets, end of period

  

$

39,449

    

$

38,423

    

Including interest expense:

  

Expenses, excluding expense support(d)(g)​

    

4.28

%(e)​

    

4.73

%(e)​

  

Expenses, including expense support(d)(f)(g)​

    

4.28

%(e)​

    

5.47

%(e)​

  

Excluding interest expense:

  

Expenses, excluding expense support(d)(g)​

    

3.59

%(e)​

    

3.65

%(e)​

  

Expenses, including expense support(d)(f)(g)​

    

3.59

%(e)​

    

4.39

%(e)​

  

Net investment income(d)​

    

4.97

%(e)​

    

5.14

%(e)​

  

Portfolio turnover rate

    

5.42

%(c)​

    

63.58

%(c)​

  

*  For the two month period ended December 31, 2019. See Note 1 to the consolidated financial statements.

(a)  Per share net investment income has been calculated using the average shares outstanding during the period.

(b)  Based on net asset value per share. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's DRIP. Total return is not annualized for periods less than one year. Total return excludes or includes, as noted, expense support provided or (recouped) by the Adviser.

(c)  Not annualized.

(d)  Includes organizational and offering costs, where applicable.

(e)  Annualized, except for certain non-recurring costs.

(f)  Includes expense support provided or (recouped) by the Adviser.

Annual Report 2023
142

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

(g)  For the periods presented below, the ratio of operating expenses to average net assets consisted of the following:

    For the
Year Ended
December 31,
2023		   For the
Year Ended
December 31,
2022		   For the
Year Ended
December 31,
2021		   For the
Year Ended
December 31,
2020		  

Base management fees

    

1.82

%

    

1.77

%

    

1.58

%

    

1.54

%

  

Income based incentive fees

    

1.74

%

    

0.70

%

    

0.06

%

    

0.03

%

  

Cost of borrowing

    

2.57

%

    

1.50

%

    

0.64

%

    

0.50

%

  

Net expense support

    

—

%

    

—

%

    

—

%

    

—

%

  

Other operating expenses

    

1.06

%

    

1.06

%

    

1.11

%

    

1.58

%

  

Total operating expenses

    

7.19

%

    

5.03

%

    

3.39

%

    

3.65

%

  

 

    For the
Period Ended
December 31,
2019*		   For the Period from
December 21, 2018
(commencement of
operations) to
October 31, 2019		  

Base management fees

    

1.56

%

    

1.57

%

  

Income based incentive fees

    

—

%

    

—

%

  

Cost of borrowing

    

0.68

%

    

0.91

%

  

Net expense support

    

—

%

    

0.74

%

  

Other operating expenses

    

2.03

%

    

2.24

%

  

Total operating expenses

    

4.27

%

    

5.47

%

  

(h)  Includes stated dividends and amortization of deferred issuance costs on the mandatory redeemable preferred shares. See Note 7 to the consolidated financial statements.

Annual Report 2023
143

CION Ares Diversified Credit Fund

Financial Highlights (continued)

(in thousands, except per share data, percentages and as otherwise noted)

Information about the Fund's senior securities as of December 31, 2023, December 31, 2022, December 31, 2021, December 31, 2020, December 31, 2019 and October 31, 2019 is shown in the following table. There were no senior securities outstanding as of October 31, 2018 and October 31, 2017.

    Total Amount
Outstanding
Exclusive of
Treasury
Securities(a)​		   Asset
Coverage
Per Unit(b)​		   Involuntary
Liquidating
Preference
Per Unit(c)​		   Average
Market Value
Per Unit(d)​		  

Class and Period Ended

  

Revolving Credit Facility (Wells Fargo Bank, N.A.)

  

December 31, 2023

  

$

426,117

    

$

6,200

      

—

      

N/A

    

December 31, 2022

    

348,844

      

5,299

      

—

      

N/A

    

December 31, 2021

    

225,664

      

6,461

      

—

      

N/A

    

December 31, 2020

    

77,025

      

6,233

      

—

      

N/A

    

December 31, 2019

    

19,054

      

5,383

      

—

      

N/A

    

October 31, 2019

    

19,397

      

3,847

      

—

      

N/A

    

Revolving Credit Facility (State Street Bank and Trust Company)

  

December 31, 2023

  

$

246,939

    

$

6,200

      

—

      

N/A

    

December 31, 2022

    

317,201

      

5,299

      

—

      

N/A

    

December 31, 2021

    

176,803

      

6,461

      

—

      

N/A

    

December 31, 2020

    

111,283

      

6,233

      

—

      

N/A

    

December 31, 2019

    

110,387

      

5,383

      

—

      

N/A

    

October 31, 2019

    

142,357

      

3,847

      

—

      

N/A

    

Mandatory Redeemable Preferred Shares*

  

December 31, 2023

  

$

570,000

    

$

86.35

    

$

25.00

      

N/A

    

December 31, 2022

    

420,000

      

81.52

      

25.00

      

N/A

    

December 31, 2021

    

300,000

      

93.11

      

25.00

      

N/A

    

Secured Borrowings

  

December 31, 2023

  

$

6,548

    

$

6,200

      

—

      

N/A

    

December 31, 2022

    

5,776

      

5,299

      

—

      

N/A

    

December 31, 2021

    

5,776

      

6,461

      

—

      

N/A

    

December 31, 2020

    

650

      

6,233

      

—

      

N/A

    

December 31, 2019

    

314

      

5,383

      

—

      

N/A

    

October 31, 2019

    

349

      

3,847

      

—

      

N/A

    

*  There were no mandatory redeemable preferred shares outstanding as of December 31, 2020, December 31, 2019 and October 31, 2019.

(a)  Total amount of each class of senior securities outstanding at principal value at the end of the period presented.

(b)  The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness as calculated separately for each of the mandatory redeemable preferred shares and the credit facilities in accordance with Section 18(h) of the Investment Company Act of 1940, as amended. With respect to the mandatory redeemable preferred shares, the asset coverage per unit figure is expressed in terms of dollar amounts per share of outstanding mandatory redeemable preferred shares (based on a per share liquidation preference of $25). With respect to the credit facilities, the asset coverage ratio is multiplied by $1,000 to determine the "Asset Coverage Per Unit".

(c)  The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it. The "—" in this column indicates that the U.S. Securities and Exchange Commission expressly does not require this information to be disclosed for certain types of senior securities.

(d)  Not applicable to senior securities outstanding as of period end.

Annual Report 2023
144

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

(1) Organization

CION Ares Diversified Credit Fund (the "Fund") is a closed-end, diversified management investment company that is registered under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). The Fund is structured as an interval fund and continuously offers its shares. The Fund was organized as a Delaware statutory trust on June 21, 2016.

The Fund's investment objective is to provide superior risk-adjusted returns across various market cycles by investing in a diversified portfolio of liquid and illiquid asset classes. The Fund seeks to capitalize on market inefficiencies and relative value opportunities throughout the entire global credit spectrum.

The Fund is externally managed by CION Ares Management, LLC (the "Adviser") pursuant to an investment advisory and management agreement. The Adviser was registered as an investment adviser with the U.S. Securities and Exchange Commission ("SEC") under the Investment Advisers Act of 1940, as amended (the "Advisers Act") on January 4, 2017. The Adviser is a joint venture between affiliates of Ares Management Corporation ("Ares Management"), a publicly traded, leading global alternative investment manager, and CION Investment Group, LLC and is controlled by Ares Management. The Adviser oversees the management of the Fund's activities and is responsible for making investment decisions for the Fund's portfolio. Ares Operations LLC, a subsidiary of Ares Management, provides certain administrative and other services necessary for the Fund to operate.

Fiscal Year End Change

On September 25, 2019, the board of trustees (the "Board") approved a change to the fiscal year end of the Fund from October 31 to December 31. Accordingly, the Fund's consolidated financial statements and related notes include information as of and for the year ended December 31, 2020, the two month period ended December 31, 2019 and the year ended October 31, 2019.

(2) Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles ("GAAP"), and include the accounts of the Fund and its consolidated subsidiaries. The Fund is an investment company following accounting and reporting guidance in Accounting Standards Codification ("ASC") Topic 946, Financial Services — Investment Companies. The consolidated financial

statements reflect all adjustments and reclassifications, that, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition as of and for the periods presented. All significant intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

Cash and cash equivalents include funds from time to time deposited with financial institutions and short-term, liquid investments in a money market account. Cash and cash equivalents are carried at cost, which approximates fair value.

Concentration of Credit Risk

The Fund places its cash and cash equivalents with financial institutions and, at times, cash held in depository or money market accounts may exceed the Federal Deposit Insurance Corporation insured limit.

Investment Transactions

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, and include investments charged off during the period, net of recoveries. 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 Investment Company Act, the Board has designated the Adviser as the Fund's "valuation designee" to perform fair value determinations for investments held by the Fund without readily available market quotations subject to the oversight of the Board. All investments are recorded at their fair value.

Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Adviser, as 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 Adviser, as the valuation designee, subject to the oversight of the Board in accordance with the Adviser's valuation policy. The Adviser may utilize independent third-party pricing and valuation services to assist in the valuation of each portfolio investment without a readily available market quotation in accordance with the valuation policy and a consistently applied valuation process.

Investments in the Fund's portfolio that do not have a readily available market are valued at fair value as determined in good

Annual Report 2023
145

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

faith by the Adviser, as the valuation designee, as described herein. As part of the valuation process for investments that do not have readily available market prices, the Adviser may take into account the following types of factors, if relevant, in determining the fair value of the Fund's 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 Adviser 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 value, the fair value of the Fund's investments may fluctuate from period to period. Additionally, the fair value of the Fund's 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 the Fund 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 the Fund was required to liquidate a portfolio investment in a forced or liquidation sale, the Fund could realize significantly less than the value at which the Fund has 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. See Note 4 for further information on the Adviser's valuation process for the Fund.

Interest Income Recognition

Interest income is recorded on an accrual basis and includes the accretion of discounts, amortization of premiums and payment-in-kind ("PIK") interest. Discounts from and premiums to par value on investments purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. To the extent loans contain PIK provisions, PIK interest, computed at the contractual rate specified in each applicable agreement, is accrued and recorded as interest income and added to the principal balance of the loan. PIK interest income added to the principal balance is generally collected upon repayment of the

outstanding principal. To maintain the Fund's tax treatment as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), this non-cash source of income must be paid out to shareholders in the form of dividends for the year the income was earned, even though the Fund has not yet collected the cash. The amortized cost of investments represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest.

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon the Fund's judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in the Fund's judgment, are likely to remain current. The Fund may make exceptions to this policy if the loan has sufficient collateral value (i.e., typically measured as enterprise value of the portfolio company) or is in the process of collection.

Collateralized loan obligation ("CLO") equity investments recognize investment income by utilizing an effective interest methodology based upon an effective yield to maturity utilizing projected cash flows, as required by ASC 325-40, Beneficial Interest in Securitized Financial Assets.

Dividend Income Recognition

Dividend income on preferred equity is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. To the extent preferred equity contains PIK provisions, PIK dividends, computed at the contractual rate specified in each applicable agreement, are accrued and recorded as dividend income and added to the principal balance of the preferred equity. PIK dividends added to the principal balance are generally collected upon redemption of the equity.

Foreign Currency Transactions and Foreign Currency Forward Contracts

The Fund's books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis: (i) fair value of investment securities, other assets and liabilities at the exchange rates prevailing at the end of the period; and (ii) purchases and sales of

Annual Report 2023
146

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

investment securities, income and expense at the exchange rates prevailing on the respective dates of such transactions, income or expenses.

The Fund does not isolate that portion of the results of operations resulting from the changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included in "net realized and unrealized gains or losses on investments" in the consolidated statement of operations.

Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates of securities transactions, and the difference between the amounts of income and expense items recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from the changes in fair values of assets and liabilities, other than investments in securities at period end, resulting from changes in exchange rates.

Investments in foreign companies and securities of foreign governments may involve special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different transaction clearance and settlement practices, and potential future adverse political and economic developments. Moreover, investments in foreign companies and securities of foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. government.

The Fund may enter into foreign currency forward contracts for operational purposes and to protect against adverse exchange rate fluctuations. A foreign currency forward contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date. The Fund may also enter into these contracts for purposes of increasing exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one currency to another. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Fund is subject to the credit risk that the other party will not complete the obligations of the contract. The fair values of the foreign currency forward contracts are obtained from an independent pricing source.

Derivative Instruments

The Fund values its derivatives at fair value with the unrealized gains or losses recorded in "net realized and

unrealized gains or losses on derivative contracts" in the Fund's consolidated statement of operations.

Mandatory Redeemable Preferred Shares

The Fund carries its mandatory redeemable preferred shares at amortized cost and such shares are included as a liability on the consolidated statement of assets and liabilities. See Note 7 for further information.

Debt and Mandatory Redeemable Preferred Shares Issuance Costs

Debt and mandatory redeemable preferred shares issuance costs are amortized over the life of the relevant senior secured revolving credit facilities and mandatory redeemable preferred shares.

Secured Borrowings

The Fund follows the guidance in ASC Topic 860, Transfers and Servicing ("ASC 860"), when accounting for participations and other partial loan sales. Certain loan sales do not qualify for sale accounting under ASC 860 because these sales do not meet the definition of a "participating interest," as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest or which are not eligible for sale accounting remain as an investment on the consolidated statement of assets and liabilities as required under GAAP and the proceeds are recorded as a secured borrowing. Secured borrowings are carried at fair value and included in "accrued expenses and other payables" in the accompanying consolidated statement of assets and liabilities.

Income Taxes

The Fund has elected to be treated as a RIC under the Code, and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, the Fund must, among other requirements, meet certain source-of-income and asset diversification requirements and timely distribute to its shareholders all or substantially all of its investment company taxable income, as defined by the Code, for each year. The Fund has made and intends to continue to make the requisite distributions to its shareholders, which will generally relieve the Fund from U.S. federal corporate-level income taxes.

Depending on the level of taxable income earned in a tax year, the Fund may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Fund determines that its estimated current year taxable income will be in excess of estimated dividend distributions for the current

Annual Report 2023
147

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

year from such income, the Fund accrues excise tax, if any, on estimated excess taxable income as such taxable income is earned.

For tax purposes, the distributions to holders of mandatory redeemable preferred shares as described in Note 7 are treated as dividends.

Commitments and Contingencies

In the normal course of business, the Fund's investment activities involve executions, settlement and financing of various transactions resulting in receivables from, and payables to, brokers, dealers and the Fund's custodian. These activities may expose the Fund to risk in the event that such parties are unable to fulfill contractual obligations. Management does not anticipate any material losses from counterparties with whom it conducts business. Consistent with standard business practice, the Fund enters into contracts that contain a variety of indemnifications, and is engaged from time to time in various legal actions. The maximum exposure of the Fund under these arrangements and activities is unknown. However, the Fund expects the risk of material loss to be remote.

Commitments to extend credit include loan proceeds the Fund is obligated to advance, such as delayed draws or revolving credit arrangements. Commitments generally have fixed expiration dates or other termination clauses. Unrealized gains or losses associated with unfunded commitments are recorded in the consolidated financial statements and reflected as an adjustment to the fair value of the related security in the consolidated schedule of investments. The par amount of the unfunded commitments is not recognized by the Fund until it becomes funded.

Distributions to Shareholders

The Fund records distributions from net investment income daily. These distributions may be reinvested or paid monthly to shareholders. The Fund intends to pay common shareholders at least annually all or substantially all of its taxable income. The Fund intends to pay any capital gains distributions at least annually.

The Fund may make distributions, without limitation, from offering proceeds or borrowings, which may constitute a return of capital, as well as net investment income from operations, capital and non-capital gains from the sale of assets, and dividends or distributions from equity investments. Furthermore, a portion of the Fund's distributions may be derived from expense support payments made by the Adviser, which are subject to repayment by the Fund within three years pursuant to the Expense Support and Conditional Reimbursement Agreement (the "Expense Support Agreement"). The purpose of such expense support payments is to ensure that the Fund bears an appropriate level of expenses. As such, the Fund's distributions may not be entirely based on investment performance and can only be sustained if positive investment performance is achieved in future periods

and/or the Adviser continues to make such expense support payments. Any future repayments of expenses by the Fund will reduce cash otherwise potentially available for distributions. There can be no assurance that sufficient performance will be achieved in order to sustain the current level of the Fund's distributions. After the expiration of the current term of the Expense Support Agreement on July 31, 2024, the Adviser has no obligation to make expense support payments in future periods. If the Adviser did not make any expense support payments during such period, all or a portion of the Fund's distributions would have been a return of capital which would reduce the available capital for investment. The sources of the Fund's distributions may vary periodically. Please refer to the Financial Highlights table for the sources of distributions.

Shareholders' Allocations

The Fund currently offers Class A, Class C, Class I, Class L, Class U, Class U-2 and Class W common shares (See Note 5). Realized and unrealized gains and losses and net investment income, excluding class specific expenses, if any, are allocated daily to each class of common shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

Use of Estimates in the Preparation of the Consolidated Financial Statements

The preparation of the consolidated financial statements in conformity with GAAP requires the Adviser to make estimates and assumptions that affect the reported amounts of actual and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income or loss and expenses during the reporting period. Actual results could differ from those estimates and such differences may be actual and contingent. Significant estimates include the valuation of investments.

Recent Accounting Pronouncements

The Fund considers the applicability and impact of all accounting standard updates ("ASU") issued by the Financial Accounting Standards Board. ASUs were assessed and either determined to be not applicable or expected to have minimal impact on the Fund's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of disaggregated income taxes paid in both U.S. and foreign jurisdictions, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for the fiscal year ending December 31, 2025. Early adoption is permitted and the amendments in this update should be applied on a prospective basis, though retrospective adoption is permitted. The Fund is currently evaluating the impact of this guidance on its consolidated financial statements.

Annual Report 2023
148

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

(3) Investment Advisory And Other Agreements

The Adviser is registered as an investment adviser under the Advisers Act. The Adviser is an affiliate of Ares Management and leverages Ares Management's entire investment platform and benefits from the significant capital markets, trading and research expertise of all of Ares Management's investment professionals.

Pursuant to the investment advisory agreement, dated December 6, 2016 (the "Investment Advisory Agreement") (most recently amended and restated as of May 22, 2020), by and between the Fund and the Adviser, the Adviser provides certain investment advisory and administrative services to the Fund and in consideration of the advisory services provided, the Adviser is entitled to a fee consisting of two components — a base management fee (the "Management Fee") and an incentive fee (the "Incentive Fee"). Pursuant to the investment sub-advisory agreement, dated as of December 6, 2016 (the "Investment Sub-Advisory Agreement"), by and among the Adviser, Ares Capital Management II LLC (the "Sub-Adviser") and the Fund, the Adviser pays the Sub-Adviser 40% of the Management Fee and Incentive Fee actually received and retained and not otherwise used to support expenses.

Pursuant to the Investment Advisory Agreement, the Fund has agreed to pay the Adviser the Management Fee at an annual rate of 1.25% of the average daily value of the Fund's total assets (including any assets attributable to any preferred shares issued or to indebtedness) minus the Fund's liabilities other than liabilities relating to indebtedness. During the year ended December 31, 2023, the Fund incurred $49,083 of Management Fees.

The Incentive Fee is calculated and payable quarterly in arrears based upon each share class's "pre-incentive fee net investment income" for the immediately preceding quarter, and is subject to a hurdle rate, expressed as a rate of return on each share class's "average daily net asset value," equal to 1.50% per quarter (or an annualized hurdle rate of 6.00%), subject to a "catch-up" feature. For this purpose, "pre-incentive fee net investment income" means interest income, dividend income and any other income accrued during the calendar quarter, minus each share class's operating expenses for the quarter and taking into account the Expense Support Agreement. For such purposes, each share class's operating expenses will include the Management Fee, expenses reimbursed to the Adviser under the administration agreement, dated as of December 6, 2016 (the "Adviser Administration Agreement"), by and between the Fund and the Adviser, and any interest expense and distributions paid on any issued and outstanding preferred shares, but will exclude the Incentive Fee.

The "catch-up" provision is intended to provide the Adviser with an Incentive Fee of 15% on each share class's pre-incentive fee net investment income when the share class's

pre-incentive fee net investment income reaches 1.765% of average daily net asset value in any calendar quarter. During the year ended December 31, 2023, all share classes incurred a total of $48,004 of Incentive Fees.

Prior to May 22, 2020, the Incentive Fee was calculated and payable quarterly in arrears based upon the Fund's (rather than each class') "pre-incentive fee net investment income" for the immediately preceding quarter, and was subject to a hurdle rate, expressed as a rate of return on the Fund's "adjusted capital," equal to 1.50% per quarter (or an annualized hurdle rate of 6.00%), subject to a "catch-up" feature. "Adjusted Capital" previously was defined as the cumulative gross proceeds received by the Fund from the sale of the Fund's shares (including pursuant to the Fund's DRIP (as defined below), reduced by amounts paid in connection with purchases of the Fund's shares pursuant to the Fund's share repurchase program and further reduced by distribution representing a return of capital. In calculating any Incentive Fee, "pre-incentive fee net investment income" means interest income, dividend income and any other income accrued during the calendar quarter, minus the Fund's operating expenses for the quarter.

The Adviser is obligated to pay expenses associated with providing the investment services stated in the Investment Advisory Agreement and Investment Sub-Advisory Agreement, including expenses associated with office space for their officers and employees, investment and economic research, trading and investment management of the Fund.

Under the Expense Support Agreement, the Adviser may at its discretion, through the period ending July 31, 2024, reimburse the Fund's operating expenses to the extent that aggregate distributions made to each class' shareholders during the applicable quarter exceed Available Operating Funds (as defined below). Additionally, during the term of the Expense Support Agreement, the Adviser may reimburse the Fund's operating expenses to the extent that it otherwise deems appropriate such that the Fund bears an appropriate level of expenses (each such payment, an "Expense Payment"). "Available Operating Funds" means the sum attributable to the applicable class of (i) the Fund's net investment Fund taxable income (including net short-term capital gains reduced by net long term capital losses); (ii) the Fund's net capital gains (including the excess of net long-term capital gains over net short-term capital losses); and (iii) dividends and other distributions paid to or otherwise earned by the Fund on account of investments in portfolio companies (to the extend such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).

In consideration of the Adviser's agreement to reimburse the Fund's operating expenses, the Fund has agreed to repay the Adviser in the amount of any Fund expenses reimbursed subject to the limitation that a reimbursement (an "Adviser

Annual Report 2023
149

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Reimbursement") will be made only if and to the extent that (i) it is payable not more than three years from the last business day of the calendar quarter in which the applicable Expense Payment was made by the Adviser; (ii) the Adviser Reimbursement does not cause other fund operating expenses attributable to the applicable class (on an annualized basis and net of any reimbursements received by the Fund during such fiscal year) during the applicable quarter to exceed the percentage of the Fund's average net assets attributable to common shares represented by other fund operating expenses allocable to the applicable class (as defined below) (on an annualized basis) during the quarter in which the applicable Expense Payment from the Adviser was made; and (iii) the distributions per share declared by the Fund for the applicable class at the time of the applicable Expense Payment are less than the effective rate of distributions per share for the applicable class at the time the Adviser Reimbursement would be paid. Other fund operating expenses is defined as, the

Fund's total Operating Expenses (as defined below), excluding the Management Fees, the Incentive Fees, offering expenses, financing fees and costs, interest expense and extraordinary expenses. "Operating Expenses" means all operating costs and expenses incurred by the Fund, as determined in accordance with GAAP for investment companies. The Expense Support Agreement was renewed for another year in May 2023 and is set to expire on July 31, 2024, unless renewed by the mutual agreement of the Adviser and the Board. The Expense Support Agreement may be terminated only by the Board on notice to the Adviser. For the year ended December 31, 2023, the Adviser did not provide any expense support and the Fund did not incur any Adviser Reimbursement.

The table below presents a summary of all expenses supported by the Adviser for each of the following three month periods in which the Fund received expense support from the Adviser and associated dates through which such expenses are eligible for reimbursement from the Fund.

Fund Level Expense Support

Three Months Ended

   Expense
Support
from the
Adviser
($)		   Recoupment
of Expense
Support
($)		   Expense
Support
No Longer
Eligible for
Reimbursement
($)		   Unreimbursed
Expense
Support
($)		   Ratio of Other
Fund Operating
Expenses to
Average Net
Assets for the
Period(a) ​%		   Annualized
Distribution
Ratios for the
Period(b)
​($)		   Eligible for
Reimbursement
through		  

January 31, 2017

    

335

      

335

      

—

      

—

      

68.82

      

—

    

January 31, 2020

  

April 30, 2017

    

820

      

820

      

—

      

—

      

54.97

      

1.39

    

April 30, 2020

  

July 31, 2017

    

738

      

738

      

—

      

—

      

37.93

      

1.39

    

July 31, 2020

  

Total

    

1,893

      

1,893

      

—

      

—

                

Class A

Three Months Ended

   Expense
Support
from the
Adviser
($)		   Recoupment
of Expense
Support
($)		   Expense
Support
No Longer
Eligible for
Reimbursement
($)		   Unreimbursed
Expense
Support
($)		   Ratio of Other
Fund Operating
Expenses to
Average Net
Assets for the
Period(a) ​%		   Annualized
Distribution
Ratios for the
Period(b)
​($)		   Eligible for
Reimbursement
through		  

July 31, 2017

    

193

      

193

      

—

      

—

      

9.01

      

1.39

    

July 31, 2020

  

October 31, 2017

    

592

      

291

      

301

      

—

      

7.68

      

1.39

    

October 31, 2020

  

January 31, 2018

    

412

      

111

      

301

      

—

      

5.42

      

1.39

    

January 31, 2021

  

April 30, 2018

    

307

      

118

      

189

      

—

      

4.43

      

1.39

    

April 30, 2021

  

July 31, 2018

    

282

      

137

      

145

      

—

      

3.86

      

1.39

    

July 31, 2021

  

October 31, 2018

    

351

      

66

      

285

      

—

      

3.15

      

1.39

    

October 31, 2021

  

January 31, 2019

    

113

      

72

      

41

      

—

      

1.21

      

1.39

    

January 31, 2022

  

April 30, 2019

    

10

      

10

      

—

      

—

      

1.29

      

1.39

    

April 30, 2022

  

Total

    

2,260

      

998

      

1,262

      

—

                

Annual Report 2023
150

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Class C

Three Months Ended

   Expense
Support
from the
Adviser
($)		   Recoupment
of Expense
Support
($)		   Expense
Support
No Longer
Eligible for
Reimbursement
($)		   Unreimbursed
Expense
Support
($)		   Ratio of Other
Fund Operating
Expenses to
Average Net
Assets for the
Period(a) ​%		   Annualized
Distribution
Ratios for the
Period(b)
​($)		   Eligible for
Reimbursement
through		  

July 31, 2017

    

—

      

—

      

—

      

—

      

—

      

—

    

July 31, 2020

  

October 31, 2017

    

99

      

99

      

—

      

—

      

5.32

      

1.39

    

October 31, 2020

  

January 31, 2018

    

174

      

64

      

110

      

—

      

6.07

      

1.39

    

January 31, 2021

  

April 30, 2018

    

206

      

2

      

204

      

—

      

4.94

      

1.39

    

April 30, 2021

  

July 31, 2018

    

264

      

21

      

243

      

—

      

4.33

      

1.39

    

July 31, 2021

  

October 31, 2018

    

313

      

—

      

313

      

—

      

3.66

      

1.39

    

October 31, 2021

  

January 31, 2019

    

163

      

—

      

163

      

—

      

1.96

      

1.39

    

January 31, 2022

  

April 30, 2019

    

84

      

84

      

—

      

—

      

2.03

      

1.39

    

April 30, 2022

  

Total

    

1,303

      

270

      

1,033

      

—

                

Class I

Three Months Ended

   Expense
Support
from the
Adviser
($)		   Recoupment
of Expense
Support
($)		   Expense
Support
No Longer
Eligible for
Reimbursement
($)		   Unreimbursed
Expense
Support
($)		   Ratio of Other
Fund Operating
Expenses to
Average Net
Assets for the
Period(a) ​%		   Annualized
Distribution
Ratios for the
Period(b)
​($)		   Eligible for
Reimbursement
through		  

July 31, 2017

    

—

      

—

      

—

      

—

      

—

      

—

    

July 31, 2020

  

October 31, 2017

    

172

      

172

      

—

      

—

      

4.81

      

1.39

    

October 31, 2020

  

January 31, 2018

    

246

      

246

      

—

      

—

      

5.03

      

1.39

    

January 31, 2021

  

April 30, 2018

    

369

      

369

      

—

      

—

      

3.84

      

1.39

    

April 30, 2021

  

July 31, 2018

    

521

      

521

      

—

      

—

      

3.19

      

1.39

    

July 31, 2021

  

October 31, 2018

    

779

      

779

      

—

      

—

      

2.45

      

1.39

    

October 31, 2021

  

January 31, 2019

    

281

      

281

      

—

      

—

      

0.96

      

1.39

    

January 31, 2022

  

April 30, 2019

    

—

      

—

      

—

      

—

      

—

      

1.39

    

April 30, 2022

  

Total

    

2,368

      

2,368

      

—

      

—

                

Class L

Three Months Ended

   Expense
Support
from the
Adviser
($)		   Recoupment
of Expense
Support
($)		   Expense
Support
No Longer
Eligible for
Reimbursement
($)		   Unreimbursed
Expense
Support
($)		   Ratio of Other
Fund Operating
Expenses to
Average Net
Assets for the
Period(a) ​%		   Annualized
Distribution
Ratios for the
Period(b)
​($)		   Eligible for
Reimbursement
through		  

July 31, 2017

    

—

      

—

      

—

      

—

      

—

      

—

    

July 31, 2020

  

October 31, 2017

    

—

      

—

      

—

      

—

      

—

      

—

    

October 31, 2020

  

January 31, 2018

    

—

      

—

      

—

      

—

      

5.49

      

1.39

    

January 31, 2021

  

April 30, 2018

    

4

      

4

      

—

      

—

      

3.54

      

1.39

    

April 30, 2021

  

July 31, 2018

    

9

      

9

      

—

      

—

      

3.23

      

1.39

    

July 31, 2021

  

October 31, 2018

    

16

      

16

      

—

      

—

      

2.62

      

1.39

    

October 31, 2021

  

January 31, 2019

    

7

      

7

      

—

      

—

      

1.46

      

1.39

    

January 31, 2022

  

April 30, 2019

    

2

      

2

      

—

      

—

      

1.54

      

1.39

    

April 30, 2022

  

Total

    

38

      

38

      

—

      

—

                

Annual Report 2023
151

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Class U

Three Months Ended

   Expense
Support
from the
Adviser
($)		   Recoupment
of Expense
Support
($)		   Expense
Support
No Longer
Eligible for
Reimbursement
($)		   Unreimbursed
Expense
Support
($)		   Ratio of Other
Fund Operating
Expenses to
Average Net
Assets for the
Period(a) ​%		   Annualized
Distribution
Ratios for the
Period(b)
​($)		   Eligible for
Reimbursement
through		  

December 31, 2019

    

27

      

27

      

—

      

—

      

1.72

      

1.39

    

December 31, 2022

  

Total

    

27

      

27

      

—

      

—

                

(a) Other Fund Operating Expenses is defined as, the Fund's total Operating Expenses (as defined below), excluding the management fees and incentive fees, offering expenses, financing fees and costs, interest expense and extraordinary expenses. "Operating Expenses" means all operating costs and expenses incurred by the Fund, as determined in accordance with generally accepted accounting principles for investment companies.

(b) The Annualized Distribution Rate per Share equals the projected annualized distribution amount which is calculated based on the average regular cash distributions per share that were declared during record dates in the applicable Expense Support Payment Quarter.

Pursuant to the Adviser Administration Agreement, the Adviser furnishes the Fund with office equipment and clerical, bookkeeping and record keeping services at the Adviser's office facilities. Under the Adviser Administration Agreement, the Fund is obligated to reimburse the Adviser, at cost, based upon the Fund's allocable portion of the Adviser's overhead and other expenses (including travel expenses) incurred by the Adviser in performing its obligations under the Adviser Administration Agreement, including the Fund's allocable portion of the compensation, rent and other expenses of certain of its officers (including but not limited to the chief compliance officer, chief financial officer, chief accounting officer, general counsel, treasurer and assistant treasurer) and their respective staffs. The Adviser Administration Agreement may be terminated by either party without penalty upon 60 days' written notice to the other party. The total of such expenses incurred for the year ended December 31, 2023 was $1,900. These expenses were included in "other expenses" in the consolidated statement of operations.

Pursuant to an administration agreement between ALPS Fund Services, Inc. ("ALPS") and the Fund, ALPS performs, or administers the performance of, certain of the Fund's required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, and operations, preparing the financial records that the Fund is required to maintain and preparing reports to the Fund's shareholders and reports filed with the SEC. In addition, ALPS coordinates the preparation and filing of the Fund's tax returns and generally coordinates the payment of the Fund's expenses and the performance of administrative and professional services rendered to the Fund by others. The Fund pays ALPS for these services. The total of such expenses incurred by the Fund for the year ended December 31, 2023 was $3,104. These expenses were included in "other expenses" in the consolidated statement of operations.

Pursuant to a transfer agent agreement between SS&C GIDS, Inc. ("SS&C GIDS") and the Fund, SS&C GIDS performs

transfer agency services for the Fund. SS&C GIDS maintains the shareholder accounting records for the Fund. The Fund pays SS&C GIDS for these services. The total of such expenses incurred for the year ended December 31, 2023 was $862. These expenses were included in "other expenses" in the consolidated statement of operations.

Shareholder Service Expenses

The Fund has adopted a "Shareholder Services Plan" with respect to its Class A, Class C, Class L and Class U-2 Shares under which the Fund may compensate financial industry professionals for providing ongoing services in respect of clients with whom they have distributed shares of the Fund. Such services may include electronic processing of client orders, electronic fund transfers between clients and the Fund, account reconciliations with the Fund's transfer agent, facilitation of electronic delivery to clients of Fund documentation, monitoring client accounts for back-up withholding and any other special tax reporting obligations, maintenance of books and records with respect to the foregoing, and such other information and liaison services as the Fund or the Adviser may reasonably request. Under the Shareholder Services Plan, the Fund, with respect to Class A, Class C, Class L and Class U-2 Shares, may incur expenses on an annual basis equal to 0.25% of its average net assets attributable to Class A, Class C, Class L and Class U-2 Shares, respectively.

Distribution Plan

The Fund, with respect to its Class C, Class L, Class U, Class W and Class U-2 Shares, is authorized under a "Distribution Plan" to pay to ALPS Distributors, Inc. (the "Distributor") a distribution fee for certain activities relating to the distribution of shares to investors. These activities include marketing and other activities to support the distribution of Class C, Class L, Class U, Class W and Class U-2 shares. The Distribution Plan operates in a manner consistent with Rule 12b-1 under the Investment Company

Annual Report 2023
152

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Act, which regulates the manner in which an open-end investment company may directly or indirectly bear the expenses of distributing its shares. Although the Fund is not an open-end investment company, it has undertaken to comply with the terms of Rule 12b-1 as a condition of an exemptive order under the Investment Company Act which permits it to offer multiple classes of shares. Under the Distribution Plan, the Fund pays the Distributor a distribution fee at an annual rate of 0.75% of average daily net assets attributable to Class C Shares, 0.25% of the average daily net assets attributable to Class L Shares, 0.50% of the average daily net assets attributable to Class W Shares and Class U-2 Shares, and 0.75% of the average daily net assets attributable to Class U Shares. Some or all of such distribution fees may be paid by the Distributor to certain financial intermediaries.

The Fund may be limited in its ability to declare any cash distribution on its capital stock or purchase its capital stock unless, at the time of such declaration or purchase, the Fund has an asset coverage (on its indebtedness) of at least 300% after deducting the amount of such distribution or purchase price, as applicable. For non-public indebtedness issued by the Fund or its subsidiaries (for example, the State Street Credit Facility and the Wells Credit Facility, both as defined below), the Fund may be able to continue to pay distributions on its capital stock or purchase its capital stock even if the asset coverage ratio on its indebtedness falls below 300%.

(4) Fair Value of Financial Instruments

The Fund follows ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASC 825-10"), which provides companies 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 companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of the company's 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. The Fund has not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value. With the exception of the line items entitled "other assets", "mandatory redeemable preferred shares" and "debt," which are reported at amortized cost, the carrying value of all other assets and liabilities approximate fair value.

The Fund also follows 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 the Fund 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, the Fund has considered its principal market as the market in which the Fund exits its 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 the Fund has 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 Adviser, as the Fund's valuation designee, continues to employ the net asset valuation policy and procedures that have been reviewed by the Fund's Board in connection with their designation of the Adviser as the Fund's valuation designee and are consistent with the provisions of Rule 2a-5 under the Investment Company Act and ASC 820-10 (see Note 2 for further information). Consistent with its valuation policies and procedures, the Adviser evaluates the source of inputs, including any markets in which the Fund's investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. Because there is not a readily available market value for most of the investments in the Fund's portfolio, the fair value of the investments must typically be determined using unobservable inputs.

The assets and liabilities classified as Level 1 or Level 2 are typically valued based on quoted market prices, forward foreign exchange rates, dealer quotations or alternative pricing sources supported by observable inputs. The Adviser obtains prices from independent pricing services which generally utilize broker quotes and may use various other pricing techniques which take into account appropriate factors such as

Annual Report 2023
153

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Adviser is responsible for all inputs and assumptions related to the pricing of securities. The Adviser has internal controls in place that support its reliance on information received from third-party pricing sources. As part of its internal controls, the Adviser obtains, reviews, and tests information to corroborate prices received from third-party pricing sources. For any security, if market or dealer quotations are not readily available, or if the Adviser determines that a quotation of a security does not represent a fair value, then the security is valued at a fair value as determined in good faith by the Adviser, as the valuation designee, subject to the oversight of the Board and will be classified as Level 3. In such instances, the Adviser will use valuation techniques consistent with the market or income approach to measure fair value and will give consideration to all factors which might reasonably affect the fair value.

The Fund's portfolio investments classified as Level 3 (other than as described below in the following paragraph) are typically valued using two different valuation techniques. The first valuation technique is 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 method for determining EV uses a multiple analysis whereby appropriate multiples are applied to the portfolio company's EBITDA (generally defined as net income before net interest expense, income tax expense, depreciation and amortization). EBITDA multiples are typically determined based upon review of market comparable transactions and publicly traded comparable companies, if any. The Adviser may also employ other valuation multiples to determine EV, such as revenues. The Adviser may also use industry specific valuation analyses to determine enterprise value, such as capitalization rate analysis used in the real estate industry. The second method 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). The EV analysis is performed to determine the value of equity investments, the value of debt investments in portfolio companies where the Fund has control or could gain control through an option or warrant security, and to determine if there is credit impairment for debt investments. If debt investments are credit impaired, an EV analysis may be used to value such debt investments; however, in addition to the methods outlined above, other methods such as a liquidation or wind down analysis may be utilized to estimate EV. The second valuation technique is a yield analysis, which is typically performed for non-credit impaired

debt investments in portfolio companies where the Fund does not own a controlling equity position. To determine fair value using a yield analysis, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the yield analysis, the Adviser considers the current contractual interest rate, the maturity and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the enterprise value of the portfolio company. As debt investments held by the Fund are substantially illiquid with no active transaction market, the Adviser, as the valuation designee, depends on primary market data, including newly funded transactions, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

The fair value of CLOs is estimated based on various valuation models from third-party pricing services. The provided prices are checked using internally developed models. The valuation models generally utilize discounted cash flows and take into consideration prepayment and loss assumptions, based on historical experience and projected performance, economic factors, the characteristics and condition of the underlying collateral, comparable yields for similar securities and recent trading activity. These securities are classified as Level 3.

Private asset-backed securities classified as Level 3 are typically valued using two different valuation techniques. The first valuation technique is an analysis of the forecasted cash flows of the security. The forecasted cash flows take into consideration prepayment and loss assumptions, based on historical experience and projected performance, economic factors, and the characteristics and condition of the underlying collateral. For equity securities, the projected cash flows are present valued using a market discount rate to determine the fair value. For debt securities, the analysis is used to determine if the borrower has the ability to repay its obligations. If it is determined that the borrower does have the ability to repay its obligations, the second valuation technique that is utilized is a yield analysis. To determine fair value using a yield analysis, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the yield analysis, the Adviser considers the current contractual interest rate, the maturity and other terms of the investment relative to risk of the borrower and the specific investment. As the debt investments are substantially illiquid with no active transaction market, the Adviser depends on primary market data, including newly funded transactions, as inputs in determining the appropriate market yield, as applicable.

Annual Report 2023
154

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

The following table is a summary of the inputs used as of December 31, 2023, in valuing the Fund's investments carried at fair value:

    Level 1 —
Quoted
Prices ($)		   Level 2 —
Other
Significant
Observable
Inputs ($)		   Level 3 —
Significant
Unobservable
Inputs ($)		  

Total ($)

  

Senior Loans

    

—

      

898,717

      

2,363,517

      

3,262,234

    
Subordinated
Loans		    

—

      

—

      

53,395

      

53,395

    
Corporate
Bonds		    

—

      

446,225

      

49,486

      

495,711

    
Collateralized
Loan
Obligations		    

—

      

—

      

345,882

      

345,882

    
Common
Stock		    

1,657

      

418

      

51,273

      

53,348

    
Preferred
Stock		    

—

      

—

      

189,554

      

189,554

    
Private
Asset-Backed
Debt		    

—

      

—

      

63,590

      

63,590

    
    Level 1 —
Quoted
Prices ($)		   Level 2 —
Other
Significant
Observable
Inputs ($)		   Level 3 —
Significant
Unobservable
Inputs ($)		  

Total ($)

  

Warrants

    

—

      

—

      

2,005

      

2,005

    
Total
Investments		    

1,657

      

1,345,360

      

3,118,702

      

4,465,719

    

Derivative Assets:

  
Purchased
Equity Options		    

119

      

—

      

—

      

119

    
Credit Default
Swaps		    

—

      

379

      

—

      

379

    

Derivative Liabilities:

  
Corporate
Bonds Sold
Short		    

—

      

(718

)

    

—

      

(718

)

  
Foreign
Currency
Forward
Contracts		    

—

      

(14,957

)

    

—

      

(14,957

)

  
Written Equity
Options		    

(70

)

    

—

      

—

      

(70

)

  
Credit Default
Swaps		    

—

      

(286

)

    

—

      

(286

)

  

The following table is a reconciliation of the Fund's investments in which significant unobservable inputs (Level 3) were used in determining fair value for the year ended December 31, 2023:

   

Senior
Loans ($)		  

Subordinated
Loans ($)		  

Corporate
Bonds ($)		   Collateralized
Loan
Obligations
($)		  
Common
Stock
($)		  
Preferred
Stock
($)		   Private
Asset
Backed
Debt ($)		  

Warrants
($)		  

Total ($)

  
Balance as of
December 31, 2022		    

2,143,841

      

37,778

      

35,917

      

208,266

      

43,402

      

158,819

      

67,277

      

2,444

      

2,697,744

    

Purchases

    

622,049

      

16,214

      

14,628

      

157,556

      

8,844

      

37,490

      

53,871

      

932

      

911,584

    
Sales and principal
redemptions		    

(391,035

)

    

(10,208

)

    

(361

)

    

(23,661

)

    

(5,193

)

    

(12,016

)

    

(60,353

)

    

(1,371

)

    

(504,198

)

  
Net realized and unrealized
gains (losses)		    

35,040

      

237

      

(743

)

    

3,434

      

4,220

      

5,261

      

2,553

      

—

      

50,002

    

Accrued discounts (premiums)

    

7,647

      

166

      

45

      

287

      

—

      

—

      

242

      

—

      

8,387

    

Transfers in to Level 3(a)​

    

35,118

      

9,208

      

—

      

—

      

—

      

—

      

—

      

—

      

44,326

    

Transfers out of Level 3(a)​

    

(89,143

)

    

—

      

—

      

—

      

—

      

—

      

—

      

—

      

(89,143

)

  
Balance as of
December 31, 2023		    

2,363,517

      

53,395

      

49,486

      

345,882

      

51,273

      

189,554

      

63,590

      

2,005

      

3,118,702

    
Net change in unrealized
gains (losses) from
investments held
at December 31, 2023		    

5,021

      

45

      

(1,593

)

    

516

      

4,283

      

2,482

      

595

      

891

      

12,240

    

(a) Investments were transferred into and out of Level 3 during the year ended December 31, 2023. Transfers between Levels 2 and 3 were as a result of changes in the observability of significant inputs or available market data for certain portfolio companies.

Annual Report 2023
155

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

The following table summarizes the significant unobservable inputs the Adviser used to value the majority of the Fund's investments categorized within Level 3 as of December 31, 2023. The table is not intended to be all-inclusive, but instead to capture the significant unobservable inputs relevant to the Adviser's determination of fair values.

    Fair Value
($)		   Primary
Valuation
Techniques		  

Inputs

   Estimated
Range		   Weighted
Average(a)​		  

Investment in securities

  

Senior Loans

  

2,335,173

   Yield
Analysis		   Market
Yield		   7.6% -
49.3%		  

12.6

%

  

Senior Loans

  

18,195

   Broker
Quotes		  

N/A

  

N/A

  

N/A

  

Senior Loans

  

10,149

   EV Market
Multiple
Analysis		   Revenue
Multiple		   4.0x -
8.0x		   4.0

x

  
Subordinated
Loans		  

53,395

   Yield
Analysis		   Market
Yield		   11.0% -
19.2%		  

17.1

%

  

Corporate Bonds

  

30,914

   Yield
Analysis		   Market
Yield		   10.6% -
19.2%		  

16.2

%

  

Corporate Bonds

  

18,572

   Broker
Quotes		  

N/A

  

N/A

  

N/A

  
Collateralized
Loan Obligations		  

345,882

   Broker
Quotes		  

N/A

  

N/A

  

N/A

  

Common Stock

  

51,273

   EV Market
Multiple
Analysis		   EBITDA
Multiple		   3.2x -
43.5x		  

10.6

x

  

Preferred Stock

  

189,554

   EV Market
Multiple
Analysis		   EBITDA
Multiple		   3.2x -
35.0x
  

16.2

x

  
Private
Asset-Backed
Debt
   
   
 		   63,590


   Income
(Other)
   
   
 
 		   Constant
Default
Rate,
Constant
Prepayment
Rate,		   2.5% -
49.0%

0.0%-
44.0%
   36.7%


40.3%

  
 
            
 		   Recovery
Rate,		   0.0%-
65.0%		   25.6%
  
                 
 		   Collection
Rate		   60.0% -
93.0%		   90.8%
  

Warrants

  

2,005

   EV Market
Multiple
Analysis		   EBITDA
Multiple		   3.2x -
13.3x		  

6.5

x

  
Total Level 3
Investments		    

3,118,702

                    

(a) Unobservable inputs were weighted by the relative fair value of investments.

Changes in market yields, discount rates or EBITDA multiples, each in isolation, may change the fair value of certain of the Fund's investments. Generally, an increase in market yields or discount rates or decrease in EBITDA multiples may result in a decrease in the fair value of certain of the Fund's investments.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Fund's investments may fluctuate from period to period. Additionally, the fair value of the Fund's 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 the Fund 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 the Fund was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Fund has 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 following are the carrying values and fair values of the Fund's senior secured revolving credit facilities and mandatory redeemable preferred shares as of December 31, 2023.

    Carrying Value
($)		   Fair Value(b)
​($)		  

Wells Credit Facility(a)​

    

426,117

      

426,117

    

State Street Credit Facility(a)​

    

246,939

      

246,939

    
Series A Mandatory Redeemable
Preferred Shares		    

59,541

      

58,800

    
Series B Mandatory Redeemable
Preferred Shares		    

89,312

      

88,200

    
Series C Mandatory Redeemable
Preferred Shares		    

148,856

      

145,500

    
Series D Mandatory Redeemable
Preferred Shares		    

54,581

      

53,625

    
Series E Mandatory Redeemable
Preferred Shares		    

64,506

      

62,725

    
Series F Mandatory Redeemable
Preferred Shares		    

84,352

      

85,000

    
Series G Mandatory Redeemable
Preferred Shares		    

64,505

      

65,000

    
     

1,238,709

      

1,231,906

    

(a) The Wells Credit Facility and the State Street Credit Facility, both as defined below, carrying values are the same as the principal amounts outstanding.

(b) The fair value of these debt obligations would be categorized as level 2 under ASC 820-10.

(5) Common Stock

The Fund began continuously offering its shares on January 3, 2017. The Fund, pursuant to an exemptive order granted by the SEC on July 11, 2017, offers multiple classes of shares. As of July 11, 2017, the Fund simultaneously redesignated its issued and outstanding shares as Class A shares and created its

Annual Report 2023
156

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Class C, Class I and Class L shares. As of December 4, 2018, the Fund created its Class U and Class W shares. As of March 31, 2020, the Fund created its Class U-2 shares. The maximum sales load imposed on purchases, maximum contingent deferred sales charges, shareholder servicing and/or distribution fees charged will vary depending on each share class.

Common share transactions were as follows:

Class A

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

2,466

      

62,506

    

Common shares issued

    

664

      

16,142

    

Reinvestment of distributions

    

51

      

1,243

    

Common shares repurchased

    

(450

)

    

(10,903

)

  

Common shares outstanding — end of period

    

2,731

      

68,988

    

Class C

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

3,110

      

79,379

    

Common shares issued

    

317

      

7,637

    

Reinvestment of distributions

    

108

      

2,613

    

Common shares repurchased

    

(335

)

    

(8,058

)

  

Common shares outstanding — end of period

    

3,200

      

81,571

    

Class I

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

75,442

      

1,921,149

    

Common shares issued

    

29,202

      

721,481

    

Reinvestment of distributions

    

1,651

      

40,767

    

Common shares repurchased

    

(9,861

)

    

(241,871

)

  

Common shares outstanding — end of period

    

96,434

      

2,441,526

    

Class L

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

440

      

11,184

    

Common shares issued

    

12

      

273

    

Reinvestment of distributions

    

25

      

611

    

Common shares repurchased

    

(26

)

    

(627

)

  

Common shares outstanding — end of period

    

451

      

11,441

    

Class U

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

16,238

      

407,259

    

Common shares issued

    

3,100

      

76,019

    

Reinvestment of distributions

    

994

      

24,403

    

Common shares repurchased

    

(1,307

)

    

(31,821

)

  

Common shares outstanding — end of period

    

19,025

      

475,860

    

Class U-2

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

3,544

      

89,492

    

Common shares issued

    

907

      

22,286

    

Reinvestment of distributions

    

218

      

5,334

    

Common shares repurchased

    

(407

)

    

(9,913

)

  

Common shares outstanding — end of period

    

4,262

      

107,199

    

Class W

   For the Year Ended
December 31, 2023		  
   

Shares

  

Amount ($)

  
Common shares outstanding — beginning
of period		    

1,334

      

34,290

    

Common shares issued

    

—

      

—

    

Reinvestment of distributions

    

79

      

1,952

    

Common shares repurchased

    

(57

)

    

(1,399

)

  

Common shares outstanding — end of period

    

1,356

      

34,843

    

Repurchase Program

Beginning in the second quarter of 2017, the Fund began offering and currently intends to continue offering, the quarterly repurchase of shares in such amount as may be determined by the Board in accordance with the Fund's fundamental policy to conduct repurchase offers for between 5%-25% of its outstanding shares each quarter.

Annual Report 2023
157

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

The following table summarizes the share repurchases completed during the year ended December 31, 2023:

Three Months Ended

   Repurchase
Date		   Shares
Repurchased		   Purchase
Price
Per Share		   Aggregate
Consideration
for
Repurchased
Shares		   Size of
Repurchase
Offer		   % of
Outstanding
Shares
Offered
to be
Repurchased		   % of
Outstanding
Shares
Repurchased		  

December 31, 2022

  

January 12, 2023

    

3,778

      

24.24

    

$

91,571

      

5,151

      

5.00

%

    

3.67

%

  

March 31, 2023

  

April 13, 2023

    

3,214

      

24.34

      

78,242

      

5,269

      

5.00

%

    

3.05

%

  

June 30, 2023

  

July 13, 2023

    

2,572

      

24.60

      

63,274

      

5,500

      

5.00

%

    

2.34

%

  

September 30, 2023

  

October 12, 2023

    

2,879

      

24.84

      

71,498

      

5,875

      

5.00

%

    

2.45

%

  

Total

        

12,443

        

$

304,585

                

(6) Debt

In accordance with the Investment Company Act, the Fund is allowed to borrow amounts with respect to senior securities representing indebtedness (such as the senior secured revolving credit facilities), such that its asset coverage, calculated pursuant to the Investment Company Act, is at least 300% after such borrowing.

State Street Credit Facility

The Fund is a party to a senior secured revolving credit facility (as amended, the "State Street Credit Facility"), that allows the Fund to borrow up to $400,000 at any one time outstanding. The State Street Credit Facility's stated maturity date is August 25, 2024. Under the State Street Credit Facility, the Fund is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness, including additional mandatory redeemable preferred shares, and liens, (b) limitations on certain restricted payments and (c) maintaining a ratio of total assets (less total liabilities other than senior securities representing indebtedness) to senior securities representing indebtedness plus the involuntary liquidation preference of the mandatory redeemable preferred shares of the Fund and its consolidated subsidiaries (subject to certain exceptions) of not less than 2:1. These covenants are subject to important limitations and exceptions that are described in the documents governing the State Street Credit Facility. Amounts available to borrow under the State Street Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Fund's portfolio that are pledged as collateral. As of December 31, 2023, the Fund was in compliance with the terms of the State Street Credit Facility.

As of December 31, 2023, there was $246,939 outstanding under the State Street Credit Facility. Since August 25, 2022, the interest rate charged on the State Street Credit Facility is based on an applicable Secured Overnight Financing Rate ("SOFR") rate plus a credit spread adjustment of 0.10% and an applicable spread of 1.00% (as defined in the agreements governing the State Street Credit Facility). Prior to August 25, 2022, the interest rate charged on the State Street Credit Facility was based on an applicable London Interbank Offered Rate ("LIBOR") rate plus an applicable spread of 1.00% (as defined in the agreements governing the State Street Credit Facility). The Fund is required to pay a commitment fee of 0.25% per annum on any unused portion of the State Street Credit Facility.

For the year ended December 31, 2023, the components of interest and unused commitment fees expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the State Street Credit Facility were as follows:

    For the Year Ended
December 31, 2023
($)		  

Stated interest expense

    

15,173

    

Unused commitment fees

    

51

    

Amortization of debt issuance costs

    

338

    

Total interest and credit facility fees expense

    

15,562

    

Cash paid for interest expense

    

15,451

    

Average stated interest rate

    

5.06

%

  

Average outstanding balance

    

300,111

    

Wells Credit Facility

The Fund and one of the Fund's consolidated subsidiaries, CADEX Credit Financing, LLC (the "Financing Sub"), are party to a revolving funding facility (as amended, the "Wells Credit Facility"), that allows the Financing Sub to borrow up to $850,000 at any one time outstanding. The Wells Credit Facility is secured by all of the assets held by, and the

Annual Report 2023
158

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

membership interest in, the Financing Sub. The end of the reinvestment period and the stated maturity date for the Wells Credit Facility are November 16, 2024 and November 16, 2026, respectively.

Amounts available to borrow under the Wells Credit Facility are subject to a borrowing base that applies different advance rates to different types of assets held by the Financing Sub. The Financing Sub is also subject to limitations with respect to the loans securing the Wells Credit Facility, including restrictions on loan size, borrower domicile, payment frequency and status, collateral interests, and loans with fixed rates, as well as restrictions on portfolio company leverage, which may also affect the borrowing base and therefore amounts available to borrow. The Fund and the Financing Sub are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Wells Credit Facility. As of December 31, 2023, the Fund and the Financing Sub were in compliance with the terms of the Wells Credit Facility.

As of December 31, 2023, there was $426,117 outstanding under the Wells Credit Facility. Since May 19, 2022, the interest rate charged on the Wells Credit Facility is based on an applicable SOFR rate plus a credit spread adjustment of 0.10% and an applicable spread of 2.00% (as defined in the agreements governing the Wells Credit Facility). Prior to May 19, 2022, the interest rate charged on the Wells Credit Facility was based on an applicable LIBOR rate plus an applicable spread of 2.00% (as defined in the agreements governing the Wells Credit Facility). The Financing Sub is also required to pay a commitment fee of between 0.50% and 1.25% per annum depending on the size of the unused portion of the Wells Credit Facility.

For the year ended December 31, 2023, the components of interest and unused commitment fees expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Wells Credit Facility were as follows:

    For the Year Ended
December 31, 2023
($)		  

Stated interest expense

    

30,247

    

Unused commitment fees

    

2,445

    

Amortization of debt issuance costs

    

955

    

Total interest and credit facility fees expense

    

33,647

    

Cash paid for interest expense

    

32,257

    

Average stated interest rate

    

7.00

%

  

Average outstanding balance

    

431,942

    

(7) Mandatory Redeemable Preferred Shares

The Fund has authorized and issued 2,400 shares of Series A Mandatory Redeemable Preferred Shares (the "Series A MRP Shares") for gross proceeds of $60,000, 3,600 shares of Series B Mandatory Redeemable Preferred Shares (the "Series B MRP Shares") for gross proceeds of $90,000, 6,000 shares of Series C Mandatory Redeemable Preferred Shares (the "Series C MRP Shares") for gross proceeds of $150,000, 2,200 shares of Series D Mandatory Redeemable Preferred Shares (the "Series D MRP Shares") for gross proceeds of $55,000, 2,600 shares of Series E Mandatory Redeemable Preferred Shares (the "Series E MRP Shares") for gross proceeds of $65,000, 3,400 shares of Series F Mandatory Redeemable Preferred Shares (the "Series F MRP Shares") for gross proceeds of $85,000 and 2,600 shares of Series G Mandatory Redeemable Preferred Shares for gross proceeds of $65,000 (the "Series G MRP Shares", and together with the Series A MRP Shares, Series B MRP Shares, Series C MRP Shares, Series D MRP Shares, Series E MRP Shares and Series F MRP Shares, the "MRP Shares"). Each of the MRP Shares has a liquidation preference of $25.00 per share. The aggregate redemption amount of the MRP Shares is $570,000.

The redemption dates for the Series A MRP Shares, Series B MRP Shares, Series C MRP Shares, Series D MRP Shares, Series E MRP Shares, Series F MRP Shares and Series G MRP Shares are July 30, 2026, September 30, 2026, September 30, 2028, January 6, 2027, January 6, 2032, June 1, 2026 and June 1, 2028, respectively.

The Series A MRP Shares and the Series B MRP Shares have a dividend rate of 2.68% per annum, payable quarterly, with a redemption date of five years from issuance. The Series C MRP Shares have a dividend rate of 3.07% per annum, payable quarterly, with a redemption date of seven years from issuance. The Series D MRP Shares have a dividend rate of 2.96% per annum, payable quarterly, with a redemption date of five years from issuance. The Series E MRP Shares have a dividend rate of 3.48% per annum, payable quarterly, with a redemption date of ten years from issuance. The Series F MRP Shares have a dividend rate of 7.16% per annum, payable quarterly, with a redemption date of three years from issuance. The Series G MRP Shares have a dividend rate of 7.23% per annum, payable quarterly, with a redemption date of five years from issuance. The weighted average dividend rate for the MRP Shares is 4.09% per annum. The MRP Shares are subject to optional and mandatory redemption in certain circumstances. The MRP Shares will be subject to redemption, at the option of the Fund, in whole or in part at any time only for the purposes of decreasing leverage of the Fund. The Fund may be obligated to redeem certain of the MRP Shares if the

Annual Report 2023
159

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Fund fails to maintain an asset coverage ratio, calculated in accordance with the Investment Company Act, greater than or equal to 225%. Holders of the MRP Shares are entitled to receive quarterly cumulative cash dividend payments on the first business day following each quarterly dividend date.

The redemption price per share is equal to the sum of the liquidation preference per share plus any accumulated but unpaid dividends plus, in some cases, an early redemption premium, which may vary based on the date of redemption. The Fund is subject to certain restrictions relating to the MRP

Shares such as maintaining certain asset coverage ratio requirements. Failure to comply with these restrictions could preclude the Fund from declaring any dividends to common shareholders and could trigger the mandatory redemption of the MRP Shares. Additionally, in accordance with the Investment Company Act, the Fund may not issue additional MRP Shares if immediately after such issuance the Fund will not have an asset coverage of at least 200%. As of December 31, 2023, the Fund was in compliance with the terms applicable to the MRP Shares.

The Fund's MRP Shares activity for the year ended December 31, 2023 was as follows:

    Series A
MRP Shares		   Series B
MRP Shares		   Series C
MRP Shares		   Series D
MRP Shares		   Series E
MRP Shares		   Series F
MRP Shares		   Series G
MRP Shares		  

Shares outstanding — beginning of period

    

2,400

      

3,600

      

6,000

      

2,200

      

2,600

      

—

      

—

    

Shares issued

    

—

      

—

      

—

      

—

      

—

      

3,400

      

2,600

    

Shares repurchased

    

—

      

—

      

—

      

—

      

—

      

—

      

—

    

Shares outstanding — end of period

    

2,400

      

3,600

      

6,000

      

2,200

      

2,600

      

3,400

      

2,600

    

The Fund's MRP Shares balance as of December 31, 2023 were as follows:

    Series A
MRP Shares
($)		   Series B
MRP Shares
($)		   Series C
MRP Shares
($)		   Series D
MRP Shares
($)		   Series E
MRP Shares
($)		   Series F
MRP Shares
($)		   Series G
MRP Shares
($)		   Total
($)		  

Principal amount

    

60,000

      

90,000

      

150,000

      

55,000

      

65,000

      

85,000

      

65,000

      

570,000

    

Unamortized issuance cost

    

(459

)

    

(688

)

    

(1,144

)

    

(419

)

    

(494

)

    

(648

)

    

(495

)

    

(4,347

)

  

Carrying value

    

59,541

      

89,312

      

148,856

      

54,581

      

64,506

      

84,352

      

64,505

      

565,653

    

Dividends on the MRP Shares are accrued on a daily basis and included in interest and credit facility fee expense on the consolidated statement of operations and in interest and facility fees payable on the consolidated statement of assets and liabilities. The table below summarizes the components of interest expense, the effective dividend rates and cash paid on the Fund's MRP Shares for the year ended December 31, 2023:

    Series A
MRP Shares
($)		   Series B
MRP Shares
($)		   Series C
MRP Shares
($)		   Series D
MRP Shares
($)		   Series E
MRP Shares
($)		   Series F
MRP Shares
($)		   Series G
MRP Shares
($)		   Total
($)		  

Stated dividends

    

1,612

      

2,419

      

4,618

      

1,633

      

2,268

      

3,565

      

2,752

      

18,867

    
Amortization of deferred
issuance costs		    

161

      

241

      

317

      

180

      

127

      

244

      

130

      

1,400

    

Total interest expense

    

1,773

      

2,660

      

4,935

      

1,813

      

2,395

      

3,809

      

2,882

      

20,267

    
Weighted average stated
dividend rate		    

2.68

%

    

2.68

%

    

3.07

%

    

2.96

%

    

3.48

%

    

7.16

%

    

7.23

%

    

4.09

%

  

Cash paid for dividends

    

1,608

      

2,412

      

4,604

      

1,628

      

2,264

      

2,114

      

1,641

      

16,271

    

(8) Investment Transactions

For the year ended December 31, 2023, the cost of investments purchased and proceeds from the sale of investments, excluding short obligations and derivatives, were as follows:

    For the Year Ended
December 31, 2023
($)		  

Cost of investments purchased

    

(2,006,337

)

  

Proceeds from the sale of investments

    

1,241,331

    

(9) Derivative Instruments

The Fund recognizes all of its derivative instruments at fair value as either assets or liabilities in the consolidated statement of assets and liabilities. The changes in the fair value are included in the consolidated statement of operations during the current year. Purchases of derivative contracts and proceeds from the sale of derivative contracts, as disclosed in the consolidated statement of cash flows, are indicative of the volume of derivative activity during the year ended December 31, 2023. The Fund is exposed to certain risks

Annual Report 2023
160

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

relating to its ongoing operations; the primary risks managed by using derivative instruments are market risk, credit risk, and foreign exchange risk. Additionally, the Fund holds certain derivative instruments for investment purposes. As of or during the year ended December 31, 2023, the Fund held the following instruments meeting the definition of a derivative instrument: foreign currency forward contracts, equity options and credit default swaps.

The Fund operates as a "limited derivatives user" for purposes of the derivatives transactions exemption in Rule 18f-4. To qualify as a limited derivatives user, the Fund's "derivatives exposure" is limited to 10% of its net assets subject to exclusions for certain currency or interest rate hedging transactions (as calculated in accordance with Rule 18f-4). If the Fund ceases to qualify as a "limited derivatives user" as defined in Rule 18f-4, the rule would, among other things, require the Fund to establish a comprehensive derivatives risk management program, to comply with certain value-at-risk based leverage limits, to appoint a derivatives risk manager and to provide additional disclosure both publicly and to the SEC regarding its derivatives positions.

Qualitative Disclosures of Derivative Financial Instruments

The following is a description of the derivatives utilized by the Fund during the reporting period, including the primary underlying risk exposure related to each instrument type.

Foreign Currency Forward Contracts

The Fund enters into foreign currency forward contracts from time to time to help mitigate its foreign currency risk exposure. As of December 31, 2023, the counterparty to the Fund's foreign currency forward contracts was Goldman Sachs.

Equity Options

The Fund is subject to equity price risk in the normal course of pursuing its investment objective. The Fund may enter into options contracts based on an equity index or specific security in order to manage its exposure to changes in market conditions. The risks of entering into equity price risk derivative instruments include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments. The Fund may purchase or write an option contract to protect against declines in market value on the underlying index or security. A purchased option contract provides the Fund a right, but not an obligation, to buy (call) or sell (put) an equity-related asset at a specified exercise price within a certain period or on a specific date. A written option contract holds the corresponding obligation to sell (call writing) or buy (put writing) the underlying

equity-related asset if the purchaser exercises the option contract. The buyer pays the seller an initial purchase price (premium) for this right. Option contracts purchased by the Fund are accounted for in the same manner as marketable portfolio securities. The premium received by the Fund for option contracts written is recorded as a liability. The proceeds from securities sold through the exercise of option contracts are decreased by the premium paid to purchase the option contracts. The Fund may recognize a realized gain or loss when the option contract is closed, exercised or expires. Net realized gains or losses occurring during the holding period of purchased options and written options contracts are included in the "net realized gains or losses on derivative contracts" in the accompanying consolidated statement of operations. Net unrealized gains or losses occurring during the holding period of purchased options and written options contracts are included in the "net unrealized gains or losses on derivative contracts" in the accompanying consolidated statement of operations.

Credit Default Swaps

The Fund enters into credit default swap contracts for investment purposes and to manage its credit risk. Credit default swap agreements involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, obligation or index. The Fund may purchase or sell protection. A seller of protection generally receives an upfront payment or periodic payments throughout the term of the swap provided there is no credit event. Such periodic payments received are accrued daily and accounted for as realized gains. If a credit event occurs, as defined under the terms of the swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. The buyer of protection generally pays an upfront premium or periodic payments throughout the term of the swap provided there is no credit event. Such periodic payments paid are accrued daily and accounted for as realized losses.

Entering into credit default swaps involves, to varying degrees, elements of credit, market and documentation risk in excess of the related amounts recognized in the consolidated statement of assets and liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may

Annual Report 2023
161

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

default on its obligations to perform or disagree as to the meaning of the contractual terms in the agreements, and that there will be unfavorable changes in net interest rates.

The Fund's derivative contracts are subject to either International Swaps and Derivatives Association Master Agreements, or futures contracts/OTC addenda which contain certain covenants and other provisions that, if violated, may require the Fund to post collateral on derivatives if the Fund is in a net liability position with its counterparties exceeding certain amounts. As of December 31, 2023, there were no

derivative instruments with credit-risk-related contingent features that are in a net liability position after taking into effect permissible offsetting. Additionally, OTC derivative counterparties may immediately terminate these agreements and the related derivative contracts if the Fund fails to maintain sufficient asset coverage for its contracts or its net assets decline by stated percentages or amounts. As of December 31, 2023, the termination values of these derivative contracts were approximately equal to their fair values.

Certain information related to the Fund's derivative instruments as of December 31, 2023 is presented below.

Derivative Instrument

   Notional
Amount		  

Maturity Date

  Gross Amount
of Recognized
Assets		   Gross Amount
of Recognized
Liabilities		   Balance Sheet
Location of Net
Amounts		  

Foreign currency forward contract

  

CAD

25,235

    

1/18/2024

  

$

—

    

$

(206

)

  

Derivatives

  

Foreign currency forward contract

  

£

95,973

    

1/26/2024

    

—

      

(5,675

)

  

Derivatives

  

Foreign currency forward contract

  

€

97,774

    

1/26/2024

    

—

      

(3,852

)

  

Derivatives

  

Foreign currency forward contract

  

CAD

11,164

    

1/26/2024

    

—

      

(319

)

  

Derivatives

  

Foreign currency forward contract

  

DKK

56,938

    

1/26/2024

    

—

      

(331

)

  

Derivatives

  

Foreign currency forward contract

  

NOK

7,895

    

1/26/2024

    

—

      

(70

)

  

Derivatives

  

Foreign currency forward contract

  

NZD

19,332

    

1/26/2024

    

—

      

(972

)

  

Derivatives

  

Foreign currency forward contract

  

PLN

15,023

    

1/26/2024

    

—

      

(270

)

  

Derivatives

  

Foreign currency forward contract

  

SEK

280,934

    

1/26/2024

    

—

      

(2,516

)

  

Derivatives

  

Foreign currency forward contract

  

AUD

15,492

    

1/26/2024

    

—

      

(616

)

  

Derivatives

  

Foreign currency forward contract

  

£

3,371

    

1/26/2024

    

—

      

(131

)

  

Derivatives

  

Call-United States Oil Fund LP-USO US

  

$

6,718

    

4/19/2024

    

102

      

—

    

Derivatives

  

Put-SPDR S&P 500 ETF Trust-SPY US

  

$

47,531

    

6/21/2024

    

17

      

—

    

Derivatives

  

Put-SPDR S&P 500 ETF Trust-SPY US

  

$

(47,531

)

  

6/21/2024

    

—

      

(70

)

  

Derivatives

  

CDX.NA.HY S35 5Y Tranche 15-25

  

$

3,531

    

12/20/2025

    

—

      

(286

)

  

Derivatives

  

CMBX.NA.BBB- S9

  

$

1,030

    

9/17/2058

    

179

      

—

    

Derivatives

  

UBER CDS USD SR 5Y

  

$

(900

)

  

6/20/2027

    

122

      

—

    

Derivatives

  

SRT CDS Tranche 95.12-99.23

  

$

(16,690

)

  

9/30/2031

    

78

        

Derivatives

  
                       

$

498

    

$

(15,313

)

          

Net realized gains (losses) on derivative instruments recognized by the Fund for the year ended December 31, 2023 are in the following locations in the consolidated statement of operations:

Derivative Instrument

  

Statement Location

   For the Year Ended
December 31, 2023
($)		  

Foreign currency forward contracts

  

Net realized losses on derivative contracts

    

(4,942

)

  

Written options

  

Net realized losses on derivative contracts

    

(719

)

  

Credit default swaps

  

Net realized losses on derivative contracts

    

168

    

Total

        

(5,493

)

  

Annual Report 2023
162

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Net unrealized gains (losses) on derivative instruments recognized by the Fund for the year ended December 31, 2023 are in the following locations in the consolidated statement of operations:

Derivative Instrument

  

Statement Location

   For the Year Ended
December 31, 2023
($)		  

Foreign currency forward contracts

  

Net unrealized losses on derivative contracts

    

(4,197

)

  

Purchased options

  

Net unrealized losses on derivative contracts

    

(636

)

  

Written options

  

Net unrealized losses on derivative contracts

    

881

    

Credit default swaps

  

Net unrealized losses on derivative contracts

    

(462

)

  

Total

        

(4,414

)

  

Offsetting Arrangements

Although the Fund generally presents derivative and other financial instruments on a gross basis in the consolidated statement of assets and liabilities, certain derivative and other financial instruments are subject to enforceable master netting arrangements with certain counterparties which allow for the derivative and other financial instruments to be offset.

The following table presents the rights of offset and related arrangements associated with the Fund's derivative instruments as of December 31, 2023:

        Gross Amounts Not Offset in
Statement of Assets and Liabilities		      

Description

   Gross Amount
of Recognized
Assets
(Liabilities)		   Gross Amount
Offset in
Assets
(Liabilities)		   Net Amounts
of Assets
(Liabilities)
Presented		   Financial
Instrument		   Collateral
(Received)
Pledged		  

Net Amount

  

Assets:

  

Goldman Sachs:

  

Foreign currency forward contracts

  

$

—

    

$

—

    

$

—

    

$

—

    

$

—

    

$

—

    

Total

  

$

—

    

$

—

    

$

—

    

$

—

    

$

—

    

$

—

    

Liabilities:

  

Goldman Sachs:

  

Foreign currency forward contracts

  

$

(14,958

)

  

$

—

    

$

(14,958

)

  

$

—

    

$

14,958

    

$

—

    

Credit default swap agreements

    

(193

)

    

—

      

(193

)

    

—

      

193

      

—

    

Total

  

$

(15,151

)

  

$

—

    

$

(15,151

)

  

$

—

    

$

15,151

    

$

—

    

(10) Income Taxes

For U.S. federal income tax purposes, the characterization of distributions made during the fiscal period from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. In addition, due to the timing of dividend distributions, the fiscal period in which amounts are distributed may differ from the fiscal period that the income or realized gains or losses were recorded by the Fund. The characterization of distributions

paid during the fiscal years ended December 31, 2023 and 2022 were as follows:

    December 31,
2023
($)		   December 31,
2022
($)		  

Ordinary income

    

244,042

      

146,774

    

Capital gain

    

—

      

—

    

Return of capital

    

—

      

—

    

Annual Report 2023
163

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

Taxable income generally differs from net increase in net assets resulting from operations for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses for book but not tax, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized. For the year ended December 31, 2023, the Fund estimated U.S. federal taxable income exceeded its distributions made from such taxable income during the year; consequently, the Fund incurred U.S. federal excise taxes of $2,000.

The Fund may adjust the classification of net assets as a result of permanent book-to-tax differences. On the consolidated statement of assets and liabilities, the following reclassifications were made for the year ended December 31, 2023:

    December 31, 2023
($)		  

Additional paid-in capital/(reduction)

    

(1,753

)

  

Distributable earnings accumulated gains

    

1,753

    

As of December 31, 2023, which is the end of the Fund's taxable year, the Fund had no uncertain tax positions that would require financial statement recognition, derecognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.

As of December 31, 2023, the components of accumulated earnings (loss) on a tax basis were as follows:

    December 31, 2023
($)		  

Undistributed ordinary income

    

122,288

    

Accumulated capital and other losses

    

(53,113

)

  

Net unrealized depreciation

    

(77,026

)

  

Other cumulative effect of timing differences

    

—

    

Total accumulated loss

    

(7,851

)

  

Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next tax year without expiration. As of the current fiscal year end, the following amounts are available as carry forwards to the next tax year:

    December 31, 2023
($)		  

Short-Term

    

13,791

    

Long-Term

    

39,322

    

ASC 740, Income Taxes ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The Fund has evaluated the implications of ASC 740 for all open tax years and has determined there is no impact to the Fund's financial statements as of the year ended December 31, 2023. The Fund's federal and state income returns for which the applicable statutes of limitations have not expired remain subject to examination by the Internal Revenue Service and states department of revenue.

All penalties and interest associated with income taxes, if any, are included in other expenses in the consolidated statement of operations. There were no penalties and interest incurred by the Fund for the fiscal year ended December 31, 2023.

(11) Risk Factors

Senior Loans Risk

Although senior loans ("Senior Loans") are senior and typically secured in a first lien (including "unitranche" loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) or second lien position in contrast to other below investment grade fixed income instruments, which are often subordinated or unsecured, the risks associated with such Senior Loans are generally similar to the risks of other below investment grade fixed income instruments. Investments in below investment grade Senior Loans are considered speculative because of the credit risk of the issuers of debt instruments (each, a "Borrower"). Such Borrowers are more likely than investment grade Borrowers to default on their payments of interest and principal owed to the Fund, and such defaults could reduce the net asset value of the Fund and income distributions. An economic downturn would generally lead to a higher non-payment rate, and a Senior Loan may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a Senior Loan may decline in value or become illiquid, which could adversely affect the Senior Loan's value.

Senior Loans are subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the Fund, a reduction in the value of the investment and a potential decrease in the net asset value of the Fund. There can be no assurance that the liquidation of any collateral securing a Senior Loan would satisfy the Borrower's obligation in the event of nonpayment of scheduled interest or principal payments, whether when due or upon acceleration, or that the collateral could be liquidated, readily or otherwise. In the event of bankruptcy or insolvency of a Borrower, the Fund could experience delays or limitations with respect to its ability to realize the benefits of the collateral, if any, securing a Senior Loan. The collateral securing a Senior Loan, if any, may lose all or substantially all

Annual Report 2023
164

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

of its value in the event of the bankruptcy or insolvency of a Borrower. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate such Senior Loans to presently existing or future indebtedness of the Borrower or take other action detrimental to the holders of Senior Loans including, in certain circumstances, invalidating such Senior Loans or causing interest previously paid to be refunded to the Borrower. Additionally, a Senior Loan may be "primed" in bankruptcy, which reduces the ability of the holders of the Senior Loan to recover on the collateral.

There may be less readily available information about most Senior Loans and the Borrowers thereunder than is the case for many other types of securities, including securities issued in transactions registered under the Securities Act of 1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Borrowers subject to the periodic reporting requirements of Section 13 of the Exchange Act. Senior Loans may be issued by companies that are not subject to SEC reporting requirements and these companies, therefore, do not file reports with the SEC that must comply with SEC form requirements and, in addition, are subject to a less stringent liability disclosure regime than companies subject to SEC reporting requirements. As a result, the Adviser will rely primarily on its own evaluation of a Borrower's credit quality rather than on any available independent sources. Consequently, the Fund will be particularly dependent on the analytical abilities of the Adviser. In certain circumstances, Senior Loans may not be deemed to be securities under certain federal securities laws, other than the Investment Company Act. Therefore, in the event of fraud or misrepresentation by a Borrower or an arranger, the Fund may not have the protection of the antifraud provisions of the federal securities laws as would otherwise be available for bonds or stocks. Instead, in such cases, parties generally would rely on the contractual provisions in the Senior Loan agreement itself and common law fraud protections under applicable state law.

The secondary trading market for Senior Loans may be less liquid than the secondary trading market for registered investment grade debt securities. No active trading market may exist for certain Senior Loans, which may make it difficult to value them. Illiquidity and adverse market conditions may mean that the Fund may not be able to sell Senior Loans quickly or at a fair price. To the extent that a secondary market does exist for certain Senior Loans, the market for them may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.

Senior Loans are subject to legislative risk. If legislation or state or federal regulations impose additional requirements or restrictions on the ability of financial institutions to make

loans, the availability of Senior Loans for investment by the Fund may be adversely affected. In addition, such requirements or restrictions could reduce or eliminate sources of financing for certain Borrowers. This would increase the risk of default. If legislation or federal or state regulations require financial institutions to increase their capital requirements this may cause financial institutions to dispose of Senior Loans that are considered highly levered transactions. If the Fund attempts to sell a Senior Loan at a time when a financial institution is engaging in such a sale, the price the Fund could receive for the Senior Loan may be adversely affected.

Subordinated Loans Risk

Subordinated loans generally are subject to similar risks as those associated with investments in Senior Loans, except that such loans are subordinated in payment and/or lower in lien priority to first lien holders. In the event of default on a Subordinated Loan, the first priority lien holder has first claim to the underlying collateral of the loan to the extent such claim is secured. Additionally, an over secured creditor may be entitled to additional interest and other charges in bankruptcy increasing the amount of their allowed claim. Subordinated Loans are subject to the additional risk that the cash flow of the Borrower and property securing the loan or debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior obligations of the Borrower. This risk is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. Subordinated Loans generally have greater price volatility than Senior Loans and may be less liquid.

Corporate Bonds Risk

The market value of a corporate bond generally may be expected to rise and fall inversely with interest rates. The market value of intermediate- and longer-term corporate bonds is generally more sensitive to changes in interest rates than is the market value of shorter-term corporate bonds. The market value of a corporate bond also may be affected by factors directly related to the Borrower, such as investors' perceptions of the creditworthiness of the Borrower, the Borrower's financial performance, perceptions of the Borrower in the marketplace, performance of management of the Borrower, the Borrower's capital structure and use of financial leverage and demand for the Borrower's goods and services. There is a risk that the Borrowers of corporate bonds may not be able to meet their obligations on interest or principal payments at the time called for by an instrument. High yield corporate bonds are often high risk and have speculative characteristics. High yield corporate bonds may be particularly susceptible to adverse Borrower-specific developments.

Annual Report 2023
165

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

CLO Securities Risk

CLOs issue securities in tranches with different payment characteristics and different credit ratings. The rated tranches of securities issued by CLOs ("CLO Securities") are generally assigned credit ratings by one or more nationally recognized statistical rating organizations. The subordinated (or residual) tranches do not receive ratings. Below investment grade tranches of CLO Securities typically experience a lower recovery, greater risk of loss or deferral or non-payment of interest than more senior tranches of the CLO.

The riskiest portion of the capital structure of a CLO is the subordinated (or residual) tranche, which bears the bulk of defaults from the loans in the CLO and serves to protect the other, more senior tranches from default in all but the most severe circumstances. Since it is partially protected from defaults, a senior tranche from a CLO typically has higher ratings and lower yields than the underlying securities, and can be rated investment grade. Despite the protection from the subordinated tranche, CLO tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults and aversion to CLO Securities as a class. The risks of an investment in a CLO depend largely on the collateral and the tranche of the CLO in which the Fund invests.

The CLOs in which the Fund invests may have issued and sold debt tranches that will rank senior to the tranches in which the Fund invests. By their terms, such more senior tranches may entitle the holders to receive payment of interest or principal on or before the dates on which the Fund is entitled to receive payments with respect to the tranches in which the Fund invests.

Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a CLO, holders of more senior tranches would typically be entitled to receive payment in full before the Fund receives any distribution. After repaying such senior creditors, such CLO may not have any remaining assets to use for repaying its obligation to the Fund. In the case of tranches ranking equally with the tranches in which the Fund invests, the Fund would have to share on an equal basis any distributions with other creditors holding such securities in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant CLO. Therefore, the Fund may not receive back the full amount of its investment in a CLO.

The transaction documents relating to the issuance of CLO Securities may impose eligibility criteria on the assets of the CLO, restrict the ability of the CLO's investment manager to trade investments and impose certain portfolio-wide asset quality requirements. These criteria, restrictions and requirements may limit the ability of the CLO's investment

manager to maximize returns on the CLO Securities. In addition, other parties involved in CLOs, such as third-party credit enhancers and investors in the rated tranches, may impose requirements that have an adverse effect on the returns of the various tranches of CLO Securities. Furthermore, CLO Securities issuance transaction documents generally contain provisions that, in the event that certain tests are not met (generally interest coverage and over-collateralization tests at varying levels in the capital structure), proceeds that would otherwise be distributed to holders of a junior tranche must be diverted to pay down the senior tranches until such tests are satisfied. Failure (or increased likelihood of failure) of a CLO to make timely payments on a particular tranche will have an adverse effect on the liquidity and market value of such tranche.

Payments to holders of CLO Securities may be subject to deferral. If cash flows generated by the underlying assets are insufficient to make all current and, if applicable, deferred payments on CLO Securities, no other assets will be available for payment of the deficiency and, following realization of the underlying assets, the obligations of the Borrower of the related CLO Securities to pay such deficiency will be extinguished.

The market value of CLO Securities may be affected by, among other things, changes in the market value of the underlying assets held by the CLO, changes in the distributions on the underlying assets, defaults and recoveries on the underlying assets, capital gains and losses on the underlying assets, prepayments on underlying assets and the availability, prices and interest rate of underlying assets. Furthermore, the leveraged nature of each subordinated class may magnify the adverse impact on such class of changes in the value of the assets, changes in the distributions on the assets, defaults and recoveries on the assets, capital gains and losses on the assets, prepayment on assets and availability, price and interest rates of assets. Finally, CLO Securities are limited recourse and may not be paid in full and may be subject to up to 100% loss.

Asset-Backed Securities Risk

Asset-backed securities often involve risks that are different from or more acute than risks associated with other types of debt instruments. For instance, asset-backed securities may be particularly sensitive to changes in prevailing interest rates. In addition, the underlying assets are subject to prepayments that shorten the securities' weighted average maturity and may lower their return. Asset-backed securities are also subject to risks associated with their structure and the nature of the assets underlying the security and the servicing of those assets. Payment of interest and repayment of principal on asset-backed securities is largely dependent upon the cash

Annual Report 2023
166

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

flows generated by the assets backing the securities and, in certain cases, supported by letters of credit, surety bonds or other credit enhancements. The values of asset-backed securities may be substantially dependent on the servicing of the underlying asset pools, and are therefore subject to risks associated with the negligence by, or defalcation of, their servicers. Furthermore, debtors may be entitled to the protection of a number of state and federal consumer credit laws with respect to the assets underlying these securities, which may give the debtor the right to avoid or reduce payment. In addition, due to their often complicated structures, various asset-backed securities may be difficult to value and may constitute illiquid investments. If many Borrowers on the underlying loans default, losses could exceed the credit enhancement level and result in losses to investors in asset-backed securities.

"Covenant-Lite" Loans Risk

Some of the loans in which the Fund may invest directly or indirectly through its investments in collateralized debt obligations, CLOs or other types of structured securities may be "covenant-lite" loans, which means the loans contain fewer maintenance covenants than other loans (in some cases, none) and do not include terms which allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. An investment by the Fund in a covenant-lite loan may potentially hinder the ability to reprice credit risk associated with the issuer and reduce the ability to restructure a problematic loan and mitigate potential loss. The Fund may also experience delays in enforcing its rights on its holdings of covenant-lite loans. As a result of these risks, the Fund's exposure to losses may be increased, which could result in an adverse impact on the Fund's net income and net asset value.

Investment and Market Risk

An investment in the common shares of the Fund is subject to investment risk, including the possible loss of the entire principal amount invested. An investment in the common shares of the Fund represents an indirect investment in the portfolio of Senior Loans, Corporate Bonds, CLO Securities and other securities and loans owned by the Fund, and the value of these securities and loans may fluctuate, sometimes rapidly and unpredictably. For instance, during periods of global economic downturn, the secondary markets for Senior Loans and investments with similar economic characteristics (such as second lien loans and unsecured loans) and Corporate Bonds may experience sudden and sharp price swings, which can be exacerbated by large or sustained sales by major investors in these markets, a high-profile default by a major Borrower, movements in indices tied to these markets or related securities or investments, or a change in the market's

perception of Senior Loans and investments with similar economic characteristics (such as second lien loans and unsecured loans) and Corporate Bonds. At any point in time, an investment in the common shares of the Fund may be worth less than the original amount invested, even after taking into account distributions paid by the Fund, if any, and the ability of common shareholders to reinvest dividends. The Fund intends to continue to utilize leverage, which will magnify the Fund's risks and, in turn, the risks to the common shareholders.

Market Disruption and Geopolitical Risk

U.S. and global markets recently have experienced increased volatility, which could be harmful to the Fund and issuers in which it invests. Such volatility may result in, amongst other things, write-offs, the re-pricing of credit risk, the failure of major financial institutions, or worsening general economic conditions, any of which could materially and adversely impact the broader financial and credit markets and reduce the availability of debt and equity capital for the market as a whole and financial services firms in particular. Continued market volatility and uncertainty and/or a downturn in market and economic and financial conditions, as a result of developments in the banking industry or otherwise (including as a result of delayed access to cash or credit facilities), could have an adverse impact on the Fund and issuers in which it invests.

Various social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics or outbreaks of infectious diseases), may also contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. Such events, including trade tensions between the United States and China, other uncertainties regarding actual and potential shifts in U.S. and foreign, trade, economic and other policies with other countries, the Russia-Ukraine war and more recently the Israel-Hamas war and health epidemics and pandemics, could adversely affect our business, financial condition or results of operations. These market and economic disruptions could negatively impact the operating results of our portfolio companies.

Interest Rate Risk

The market value of Corporate Bonds and other fixed-income securities changes in response to interest rate changes and other factors. In an effort to combat inflation, the U.S. Federal Reserve (the "Federal Reserve") increased the federal funds rate in 2023. Although the Federal Reserve left its benchmark rates steady in the fourth quarter of 2023, it has indicated that additional rate increases in the future may be necessary to

Annual Report 2023
167

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

mitigate inflationary pressures and there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate in the future. However, there are reports that the Federal Reserve may begin to cut the benchmark rates in 2024. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as rates rise. Accordingly, an increase in market interest rates may cause a decrease in the price of a debt security and, therefore, a decline in the net asset value of the Fund's common shares. The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Because Senior Loans with floating or variable rates reset their interest rates only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund's common shares. In addition, Senior Loans or similar loans or securities may allow the Borrower to opt between LIBOR-based interest rates, SOFR-based interest rates and interest rates based on bank prime rates, which may have an effect on the net asset value of the Fund's common shares.

Liquidity Risk

The Fund may not be able to readily dispose of illiquid securities or loans at prices that approximate those at which the Fund could sell the securities or loans if they were more widely traded and, as a result of that illiquidity, the Fund may have to sell other investments or engage in borrowing transactions if necessary to raise cash to meet its obligations. Limited liquidity can also affect the market price of securities, thereby adversely affecting the net asset value of the common shares and ability to make dividend distributions. The Fund's investments may not be readily marketable and may be subject to restrictions on resale. Generally, the Fund's investments are not listed on any national securities exchange and no active trading market may exist. When a secondary market exists, the market may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. Further, the lack of an established secondary market for illiquid securities may make it more difficult to value such securities, which may negatively affect the price the Fund would receive upon disposition of such securities.

Duration and Maturity Risk

The Fund has no fixed policy regarding portfolio maturity or duration. Holding long duration and long maturity investments will expose the Fund to certain additional risks.

When interest rates rise, certain obligations will be paid off by the Borrower more slowly than anticipated, causing the value of these obligations to fall. Rising interest rates tend to extend the duration of securities, making them more sensitive to

changes in interest rates. The value of longer-term securities generally changes more in response to changes in interest rates than shorter-term securities. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value.

When interest rates fall, certain obligations will be paid off by the Borrower more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. In periods of falling interest rates, the rate of prepayments tends to increase (as does price fluctuation) as Borrowers are motivated to pay off debt and refinance at new lower rates. During such periods, reinvestment of the prepayment proceeds by the Adviser will generally be at lower rates of return than the return on the assets that were prepaid. Prepayment reduces the yield to maturity and the average life of the security.

Special Situations and Stressed Investments Risk

Although investments in debt and equity securities and other obligations of companies that may be in some level of financial or business distress, including companies involved in, or that have recently completed, bankruptcy or other reorganization and liquidation proceedings ("Stressed Issuers") (such investments, "Special Situation Investments") may result in significant returns for the Fund, they are speculative and involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful investment in distressed assets is unusually high. Therefore, the Fund will be particularly dependent on the analytical abilities of the Adviser. In any reorganization or liquidation proceeding relating to a company in which the Fund invests, the Fund may lose its entire investment, may be required to accept cash or securities with a value less than the Fund's original investment and/or may be required to accept payment over an extended period of time. Among the risks inherent in investments in a troubled company is that it may be difficult to obtain information as to the true financial condition of such company. Troubled company investments and other distressed asset-based investments require active monitoring.

The Fund may make investments in Stressed Issuers when the Adviser believes it is reasonably likely that the Stressed Issuer will make an exchange offer or will be the subject to a plan of reorganization pursuant to which the Fund will receive new securities in return for a Special Situation Investment. There can be no assurance, however, that such an exchange offer will be made or that such a plan of reorganization will be adopted. In addition, a significant period of time may pass between the time at which the Fund makes its investment in the Special Situation Investment and the time that any such exchange offer or plan of reorganization is completed, if at all. During this

Annual Report 2023
168

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

period, it is unlikely that the Fund would receive any interest payments on the Special Situation Investment, the Fund would be subject to significant uncertainty whether the exchange offer or plan of reorganization will be completed and the Fund may be required to bear certain extraordinary expenses to protect and recover its investment. Therefore, to the extent the Fund seeks capital appreciation through investment in Special Situation Investments, the Fund's ability to achieve current income for its shareholders may be diminished. The Fund also will be subject to significant uncertainty as to when, in what manner and for what value the obligations evidenced by Special Situation Investments will eventually be satisfied (e.g., through a liquidation of the obligor's assets, an exchange offer or plan of reorganization involving the Special Situation Investments or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is made or plan of reorganization is adopted with respect to Special Situation Investments held by the Fund, there can be no assurance that the securities or other assets received by the Fund in connection with such exchange offer or plan of reorganization will not have a lower value or income potential than may have been anticipated when the investment was made or even no value. Moreover, any securities received by the Fund upon completion of an exchange offer or plan of reorganization may be restricted as to resale. Similarly, if the Fund participates in negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of Special Situation Investments, the Fund may be restricted from disposing of such securities. To the extent that the Fund becomes involved in such proceedings, the Fund may have a more active participation in the affairs of the issuer than that assumed generally by an investor.

To the extent that the Fund holds interests in a Stressed Issuer that are different (or more senior or junior) than those held by other funds and/or accounts managed by the Adviser or its affiliates ("Other Accounts"), the Adviser is likely to be presented with decisions involving circumstances where the interests of such Other Accounts may be in conflict with the Fund's interests. Furthermore, it is possible that the Fund's interest may be subordinated or otherwise adversely affected by virtue of such Other Accounts' involvement and actions relating to their investment. In addition, when the Fund and Other Accounts hold investments in the same Stressed Issuer (including in the same level of the capital structure), the Fund may be prohibited by applicable law from participating in restructurings, work-outs, renegotiations or other activities related to its investment in the Stressed Issuer absent an exemption due to the fact that Other Accounts hold investments in the same Stressed Issuer. As a result, the Fund may not be permitted by law to make the same investment decisions as Other Accounts in the same or similar situations

even if the Adviser believes it would be in the Fund's best economic interests to do so. Also, the Fund may be prohibited by applicable law from investing in a Stressed Issuer (or an affiliate) that Other Accounts are also investing in or currently invest in even if the Adviser believes it would be in the best economic interests of the Fund to do so. Furthermore, entering into certain transactions that are not deemed prohibited by law when made may potentially lead to a condition that raises regulatory or legal concerns in the future. This may be the case, for example, with Stressed Issuers who are near default and more likely to enter into restructuring or work-out transactions with their existing debt holders, which may include the Fund and its affiliates. In some cases, to avoid the potential of future prohibited transactions, the Adviser may avoid recommending allocating an investment opportunity to the Fund that it would otherwise recommend, subject to the Adviser's then-current allocation policy and any applicable exemptions.

Below Investment Grade Rating Risk

Debt instruments that are rated below investment grade are often referred to as "high yield" securities or "junk bonds." Below investment grade instruments are rated "Ba1" or lower by Moody's, "BB+" or lower by S&P or "BB+" or lower by Fitch or, if unrated, are judged by the Adviser to be of comparable credit quality. While generally providing greater income and opportunity for gain, below investment grade debt instruments may be subject to greater risks than securities or instruments that have higher credit ratings, including a higher risk of default. The credit rating of an instrument that is rated below investment grade does not necessarily address its market value risk, and ratings may from time to time change, positively or negatively, to reflect developments regarding the Borrower's financial condition. Below investment grade instruments often are considered to be speculative with respect to the capacity of the Borrower to timely repay principal and pay interest or dividends in accordance with the terms of the obligation and may have more credit risk than higher rated securities. Lower grade securities and similar debt instruments may be particularly susceptible to economic downturns. It is likely that a prolonged or deepening economic recession could adversely affect the ability of some Borrowers issuing such debt instruments to repay principal and pay interest on the instrument, increase the incidence of default and severely disrupt the market value of the securities and similar debt instruments.

The secondary market for below investment grade instruments may be less liquid than that for higher rated instruments. Because unrated securities may not have an active trading market or may be difficult to value, the Fund might have difficulty selling them promptly at an acceptable price. To the extent that the Fund invests in unrated securities, the Fund's

Annual Report 2023
169

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

ability to achieve its investment objective will be more dependent on the Adviser's credit analysis than would be the case when the Fund invests in rated securities.

Under normal market conditions, the Fund will invest in debt instruments rated in the lower rating categories ("Caa1" or lower by Moody's, "CCC+" or lower by S&P or "CCC+" or lower by Fitch) or unrated and of comparable quality. For these securities, the risks associated with below investment grade instruments are more pronounced. The Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal or interest on its portfolio holdings. In any reorganization or liquidation proceeding relating to an investment, the Fund may lose its entire investment or may be required to accept cash or securities with a value substantially less than its original investment.

European Risk

The Fund may invest a portion of its capital in debt securities issued by issuers domiciled in Europe, including issuers domiciled in the United Kingdom (the "UK"). Concerns regarding the sovereign debt of various Eurozone countries and proposals for investors to incur substantial write-downs and reductions in the face value of the sovereign debt of certain countries give rise to concerns about sovereign defaults, the possibility that one or more countries might leave the European Union (the "EU") or the Eurozone and various proposals (still under consideration and unclear in material respects) for support of affected countries and the Euro as a currency. The outcome of any such situation cannot be predicted. Sovereign debt defaults and EU and/or Eurozone exits could have material adverse effects on investments by the Fund in securities of European companies, including but not limited to the availability of credit to support such companies' financing needs, uncertainty and disruption in relation to financing, customer and supply contracts denominated in Euro and wider economic disruption in markets served by those companies, while austerity and other measures that have been introduced in order to limit or contain these issues may themselves lead to economic contraction and resulting adverse effects for the Fund. A number of the Fund's securities may be denominated in the Euro. Legal uncertainty about the funding of Euro denominated obligations following any breakup or exits from the Eurozone (particularly in the case of investments in securities of companies in affected countries) could also have material adverse effects on the Fund. In connection with investments in non-U.S. issuers, the Fund may engage in foreign currency exchange transactions but is not required to hedge its currency exposure. As such, the Fund may make investments that are denominated in British pound sterling or Euros. The Fund's assets are valued in U.S. dollars

and the depreciation of the British pound sterling and/or the Euro in relation to the U.S. dollar could adversely affect the Fund's investments denominated in British pound sterling or Euros that are not fully hedged regardless of the performance of the underlying issuer.

Litigation Risk

The Fund as well as the Adviser, the Sub-Adviser and its affiliates participate in a highly regulated industry and are each subject to regulatory examinations in the ordinary course of business. There can be no assurance that the Fund, its executive officers, trustees, and the Adviser, the Sub-Adviser, their affiliates and/or any of their respective principals and employees will avoid regulatory investigation and possible enforcement actions stemming therefrom. The Adviser and the Sub-Adviser are each registered investment advisers and, as such, subject to the provisions of the Advisers Act. The Fund the Adviser and the Sub-Adviser may each be, from time to time, subject to formal and informal examinations, investigations, inquiries, audits and reviews from numerous regulatory authorities both in response to issues and questions raised in such examinations or investigations and in connection with the changing priorities of the applicable regulatory authorities across the market in general.

The Fund, its executive officers, trustees, and the Adviser, the Sub-Adviser and their affiliates and/or any of their respective principals and employees could also be named as defendants in, or otherwise become involved in, litigation. Litigation and regulatory actions can be time-consuming and expensive and can lead to unexpected losses, which expenses and losses are often subject to indemnification by us. Legal proceedings could continue without resolution for long periods of time and their outcomes, which could materially and adversely affect the value of us or the ability of the Adviser or the Sub-Adviser to manage the Fund, are often impossible to anticipate. The Adviser or the Sub-Adviser would likely be required to expend significant resources responding to any litigation or regulatory action related to it, and these actions could be a distraction to the activities of the Adviser or the Sub-Adviser, as applicable.

The Fund's investment activities are subject to the normal risks of becoming involved in litigation by third parties. The expense of defending against claims by third parties and paying any amounts pursuant to settlements or judgments would, absent willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved by the Adviser, Sub-Adviser, administrator, or any of our officers, be borne by the Fund and would reduce the Fund's net assets. The Adviser, the Sub-Adviser and others are indemnified by the Fund in connection with such litigation, subject to certain conditions.

Annual Report 2023
170

CION Ares Diversified Credit Fund

Notes to Consolidated Financial Statements (continued)

December 31, 2023

(in thousands, except per share data, percentages and as otherwise noted)

(12) Subsequent Events

The Adviser has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure or would be required to be recognized in the consolidated financial

statements as of and for the year ended December 31, 2023, except as discussed below:

In January 2024, the Fund's board of directors appointed Scott Lem as Treasurer, who will succeed Penni F. Roll, the Fund's current Treasurer, effective as of February 15, 2024. Penni F. Roll will remain at Ares Management in a senior leadership capacity.

The following common share distributions were declared for January and February 2024.

   

Class A

  

Class C

  

Class I

  

Class L

  

Class U

  

Class U-2

  

Class W

  

January 2024

  

Record Date

  

Daily

  

Daily

  

Daily

  

Daily

  

Daily

  

Daily

  

Daily

  

Payable Date

   January 31,
2024		   January 31,
2024		   January 31,
2024		   January 31,
2024		   January 31,
2024		   January 31,
2024		   January 31,
2024		  
Monthly Per Share
Amount		   $0.19039890   $0.17334580   $0.19773970   $0.18574580   $0.18073930   $0.18054400   $0.18715320  

February 2024

  

Record Date

  

Daily

  

Daily

  

Daily

  

Daily

  

Daily

  

Daily

  

Daily

  

Payable Date

   February 29,
2024		   February 29,
2024		   February 29,
2024		   February 29,
2024		   February 29,
2024		   February 29,
2024		   February 29,
2024		  
Monthly Per Share
Amount		   $0.19039890   $0.17334580   $0.19773970   $0.18574580   $0.18073930   $0.18054400   $0.18715320  

Annual Report 2023
171

CION Ares Diversified Credit Fund

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of CION Ares Diversified Credit Fund:

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of assets and liabilities of CION Ares Diversified Credit Fund (the "Fund"), including the consolidated schedule of investments, as of December 31, 2023, and the related consolidated statements of operations and cash flows for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the four years in the period then ended, the period from November 1, 2019 to December 31, 2019, each of the two years in the period ended October 31, 2019, and the period from January 26, 2017 (commencement of operations) to October 31, 2017 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Fund at December 31, 2023, the consolidated results of its operations and its cash flows for the year then ended, the consolidated changes in its net assets for each of the two years in the period then ended and its consolidated financial highlights for each of the four years in the period then ended, the period from November 1, 2019 to December 31, 2019, each of the two years in the period ended October 31, 2019, and the period from January 26, 2017 (commencement of operations) to October 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund's internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023, by correspondence with the custodians, brokers and others; when replies were not received from custodians, brokers and others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Fund's auditor since 2016.

Los Angeles, California
February 29, 2024

Annual Report 2023
172

CION Ares Diversified Credit Fund

Additional Information

December 31, 2023 (Unaudited)

Proxy Information

The policies and procedures used to determine how to vote proxies relating to securities held by the Fund are available (1) without charge, upon request, by calling 1-877-855-3434, or (2) on the SEC's website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 will be available on Form N-PX by August 31 of each year (1) without charge, upon request, by calling 1-877-855-3434, or (2) on the SEC's website at http://www.sec.gov.

Portfolio Information

The Fund files its complete schedule of portfolio holdings for the first quarter and the third quarter of each fiscal year on SEC Form N-PORT. The Fund's Form N-PORT reports are available (1) without charge, upon request, by calling 1-877-855-3434; or (2) on the SEC's website at http://www.sec.gov.

Annual Report 2023
173

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023 (Unaudited)

Dividend Reinvestment Plan

The Fund operates under a dividend reinvestment plan, (the "DRIP") administered by SS&C GIDS, Inc. ("SS&C GIDS"). Pursuant to the plan, the Fund's distributions, net of any applicable U.S. withholding tax, are reinvested in the same class of shares of the Fund.

Shareholders automatically participate in the DRIP, unless and until an election is made to withdraw from the plan on behalf of such participating shareholder. A shareholder who does not wish to have distributions automatically reinvested may terminate participation in the DRIP at any time by written instructions to that effect to SS&C GIDS. Shareholders who elect not to participate in the DRIP will receive all distributions in cash paid to the shareholder of record (or, if the shares are held in street or other nominee name, then to such nominee). Such written instructions must be received by the SS&C GIDS 30 days prior to the record date of the distribution or the shareholder will receive such distribution in shares through the DRIP. Under the DRIP, the Fund's distributions to shareholders are automatically reinvested in full and fractional shares as described below.

When the Fund declares a distribution, SS&C GIDS, on the shareholder's behalf, will receive additional authorized shares from the Fund either newly issued or repurchased from shareholders by the Fund and held as treasury stock. The number of shares to be received when distributions are reinvested will be determined by dividing the amount of the distribution by the Fund's net asset value per share.

SS&C GIDS will maintain all shareholder accounts and furnish written confirmations of all transactions in the accounts, including information needed by shareholders for personal and tax records. SS&C GIDS will hold shares in the account of the shareholders in non-certificated form in the name of the participant, and each shareholder's proxy, if any, will include those shares purchased pursuant to the DRIP. Each participant, nevertheless, has the right to request certificates for whole and fractional shares owned. The Fund will issue certificates in its sole discretion. SS&C GIDS will distribute all proxy solicitation materials, if any, to participating shareholders.

In the case of shareholders, such as banks, brokers or nominees, that hold shares for others who are beneficial owners participating under the DRIP, SS&C GIDS will administer the DRIP on the basis of the number of shares certified from time to time by the record shareholder as representing the total amount of shares registered in the shareholder's name and held for the account of beneficial owners participating under the DRIP.

Neither SS&C GIDS nor the Fund shall have any responsibility or liability beyond the exercise of ordinary care for any action taken or omitted pursuant to the DRIP, nor shall they have any duties, responsibilities or liabilities except such as expressly set forth herein. Neither shall they be liable hereunder for any act done in good faith or for any good faith omissions to act, including, without limitation, failure to terminate a participant's account prior to receipt of written notice of his or her death or with respect to prices at which shares are purchased or sold for the participants account and the terms on which such purchases and sales are made, subject to applicable provisions of the federal securities laws.

The automatic reinvestment of dividends will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. The Fund reserves the right to amend or terminate the DRIP. There is no direct service charge to participants with regard to purchases under the DRIP; however, the Fund reserves the right to amend the DRIP to include a service charge payable by the participants.

All correspondence concerning the DRIP should be directed to SS&C GIDS at CION Ares Diversified Credit Fund c/o SS&C GIDS, Inc., P.O. Box 219422, Kansas City, MO 64121-9422. Certain transactions can be performed by calling the toll free number 888-729-4266.

Annual Report 2023
174

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023 (Unaudited)

Plan of Distribution

ALPS Distributors, Inc. located at 1290 Broadway, Suite 1100, Denver, CO 80203, serves as the Fund's principal underwriter and acts as the Distributor of the Fund's shares on a best efforts basis, subject to various conditions. The Fund's shares are offered for sale through the Distributor at net asset value plus the applicable sales load. The Distributor also may enter into agreements with financial intermediaries for the sale and servicing of the Fund's shares. In reliance on Rule 415 of the Securities Act, the Fund intends to offer to sell an unlimited number of common shares, on a continual basis, through the Distributor. No arrangement has been made to place funds received in an escrow, trust or similar account. The Distributor is not required to sell any specific number or dollar amount of the Fund's shares, but will use its best efforts to solicit orders for the purchase of the shares. Shares of the Fund will not be listed on any national securities exchange and the Distributor will not act as a market marker in Fund shares.

The Distributor has entered into a wholesale marketing agreement with CION Securities, a registered broker-dealer and an affiliate of CION. Pursuant to the terms of the wholesale marketing agreement, CION Securities will seek to market and otherwise promote the Fund through various wholesale distribution channels, including regional and independent retail broker-dealers and registered investment advisers.

CION Securities has also entered into a dealer manager agreement with the Fund pursuant to which CION Securities has agreed to provide certain marketing and wholesale services in consideration of its receipt of the dealer manager fee.

The Adviser or its affiliates, in the Adviser's discretion and from their own resources, may pay additional compensation to financial intermediaries in connection with the sale of the Fund's shares. In return for the additional compensation, the Fund may receive certain marketing advantages including access to a financial intermediaries' registered representatives, placement on a list of investment options offered by a financial intermediary, or the ability to assist in training and educating the financial intermediaries. The additional compensation may differ among financial intermediaries in amount or in the manner of calculation: payments of additional compensation may be fixed dollar amounts, or based on the aggregate value of outstanding shares held by shareholders introduced by the financial intermediary, or determined in some other manner. The receipt of additional compensation by a selling financial intermediary may create potential conflicts of interest between an investor and its financial intermediary who is recommending the Fund over other potential investments. Additionally, the Fund pays a servicing fee to the financial intermediaries or financial institution for providing ongoing services in respect of clients holding shares of the Fund. Such services may include electronic processing of client orders, electronic fund transfers between clients and the Fund, account reconciliations with the Fund's transfer agent, facilitation of electronic delivery to clients of Fund documentation, monitoring client accounts for back-up withholding and any other special tax reporting obligations, maintenance of books and records with respect to the foregoing, and such other information and ongoing liaison services as the Fund or the Adviser may reasonably request.

The Fund and the Adviser have agreed to indemnify the Distributor against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Distributor may be required to make because of any of those liabilities. Such agreement does not include indemnification of the Distributor against liability resulting from willful misfeasance, bad faith or negligence on the part of the Distributor in the performance of its duties or from reckless disregard by the Distributor of its obligations and duties under the Distribution Agreement.

Annual Report 2023
175

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023 (Unaudited)

Investment Adviser

CION Ares Management, LLC
100 Park Avenue, 25th Floor,
New York, NY 10017

Administrator

ALPS Fund Services, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111

Transfer Agent and DRIP Administrator

SS&C GIDS, Inc.
333 W 11th Street
Kansas City, MO 64105

Distributor

ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203

Independent Registered Public Accounting Firm

Ernst & Young LLP
725 S. Figueroa Street
Los Angeles, CA 90017

Fund Counsel

Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019

Annual Report 2023
176

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023 (Unaudited)

Privacy Notice

We are committed to maintaining the privacy of our shareholders and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information we collect, how we protect that information and why, in certain cases, we may share information with select other parties.

Generally, we will not receive any non-public personal information about shareholders of the common shares of the Fund, although certain of our shareholders' non-public information may become available to us. The non-public personal information that we may receive falls into the following categories:

•  Information we receive from shareholders, whether we receive it orally, in writing or electronically. This includes shareholders' communications to us concerning their investment;

•  Information about shareholders' transactions and history with us; or

•  Other general information that we may obtain about shareholders, such as demographic and contact information such as address.

•  We do not disclose any non-public personal information about shareholders, except:

•  to our affiliates (such as our investment adviser) and their employees that have a legitimate business need for the information;

•  to our service providers (such as our administrator, accountants, attorneys, custodians, transfer agent, underwriter and proxy solicitors) and their employees as is necessary to service shareholder accounts or otherwise provide the applicable service;

•  to comply with court orders, subpoenas, lawful discovery requests, or other legal or regulatory requirements; or

•  as allowed or required by applicable law or regulation.

When the Fund shares non-public shareholder personal information referred to above, the information is made available for limited business purposes and under controlled circumstances designed to protect our shareholders' privacy. The Fund does not permit use of shareholder information for any non-business or marketing purpose, nor does the Fund permit third parties to rent, sell, trade or otherwise release or disclose information to any other party.

The Fund's service providers, such as their adviser, administrator, and transfer agent, are required to maintain physical, electronic, and procedural safeguards to protect shareholder nonpublic personal information; to prevent unauthorized access or use; and to dispose of such information when it is no longer required.

Personnel of affiliates may access shareholder information only for business purposes. The degree of access is based on the sensitivity of the information and on personnel need for the information to service a shareholder's account or comply with legal requirements.

If a shareholder ceases to be a shareholder, we will adhere to the privacy policies and practices as described above. We may choose to modify our privacy policies at any time. Before we do so, we will notify shareholders and provide a description of our privacy policy.

In the event of a corporate change in control resulting from, for example, a sale to, or merger with, another entity, or in the event of a sale of assets, we reserve the right to transfer your non-public personal information to the new party in control or the party acquiring assets.

Annual Report 2023
177

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023

Board of Trustees and Executive Officers

Trustees

Information regarding the members of the Board is set forth below. The Trustees have been divided into two groups — Interested Trustees and Independent Trustees. As set forth in the Fund's declaration of trust, each Trustee's term of office shall continue until his or her death, resignation or removal.

Name, Address(1)
​and Year of Birth		   Position(s) Held
with the Trust		   Term of Office
and Length of
Time Served		   Principal
Occupation(s)
During Past 5 Years		   Number of
Portfolios
in Fund
Complex
Overseen
by Trustee
(including the
Fund)(2)​		   Other Directorships
Held by Trustee		  

Interested Trustees(3)​

  
Mark Gatto
1972		  

Trustee

  

2016

  

Co-Chief Executive Officer and Co-President, CION Investment Group, LLC and Co-Chief Executive Officer, CION Investment Corporation; Director, CION Ares Management, LLC

  

1

  

CION Investment Corporation; CION Ares Management, LLC

  
Mitch Goldstein
1967		  

Trustee

  

2016

  

Partner of Ares Management Corporation; Co-President, Ares Capital Corporation; Co-Chief Executive Officer, Ares Strategic Income Fund

  

2

  

Ares Strategic Income Fund

  
Michael A. Reisner
1970		  

Trustee

  

2016

  

Co-Chief Executive Officer and Co-President, CION Investment Group, LLC and Co-Chief Executive Officer, CION Investment Corporation; Director, CION Ares Management, LLC

  

1

  

CION Investment Corporation; CION Ares Management, LLC

  
David A. Sachs
1959		  

Trustee and Chairman of the Board

  

2016

  

Partner of Ares Management Corporation

  

3

  

Terex Corporation; Ares Dynamic Credit Allocation Fund, Inc.; Ares Private Markets Fund; CION Ares Management, LLC

  

Annual Report 2023
178

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023

Trustees

Name, Address(1)
​and Year of Birth		   Position(s) Held
with the Trust		   Term of Office
and Length of
Time Served		   Principal
Occupation(s)
During Past 5 Years		   Number of
Portfolios
in Fund
Complex
Overseen
by Trustee
(including the
Fund)(2)​		   Other Directorships
Held by Trustee		  

Independent Trustees

  
Elaine Orr
1966		  

Trustee

  

2022

  

Serves on various fund and pension boards; from 2018 to 2019, Senior Director of Philanthropy and Strategic Partnerships for the Robert Toigo Foundation

  

2

  

Ares Dynamic Credit Allocation Fund, Inc.; TCW Transform 500 ETF; TCW Transform Climate ETF; TCW Supply Chain ETF

  
Jeffrey Perlowitz
1956		  

Trustee

  

2020

  

Independent Consultant; prior to 2016, Managing Director, Citigroup, Inc.

  

1

  

PennyMac Financial Services, Inc.

  
John Joseph Shaw
1951		  

Trustee

  

2016

  

Independent Consultant; prior to 2012, President, Los Angeles Rams

  

2

  

Ares Dynamic Credit Allocation Fund, Inc.

  
Bruce H. Spector
1942		  

Trustee

  

2016

  

Independent Consultant; from 2007 to 2015, Senior Advisor, Apollo Global Management, LLC (private equity)

  

2

  

Ares Dynamic Credit Allocation Fund, Inc.

  
Mark R. Yosowitz
1968		  

Trustee

  

2016

  

From 2014 to present, President, Mentored; from 2014 to present, Adjunct Professor, Brooklyn Law School; from 2008 to present, Senior Vice President, Corporate Development, ThinkEco Inc.

  

1

  

None

  

(1)​  The address of each Trustee is care of the Corporate Secretary of the Fund at 100 Park Avenue, 25th Floor, New York, NY 10017.

(2)​  The term "Fund Complex" means two or more registered investment companies that share the same investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies or hold themselves out to investors as related companies for the purpose of investment and investor services.

(3)​  "Interested person," as defined in the Investment Company Act, of the Fund. Mark Gatto, Mitch Goldstein, Michael Reisner and David Sachs are interested persons of the Fund due to their affiliation with the Adviser.

Annual Report 2023
179

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023

Executive Officers

Name, Address(1)
​and Year of Birth		   Position(s) Held
with the Trust		   Term of Office
and Length of
Time Served		  

Principal Occupation(s) During Past 5 Years

  
John Atherton
1981		  

Vice President and Assistant Secretary

  

2018

  

John Atherton is a Partner and General Counsel, Europe in the Ares Legal Department. Prior to joining Ares in 2018, John Atherton was General Counsel, Private Investment Structures at Schroder Adveq.

  
Joshua Bloomstein
1973		  

Vice President and Assistant Secretary

  

2016

  

Joshua Bloomstein serves as a Partner and General Counsel (Credit) and Deputy General Counsel (Corporate) of Ares Management, where he focuses on credit matters. He is General Counsel, Vice President and Secretary of Ares Capital Corporation ("ARCC"), General Counsel and Secretary of Ares Strategic Income Fund ("ASIF") and Vice President and Assistant Secretary of Ares Commercial Real Estate Corporation and of Ares Dynamic Credit Allocation Fund, Inc. ("ARDC"), a NYSE-listed, closed end fund managed by an affiliate of Ares. Joshua Bloomstein joined Ares in 2006.

  
Michael Dennis
1976		  

Vice President

  

2017

  

Michael Dennis is a Partner and Co-Head of European Credit, in the Ares Credit Group. Michael Dennis serves on the Ares Executive Management Committee. Additionally, Michael Dennis serves as a member of the Ares Credit Group's European Direct Lending and European Liquid Credit Investment Committees, and the Ares Asia Direct Lending (Australia) Investment Committee. Michael Dennis joined Ares in 2007.

  
Kevin Early
1971		  

Vice President

  

2017

  

Kevin Early is a Partner, European Chief Financial Officer in the Ares Finance and Accounting Department. Kevin Early joined Ares in 2012.

  
Anton Feingold
1980		  

Vice President and Assistant Secretary

  

2016

  

Anton Feingold is a Partner and Associate General Counsel in the Ares Legal Group and Assistant Secretary of Ares Management Corporation. He also serves as General Counsel, Vice President and Secretary of Ares Commercial Real Estate Corporation. Anton Feingold joined Ares in 2014.

  
Ian Fitzgerald
1975		   General Counsel
and Corporate
Secretary
Vice President and Assistant Secretary		   2019


2017-2019		  

Ian Fitzgerald is a Managing Director and Deputy General Counsel (Credit) in the Ares Legal Group, where he focuses on direct lending matters. Additionally, he serves as General Counsel and Secretary of ARDC and Chief Legal Officer, General Counsel and Secretary of Ares Private Markets Fund ("APMF"). He also serves as Vice President and Assistant Secretary of Ivy Hill Asset Management, L.P. ("IHAM") and Vice President and Assistant Secretary of Ivy Hill Asset Management GP, LLC, IHAM's General Partner. Ian Fitzgerald joined Ares in 2010.

  
Mark Gatto
1972		  

Co-President and Co-Chief Executive Officer

  

2016

  

Mark Gatto is Co-Chief Executive Officer and Co-President of CION Investment Group, LLC as well as Co-Chief Executive Officer of CION Investment Corp. ("CIC"), a business development company focused on middle market loans. Mark Gatto serves on the investment committee of CIC. In addition, Mark Gatto is a Director of CION Ares Management, LLC. Mark Gatto joined CION in 1999.

  
Mitch Goldstein
1967		  

Vice President

  

2016

  

Mitch Goldstein is a Partner and Co-Head of the Ares Credit Group and a member of the Executive Management Committee of Ares Management. He additionally serves as Co-President of ARCC and an interested trustee and Co-Chief Executive Officer of ASIF. He is a member of the Ares Credit Group's U.S. Direct Lending, Commercial Finance, Pathfinder and the Ivy Hill Asset Management Investment Committees, the Ares Infrastructure Debt Investment Committee and the Ares Asia Direct Lending (Australia) Investment Committee. Mitch Goldstein joined Ares Management in 2005.

  

Annual Report 2023
180

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023

Executive Officers

Name, Address(1)
​and Year of Birth		   Position(s) Held
with the Trust		   Term of Office
and Length of
Time Served		  

Principal Occupation(s) During Past 5 Years

  
Blair Jacobson
1972		  

Vice President

  

2017

  

Blair Jacobson is a Partner and Co-Head of European Credit in the Ares Credit Group and a member of the Executive Management Committee of Ares Management and the Ares Diversity, Equity and Inclusion Council. He also serves on the boards of Ares Management Limited and Ares Management UK Limited. Additionally, Blair Jacobson serves on the Ares Credit Group's European Direct Lending and European Liquid Credit Investment Committees, the Ares Secondaries Group's Credit Investment Committee and the Ares Sports, Media and Entertainment Investment Committee. He joined Ares in 2012.

  
Keith Kooper
1975		  

Vice President and Assistant Secretary

  

2016

  

Keith Kooper is a Partner and Co-General Counsel (Real Estate) in the Ares Legal Group. He also serves as Vice President and Assistant Secretary of Ares Commercial Real Estate Corporation. Keith Kooper joined Ares in 2013.

  
Scott Lem
1977		   Chief Financial
Officer
Treasurer		   2019

2016-2019		  

Scott Lem is a Partner and Chief Accounting Officer, Credit (Direct Lending) in the Ares Finance and Accounting Department. Scott Lem additionally serves as Chief Accounting Officer, Vice President and Treasurer of ARCC. Scott Lem also serves as Chief Financial Officer of ARDC and Chief Financial Officer and Treasurer of ASIF. He may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or investment funds managed by Ares Management and its affiliates. Scott Lem joined Ares in 2003.

  
Greg Margolies
1966		  

Vice President

  

2016

  

Greg Margolies is a Partner in the Ares Credit Group. Additionally, Greg Margolies serves as a member of the Ares Credit Group's Alternative Credit Investment Committee and the Ares Private Equity Group's Special Opportunities Investment Committee and is on the Board of Directors of the Ares Charitable Foundation. Greg Margolies joined Ares in 2009.

  
Lisa Morgan
1976		  

Chief Compliance Officer and Anti-Money Laundering Officer

  

2021

  

Lisa Morgan is a Partner and Chief Compliance Officer, Registered Products in the Ares Compliance Group. She also serves as the Chief Compliance Officer of ARCC, APMF, ASIF and ARDC. Lisa Morgan joined Ares in 2017.

  
Michael Reisner
1970		  

Co-President and Co-Chief Executive Officer

  

2016

  

Michael Reisner is Co-Chief Executive Officer and Co-President of CION Investment Group, LLC as well as Co-Chief Executive Officer of CIC, a business development company focused on middle market loans. Michael Reisner serves on the investment committee of CIC. In addition, Michael Reisner is a Director of CION Ares Management, LLC. Michael Reisner joined CION in 2001.

  
Penni F. Roll
1965		   Treasurer
Chief Financial Officer		   2019
2016-2019		  

Penni F. Roll is a Partner and the Chief Financial Officer of the Ares Credit Group. Penni F. Roll also serves as the Chief Financial Officer of ARCC and is Treasurer of ARDC. Penni F. Roll is also a Vice President of ASIF, Chief Financial Officer, Vice President and Treasurer of IHAM and Chief Financial Officer of Ivy Hill Asset Management GP, LLC, IHAM's General Partner, where she also serves on the Board of Managers. Penni F. Roll may additionally from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Penni F. Roll also serves as a member of the Ares Diversity, Equity and Inclusion Council. Penni F. Roll joined Ares in 2010.

  

Annual Report 2023
181

CION Ares Diversified Credit Fund

Additional Information (continued)

December 31, 2023

Executive Officers

Name, Address(1)
​and Year of Birth		   Position(s) Held
with the Trust		   Term of Office
and Length of
Time Served		  

Principal Occupation(s) During Past 5 Years

  
Naseem Sagati Aghili
1981		   Vice President and
Assistant Secretary		  

2019

  

Naseem Sagati Aghili is a Partner, General Counsel and Corporate Secretary of Ares Management. She is a Partner in and Head of the Ares Legal Group and additionally serves on the Ares Executive Management Committee, Enterprise Risk Committee and the Ares Diversity, Equity and Inclusion Council. She also serves as Vice President of ARCC, ASIF, ARDC and APMF. Prior to being named the firm's General Counsel in 2020, Naseem Sagati Aghili served in a variety of roles at Ares Management, including most recently as Co-General Counsel, Deputy General Counsel and General Counsel of Private Equity. Naseem Sagati Aghili joined Ares in 2009.

  
Gregg Schill
1981		  

Vice President

  

2016

  

Gregg Schill is Senior Managing Director of CION Investment Group, LLC. Prior to this, Gregg Schill served as Managing Director since 2012. Gregg Schill joined CION in 2001.

  

(1)​  The address of each officer is care of the Corporate Secretary of the Fund at 100 Park Avenue, 25th Floor, New York, NY 10017.

(2)​  The Fund's Board appointed Michael Smith as Vice President of the Fund, effective as of January 1, 2024. The Fund's Board also appointed Scott Lem as Treasurer, Paul Cho as Vice President and Angela Lee as Vice President of the Fund, effective as of February 15, 2024. Concurrently with Scott Lem's appointment, Penni F. Roll will step down as Treasurer of the Fund and will remain at Ares in a senior leadership capacity.

The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call 888-729-4266 to request the SAI.

Annual Report 2023
182

 

(b) Not applicable.

 

Item 2. Code of Ethics.

 

(a)       CION Ares Diversified Credit Fund (the “Fund”) has adopted a Code of Ethics that applies to the Fund’s principal executive officer and principal financial officer (the “Code of Ethics”).

 

(c)       The Fund has not made any amendment to its Code of Ethics during the period covered by this Form N-CSR.

 

(d)       There have been no waivers, including any implicit waivers, granted by the Fund to individuals covered by the Fund’s Code of Ethics during the reporting period for this Form N-CSR.

 

(e)       Not applicable.

 

(f)       The registrant’s Code of Ethics is attached herewith as Exhibit 19(a)(1).

 

Item 3. Audit Committee Financial Expert.

 

(a)(1)    The Board of Trustees of the Fund has determined that the Fund has two members serving on the Fund’s Audit Committee that possess the attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an “audit committee financial expert.”

 

(a)(2)    The name of the audit committee financial experts as of the date of filing of this Form N-CSR are John Joseph Shaw and Elaine Orr. Both John Joseph Shaw and Elaine Orr have been deemed to be “independent” for the purpose of this Item because he or she is not an “interested person” of the Fund as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”), and does not accept directly or indirectly any consulting, advisory, or other compensatory fee from the Fund.

 

Item 4. Principal Accountant Fees and Services.

 

(a)       Audit Fees

 

For the fiscal years ended December 31, 2023 and December 31, 2022, Ernst & Young LLP (“E&Y”), the Fund’s independent registered public accounting firm, billed the Fund aggregate fees of $437,400 and

$361,140, respectively, for professional services rendered for the audit of the Fund’s annual financial statements or for services normally provided by E&Y in connection with statutory and regulatory filings or engagements.

 

(b)       Audit-Related Fees

 

For the fiscal years ended December 31, 2023 and December 31, 2022, the aggregate fees billed for assurance and related services rendered by E&Y that are reasonably related to the performance of the audit or review of the Fund’s financial statements and that are not reported under Audit Fees above were $47,500 and $43,700, respectively.

 

 

 

 

For the fiscal years ended December 31, 2023 and December 31, 2022, aggregate Audit-Related Fees billed by E&Y that were required to be approved by the Fund’s Audit Committee for audit-related services rendered to the Fund’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Fund (the “Affiliated Service Providers”) that relate directly to the operations and financial reporting of the Fund were $0 and $0, respectively.

 

(c)       Tax Fees

 

For the fiscal years ended December 31, 2023 and December 31, 2022, E&Y billed the Fund aggregate fees of $37,600 and $26,000, respectively, for professional services rendered for tax compliance, tax advice, and tax planning. The nature of the services comprising the Tax Fees was the review of the Fund’s income tax returns and tax distribution requirements.

 

For the fiscal years ended December 31, 2023 and December 31, 2022, the aggregate Tax Fees billed by E&Y that were required to be approved by the Fund’s Audit Committee for tax compliance, tax advice and tax planning services rendered on behalf of Affiliated Service Providers that relate directly to the operations and financial reporting of the Fund were $0 and $0, respectively.

 

(d)       All Other Fees

 

For the fiscal years ended December 31, 2023 and December 31, 2022, the aggregate fees billed by E&Y to the Fund for all services other than services reported under Audit Fees, Audit-Related Fees, and Tax Fees were $0 and $0, respectively.

 

For the fiscal years ended December 31, 2023 and December 31, 2022, the aggregate fees in this category billed by E&Y that were required to be approved by the Fund’s Audit Committee for services rendered on behalf of Affiliated Service Providers that relate directly to the operations and financial reporting of the Fund were $0 and 0, respectively.

 

(e)(1)    Audit Committee’s Pre-Approval Policies and Procedures

 

The Fund’s Audit Committee Charter requires that the Audit Committee pre-approve all audit and non-audit services to be provided to the Fund by the Fund’s independent registered public accounting firm; provided, however, that the pre-approval requirement with respect to the provision of non-auditing services to the Fund by the Fund's independent registered public accounting firm may be waived by the Audit Committee under the circumstances described in the Securities Exchange Act of 1934, as amended (the “1934 Act”).

 

(e)(2)    Percentage of Services

 

All of the audit and tax services described above for which E&Y billed the Fund fees for the fiscal years ended December 31, 2023 and December 31, 2022, were pre-approved by the Audit Committee.

 

For the fiscal years ended December 31, 2023 and December 31, 2021, the Fund’s Audit Committee did not waive the pre-approval requirement of any non-audit services to be provided to the Fund by E&Y.

 

 

 

 

(f)       Not applicable.

 

(g)       For the fiscal years ended December 31, 2023 and December 31, 2022, aggregate non-audit fees billed by E&Y for services rendered to the Fund were $0 and $0, respectively.

 

For the fiscal years ended December 31, 2023 and December 31, 2022, aggregate non-audit fees billed by E&Y for services rendered to the Affiliated Service Providers were $0 and $0, respectively.

 

(h)       E&Y notified the Fund’s Audit Committee of all non-audit services that were rendered by E&Y to the Fund’s Affiliated Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, allowing the Fund’s Audit Committee to consider whether such services were compatible with maintaining E&Y’s independence.

 

Item 5. Audit Committee of Listed Registrants.

 

(a)       The Fund has a separately-designated Audit Committee established in accordance with Section 3(a)(58)(A) of the 1934 Act. The members of the Fund’s Audit Committee are Jeffrey Perlowitz, Elaine Orr, John Joseph Shaw, Bruce H. Spector and Mark R. Yosowitz.

 

(b)       Not applicable.

 

Item 6. Investments.

 

(a)       Schedule of Investments is included as part of Item 1 of this Form N-CSR.

 

(b)       Not applicable.

 

Item 7. Not applicable.

 

Item 8. Not applicable.

 

Item 9. Not applicable.

 

Item 10. Not applicable.

 

Item 11. Not applicable.

 

Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Investment Companies.

 

Attached to this Form N-CSR as exhibit 19(a)(5) is a copy of the proxy voting policies and procedures of the Fund and its investment adviser.

 

 

 

 

Item 13.  Portfolio Managers of Closed-End Management Investment Companies.

 

(a)(1) As of the date of this filing, the portfolio managers of the Fund are as follows:

 

Mitch Goldstein

Partner, Co-Head of the Ares Credit Group and Portfolio Manager (since inception)

 

Mitch Goldstein is a Partner and Co-Head of the Ares Credit Group. He serves on the Executive Management Committee of Ares Management Corporation (“Ares”). Mitch Goldstein serves as a Vice President, interested trustee and Portfolio Manager of the Fund. He additionally serves as Co-President of Ares Capital Corporation and Co-Chief Executive Officer and interested trustee of Ares Strategic Income Fund. He is a member of the Ares Credit Group's U.S. Direct Lending, Commercial Finance, Pathfinder and the Ivy Hill Asset Management Investment Committees and the Ares Infrastructure Debt Investment Committee and the Ares Asia Direct Lending (Australia) Investment Committee. Prior to joining Ares Management in May 2005, Mitch Goldstein worked at Credit Suisse First Boston, where he was a Managing Director in the Financial Sponsors Group. At CSFB, Mitch Goldstein was responsible for providing investment banking services to private equity funds and hedge funds with a focus on M&A and restructurings as well as capital raisings, including high yield, bank debt, mezzanine debt, and IPOs. Mitch Goldstein joined CSFB in 2000 at the completion of the merger with Donaldson, Lufkin & Jenrette. From 1998 to 2000, Mitch Goldstein was at Indosuez Capital, where he was a member of the Investment Committee and a Principal, responsible for originating, structuring and executing leveraged transactions across a broad range of products and asset classes. From 1993 to 1998, Mitch Goldstein worked at Bankers Trust. He also serves on the Board of Managers of Ivy Hill Asset Management GP, LLC. Mitch Goldstein graduated summa cum laude from the State University of New York at Binghamton with a B.S. in Accounting and received an M.B.A. from Columbia University's Graduate School of Business.

 

Greg Margolies

Partner in the Ares Credit Group Portfolio Manager (since inception)

 

Greg Margolies is a Partner in the Ares Credit Group and is Vice President of the Fund. Additionally, Greg Margolies serves as a member of the Ares Credit Group’s Alternative Credit Investment Committee, the Ares Dynamic Credit Allocation Fund Investment Committee, the Ares Private Equity Group’s Special Opportunities Investment Committee and is on the Board of Directors of the Ares Charitable Foundation. Prior to joining Ares in 2009, Greg Margolies served as a Managing Director and Global Head of Leveraged Finance and Capital Commitments at Merrill Lynch & Co. and was a member of the Executive Committee for Merrill Lynch’s Global Investment Banking Group. Previously, Greg Margolies was Co-Head of the DB Capital Mezzanine Fund. Greg Margolies serves on the Board of Directors for the International Organization for Women and Development and the Advisory Council for University of Michigan’s Life Science Institute. Greg Margolies holds a B.A. from the University of Michigan in International Economics and Finance and an M.B.A. from the University of Pennsylvania Wharton School of Business.

 

 

 

 

Michael Smith

Partner, Co-Head of the Ares Credit Group and Portfolio Manager (since January 2024)

 

Michael Smith is a Partner and Co-Head of the Ares Global Credit Group. Additionally, Michael Smith serves as Co-Chief Executive Officer of Ares Strategic Income Fund. He also serves as a Director of Ares Capital Corporation (Nasdaq: ARCC) and previously served as Co-President of Ares Capital Corporation from July 2014 to October 2022. He serves on the Ares Executive Management Committee. From time to time, he may serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. He is a member of the Ares Credit Group's U.S. Direct Lending and Commercial Finance Investment Committees, the Ivy Hill Asset Management Investment Committee, the Ares Private Equity Group's Special Opportunities Investment Committee, the Ares Secondaries Group's Private Equity Investment Committee, and the Ares Infrastructure Group's Infrastructure Opportunities, Climate Infrastructure Partners and Infrastructure Debt Investment Committees. Prior to joining Ares in 2004, Michael Smith was a Partner at RBC Capital Partners, a division of Royal Bank of Canada, which led the firm's middle market financing and principal investment business. Previously, Michael Smith worked at Indosuez Capital in their Merchant Banking Group, Kenter, Glastris & Company, and at Salomon Brothers Inc, in their Debt Capital Markets Group and Financial Institutions Group. Michael Smith serves on the Board of Directors of the University of Notre Dame's Wilson Sheehan Lab for Economic Opportunity (LEO), which helps service providers apply scientific evaluation methods to better understand and share effective poverty interventions. Michael Smith received a B.S. in Business Administration from the University of Notre Dame and a Masters in Management from Northwestern University's Kellogg Graduate School of Management.

 

(a)(2) As of December 31, 2023, the Portfolio Managers were primarily responsible for the day-to-day portfolio management of the following accounts:

 

Name of
Portfolio
Manager		   Type of
Accounts		   Total # of
Accounts
Managed		     Total Assets
(in millions)		      # of Accounts
Managed for
which Advisory
Fee is Based on
Performance		     Total Assets for
which Advisory Fee
is Based on
Performance
(in millions)		  
Mitch Goldstein   Registered investment companies   2     $ 31,538     2     $ 31,538  
    Other pooled investment vehicles   5     $ 32,116     5     $ 32,116  
    Other accounts   34     $ 23,821     29     $ 17,408  
                                 
Greg Margolies   Registered investment companies   0     $ 0     0     $ 0  
    Other pooled investment vehicles   2     $ 2,413     2     $ 2,413  
    Other accounts   3     $ 1,895     3     $ 1,895  
                                 
Michael Smith   Registered Investment Companies   2     $ 31,538     2     $ 31,538  
    Other pooled investment vehicles   3     $ 9,206     3     $ 9,206  
    Other accounts   0     $ 0     0     $ 0  

 

 

 

 

Material Conflicts of Interest:

 

The Fund’s executive officers and trustees, and the employees of CION Ares Management, LLC (“CAM” or the “Advisor”) and Ares Capital Management II LLC (“Ares Capital” and collectively with CAM, the “Advisors”), serve or may serve as officers, trustees or principals of entities that operate in the same or a related line of business as the Fund or of other Ares- or CION Investment Group, LLC (“CION”)-advised funds (“Other Managed Funds”). As a result, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of the Fund or its shareholders. Moreover, notwithstanding the difference in principal investment objectives between the Fund and the Other Managed Funds, such other funds, including potential new pooled investment vehicles or managed accounts not yet established (whether managed or sponsored by affiliates or the Advisors), have, and may from time to time have, overlapping investment objectives with the Fund and, accordingly, invest in, whether principally or secondarily, asset classes similar to those targeted by the Fund. To the extent the Other Managed Funds have overlapping investment objectives, the scope of opportunities otherwise available to the Fund may be adversely affected and/or reduced. Additionally, certain employees of the Advisors and their management may face conflicts in their time management and commitments as well as in the allocation of investment opportunities to other Ares funds.

 

The results of the Fund’s investment activities may differ significantly from the results achieved by the Other Managed Funds. It is possible that one or more of such funds will achieve investment results that are substantially more or less favorable than the results achieved by the Fund. Moreover, it is possible that the Fund will sustain losses during periods in which one or more affiliates achieve significant profits on their trading for proprietary or other accounts. The opposite result is also possible. The investment activities of one or more Advisor affiliates for their proprietary accounts and accounts under their management may also limit the investment opportunities for the Fund in certain markets.

 

The Advisors may determine that the Fund should invest on a side-by-side basis with one or more Other Managed Funds. In certain circumstances, negotiated co-investments may be made only in accordance with the terms of the exemptive order Ares received from the SEC (the “Order”). Co-investments made under the Order are subject to compliance with the conditions and other requirements contained in the Order, which could limit the Fund’s ability to participate in a co-investment transaction.

 

 

 

 

In the event investment opportunities are allocated among the Fund and Other Managed Funds, we may not be able to structure our investment portfolio in the manner desired. Although the Advisors endeavor to allocate investment opportunities in a fair and equitable manner, the Fund is not generally permitted to co-invest in any portfolio company in which a fund managed by Ares or any of its downstream affiliates (other than the Fund and its downstream affiliates) currently has an investment. However, the Fund may co-invest with funds managed by Ares or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and its allocation procedures.

 

From time to time, the Fund and the Other Managed Funds may make investments at different levels of an issuer’s capital structure or otherwise in different classes of an issuer’s securities. Such investments may inherently give rise to conflicts of interest or perceived conflicts of interest between or among the various classes of securities that may be held by such entities.

 

The Advisors, their affiliates and their clients may pursue or enforce rights with respect to an issuer in which the Fund has invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability, liquidity and terms of the Fund’s investments may be negatively impacted by the activities of the Advisors and their affiliates or their clients, and transactions for the Fund may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case.

 

The Advisors may enter into transactions and invest in securities, instruments and currencies on behalf of the Fund in which customers of its affiliates, to the extent permitted by applicable law, serve as the counterparty, principal or issuer. In such cases, such party’s interests in the transaction could be adverse to the interests of the Fund, and such party may have no incentive to assure that the Fund obtains the best possible prices or terms in connection with the transaction. In addition, the purchase, holding and sale of such investments by the Fund may enhance the profitability of the Advisors or their affiliates. One or more affiliates may also create, write or issue Derivatives for their customers, the underlying securities, currencies or instruments of which may be those in which the Fund invests or which may be based on the performance of the Fund. The Fund may, subject to applicable law, purchase investments that are the subject of an underwriting or other distribution by one or more Advisors affiliates and may also enter into transactions with other clients of an affiliate where such other clients have interests adverse to those of the Fund.

 

The Fund will be required to establish business relationships with its counterparties based on the Fund’s own credit standing. Neither the Advisors nor any of their affiliates will have any obligation to allow its credit to be used in connection with the Fund’s establishment of its business relationships, nor is it expected that the Fund’s counterparties will rely on the credit of the Advisors or their affiliates in evaluating the Fund’s creditworthiness.

 

The Advisors are paid a fee based on a percentage of the Fund’s Managed Assets. The participation of the Advisors’ investment professionals in the valuation process could therefore result in a conflict of interest. The Advisors also may have a conflict of interest in deciding whether to cause the Fund to incur leverage or to invest in more speculative investments or financial instruments, thereby potentially increasing the assets or the yield of the Fund and, accordingly, the Management Fees or Incentive Fees (as such terms are defined in the Fund’s Prospectus) received by the Advisors. Certain other Ares-advised funds pay the Advisors or their affiliates performance-based compensation, which could create an incentive for the Advisors or affiliate to favor such investment fund or account over the Fund.

 

By reason of the various activities of the Advisors and their affiliates, the Advisors and such affiliates may acquire confidential or material non-public information or otherwise be restricted from purchasing certain potential Fund investments that otherwise might have been purchased or be restricted from selling certain Fund investments that might otherwise have been sold at the time.

 

 

 

 

The Advisors have adopted policies and procedures designed to prevent conflicts of interest from influencing proxy voting decisions made on behalf of advisory clients, including the Fund, and to help ensure that such decisions are made in accordance with its fiduciary obligations to clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting decisions may have the effect of favoring the interests of other clients, provided that the Advisors believe such voting decisions to be in accordance with its fiduciary obligations.

 

(a)(3) Compensation Structure of Portfolio Manager(s) or Management Team Members

 

Compensation is determined by Advisors’ executive leadership, with recommendations made by the head of each applicable business unit. Compensation may include a variety of components and may vary from year to year based on a number of factors. Generally, Portfolio Managers receive a base salary and are eligible for a discretionary year-end bonus based on performance, a portion of which may be paid in the form of shares of Class A Common Stock of Ares Capital’s publicly traded parent company.

 

Base Compensation.

 

Generally, when the Portfolio Managers receive base compensation from the Advisors it is based on their individual seniority and their position within the firm.

 

Discretionary Compensation.

 

In addition to base compensation, the Portfolio Managers may receive discretionary year-end bonus compensation from the Advisors or its ultimate parent company. Subject to a minimum compensation threshold, a portion of year-end bonus may be paid in the form of shares of Class A Common Stock of Ares Capital’s publicly traded parent company, which vests over time. Discretionary compensation may be based on individual seniority and contribution, and, if applicable, may include direct carried interest and/or profit participations with respect to funds in which the Portfolio Managers are involved and may also include similar incentive awards relating to the funds in the firm’s other investment groups.

 

(a)(4) Ownership of Securities 

 

The following table sets forth, for each Portfolio Manager, the aggregate dollar range of the Fund's equity securities beneficially owned as of December 31, 2023.

 

Portfolio Manager Dollar Range of Fund Shares Beneficially Owned
Mitch Goldstein None
Greg Margolies None
Michael Smith None

 

(b) Not applicable.

 

 

 

 

Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

None during the period covered by this Form N-CSR filing pursuant to a plan or program.

 

Item 15. Submission of Matters to a Vote of Security Holders.

 

There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Trustees during the period covered by this Form N-CSR filing.

 

Item 16. Controls and Procedures.

 

(a)The Fund’s principal executive and principal financial officers have concluded that the Fund’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the 1934 Act, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

(b)There were no changes in the Fund’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

 

Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

(a)Not applicable.

 

(b)Not applicable.

 

Item 18. Recovery of Erroneously Awarded Compensation.

 

(a)Not applicable.

 

(b)Not applicable.

 

Item 19. Exhibits.

 

(a)(1)The registrant’s Sarbanes Oxley Code of Ethics is attached hereto in response to Item 2(f).

 

(a)(2)The certifications required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) are attached hereto.

 

(a)(3)Not applicable.

 

(a)(4)Not applicable.

 

(a)(5)Proxy voting policies and procedures of the Fund and its investment adviser are attached hereto in response to Item 12.

 

(b)The certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)) and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Fund has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CION ARES DIVERSIFIED CREDIT FUND

 

By: /s/ Michael A. Reisner  
  Michael A. Reisner  
  Co-President and Chief Executive Officer  
     
Date: March 8, 2024  
     
By: /s/ Mark Gatto  
  Mark Gatto  
  Co-President and Chief Executive Officer  
     
Date: March 8, 2024  

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Fund and in the capacities and on the dates indicated.

 

By: /s/ Michael A. Reisner  
  Michael A. Reisner  
  Co-President and Co-Chief Executive Officer  
     
Date: March 8, 2024  
     
By: /s/ Mark Gatto  
  Mark Gatto  
  Co-President and Co-Chief Executive Officer  
     
Date: March 8, 2024  
     
By: /s/ Scott C. Lem  
  Scott C. Lem  
  Chief Financial Officer  
     
Date: March 8, 2024