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Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Investments and Fair Value Measurements [Abstract]

Investment Portfolio at Cost and Fair Value

The composition of the Company’s investment portfolio at cost and fair value as of June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024							December 31, 2023
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Amortized Cost		Fair Value		% of Total Investments at Fair Value
First lien debt	$	488,506,751	$	491,192,675		93.09	%	$	313,932,958	$	317,768,488		90.18	%
Second lien debt		18,105,078		20,571,894		3.90	%		16,498,048		19,050,076		5.41	%
Equity		14,792,309		15,871,933		3.01	%		14,792,309		15,559,956		4.41	%
Total investments	$	521,404,138	$	527,636,502		100.00	%	$	345,223,315	$	352,378,520		100.00	%

The industry composition of investments based on fair value as of June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024			December 31, 2023
Construction & Engineering		11.09	%		4.17	%
Commercial Services & Supplies		7.74			15.33
Trading Companies & Distributors		7.18			9.52
Health Care Providers & Services		6.75			7.37
Electrical Equipment		6.30			—
Oil, Gas & Consumable Fuels		6.15			—
Electric Utilities		6.01			7.20
Energy Equipment & Services		5.42			1.41
Independent Power and Renewable Electricity Producers		4.73			0.80
Professional Services		4.62			6.33
Hotels, Restaurants & Leisure		3.90			5.69
Aerospace & Defense		3.78			—
Automobiles		3.67			1.20
Machinery		3.10			3.69
Household Products		2.63			4.20
Textiles, Apparel & Luxury Goods		2.13			3.21
IT Services		1.83			3.63
Automobile Components		1.46			1.62
Distributors		1.37			2.80
Chemicals		1.29			2.55
Containers & Packaging		1.02			1.98
Building Products		0.94			1.06
Personal Care Products		0.76			1.12
Diversified		0.75			—
Air Freight & Logistics		0.72			1.36
Metals & Mining		0.57			0.85
Diversified Consumer Services		0.57			1.87
Specialty Retail		0.53			—
Software		0.44			3.48
Biotechnology		0.38			1.40
Leisure Products		0.38			0.56
Technology Hardware, Storage & Peripherals		0.34			—
Insurance		0.32			3.16
Health Care Equipment & Supplies		0.31			0.88
Construction Materials		0.28			—
Ground Transportation		0.18			0.69
Gas Utilities		0.19			0.27
Health Care Technology		0.17			0.28
Electronic Equipment, Instruments & Components		—			0.32
Total		100.00	%		100.00	%

The geographic composition of investments at cost and fair value as of June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024										December 31, 2023
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets			Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets
United States	$	500,145,598	$	506,278,706		95.95	%		149.69	%	$	340,353,603	$	347,440,385		98.60	%		156.78	%
Canada		3,886,039		3,995,825		0.76	%		1.18	%		3,885,951		3,954,000		1.12	%		1.78	%
Germany		17,372,501		17,361,971		3.29	%		5.13	%		—		—		—			—
Luxembourg		—		—		—			—			983,761		984,135		0.28	%		0.44	%
Total	$	521,404,138	$	527,636,502		100.00	%		156.00	%	$	345,223,315	$	352,378,520		100.00	%		159.00	%

Fair Value Hierarchy of Investments

The following tables present the fair value hierarchy of the Company’s investment portfolio as of June 30, 2024 and December 31, 2023:


	June 30, 2024
Assets	Level 1		Level 2		Level 3		Total
First Lien Debt	$	—	$	155,356,443	$	335,836,232	$	491,192,675
Second Lien Debt		—		—		20,571,894		20,571,894
Subtotal	$	—	$	155,356,443	$	356,408,126	$	511,764,569
Investment measured at net asset value(1)								15,871,933
Total investments							$	527,636,502


	December 31, 2023
Assets	Level 1		Level 2		Level 3		Total
First Lien Debt	$	—	$	179,350,279	$	138,418,209	$	317,768,488
Second Lien Debt	—		—			19,050,076		19,050,076
Subtotal	$	—	$	179,350,279	$	157,468,285	$	336,818,564
Investment measured at net asset value(1)								15,559,956
Total investments							$	352,378,520

(1) The Company, as a practical expedient, estimates the fair value of its investment in KKR Tinder TFC Aggregator L.P. using the net asset value of the Company’s members’ interest in the entity. As such, the fair value has not been classified within the fair value hierarchy.

Fair Value of Investments

The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value for the three and six months ended June 30, 2024 and June 30, 2023, respectively:


	First Lien Debt			Second Lien Debt			Total
Balance as of March 31, 2024	$	215,939,500		$	19,803,414		$	235,742,914
Purchases of investments		140,921,962			—			140,921,962
Proceeds from principal pre-payments and sales of investments		(31,046,387	)		—			(31,046,387	)
Payment-in-kind		465,108			692,137			1,157,245
Net accretion of discount on investments		835,950			119,644			955,594
Net realized gain (loss)		282,797			—			282,797
Net change in unrealized appreciation/(depreciation)		171,879			(43,301	)		128,578
Transfers into Level 3		9,255,423			—			9,255,423
Transfers out of Level 3		(990,000	)		—			(990,000	)
Balance as of June 30, 2024	$	335,836,232		$	20,571,894		$	356,408,126

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	171,879		$	(43,301	)	$	128,578


	First Lien Debt			Second Lien Debt			Total
Balance as of December 31, 2023	$	138,418,209		$	19,050,076		$	157,468,285
Purchases of investments		239,317,012			—			239,317,012
Proceeds from principal pre-payments and sales of investments		(36,529,551	)		—			(36,529,551	)
Payment-in-kind		766,126			1,373,534			2,139,660
Net accretion of discount on investments		1,257,980			233,496			1,491,476
Net realized gain (loss)		300,109			—			300,109
Net change in unrealized appreciation/(depreciation)		520,025			(85,212	)		434,813
Transfers into Level 3		1,981,667			—			1,981,667
Transfers out of Level 3		(10,195,345	)		—			(10,195,345	)
Balance as of June 30, 2024	$	335,836,232		$	20,571,894		$	356,408,126

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	520,025		$	(85,212	)	$	434,813

Level 2 investments are valued using prices obtained from pricing services. The Company had $8,265,423 and $8,213,678 transfers between levels on a net basis during the three and six months ended June 30, 2024, respectively.


	First Lien Debt			Second Lien Debt		Total
Balance as of March 31, 2023	$	—		$	—	$	—
Purchases of investments		59,279,599			13,500,000		72,779,599
Proceeds from principal pre-payments and sales of investments		(325,927	)		—		(325,927	)
Payment-in-kind		—			1,500,000		1,500,000
Net accretion of discount on investments		15,365			4,322		19,687
Net change in unrealized appreciation/(depreciation)		(8,971	)		2,650,678		2,641,707
Transfers into Level 3		—			—		—
Transfers out of Level 3		—			—		—
Balance as of June 30, 2023	$	58,960,066		$	17,655,000	$	76,615,066

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	(8,971	)	$	2,650,678	$	2,641,707


	First Lien Debt			Second Lien Debt		Total
Balance as of February 1, 2023 (commencement of operations)	$	—		$	—	$	—
Purchases of investments		59,279,599			13,500,000		72,779,599
Proceeds from principal pre-payments and sales of investments		(325,927	)		—		(325,927	)
Payment-in-kind		—			1,500,000		1,500,000
Net accretion of discount on investments		15,365			4,322		19,687
Net change in unrealized appreciation/(depreciation)		(8,971	)		2,650,678		2,641,707
Transfers into Level 3		—			—		—
Transfers out of Level 3		—			—		—
Balance as of June 30, 2023	$	58,960,066		$	17,655,000	$	76,615,066

Net change in unrealized appreciation (depreciation) on Level 3 investments still held at the end of the period	$	(8,971	)	$	2,650,678	$	2,641,707

Valuation Techniques and Significant Unobservable Inputs of Level 3 Investments

The valuation techniques and significant unobservable inputs used in the valuation of Level 3 investments as of June 30, 2024 and December 31, 2023 were as follows:


Investment Type	Fair Value as of June 30, 2024		Valuation Technique	Unobservable Input	Range	Weighted Average (2)
Second Lien Debt	$	20,571,894	Discounted cash flow	Discount rate	15.5%	15.5%
First Lien Debt		289,949,995	Discounted cash flow	Discount rate	10.15% - 15.00%	12.06%
		28,524,266	Market quotations	Broker quoted price	96.5.00 - 100.50		99.43
		17,361,971	Transactional Value (1)	N/A	N/A	N/A
	$	356,408,126

(1)

Fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio companies since the transaction date.

(2)

Unobservable inputs were weighted by the relative fair value of investments.


Investment Type	Fair Value as of December 31, 2023		Valuation Technique	Unobservable Input	Range	Weighted Average (2)
Second Lien Debt	$	19,050,076	Discounted cash flow	Discount rate	15.50%	15.50%
First Lien Debt		79,221,269	Discounted cash flow	Discount rate	9.86% - 13.44%	10.95%
		18,288,599	Market quotations	Broker quoted price	95.75 - 100.50		98.35
		40,908,341	Transactional Value(1)	N/A	N/A	N/A
	$	157,468,285

(1)

(2)

Unobservable inputs were weighted by the relative fair value of investments.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details