8-K: North Haven Private Income Fund Sells $51.7 Million in Units, Declares Distributions

North Haven Private Income Fund LLC announces the sale of Class S units for $51.7 million, declares distributions, and provides a portfolio update as of December 31, 2024.

Summary

• North Haven Private Income Fund LLC sold approximately 2,728,267 Class S units for an aggregate offering price of approximately $51.7 million on January 1, 2025.
• The purchase price per unit was $18.96.
• On January 27, 2025, the Fund declared a distribution of $0.1265 per unit to unitholders of record, payable around February 5, 2025.
• A special distribution of $0.0474 per unit was also declared, payable around April 3, 2025, to unitholders of record as of March 31, 2025.
• As of December 31, 2024, the Company had investments in 304 portfolio companies across 42 industries with an aggregate par value of approximately $7,231.9 million.
• Approximately 98.8% of the investments were in first lien debt, 0.3% in second lien debt, and 0.9% in other securities.
• Approximately 99.9% of the debt investments were at floating rates.
• Approximately 93.4% of the Company's total investment commitments were in private senior secured loans and equity investments, and approximately 6.6% were in broadly syndicated loans.
• New investment commitments from December 1, 2024, through December 31, 2024, totaled approximately $76.9 million, all in private senior secured loans.
• The largest industry composition is in Software at $1,534.8 million (21.2% of total).
• The largest portfolio company investment is World Insurance Associates, LLC at $120.3 million (1.7% of total).
• The Company's aggregate net asset value as of December 31, 2024, is estimated to be approximately $3,271.2 million.
• As of December 31, 2024, the Company had approximately $2,887.9 million of debt outstanding.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the successful sale of units, declaration of distributions, and the fund's defensive positioning in the current market. However, the document also acknowledges an uncertain market environment and potential risks.

Positives

• The fund's focus on senior secured credit investments in businesses with leading market positions and strong private equity sponsor backing is a defensive strategy.
• The high percentage of floating-rate debt investments positions the Company well in an environment of elevated interest rates.
• The fund has limited exposure to cyclical industries.
• The company believes that sponsors will continue to seek financing from non-bank lenders due to the flexibility of private credit transactions and the speed and certainty of execution.
• Middle-market companies have significant refinancing needs over the next several years, which may provide investing opportunities for the Fund.
• Private equity managers have substantial capital raised but not yet deployed, which will provide support for both new and existing investments.

Risks

• The final net asset value may differ materially from the estimated value due to the completion of financial closing procedures and subsequent events.
• The document mentions an uncertain market environment.

Future Outlook

The Company believes the current market environment creates attractive investing opportunities, particularly given the Fund's defensive investment strategy. They anticipate potential acceleration in deal volumes and are well-positioned in the current elevated interest rate environment.

Management Comments

• The Funds investment approach, focused on long-term credit performance, risk mitigation and preservation of capital, positions the Fund well to navigate the uncertain market environment.
• The Company invests primarily in floating rate debt investments, which bear higher yields when base rates are higher.

Industry Context

The announcement highlights the continued activity in the sponsored middle market loan sector, driven by demand for incremental financings. The fund's focus on private, sponsor-backed first lien senior secured middle market loans aligns with the trend of sponsors seeking financing from non-bank lenders due to flexibility and speed of execution.

Comparison to Industry Standards

• The fund's investment strategy of focusing on senior secured loans is common among business development companies (BDCs) and private credit funds.
• A high allocation to first lien debt (98.8%) is generally considered a more conservative approach compared to funds with higher allocations to second lien or unsecured debt.
• The fund's exposure to broadly syndicated loans (6.6%) is relatively low, indicating a focus on direct lending opportunities.
• Comparable companies include Ares Capital Corporation, Owl Rock Capital Corporation, and Golub Capital BDC, which also focus on direct lending to middle-market companies.

Stakeholder Impact

• Shareholders will receive distributions.
• The fund's investment strategy aims to preserve capital and mitigate risk, benefiting shareholders.
• Portfolio companies receive financing to support their operations and growth.

Next Steps

• Payment of the distribution on or around February 5, 2025.
• Payment of the special distribution on or around April 3, 2025.
• Completion of the Company's financial closing procedures.
• Filing of the Company's annual report on Form 10-K for the year ended December 31, 2024.

Key Dates