Audax Private Credit Fund, LLC

Overview

Audax Private Credit Fund, LLC is a newly formed, non-diversified, closed-end management investment company that has elected to be regulated as a Business Development Company (BDC) under the Investment Company Act of 1940. The Fund plans to elect and qualify as a Regulated Investment Company (RIC) under Subchapter M of the Internal Revenue Code.

Corporate and regulatory status

• Organized as a Delaware limited liability company.
• Converted from Audax Private Credit Fund, LP (a Delaware limited partnership) on April 10, 2025.
• Converted to a Delaware LLC and elected BDC status on April 23, 2025 (Conversion Effective Date).

Inception and private fund background

• Originated as Audax Private Credit Fund, LP, a private fund relying on Section 3(c)(7).
• At Conversion, 16 Initial Members converted their interests to Shares at a NAV of $25 per share.
• At Conversion, the private fund had $568 million of Capital Commitments (including $6 million from an affiliate of the Adviser) and had called $326 million.
• Commitments totaling $241 million were in place for share purchases under Drawdown Subscription Agreements.

Offering and ownership

• Conducted a private offering of Shares (common and preferred LLC interests) to accredited U.S. investors under exemptions from registration (Section 4(a)(2), Regulation D/S).
• Closings may occur monthly or intra-month; capital calls during an Interim Period may be made alongside closings.
• The Fund is non-exchange-traded and prices subscriptions based on NAV, which is generally available within 20 business days after month-end.

Capital structure and investment policy

• Investment objective: generate current income with some capital appreciation.
• Core strategy: primarily directly originated senior secured first-lien loans to privately owned U.S. middle-market companies.
• Additional exposure: second lien, subordinated/mezzanine debt, and equity or equity-like investments (for example, warrants).
• Target companies typically have EBITDA of $15 million to $100 million.
• Asset concentration: generally expects 80%+ of assets invested directly in Private Credit Instruments; at least 70% in “eligible portfolio companies” for RIC compliance.
• May invest in private, non-exchange-traded securities and certain illiquid instruments.
• May use debt financing up to a 2:1 debt-to-equity ratio, subject to asset coverage and Investment Company Act restrictions.
• Policy thresholds: under normal circumstances, at least 80% of total assets (including borrowings for investment purposes) in “Private Credit Instruments” and at least 70% in “eligible portfolio companies.”

Investment activities and process

• Emphasis on direct origination; majority of investments expected to be directly originated loans.
• Portfolio may include senior secured first-lien loans, second lien or mezzanine debt (to a lesser extent), and equity/equity-like investments in privately held U.S. companies.
• May include some investments in non-U.S. companies and liquid credit investments (for liquidity or programmatic purposes), such as broadly syndicated loans or corporate bonds.
• Has co-investment arrangements with Audax Private Debt and other Audax vehicles under an exemptive relief order issued August 19, 2025, with allocation policies intended to be fair and equitable over time.

Management and oversight

• Adviser: Audax PDB Management Company, LLC (a Delaware LLC, wholly owned by Audax Management Company (NY), LLC).
• The Adviser is a registered investment adviser under the Advisers Act and provides origination, due diligence, structuring, monitoring, and portfolio management services.
• An Investment Committee reviews and authorizes investments; ongoing portfolio management and monitoring are provided by the Adviser’s team.

Valuation and governance

• Valuation policy governed by Rule 2a-5; the Adviser is the Fund’s Valuation Designee with oversight from the Board’s Audit Committee.
• Valuations for non-readily marketable investments are conducted quarterly using internal valuation teams, third-party valuation agents, and guidance from outside counsel.
• The Fund applies the ASC 820 fair value framework (Level 1/2/3 inputs), using market quotes where available and fair value measures where not.
• Board composition: seven Directors, including four Independent Directors. Committees include Audit and Nominating & Corporate Governance.

Administration, fees, and expenses

• Administrator: Audax Management Company (NY), LLC (provides fund operations support, NAV calculation support, financial reporting, and related services).
• Advisory fees:
  • Base Management Fee: 1.25% annually of net assets, paid monthly.
  • Incentive Fee: two components — an income-based component (with a hurdle rate) and a capital gains component (12.5% carry on capital gains).
• Historical fee items:
  • 2025 Base Management Fees: $1.0 million (waived $1.0 million).
  • 2024 Base Management Fees: $0.5 million (waived $0.5 million).
  • 2025 Pre-Incentive Net Investment Income Incentive: $3.0 million; 2024: $0.
  • Capital gains incentive: accrued but not paid for unrealized gains; no capital gains incentive fee paid in 2025.
• Administration expenses were approximately $0.2 million in both 2025 and 2024.
• Expense Support and Conditional Reimbursement Agreement: the Adviser may pay certain Fund expenses and be reimbursed from Available Operating Funds over a multi-year period, subject to caps, waivers, and timing. As of December 31, 2025, the Adviser had paid approximately $5.0 million on the Fund’s behalf.

Distributions, liquidity, and repurchases

• Intends to distribute substantially all available earnings quarterly, subject to RIC distribution requirements and other regulatory constraints.
• Cash distributions may be reinvested into additional Shares under a distribution reinvestment plan unless a shareholder opts out.
• Share repurchase program: beginning no later than the first full calendar quarter following one year after election to be a BDC, the Fund may repurchase up to 5% of NAV of outstanding Shares per quarter, subject to Board discretion; the program can be amended, suspended, or terminated.
• The Fund is private and non-exchange-traded with a perpetual-life design; mergers or conversions remain possible subject to regulation.

Subsidiaries and structural considerations

• Three wholly-owned subsidiaries: APCF SPV I, LLC; Audax Private Credit Subsidiary, LLC; APCF Equity, LLC.
• Subsidiaries use the same custodian as the Fund and do not have separate investment advisory contracts.
• The Fund contemplates potential future securitizations (for example, collateralized loan obligations), with related asset-coverage, governance, and structural considerations and potential consolidation for financial reporting.

Investment geography and risk posture

• Primarily focused on U.S. middle-market private credit, with some non-U.S. exposure and opportunistic investments in public issuers.
• Principal risks include leverage-related risk, liquidity risk from private and illiquid assets, credit risk, market cycle risk, and regulatory risks associated with BDC/RIC status, capital-raising constraints, and co-investment rules.

People and scale

• Adviser: Audax PDB Management Company, LLC, part of the Audax Private Debt platform.
• Audax Private Debt has about 81 dedicated investment professionals across origination, underwriting, capital markets, and portfolio management.
• Audax Group manages more than $46 billion in assets across private debt and private equity, with offices in multiple cities.
• As of December 31, 2025, Audax Private Debt reported AUM of $26 billion (as of 9/30/2025), with $43 billion of capital raised and $53 billion deployed across its funds historically.

Recent corporate actions

• The Board approved the Plan of Conversion, governance changes, and new advisory arrangements related to the private fund–to–BDC transition.
• The SEC issued an Order on August 19, 2025, providing co-investment relief with Audax Private Debt affiliates, expanding the Fund’s capacity to participate in co-investments with other Audax vehicles under specified terms.

One-sentence description

The Fund is a newly formed, permanent, non-exchange-traded BDC that seeks current income and some capital appreciation by investing primarily in directly originated senior secured first‑lien loans to privately held U.S. middle‑market companies, with limited exposure to second‑lien and mezzanine debt, equity‑like instruments, and opportunistic liquid credits, managed through a structured relationship with Audax Private Debt and its affiliates.